I 

109TH CONGRESS 

1ST SESSION H. R. 3205 

To amend title IX of the Public Health Service Act to provide for the 

improvement of patient safety and to reduce the incidence of events 

that adversely affect patient safety, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 12, 2005 

Mr. BILIRAKIS (for himself, Mr. DEAL of Georgia, Mr. BROWN of Ohio, and 

Mr. WAXMAN) introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To amend title IX of the Public Health Service Act to 

provide for the improvement of patient safety and to 

reduce the incidence of events that adversely affect patient safety, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Patient Safety and Quality Improvement Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 
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Sec. 2. Findings and purposes. 

Sec. 3. Amendments to Public Health Service Act. 

Sec. 4. Promoting the diffusion and interoperability of information technology 

systems involved with health care delivery. 

Sec. 5. Required use of product identification technology. 

Sec. 6. Grants for electronic prescription programs. 

Sec. 7. Grants to hospitals and other health care providers for information 

technologies. 

Sec. 8. Authorization of appropriations for grants under sections 6 and 7. 

1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) FINDINGS.—The Congress finds as follows: 

3 (1) In 1999, the Institute of Medicine released 

4 a report entitled ‘‘To Err Is Human’’ that described 

5 medical errors as the 8th leading cause of death in 

6 the United States, with as many as 98,000 people 

7 dying as a result of medical errors each year. 

8 (2) To address these deaths and injuries due to 

9 medical errors, the health care system must identify 

10 and learn from such errors so that systems of care 

11 can be improved. 

12 (3) Myriad public and private patient safety ini13 tiatives have begun. The Quality Interagency Coordi14 nation Task Force has recommended steps to im15 prove patient safety that may be taken by each Fed16 eral agency involved in health care and activities re17 lating to these steps are ongoing. 

18 (4) The Department of Health and Human 

19 Services has initiated several patient safety projects. 

20 The Joint Commission on Accreditation of 

21 Healthcare Organizations issued a patient safety 
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1 standard that went into effect on July 1, 2001, and 

2 the peer review organizations are conducting ongoing 

3 studies of clinical performance measurement of care 

4 delivered to beneficiaries under the medicare pro5 gram under title XVIII of the Social Security Act. 

6 (5) Several steps can be taken now to improve 

7 patient safety. For example, according to the Cen8 ters for Disease Control and Prevention, hand wash9 ing is the single most important means of preventing 

10 the spread of infection. Repeated studies indicate 

11 that lack of or improper hand washing still contrib12 utes significantly to disease transmission in health 

13 care settings. Working with experts from the private 

14 sector, the Centers for Disease Control and Preven15 tion has drafted ‘‘Guidelines for Hand Hygiene in 

16 Healthcare Settings’’ setting forth recommendations 

17 to promote improved hand hygiene practices and re18 duce transmission of pathogenic microorganisms to 

19 patients and personnel in health care settings. 

20 (6) According to the Centers for Disease Con21 trol and Prevention, nosocomial infections affect ap22 proximately 2 million patients annually in acute care 

23 facilities in the United States at an estimated direct 

24 patient care cost of approximately $3.5 billion each 

25 year. 
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1 (7) The Congress encourages the continuation 

2 and acceleration of private sector efforts to take im3 mediate steps to improve patient safety and recog4 nizes the need for action in the public sector to com5 plement these efforts. 

6 (8) The research on patient safety unequivo7 cally calls for a learning environment, where pro8 viders will feel safe to report health care errors, in 

9 order to improve patient safety. 

10 (9) Voluntary data gathering systems are more 

11 supportive than mandatory systems in creating the 

12 learning environment referred to in paragraph (8) as 

13 stated in the Institute of Medicine’s report. 

14 (10) Promising patient safety reporting systems 

15 have been established throughout the United States, 

16 and the best ways to structure and use these sys17 tems are currently being determined, largely through 

18 projects funded by the Agency for Healthcare Re19 search and Quality. 

20 (11) Many organizations currently collecting 

21 patient safety information have expressed a need for 

22 protections that will allow them to review protected 

23 information so that they may collaborate in the de24 velopment and implementation of patient safety im25 provement strategies. Currently, the State peer re-
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1 view protections provide inadequate conditions to 

2 allow the sharing of information to promote patient 

3 safety. 

4 (12) In 2001, the Institute of Medicine released 

5 a report entitled ‘‘Crossing the Quality Chasm’’ that 

6 found that the United States health care system 

7 does not consistently deliver high-quality care to pa8 tients. 

9 (b) PURPOSES.—The purposes of this Act are— 

10 (1) to encourage a culture of safety and quality 

11 in the United States health care system by providing 

12 for a health care errors reporting system that both 

13 protects information and improves patient safety 

14 and quality of health care; and 

15 (2) to ensure accountability by raising stand16 ards and expectations for continuous quality im17 provements in patient safety through the actions of 

18 the Secretary of Health and Human Services. 

19 SEC. 3. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT. 

20 (a) IN GENERAL.—Title IX of the Public Health 

21 Service Act (42 U.S.C. 299 et seq.) is amended— 

22 (1) in section 912(c), by inserting ‘‘, in accord23 ance with part C,’’ after ‘‘The Director shall’’; 

24 (2) by redesignating part C as part D; 
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1 (3) by redesignating sections 921 through 928, 

2 as sections 931 through 938, respectively; 

3 (4) in section 938(1) (as so redesignated), by 

4 striking ‘‘921’’ and inserting ‘‘931’’; and 

5 (5) by inserting after part B the following: 

6 ‘‘PART C—PATIENT SAFETY IMPROVEMENT 

7 ‘‘SEC. 921. DEFINITIONS. 

8 ‘‘In this part: 

9 ‘‘(1) IDENTIFIABLE INFORMATION.—The term 

10 ‘identifiable information’ means information that is 

11 presented in a form and manner that allows the 

12 identification of any provider, patient, or reporter of 

13 patient safety work product. With respect to pa14 tients, such information includes any individually 

15 identifiable health information as that term is de16 fined in the regulations promulgated pursuant to 

17 section 264(c) of the Health Insurance Portability 

18 and Accountability Act of 1996 (Public Law 104– 

19 191; 110 Stat. 2033). 

20 ‘‘(2) NONIDENTIFIABLE INFORMATION.—The 

21 term ‘nonidentifiable information’ means informa22 tion that is presented in a form and manner that 

23 prevents the identification of any provider, patient, 

24 or reporter of patient safety work product. With re25 spect to patients, such information must be de-iden-
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1 tified consistent with the regulations promulgated 

2 pursuant to section 264(c) of the Health Insurance 

3 Portability and Accountability Act of 1996 (Public 

4 Law 104–191; 110 Stat. 2033). 

5 ‘‘(3) PATIENT SAFETY EVALUATION SYSTEM.— 

6 The term ‘patient safety evaluation system’ means a 

7 process that involves the collection, management, or 

8 analysis of information for submission to or by a pa9 tient safety organization. 

10 ‘‘(4) PATIENT SAFETY ORGANIZATION.—The 

11 term ‘patient safety organization’ means a private or 

12 public organization or component thereof that is cer13 tified, through a process to be determined by the 

14 Secretary under section 925, to perform each of the 

15 following activities: 

16 ‘‘(A) The conduct, as the organization or 

17 component’s primary activity, of efforts to im18 prove patient safety and the quality of health 

19 care delivery. 

20 ‘‘(B) The collection and analysis of patient 

21 safety work product that is submitted by pro22 viders. 

23 ‘‘(C) The development and dissemination 

24 of evidence-based information to providers with 

25 respect to improving patient safety, such as rec-
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1 ommendations, protocols, or information re2 garding best practices. 

3 ‘‘(D) The utilization of patient safety work 

4 product to carry out activities limited to those 

5 described under this paragraph and for the pur6 poses of encouraging a culture of safety and of 

7 providing direct feedback and assistance to pro8 viders to effectively minimize patient risk. 

9 ‘‘(E) The maintenance of confidentiality 

10 with respect to identifiable information. 

11 ‘‘(F) The provision of appropriate security 

12 measures with respect to patient safety work 

13 product. 

14 ‘‘(G) The submission of nonidentifiable in15 formation to the Agency consistent with stand16 ards established by the Secretary under section 

17 923(b) for any National Patient Safety Data18 base. 

19 ‘‘(5) PATIENT SAFETY WORK PRODUCT.— 

20 ‘‘(A) The term ‘patient safety work prod21 uct’ means any document or communication 

22 (including any information, report, record, 

23 memorandum, analysis, deliberative work, state24 ment, or root cause analysis) that— 
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1 ‘‘(i) except as provided in subpara2 graph (B), is developed by a provider for 

3 the purpose of reporting to a patient safety 

4 organization, and is reported to a patient 

5 safety organization; 

6 ‘‘(ii) is created by a patient safety or7 ganization; or 

8 ‘‘(iii) would reveal the deliberations or 

9 analytic process of a patient safety evalua10 tion system (as defined in paragraph (3)). 

11 ‘‘(B)(i) Patient safety work product de12 scribed in subparagraph (A)(i)— 

13 ‘‘(I) does not include any separate in14 formation described in clause (ii); and 

15 ‘‘(II) shall not be construed to include 

16 such separate information merely by rea17 son of inclusion of a copy of the document 

18 or communication involved in a submission 

19 to, or the fact of submission of such a copy 

20 to, a patient safety organization. 

21 ‘‘(ii) Separate information described in this 

22 clause is a document or communication (includ23 ing a patient’s medical record or any other pa24 tient or hospital record) that is developed or 
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1 maintained, or exists, separately from any pa2 tient safety evaluation system. 

3 ‘‘(C) Information available from sources 

4 other than a patient safety work product under 

5 this section may be discovered or admitted in a 

6 civil or administrative proceeding, if discover7 able or admissible under applicable law. 

8 ‘‘(6) PROVIDER.—The term ‘provider’ means— 

9 ‘‘(A) an individual or entity licensed or 

10 otherwise authorized under State law to provide 

11 health care services, including— 

12 ‘‘(i) a hospital, nursing facility, com13 prehensive outpatient rehabilitation facil14 ity, home health agency, and hospice pro15 gram; 

16 ‘‘(ii) a physician, physician assistant, 

17 nurse practitioner, clinical nurse specialist, 

18 certified nurse midwife, nurse anesthetist, 

19 psychologist, certified social worker, reg20 istered dietitian or nutrition professional, 

21 physical or occupational therapist, or other 

22 individual health care practitioner; 

23 ‘‘(iii) a pharmacist; and 

24 ‘‘(iv) a renal dialysis facility, ambula25 tory surgical center, pharmacy, physician 
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1 or health care practitioner’s office, long2 term care facility, behavioral health resi3 dential treatment facility, clinical labora4 tory, or community health center; or 

5 ‘‘(B) any other person or entity specified 

6 in regulations by the Secretary after public no7 tice and comment. 

8 ‘‘SEC. 922. PRIVILEGE FOR PATIENT SAFETY WORK PROD9 UCT. 

10 ‘‘(a) PRIVILEGE.—Notwithstanding any other provi11 sion of law and subject to subsection (c), patient safety 

12 work product shall not be— 

13 ‘‘(1) subject to a civil or administrative sub14 poena or order; 

15 ‘‘(2) subject to discovery in connection with a 

16 civil or administrative proceeding; 

17 ‘‘(3) subject to disclosure pursuant to section 

18 552 of title 5, United States Code (commonly known 

19 as the Freedom of Information Act), or any other 

20 similar Federal or State law; 

21 ‘‘(4) required to be admitted as evidence or oth22 erwise disclosed in any State or Federal civil or ad23 ministrative proceeding; or 

24 ‘‘(5) if the patient safety work product is identi25 fiable information and is received by a national ac-
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1 creditation organization in its capacity as a patient 

2 safety organization— 

3 ‘‘(A) used by a national accreditation orga4 nization in an accreditation action against the 

5 provider that reported the information; 

6 ‘‘(B) shared by such organization with its 

7 survey team; or 

8 ‘‘(C) required as a condition of accredita9 tion by a national accreditation association. 

10 ‘‘(b) REPORTER PROTECTION.— 

11 ‘‘(1) IN GENERAL.—A provider may not use 

12 against an individual in an adverse employment ac13 tion described in paragraph (2) the fact that the in14 dividual in good faith reported information— 

15 ‘‘(A) to the provider with the intention of 

16 having the information reported to a patient 

17 safety organization; or 

18 ‘‘(B) directly to a patient safety organiza19 tion. 

20 ‘‘(2) ADVERSE EMPLOYMENT ACTION.—For 

21 purposes of this subsection, an ‘adverse employment 

22 action’ includes— 

23 ‘‘(A) the failure to promote an individual 

24 or provide any other employment-related benefit 
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1 for which the individual would otherwise be eli2 gible; 

3 ‘‘(B) an adverse evaluation or decision 

4 made in relation to accreditation, certification, 

5 credentialing, or licensing of the individual; and 

6 ‘‘(C) a personnel action that is adverse to 

7 the individual concerned. 

8 ‘‘(3) REMEDIES.—Any provider that violates 

9 this subsection shall be subject to a civil monetary 

10 penalty of not more than $20,000 for each such vio11 lation involved. Such penalty shall be imposed and 

12 collected in the same manner as civil money pen13 alties under subsection (a) of section 1128A of the 

14 Social Security Act are imposed and collected. 

15 ‘‘(c) DISCLOSURES.—Nothing in this section pro16 hibits any of the following disclosures: 

17 ‘‘(1) Voluntary disclosure of nonidentifiable in18 formation. 

19 ‘‘(2) Voluntary disclosure of identifiable infor20 mation by a provider or patient safety organization, 

21 if such disclosure— 

22 ‘‘(A) is authorized by the provider for the 

23 purposes of improving quality and safety; 

24 ‘‘(B) is to an entity or person subject to 

25 the requirements of section 264(c) of the 
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1 Health Insurance Portability and Accountability 

2 Act of 1996 (Public Law 104–191; 110 Stat. 

3 2033), or any regulation promulgated under 

4 such section; and 

5 ‘‘(C) is not in conflict with such section or 

6 any regulation promulgated under such section. 

7 ‘‘(3) Disclosure as required by law by a pro8 vider to the Food and Drug Administration, or on 

9 a voluntary basis by a provider to a federally estab10 lished patient safety program, with respect to an Ad11 ministration-regulated product or activity for which 

12 that entity has responsibility, for the purposes of ac13 tivities related to the quality, safety, or effectiveness 

14 of such Administration-regulated product or activity. 

15 ‘‘(4) Disclosures of patient safety work product 

16 in accordance with this part by a provider to a pa17 tient safety organization. 

18 ‘‘(d) EFFECT OF TRANSFER, DISCLOSURE.—The fol19 lowing shall not be treated as a waiver of any privilege 

20 or protection established under this part: 

21 ‘‘(1) The transfer of any patient safety work 

22 product between a provider and a patient safety or23 ganization. 

24 ‘‘(2) Disclosure of patient safety work product 

25 as described in subsection (c). 
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1 ‘‘(3) The unauthorized disclosure of patient 

2 safety work product. 

3 ‘‘(e) PENALTY.— 

4 ‘‘(1) PROHIBITION.—Except as provided in this 

5 part, and subject to paragraphs (2) and (4), it shall 

6 be unlawful for any person to disclose patient safety 

7 work product in violation of this section, if such dis8 closure constitutes a negligent or knowing breach of 

9 confidentiality. 

10 ‘‘(2) RELATION TO HIPAA.—The penalty under 

11 paragraph (3) for a disclosure in violation of para12 graph (1) does not apply if the person would be sub13 ject to a penalty under section 264(c) of the Health 

14 Insurance Portability and Accountability Act of 

15 1996 (Public Law 104–191; 110 Stat. 2033), or any 

16 regulation promulgated under such section, for the 

17 same disclosure. 

18 ‘‘(3) AMOUNT.—Any person who violates para19 graph (1) shall be subject to a civil monetary penalty 

20 of not more than $10,000 for each such violation in21 volved. Such penalty shall be imposed and collected 

22 in the same manner as civil money penalties under 

23 subsection (a) of section 1128A of the Social Secu24 rity Act are imposed and collected. 
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1 ‘‘(4) SUBSEQUENT DISCLOSURE.—Paragraph 

2 (1) applies only to the first person that breaches 

3 confidentiality with respect to particular patient 

4 safety work product. 

5 ‘‘(f) RELATION TO HIPAA.— 

6 ‘‘(1) IN GENERAL.—For purposes of applying 

7 the regulations promulgated pursuant to section 

8 264(c) of the Health Insurance Portability and Ac9 countability Act of 1996 (Public Law 104–191; 110 

10 Stat. 2033)— 

11 ‘‘(A) patient safety organizations shall be 

12 treated as business associates; and 

13 ‘‘(B) activities of such organizations de14 scribed in section 921(4) in relation to a pro15 vider are deemed to be health care operations 

16 (as defined in such regulations) of the provider. 

17 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

18 this section shall be construed to alter or affect the 

19 implementation of such regulations or such section 

20 264(c). 

21 ‘‘(g) NO LIMITATION OF OTHER PRIVILEGES.— 

22 Nothing in this section shall be construed to affect privi23 leges, including peer review and confidentiality protec24 tions, that are otherwise available under Federal or State 

25 laws. 
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1 ‘‘(h) NO LIMITATION ON CONTRACTS.—Nothing in 

2 this section shall be construed to limit the power of a pro3 vider and a patient safety organization, or a patient safety 

4 organization and the Agency or any National Patient 

5 Safety Database, consistent with the provisions of this Act 

6 and other applicable law, to enter into a contract requiring 

7 greater confidentiality or delegating authority to make an 

8 authorized disclosure. 

9 ‘‘(i) RELATION TO STATE REPORTING REQUIRE10 MENTS.—Nothing in this part shall be construed as pre11 empting or otherwise affecting any State law requiring a 

12 provider to report information, including information de13 scribed in section 921(5)(B), that is not patient safety 

14 work product. 

15 ‘‘(j) CONTINUATION OF PRIVILEGE.—Patient safety 

16 work product of an organization that is certified as a pa17 tient safety organization shall continue to be privileged 

18 and confidential, in accordance with this section, if the or19 ganization’s certification is terminated or revoked or if the 

20 organization otherwise ceases to qualify as a patient safety 

21 organization. 

22 ‘‘(k) REPORTS ON STRATEGIES TO IMPROVE PA23 TIENT SAFETY.— 

24 ‘‘(1) DRAFT REPORT.—Not later than the date 

25 that is 18 months after any National Patient Safety 
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1 Database is operational, the Secretary, in consulta2 tion with the Director, shall prepare a draft report 

3 on effective strategies for reducing medical errors 

4 and increasing patient safety. The draft report shall 

5 include any measure determined appropriate by the 

6 Secretary to encourage the appropriate use of such 

7 strategies, including use in any federally funded pro8 grams. The Secretary shall make the draft report 

9 available for public comment and submit the draft 

10 report to the Institute of Medicine for review. 

11 ‘‘(2) FINAL REPORT.—Not later than 1 year 

12 after the date described in paragraph (1), the Sec13 retary shall submit a final report to the Congress 

14 that includes, in an appendix, any findings by the 

15 Institute of Medicine concerning research on the 

16 strategies discussed in the draft report and any 

17 modifications made by the Secretary based on such 

18 findings. 

19 ‘‘SEC. 923. NATIONAL PATIENT SAFETY DATABASE. 

20 ‘‘(a) AUTHORITY.— 

21 ‘‘(1) IN GENERAL.—In conducting activities 

22 under this part, the Secretary shall provide for the 

23 establishment and maintenance of a database to re24 ceive relevant nonidentifiable patient safety work 

25 product, and may designate entities to collect rel-
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1 evant nonidentifiable patient safety work product 

2 that is voluntarily reported by patient safety organi3 zations upon the request of the Secretary. Any data4 base established or designated under this paragraph 

5 may be referred to as a ‘National Patient Safety 

6 Database’. 

7 ‘‘(2) USE OF INFORMATION.—Information re8 ported to any National Patient Safety Database 

9 shall be used to analyze national and regional statis10 tics, including trends and patterns of health care er11 rors. The information resulting from such analyses 

12 may be included in the annual quality reports pre13 pared under section 913(b)(2). 

14 ‘‘(3) ADVISORY ROLE.—The Secretary shall 

15 provide scientific support to patient safety organiza16 tions, including the dissemination of methodologies 

17 and evidence-based information related to root 

18 causes and quality improvement. 

19 ‘‘(b) STANDARDS.—In establishing or designating a 

20 database under subsection (a)(1), the Secretary shall, in 

21 consultation with representatives of patient safety organi22 zations, the provider community, and the health informa23 tion technology industry, determine common formats for 

24 the voluntary reporting of nonidentifiable patient safety 

25 work product, including necessary elements, common and 
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1 consistent definitions, and a standardized computer inter2 face for the processing of the work product. To the extent 

3 practicable, such standards shall be consistent with the 

4 administrative simplification provisions of part C of title 

5 XI of the Social Security Act. 

6 ‘‘(c) CERTAIN METHODOLOGIES FOR COLLECTION.— 

7 The Secretary shall ensure that the methodologies for the 

8 collection of nonidentifiable patient safety work product 

9 for any National Patient Safety Database include the 

10 methodologies developed or recommended by the Patient 

11 Safety Task Force of the Department of Health and 

12 Human Services. 

13 ‘‘(d) FACILITATION OF INFORMATION EXCHANGE.— 

14 To the extent practicable, the Secretary may facilitate the 

15 direct link of information between providers and patient 

16 safety organizations and between patient safety organiza17 tions and any National Patient Safety Database. 

18 ‘‘(e) RESTRICTION ON TRANSFER.—Only nonidentifi19 able information may be transferred to any National Pa20 tient Safety Database. 

21 ‘‘SEC. 924. TECHNICAL ASSISTANCE. 

22 ‘‘(a) IN GENERAL.—The Secretary, acting through 

23 the Director, may— 
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1 ‘‘(1) provide technical assistance to patient 

2 safety organizations, and to States with reporting 

3 systems for health care errors; and 

4 ‘‘(2) provide guidance on the type of data to be 

5 voluntarily submitted to any National Patient Safety 

6 Database. 

7 ‘‘(b) ANNUAL MEETINGS.—Assistance provided 

8 under subsection (a) may include annual meetings for pa9 tient safety organizations to discuss methodology, commu10 nication, information collection, or privacy concerns. 

11 ‘‘SEC. 925. CERTIFICATION OF PATIENT SAFETY ORGANIZA12 TIONS. 

13 ‘‘(a) IN GENERAL.—Not later than 6 months after 

14 the date of enactment of the Patient Safety and Quality 

15 Improvement Act, the Secretary shall establish a process 

16 for certifying patient safety organizations. 

17 ‘‘(b) PROCESS.—The process established under sub18 section (a) shall include the following: 

19 ‘‘(1) Certification of patient safety organiza20 tions by the Secretary or by such other national or 

21 State governmental organizations as the Secretary 

22 determines appropriate. 

23 ‘‘(2) If the Secretary allows other governmental 

24 organizations to certify patient safety organizations 

25 under paragraph (1), the Secretary shall establish a 
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1 process for approving such organizations. Any such 

2 approved organization shall conduct certifications 

3 and reviews in accordance with this section. 

4 ‘‘(3) A review of each certification under para5 graph (1) (including a review of compliance with 

6 each criterion in this section and any related imple7 menting standards as determined by the Secretary 

8 through rulemaking) not less often than every 3 

9 years, as determined by the Secretary. 

10 ‘‘(4) Revocation of any such certification by the 

11 Secretary or other such governmental organization 

12 that issued the certification, upon a showing of 

13 cause. 

14 ‘‘(c) CRITERIA.—A patient safety organization must 

15 meet the following criteria as conditions of certification: 

16 ‘‘(1) The mission of the patient safety organiza17 tion is to conduct activities that are to improve pa18 tient safety and the quality of health care delivery 

19 and is not in conflict of interest with the providers 

20 that contract with the patient safety organization. 

21 ‘‘(2) The patient safety organization has appro22 priately qualified staff, including licensed or certified 

23 medical professionals. 

24 ‘‘(3) The patient safety organization, within any 

25 2 year period, contracts with more than 1 provider 
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1 for the purpose of receiving and reviewing patient 

2 safety work product. 

3 ‘‘(4) The patient safety organization is not a 

4 component of a health insurer or other entity that 

5 offers a group health plan or health insurance cov6 erage. 

7 ‘‘(5) The patient safety organization is man8 aged, controlled, and operated independently from 

9 any provider that contracts with the patient safety 

10 organization for reporting patient safety work prod11 uct. 

12 ‘‘(6) To the extent practical and appropriate, 

13 the patient safety organization collects patient safety 

14 work product from providers in a standardized man15 ner that permits valid comparisons of similar cases 

16 among similar providers. 

17 ‘‘(d) ADDITIONAL CRITERIA FOR COMPONENT ORGA18 NIZATIONS.—If a patient safety organization is a compo19 nent of another organization, the patient safety organiza20 tion must, in addition to meeting the criteria described 

21 in subsection (c), meet the following criteria as conditions 

22 of certification: 

23 ‘‘(1) The patient safety organization maintains 

24 patient safety work product separately from the rest 

25 of the organization, and establishes appropriate se-
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1 curity measures to maintain the confidentiality of 

2 the patient safety work product. 

3 ‘‘(2) The patient safety organization does not 

4 make an unauthorized disclosure under this Act of 

5 patient safety work product to the rest of the orga6 nization in breach of confidentiality. 

7 ‘‘(3) The mission of the patient safety organiza8 tion does not create a conflict of interest with the 

9 rest of the organization.’’. 

10 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

11 937 of the Public Health Service Act (as redesignated by 

12 subsection (a)) is amended by adding at the end the fol13 lowing: 

14 ‘‘(e) PATIENT SAFETY AND QUALITY IMPROVE15 MENT.—For the purpose of carrying out part C, there are 

16 authorized to be appropriated such sums as may be nec17 essary for each of the fiscal years 2006 through 2010.’’. 

18 SEC. 4. PROMOTING THE DIFFUSION AND INTEROPER19 ABILITY OF INFORMATION TECHNOLOGY SYS20 TEMS INVOLVED WITH HEALTH CARE DELIV21 ERY. 

22 (a) VOLUNTARY STANDARDS.— 

23 (1) IN GENERAL.—Not later than 18 months 

24 after the date of the enactment of this Act, the Sec-
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1 retary of Health and Human Services (in this sec2 tion referred to as the ‘‘Secretary’’) shall— 

3 (A) develop or adopt voluntary national 

4 standards that promote the interoperability of 

5 information technology systems involved with 

6 health care delivery, including but not limited to 

7 computerized physician order entry; 

8 (B) in developing or adopting such stand9 ards, take into account— 

10 (i) the ability of such systems to cap11 ture and aggregate clinically specific data 

12 to enable evidence-based medicine and 

13 other applications that promote the elec14 tronic exchange of patient medical record 

15 information; and 

16 (ii) the cost that meeting such stand17 ards would have on providing health care 

18 in the United States and the increased effi19 ciencies in providing such care achieved 

20 under the standards; 

21 (C) in developing or adopting such stand22 ards and to the extent practicable, test the effi23 cacy, usability, and scalability of proposed inter24 operability standards within a variety of clinical 

25 settings, including an urban academic medical 
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1 center, a rural hospital, a community health 

2 center, and a community hospital; and 

3 (D) submit a report to the Congress con4 taining recommendations on such standards. 

5 (2) CONSULTATION.—In developing or adopting 

6 standards under paragraph (1)(A), the Secretary 

7 shall consider the recommendations of the National 

8 Committee on Vital Health Statistics for the stand9 ardization of message formatting, coding, and vocab10 ulary for interoperability of information technology 

11 systems involved with health care delivery. The Sec12 retary shall consult with representatives of the 

13 health information technology industry and the pro14 vider community who are involved with the develop15 ment of interoperability standards. 

16 (b) UPDATES.—The Secretary shall provide for the 

17 ongoing review and periodic updating of the standards de18 veloped under subsection (a). 

19 SEC. 5. REQUIRED USE OF PRODUCT IDENTIFICATION 

20 TECHNOLOGY. 

21 The Federal Food, Drug, and Cosmetic Act (21 

22 U.S.C. 301 et seq.) is amended— 

23 (1) in section 502, by adding at the end the fol24 lowing: 
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1 ‘‘(x) If it is a drug or biological product, unless it 

2 includes a unique product identifier for the drug or bio3 logical product as required by regulations under section 

4 510(q).’’; and 

5 (2) in section 510, by adding at the end the fol6 lowing: 

7 ‘‘(q)(1) The Secretary shall issue, and may periodi8 cally revise, regulations requiring the manufacturer of any 

9 drug or biological product that is subject to regulation by 

10 the Food and Drug Administration, or the packager or 

11 labeler of a drug or biological product that is subject to 

12 regulation by the Food and Drug Administration, to in13 clude a unique product identifier on the packaging of the 

14 drug or biological product. 

15 ‘‘(2) For purposes of this subsection, the term 

16 ‘unique product identifier’ means an identification that— 

17 ‘‘(A) is affixed by the manufacturer, labeler, or 

18 packager to each drug or biological product de19 scribed in paragraph (1) at each packaging level; 

20 ‘‘(B) uniquely identifies the item and meets the 

21 standards required by this section; and 

22 ‘‘(C) can be read by a scanning device or other 

23 technology acceptable to the Secretary. 
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1 ‘‘(3) A unique product identifier required by regula2 tions issued or revised under paragraph (1) shall be based 

3 on— 

4 ‘‘(A) the National Drug Code maintained by 

5 the Food and Drug Administration; 

6 ‘‘(B) commercially accepted standards estab7 lished by organizations that are accredited by the 

8 American National Standards Institute, such as the 

9 Health Industry Business Communication Council or 

10 the Uniform Code Council; or 

11 ‘‘(C) other identification formats that the Sec12 retary deems appropriate. 

13 ‘‘(4) The Secretary may, at the Secretary’s discre14 tion, waive the requirements of this section, or add addi15 tional provisions that are necessary to safeguard the pub16 lic health.’’. 

17 SEC. 6. GRANTS FOR ELECTRONIC PRESCRIPTION PRO18 GRAMS. 

19 (a) GRANTS.— 

20 (1) IN GENERAL.—The Secretary of Health and 

21 Human Services (in this section referred to as the 

22 ‘‘Secretary’’) may make grants to qualified practi23 tioners for the purpose of establishing electronic pre24 scription programs. 

25 (2) MATCHING FUNDS.— 
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1 (A) IN GENERAL.—With respect to the 

2 costs of establishing an electronic prescription 

3 program, a condition for the receipt of a grant 

4 under paragraph (1) is that the qualified practi5 tioner involved agree to make available (directly 

6 or through donations from public or private en7 tities) non-Federal contributions toward such 

8 costs in an amount that is not less than 50 per9 cent of such costs. 

10 (B) DETERMINATION OF AMOUNT CON11 TRIBUTED.—Non-Federal contributions re12 quired in subparagraph (A) may be in cash or 

13 in kind, fairly evaluated, including equipment or 

14 services. Amounts provided by the Federal Gov15 ernment, or services assisted or subsidized to 

16 any significant extent by the Federal Govern17 ment, may not be included in determining the 

18 amount of such non-Federal contributions. 

19 (b) STUDY.— 

20 (1) IN GENERAL.—The Secretary, acting 

21 through the Director of the Agency for Healthcare 

22 Research and Quality, shall support a study to as23 sess existing scientific evidence regarding the effec24 tiveness and cost-effectiveness of the use of elec25 tronic prescription programs intended to improve the 
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1 efficiency of prescription ordering and the safe and 

2 effective use of prescription drugs. The study shall 

3 address the following: 

4 (A) The ability of such programs to reduce 

5 medical errors and improve the quality and 

6 safety of patient care. 

7 (B) The impact of the use of such pro8 grams on physicians, pharmacists, and patients, 

9 including such factors as direct and indirect 

10 costs, changes in productivity, and satisfaction. 

11 (C) The effectiveness of strategies for over12 coming barriers to the use of electronic pre13 scription programs. 

14 (2) REPORT.—The Secretary shall ensure that, 

15 not later than 18 months after the date of the enact16 ment of this Act, a report containing the findings of 

17 the study under paragraph (1) is submitted to the 

18 appropriate committees of the Congress. 

19 (3) DISSEMINATION OF FINDINGS.—The Sec20 retary shall disseminate the findings of the study 

21 under paragraph (1) to appropriate public and pri22 vate entities. 

23 (c) DEVELOPMENT OF MODEL.—The Secretary, act24 ing through the Director of the Agency for Healthcare Re25 search and Quality, may develop an Internet-based mathe-
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1 matical model that simulates the cost and effectiveness of 

2 electronic prescription programs for qualified practi3 tioners. The model may be designed to allow qualified 

4 practitioners to estimate, through an interactive interface, 

5 the impact of electronic prescribing on their practices, in6 cluding the reduction in drug-related health care errors. 

7 (d) DEFINITIONS.—For purposes of this section: 

8 (1) The term ‘‘electronic prescription pro9 gram’’— 

10 (A) means a program for the electronic 

11 submission and processing of prescriptions; and 

12 (B) includes the hardware (including com13 puters and other electronic devices) and soft14 ware programs for the electronic submission of 

15 prescriptions to pharmacies, the processing of 

16 such submissions by pharmacies, and decision17 support programs. 

18 (2) The term ‘‘qualified practitioner’’ means a 

19 practitioner licensed by law to administer or dis20 pense prescription drugs. 

21 SEC. 7. GRANTS TO HOSPITALS AND OTHER HEALTH CARE 

22 PROVIDERS FOR INFORMATION TECH23 NOLOGIES. 

24 (a) IN GENERAL.—The Secretary of Health and 

25 Human Services (in this section referred to as the ‘‘Sec-
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1 retary’’) shall make grants to hospitals and other health 

2 care providers (but not more than 1 grant to any 1 hos3 pital or provider) to pay the costs of acquiring or imple4 menting information technologies whose purposes are— 

5 (1) to improve quality of care and patient safe6 ty; and 

7 (2) to reduce adverse events and health care 

8 complications resulting from medication errors. 

9 (b) SPECIAL CONSIDERATION.—In making grants 

10 under subsection (a), the Secretary shall give special con11 sideration to applicants who seek to promote the following: 

12 (1) Interoperability across hospital services or 

13 departments using standards developed or adopted 

14 by the Secretary under section 4. 

15 (2) Electronic communication of patient data 

16 across the spectrum of health care delivery. 

17 (3) Computerized physician order entry or bar 

18 coding applications. 

19 (4) Electronic communication of patient data in 

20 hospitals that provide services to underserved or low21 income populations. 

22 (5) Improved clinical decisionmaking through 

23 acquisition and implementation of decision-support 

24 technologies. 
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1 (c) CERTAIN GRANT CONDITIONS.—A condition for 

2 the receipt of a grant under subsection (a) is that the ap3 plicant involved meet the following requirements: 

4 (1) The applicant agrees to carry out a pro5 gram to measure, analyze, and report patient safety 

6 and medical errors at the hospital or other health 

7 care provider involved, to submit to the Secretary a 

8 description of the methodology that will be used, and 

9 to have such program in effect as soon as prac10 ticable after the application for the grant is ap11 proved, without regard to whether information tech12 nologies under the grant have been implemented. 

13 (2) The applicant has arranged for an evalua14 tion that addresses the effectiveness and cost-effec15 tiveness of the information technology for which the 

16 grant is provided and its impact on the quality and 

17 safety of patient care, submitted the evaluation plan 

18 to the Secretary, and received approval from the 

19 Secretary of the applicant’s methodology. 

20 (3) The applicant has or is developing a patient 

21 safety evaluation system (as that term is defined in 

22 section 921 of the Public Health Service Act (as 

23 amended by section 3)) for reporting health care er24 rors to a patient safety organization. 
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1 (4) The applicant agrees to provide the Sec2 retary with such information as the Secretary may 

3 require regarding the use of funds under this pro4 gram or its impact. 

5 (5) The applicant provides assurances satisfac6 tory to the Secretary that any information tech7 nology planned, acquired, or implemented with grant 

8 funds under this section will be part of an informa9 tion program that— 

10 (A) carries out the purposes described in 

11 subsection (a); and 

12 (B) is comprehensive or will be expanded 

13 to become comprehensive, regardless of whether 

14 Federal assistance is available for such expan15 sion. 

16 (d) TECHNICAL ASSISTANCE TO GRANTEES.—The 

17 Secretary, acting through the Director of the Agency for 

18 Healthcare Research and Quality, shall provide technical 

19 assistance to applicants and grantees to ensure the appro20 priate evaluation of the information technologies for which 

21 grants are awarded under this section, such as— 

22 (1) reviewing and providing technical assistance 

23 on the applicant’s proposed evaluation; 

24 (2) developing mechanisms to ensure ongoing 

25 communications between grantees and evaluators to 
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1 facilitate the identification and resolution of prob2 lems as they arise, ensure mutual learning, and pro3 mote the rapid dissemination of information; 

4 (3) reviewing the interim and final reports re5 quired under subsection (e); and 

6 (4) disseminating evidence-based information in 

7 interim and final reports to patient safety organiza8 tions, as appropriate. 

9 (e) EVALUATION REPORTS BY GRANTEE.—A condi10 tion for the receipt of a grant under subsection (a) is that 

11 the applicant agree to submit an interim and a final report 

12 to the Secretary in accordance with this subsection. 

13 (1) INTERIM REPORT.—Not later than 1 year 

14 after the implementation of information technologies 

15 under the grant is completed, the applicant will sub16 mit an interim report to the Secretary describing the 

17 initial effectiveness of such technologies in carrying 

18 out the purposes described in subsection (a). 

19 (2) FINAL REPORT.—Not later than 3 years 

20 after the implementation of information technologies 

21 under the grant is completed, the applicant will sub22 mit a final report to the Secretary describing the ef23 fectiveness and cost-effectiveness of such tech24 nologies and addressing other issues determined to 
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1 be important in carrying out the purposes described 

2 in subsection (a). 

3 (3) RELATION TO DISBURSEMENT OF GRANT.— 

4 In disbursing a grant under subsection (a), the Secretary shall withhold 1 5 ⁄3 of the grant until the grant6 ee submits to the Secretary the report required in 

7 paragraph (1). 

8 (f) REPORTS BY SECRETARY.— 

9 (1) INTERIM REPORTS.— 

10 (A) IN GENERAL.—Through the fiscal year 

11 preceding the fiscal year in which the final re12 port under paragraph (2) is prepared, the Sec13 retary shall submit to the Committee on Energy 

14 and Commerce of the House of Representatives 

15 and the Committee on Health, Education, 

16 Labor, and Pensions of the Senate periodic re17 ports on the grant program under subsection 

18 (a). Such reports shall be submitted not less 

19 frequently than once each fiscal year, beginning 

20 with fiscal year 2004. 

21 (B) CONTENTS.—A report under subpara22 graph (A) shall include information on— 

23 (i) the number of grants made; 
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1 (ii) the nature of the projects for 

2 which funding is provided under the grant 

3 program; 

4 (iii) the geographic distribution of 

5 grant recipients; and 

6 (iv) such other matters as the Sec7 retary determines appropriate. 

8 (2) FINAL REPORT.—Not later than 180 days 

9 after the date on which the last of the reports is due 

10 under subsection (e)(2), the Secretary shall submit 

11 a final report to the committees referred to in para12 graph (1)(A) on the grant program under subsection 

13 (a), together with such recommendations for legisla14 tion and administrative action as the Secretary de15 termines appropriate. 

16 (g) DEFINITIONS.—For purposes of this section: 

17 (1) The term ‘‘costs’’, with respect to informa18 tion technologies referred to in subsection (a), in19 cludes total expenditures incurred for— 

20 (A) purchasing, leasing, and installing 

21 computer software and hardware, including 

22 hand-held computer technologies; 

23 (B) making improvements to existing com24 puter software and hardware; and 
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1 (C) purchasing or leasing communications 

2 capabilities necessary for clinical data access, 

3 storage, and exchange. 

4 (2) The term ‘‘health care provider’’ has the 

5 same meaning given to the term ‘‘provider’’ in sec6 tion 921 of the Public Health Services Act (as 

7 amended by this Act). 

8 (h) TERMINATION OF GRANT AUTHORITIES.—The 

9 authority of the Secretary to make grants under sub10 section (a) terminates upon the expiration of fiscal year 

11 2013. 

12 (i) MATCHING FUNDS.— 

13 (1) IN GENERAL.—With respect to the costs of 

14 a grant to be carried out under this section, such 

15 grant may be made only if the applicant agrees to 

16 make available (directly or through donations from 

17 public or private entities) non-Federal contributions 

18 toward such costs in an amount that is not less than 

19 50 percent of such costs ($1 for each $1 of Federal 

20 funds provided in the grant). 

21 (2) DETERMINATION OF AMOUNTS CONTRIB22 UTED.—Amounts provided by the Federal Govern23 ment, or services assisted or subsidized to any sig24 nificant extent by the Federal Government, may not 
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1 be included in determining the amount of such non2 Federal contributions. 

3 SEC. 8. AUTHORIZATION OF APPROPRIATIONS FOR GRANTS 

4 UNDER SECTIONS 6 AND 7. 

5 For the purpose of carrying out sections 6 and 7, 

6 there are authorized to be appropriated $25,000,000 for 

7 each of fiscal years 2006 and 2007. 

Æ