I 

110TH CONGRESS 

1ST SESSION H. R. 1952 

To amend title XI of the Social Security Act to achieve a national health 

information infrastructure, and to amend the Internal Revenue Code 

of 1986 to increase the deduction under section 179 for the purchase 

of qualified health care information technology by medical care providers. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 19, 2007 

Mr. GONZALEZ (for himself, Mr. GINGREY, Ms. VELA ́ZQUEZ, and Mr. GENE

GREEN of Texas) introduced the following bill; which was referred to the 

Committee on Energy and Commerce, and in addition to the Committee 

on Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To amend title XI of the Social Security Act to achieve 

a national health information infrastructure, and to 

amend the Internal Revenue Code of 1986 to increase 

the deduction under section 179 for the purchase of 

qualified health care information technology by medical 

care providers. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as ‘‘National Health Informa3 tion Incentive Act of 2007’’. 

4 SEC. 2. FINDINGS AND PURPOSE. 

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

6 (1) A March 2001 Institute of Medicine 

7 (‘‘IOM’’) study concludes that in order to improve 

8 quality, the nation must have a national commit9 ment to building an information infrastructure to 

10 support healthcare delivery, consumer health, quality 

11 measurement and improvement, public account12 ability, clinical and health services research, and 

13 clinical education. 

14 (2) A November 2001 National Committee on 

15 Vital Health Statistics study lauds the importance of 

16 a national health information infrastructure to im17 prove patient safety, improve healthcare quality, im18 prove bioterrorism detection, better inform and em19 power healthcare consumers regarding their own 

20 personal health information, and to better under21 stand healthcare costs. 

22 (3) An October 2002 IOM report calls on the 

23 federal government to take steps to encourage and 

24 facilitate development in the information technology 

25 infrastructure that is critical to healthcare quality 

26 and safety enhancement. 


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1 (4) A General Accounting Office October 2003 

2 report found that the benefits of an electronic 

3 healthcare information system included improved 

4 quality of care, reduced costs associated with medi5 cation errors, more accurate and complete medical 

6 documentation, more accurate capture of codes and 

7 charges, and improved communication among pro8 viders enabling them to respond more quickly to pa9 tients’ needs. 

10 (5) Other more recent studies and surveys show 

11 that cultivating a national healthcare information in12 frastructure and improving patient care will depend 

13 crucially on adoption of uniform medical data stand14 ards and interoperability. 

15 (6) The ability of physicians to deliver patient16 centered care to patients, particularly those with 

17 multiple chronic illnesses, will depend on having the 

18 electronic systems in place at the practice level to 

19 enable them to track patients by disease conditions, 

20 to have access to evidence-based clinical decision 

21 support tools at the point of care, to share informa22 tion with patients and other health care profes23 sionals, and to track, measure and report on the 

24 qualify of care provided. 


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1 (7) A Commonwealth Fund survey of physicians 

2 found that there is a gap between physicians’ sup3 port for and willingness to provide such patient-cen4 tered services and having the electronic systems in 

5 place to enable them to do, with the costs of acquir6 ing and maintaining such systems being identified as 

7 a major barrier. 

8 (8) Acquisition costs, physician and staff time 

9 required to transition from paper-based offices to 

10 electronic health systems, and the lack of industry 

11 standards on interoperability are the principle bar12 riers to creating a national health information infra13 structure. 

14 (9) The success of a national health informa15 tion infrastructure depends on the widespread use 

16 and acceptance of electronic health records and 

17 other health information technologies in physician 

18 offices. 

19 (b) PURPOSES.—The purposes of this Act are as fol20 lows: 

21 (1) To create incentives that encourage physi22 cians and other health professionals to adopt inter23 operable electronic health records, electronic pre24 scribing systems, evidence-based clinical decision 

25 tools, remote monitoring, patient registries, secure 


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1 email, and other health information technology as a 

2 key component of a national health care information 

3 infrastructure in the United States to ensure the 

4 rapid flow of secure, private and digitized informa5 tion relevant to all facets of patient care. 

6 (2) To do so in a voluntary manner that does 

7 not become an unfunded mandate on small physician 

8 practices. 

9 (3) To do so in a manner that does not com10 promise the medical care provider’s ability to make 

11 patient care decisions based solely on his or her clin12 ical expertise and experience, and what the provider 

13 and patient concludes is the best for a particular pa14 tient based upon scientific evidence and knowledge 

15 of the patient’s medical history. 

16 SEC. 3. OFFICE OF THE NATIONAL COORDINATOR FOR 

17 HEALTH INFORMATION TECHNOLOGY. 

18 (a) ESTABLISHMENT.—There is established within 

19 the Office of the Secretary of Health and Human Services 

20 an Office of the National Coordinator for Health Informa21 tion Technology. The Office shall be headed by a National 

22 Coordinator appointed by the President, in consultation 

23 with the Secretary of Health and Human Services. The 

24 National Coordinator shall report directly to the Sec25 retary. 


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1 (b) RESOURCES.—The President shall make available 

2 to the Office of the National Coordinator for Health Infor3 mation Technology the resources, both financial and oth4 erwise, necessary to enable the National Coordinator to 

5 carry out the purposes of, and perform the duties and re6 sponsibilities of, the Office. 

7 SEC. 4. BUILDING THE NATIONAL HEALTH INFORMATION 

8 INFRASTRUCTURE. 

9 Title XI of the Social Security Act (42 U.S.C. 1301 

10 et seq.) is amended by adding at the end the following 

11 part: 

12 ‘‘PART D—BUILDING THE NATIONAL HEALTH

13 INFORMATION INFRASTRUCTURE

14 ‘‘FINANCIAL INCENTIVE TO SMALL MEDICAL CARE PRO15 VIDERS AND ENTITIES TO IMPLEMENT A NATIONAL

16 HEALTH INFORMATION INFRASTRUCTURE

17 ‘‘SEC. 1181. (a) IN GENERAL.—The Secretary shall 

18 include additional Medicare payment incentives to assure 

19 small medical care providers have the capability to move 

20 toward a national health care information infrastructure 

21 by acquiring electronic health record systems and other 

22 health information technologies. 

23 ‘‘(b) CONDITIONS FOR QUALIFICATION.—As a condi24 tion of qualifying for financial incentives described in this 

25 section, the Secretary shall grant the use of financial inVerDate Aug 31 2005 23:42 Apr 20, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1952.IH H1952

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1 centives to assure that such technologies are consistent 

2 with the goals of creation of a national health information 

3 infrastructure, such as— 

4 ‘‘(1) voluntary participation in studies or dem5 onstration projects to evaluate the use of such sys6 tems to measure and report quality data based on 

7 accepted clinical performance measures; 

8 ‘‘(2) voluntary participation in studies to dem9 onstrate the impact of such technologies on improv10 ing patient care, reducing costs and increasing effi11 ciencies; and 

12 ‘‘(3) voluntary participation in studies and dem13 onstration projects on providing patient-centered 

14 care coordinated by a patient’s personal physician 

15 (as defined by the Institute of Medicine), using elec16 tronic systems that enable and facilitate care coordi17 nation and sharing of information among the physi18 cian and other treating health care professionals, 

19 family caregivers, and the patient. 

20 ‘‘(c) ADDITIONAL MEDICARE PAYMENT TO SMALL

21 MEDICAL CARE PROVIDERS AND ENTITIES FOR EXPEND22 ITURES RELATING TO THE IMPLEMENTATION OF PRAC23 TICE-BASED ELECTRONIC SYSTEMS THAT WILL SERVE

24 AS THE FOUNDATION FOR A NATIONAL HEALTH INFOR25 MATION INFRASTRUCTURE.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall provide 

2 for additional payment to medical care providers in 

3 small practice settings, including physicians and oth4 ers in clinical practice, for the purpose of assisting 

5 such entities to acquire and adopt patient registries, 

6 evidence-based clinical decision support tools at the 

7 point of care, electronic health records, secure email, 

8 and other health information technologies defined by 

9 the Secretary as a key component of a national 

10 health care information infrastructure. 

11 ‘‘(2) TYPES OF REIMBURSEMENT INCEN12 TIVES.—In developing the reimbursement incentives 

13 described in paragraph (1), the Secretary shall con14 sider inclusion of one or more of the following types 

15 of incentives: 

16 ‘‘(A) Adds-ons to payments for evaluation 

17 and management services. 

18 ‘‘(B) Care management fees that include 

19 an allowance for the costs associated with ac20 quiring the electronic systems associated with 

21 providing coordinated and patient-centered care 

22 to beneficiaries, especially those with multiple 

23 chronic illnesses, as determined by the Sec24 retary and that is included in the top 5 percent 

25 of claims (determined on the basis of cost). 


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1 ‘‘(C) Payments for structured e-mail 

2 consults and other technologies that will facili3 tate care coordination that are separately iden4 tifiable medical services from other evaluation 

5 and management services. 

6 ‘‘(D) Any other method deemed appro7 priate by the Secretary to encourage participa8 tion. 

9 ‘‘(3) AMOUNT OF REIMBURSEMENT.—The 

10 amount of reimbursement made to small medical 

11 care providers and entities to implement a national 

12 health care information infrastructure shall be in a 

13 manner determined by the Secretary that takes into 

14 account the costs of implementation, training, and 

15 complying with applicable standards. Such reim16 bursement amounts shall be calculated on a sliding 

17 scale, in a manner determined by the Secretary, to 

18 reward qualifying practices using more functional 

19 and comprehensive health information systems that 

20 meet the certification guidelines under paragraph 

21 (4) based on the following weighted-structure: 

22 ‘‘(A) BASIC.—The maintenance of patient 

23 registries for the purpose of identifying and fol24 lowing up with at-risk patients and for the pro25 vision of educational resources to patients. 


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1 ‘‘(B) INTERMEDIATE.—In addition to com2 plying with subparagraph (A), the use of three 

3 or more of the following: 

4 ‘‘(i) An electronic systems to maintain 

5 patient records (EHRs). 

6 ‘‘(ii) Clinical-decision support tools. 

7 ‘‘(iii) Electronic order for prescrip8 tions and lab tests (e-prescribing). 

9 ‘‘(iv) Patient reminders. 

10 ‘‘(v) E-consults (communication be11 tween patient-physician or other provider) 

12 when an identifiable medical service is pro13 vided. 

14 ‘‘(vi) Managing patients with multiple 

15 chronic illnesses. 

16 ‘‘(C) ADVANCED.—In addition to com17 plying with subparagraphs (A) and (B), the use 

18 by a practice of an electronic system that— 

19 ‘‘(i) is interconnected and is interoper20 able with other electronic systems; 

21 ‘‘(ii) uses nationally accepted medical 

22 code sets; and 

23 ‘‘(iii) can automatically send, receive, 

24 and integrate data, such as lab results and 


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1 medical histories, from other organizations’ 

2 systems. 

3 ‘‘(4) CERTIFICATION OF TECHNOLOGY.—The 

4 technology used under paragraph (3) must meet 

5 such guidelines for functionality as may be developed 

6 by the Secretary. In the case of technology for elec7 tronic health records (EHRs), technology that has 

8 been certified by the Certification Commission for 

9 Healthcare Information Technology (CCHIT) shall 

10 be considered as having met such guidelines. 

11 ‘‘(5) EXEMPTION FROM BUDGET NEUTRALITY

12 UNDER THE PHYSICIAN FEE SCHEDULE.—Any in13 creased expenditures pursuant to this section shall 

14 be treated as additional allowed expenditures for 

15 purposes of computing any update under section 

16 1848(d). 

17 ‘‘(d) SMALL MEDICARE CARE PROVIDER DE18 FINED.—In this part, the term ‘small medical care pro19 vider’ means a medical care provider (as defined in section 

20 179(e)(2)(B) of the Internal Revenue Code of 1986) that 

21 has an average of 10 or fewer full-time equivalent employ22 ees during the period involved. 


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1 ‘‘OPTIONAL FINANCIAL INCENTIVES TO SMALL MEDICAL

2 CARE PROVIDERS AND ENTITIES TO IMPLEMENT A

3 NATIONAL HEALTH INFORMATION INFRASTRUCTURE

4 ‘‘SEC. 1182. (a) IN GENERAL.—The Secretary may 

5 utilize any, all, or a combination of financial incentives 

6 thereof, to assure small medical care providers have the 

7 capability to move toward a national health care informa8 tion infrastructure by acquiring electronic health record 

9 systems and other health information technologies that 

10 meet the standards adopted or modified by the Secretary. 

11 ‘‘(b) CONDITIONS FOR QUALIFICATION.—As a condi12 tion of qualifying for financial incentives described in this 

13 section, the Secretary shall grant the use of financial in14 centives to assure that such technologies are consistent 

15 with the goals of creation of a national health information 

16 infrastructure, such as— 

17 ‘‘(1) voluntary participation in studies or dem18 onstration projects to evaluate the use of such sys19 tems to measure and report quality data based on 

20 accepted clinical performance measures; 

21 ‘‘(2) voluntary participation in studies to dem22 onstrate the impact of such technologies on improv23 ing patient care, reducing costs and increasing effi24 ciencies; and 


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1 ‘‘(3) voluntary participation in studies and dem2 onstration projects on providing patient-centered 

3 care coordinated by a patient’s personal physician 

4 (as defined by the Institute of Medicine), using elec5 tronic systems that enable and facilitate care coordi6 nation and sharing of information among the physi7 cian and other treating health care professionals, 

8 family caregivers, and the patient. 

9 ‘‘(c) GRANTS TO SMALL MEDICAL CARE PROVIDERS

10 AND ENTITIES FOR EXPENDITURES RELATING TO THE

11 IMPLEMENTATION OF A NATIONAL HEALTH INFORMA12 TION INFRASTRUCTURE.— 

13 ‘‘(1) IN GENERAL.—The Secretary is authorized 

14 to make grants to small medical care providers, in15 cluding physicians and others in clinical practice, for 

16 the purpose of assisting such entities to acquire and 

17 adopt patient registries, evidence-based clinical deci18 sion support tools at the point of care, electronic 

19 health records, secure email, and other health infor20 mation technologies defined by the Secretary as a 

21 key component of a national health care information 

22 infrastructure. 

23 ‘‘(2) AMOUNT OF GRANT.—The grant amount 

24 made to small medical care providers and entities to 

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1 structure shall be in a manner determined by the 

2 Secretary that takes into account the costs of imple3 mentation, training, and complying with applicable 

4 standards. 

5 ‘‘(3) APPLICATION.—No grant may be made 

6 under this subsection except pursuant to a grant ap7 plication that is submitted in a time, manner, and 

8 form approved by the Secretary. 

9 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

10 There are authorized to be appropriated to carry out 

11 this subsection such sums as may be necessary for 

12 each fiscal year. 

13 ‘‘(d) REVOLVING LOANS TO SMALL MEDICAL CARE

14 PROVIDERS AND ENTITIES FOR EXPENDITURES RELAT15 ING TO THE IMPLEMENTATION OF A NATIONAL HEALTH

16 INFORMATION INFRASTRUCTURE.— 

17 ‘‘(1) IN GENERAL.—The Secretary is authorized 

18 to make and guarantee loans to small medical care 

19 providers, including physicians and others in clinical 

20 practice, for the purpose of assisting such entities to 

21 acquire and adopt patient registries, evidence-based 

22 clinical decision support tools at the point of care, 

23 electronic health records, secure email, and other 

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1 retary as a key component of a national health care 

2 information infrastructure. 

3 ‘‘(2) AMOUNT OF LOAN.—The loan amount 

4 made to small medical care providers and entities to 

5 implement a national health care information infra6 structure shall be in a manner determined by the 

7 Secretary that takes into account the costs of imple8 mentation, training, and complying with standards. 

9 ‘‘(3) APPLICATION.—No loan may be made 

10 under this subsection except pursuant to a loan ap11 plication that is submitted in a time, manner, and 

12 form approved by the Secretary. 

13 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

14 There are authorized to be appropriated to carry out 

15 this subsection such sums as may be necessary for 

16 each fiscal year.’’. 

17 SEC. 5. ELECTION TO EXPENSE QUALIFIED HEALTH CARE 

18 INFORMATION TECHNOLOGY. 

19 (a) IN GENERAL.—Section 179 of the Internal Rev20 enue Code of 1986 (relating to election to expense certain 

21 depreciable assets) is amended by adding at the end the 

22 following new subsection: 

23 ‘‘(e) HEALTH CARE INFORMATION TECHNOLOGY.— 

24 ‘‘(1) IN GENERAL.—In the case of qualified 

25 health care information technology purchased by a 


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1 medical care provider and placed in service during a 

2 taxable year— 

3 ‘‘(A) subsection (b)(1) shall be applied by 

4 substituting ‘$250,000’ for ‘$100,000’, 

5 ‘‘(B) subsection (b)(2) shall be applied by 

6 substituting ‘$600,000’ for ‘$400,000’, and 

7 ‘‘(C) subsection (b)(5)(A) shall be applied 

8 by substituting ‘$250,000 and $600,000’ for 

9 ‘$100,000 and $400,000’. 

10 ‘‘(2) DEFINITIONS.—For purposes of this sub11 section— 

12 ‘‘(A) QUALIFIED HEALTH CARE INFORMA13 TION TECHNOLOGY.—The term ‘qualified health 

14 care information technology’ means section 179 

15 property which— 

16 ‘‘(i) meets such guidelines for 

17 functionality as may be developed by the 

18 Secretary of Health and Human Services 

19 under section 1181(c)(4) of the Social Se20 curity Act, and 

21 ‘‘(ii) is used primarily for the elec22 tronic creation, maintenance, and exchange 

23 of medical care information to improve the 

24 quality or efficiency of medical care. 


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1 ‘‘(B) MEDICAL CARE PROVIDER.—The 

2 term ‘medical care provider’ means any person 

3 engaged in the trade or business of providing 

4 medical care. 

5 ‘‘(C) MEDICAL CARE.—The term ‘medical 

6 care’ has the meaning given such term by sec7 tion 213(d).’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to property placed in service after 

10 December 31, 2006. 

Æ 


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