II 

108TH CONGRESS 

2D SESSION H. R. 3015 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 6, 2004 

Received 

AN ACT 

To provide for the establishment of a controlled substance 

monitoring program in each State. 

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 the ‘‘National All Schedules 

3 Prescription Electronic Reporting Act of 2004’’. 

4 SEC. 2. CONTROLLED SUBSTANCE MONITORING PROGRAM. 

5 Part P of title III of the Public Health Service Act 

6 (42 U.S.C. 280g et seq.) is amended by adding after sec7 tion 399N the following: 

8 ‘‘SEC. 399O. CONTROLLED SUBSTANCE MONITORING PRO9 GRAM. 

10 ‘‘(a) FORMULA GRANTS.— 

11 ‘‘(1) IN GENERAL.—Each fiscal year, the Sec12 retary shall make a payment to each State with an 

13 application approved under this section for the pur14 pose of establishing and implementing a controlled 

15 substance monitoring program under this section. 

16 ‘‘(2) DETERMINATION OF AMOUNT.—In making 

17 payments under paragraph (1) for a fiscal year, the 

18 Secretary shall allocate to each State with an appli19 cation approved under this section an amount which 

20 bears the same ratio to the amount appropriated to 

21 carry out this section for that fiscal year as the 

22 number of pharmacies of the State bears to the 

23 number of pharmacies of all States with applications 

24 approved under this section (as determined by the 

25 Secretary), except that the Secretary may adjust the 

26 amount allocated to a State under this paragraph 
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1 after taking into consideration the budget cost esti2 mate for the State’s controlled substance monitoring 

3 program. 

4 ‘‘(b) APPLICATION APPROVAL PROCESS.— 

5 ‘‘(1) IN GENERAL.—To seek a grant under this 

6 section, a State shall submit an application at such 

7 time, in such manner, and containing such assur8 ances and information as the Secretary may reason9 ably require. Each such application shall include— 

10 ‘‘(A) a budget cost estimate for the State’s 

11 controlled substance monitoring program; 

12 ‘‘(B) proposed standards for security for 

13 information handling and for the database 

14 maintained by the State under subsection (d) 

15 generally including efforts to use appropriate 

16 encryption technology or other such technology; 

17 ‘‘(C) proposed standards for meeting the 

18 uniform electronic format requirement of sub19 section (g); 

20 ‘‘(D) proposed standards for availability of 

21 information and limitation on access to pro22 gram personnel; 

23 ‘‘(E) proposed standards for access to the 

24 database, and procedures to ensure database 

25 accuracy; 
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1 ‘‘(F) proposed standards for redisclosure 

2 of information; 

3 ‘‘(G) proposed penalties for illegal redisclo4 sure of information; and 

5 ‘‘(H) assurances of compliance with all 

6 other requirements of this section. 

7 ‘‘(2) APPROVAL OR DISAPPROVAL.—Not later 

8 than 90 days after the submission by a State of an 

9 application under paragraph (1), the Secretary shall 

10 approve or disapprove the application. The Secretary 

11 shall approve the application if the State dem12 onstrates to the Secretary that the State will estab13 lish and implement or operate a controlled substance 

14 monitoring program in accordance with this section. 

15 ‘‘(3) WITHDRAWAL OF AUTHORIZATION.—If a 

16 State fails to implement a controlled substance mon17 itoring program in accordance with this section— 

18 ‘‘(A) the Secretary shall give notice of the 

19 failure to the State; and 

20 ‘‘(B) if the State fails to take corrective 

21 action within a reasonable period of time, the 

22 Secretary shall withdraw any approval of the 

23 State’s application under this section. 

24 ‘‘(4) VOLUNTARY DISCONTINUANCE.—A fund25 ing agreement for the receipt of a payment under 
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1 this section is that the State involved will give a rea2 sonable period of notice to the Secretary before ceas3 ing to implement or operate a controlled substance 

4 monitoring program under this section. The Sec5 retary shall determine the period of notice that is 

6 reasonable for purposes of this paragraph. 

7 ‘‘(5) RETURN OF FUNDS.—If the Secretary 

8 withdraws approval of a State’s application under 

9 this section, or the State chooses to cease to imple10 ment a controlled substance monitoring program 

11 under this section, a funding agreement for the re12 ceipt of a payment under this section is that the 

13 State will return to the Secretary an amount which 

14 bears the same ratio to the overall payment as the 

15 remaining time period for expending the payment 

16 bears to the overall time period for expending the 

17 payment (as specified by the Secretary at the time 

18 of the payment). 

19 ‘‘(c) REPORTING REQUIREMENTS.—In implementing 

20 a controlled substance monitoring program under this sec21 tion, a State shall comply with the following: 

22 ‘‘(1) The State shall require dispensers to re23 port to such State each dispensing in the State of 

24 a controlled substance to an ultimate user or re-
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1 search subject not later than 1 week after the date 

2 of such dispensing. 

3 ‘‘(2) The State may exclude from the reporting 

4 requirement of this subsection— 

5 ‘‘(A) the direct administration of a con6 trolled substance to the body of an ultimate 

7 user or research subject; 

8 ‘‘(B) the dispensing of a controlled sub9 stance in a quantity limited to an amount ade10 quate to treat the ultimate user or research 

11 subject involved for 48 hours or less; or 

12 ‘‘(C) the administration or dispensing of a 

13 controlled substance in accordance with any 

14 other exclusion identified by the Secretary for 

15 purposes of this paragraph. 

16 ‘‘(3) The information to be reported under this 

17 subsection with respect to the dispensing of a con18 trolled substance shall include the following: 

19 ‘‘(A) Drug Enforcement Administration 

20 Registration Number of the dispenser. 

21 ‘‘(B) Drug Enforcement Administration 

22 Registration Number and name of the practi23 tioner who prescribed the drug. 

24 ‘‘(C) Name, address, and telephone num25 ber of the ultimate user or research subject. 
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1 ‘‘(D) Identification of the drug by a na2 tional drug code number. 

3 ‘‘(E) Quantity dispensed. 

4 ‘‘(F) Estimated number of days for which 

5 such quantity should last. 

6 ‘‘(G) Number of refills ordered. 

7 ‘‘(H) Whether the drug was dispensed as 

8 a refill of a prescription or as a first-time re9 quest. 

10 ‘‘(I) Date of the dispensing. 

11 ‘‘(J) Date of origin of the prescription. 

12 ‘‘(4) The State shall require dispensers to re13 port information under this section in accordance 

14 with the electronic format specified by the Secretary 

15 under subsection (g), except that the State may 

16 waive the requirement of such format with respect to 

17 an individual dispenser. 

18 ‘‘(5) The State shall automatically share infor19 mation reported under this subsection with another 

20 State with an application approved under this sec21 tion if the information concerns— 

22 ‘‘(A) the dispensing of a controlled sub23 stance to an ultimate user or research subject 

24 who resides in such other State; or 
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1 ‘‘(B) the dispensing of a controlled sub2 stance prescribed by a practitioner whose prin3 cipal place of business is located in such other 

4 State. 

5 ‘‘(6) The State may notify the appropriate au6 thorities responsible for drug diversion investigation 

7 if information in the database maintained by the 

8 State under subsection (d) indicates an unlawful di9 version or misuse of a controlled substance. 

10 ‘‘(d) DATABASE.—In implementing a controlled sub11 stance monitoring program under this section, a State 

12 shall comply with the following: 

13 ‘‘(1) The State shall establish and maintain an 

14 electronic database containing the information re15 ported to the State under subsection (c). 

16 ‘‘(2) The database must be searchable by any 

17 field or combination of fields. 

18 ‘‘(3) The State shall include reported informa19 tion in the database at such time and in such man20 ner as the Secretary determines appropriate, with 

21 appropriate safeguards for ensuring the accuracy 

22 and completeness of the database. 

23 ‘‘(4) The State shall take appropriate security 

24 measures to protect the integrity of, and access to, 

25 the database. 
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1 ‘‘(e) PROVISION OF INFORMATION.—Subject to sub2 section (f), in implementing a controlled substance moni3 toring program under this section, a State may provide 

4 information from the database established under sub5 section (d) and, in the case of a request under paragraph 

6 (3), summary statistics of such information, in response 

7 to a request by— 

8 ‘‘(1) a practitioner (or the agent thereof) who 

9 certifies, under the procedures determined by the 

10 State, that the requested information is for the pur11 pose of providing medical or pharmaceutical treat12 ment or evaluating the need for such treatment to 

13 a bona fide current patient; 

14 ‘‘(2) any local, State, or Federal law enforce15 ment, narcotics control, licensure, disciplinary, or 

16 program authority, who certifies, under the proce17 dures determined by the State, that the requested 

18 information is related to an individual investigation 

19 or proceeding involving the unlawful diversion or 

20 misuse of a schedule II, III, or IV substance, and 

21 such information will further the purpose of the in22 vestigation or assist in the proceeding; 

23 ‘‘(3) any agent of the Department of Health 

24 and Human Services, a State medicaid program, a 

25 State health department, or the Drug Enforcement 
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1 Administration who certifies that the requested in2 formation is necessary for research to be conducted 

3 by such department, program, or administration, re4 spectively, and the intended purpose of the research 

5 is related to a function committed to such depart6 ment, program, or administration by law that is not 

7 investigative in nature; or 

8 ‘‘(4) any agent of another State, who certifies 

9 that the State has an application approved under 

10 this section and the requested information is for the 

11 purpose of implementing the State’s controlled sub12 stance monitoring program under this section. 

13 ‘‘(f) LIMITATIONS.—In implementing a controlled 

14 substance monitoring program under this section, a 

15 State— 

16 ‘‘(1) shall make reasonable efforts to limit the 

17 information provided pursuant to a valid request 

18 under subsection (e) to the minimum necessary to 

19 accomplish the intended purpose of the request; and 

20 ‘‘(2) shall not provide any individually identifi21 able information in response to a request under sub22 section (e)(3). 

23 ‘‘(g) ELECTRONIC FORMAT.—The Secretary shall 

24 specify a uniform electronic format for the reporting, shar25 ing, and provision of information under this section. 
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1 ‘‘(h) RULES OF CONSTRUCTION.— 

2 ‘‘(1) FUNCTIONS OTHERWISE AUTHORIZED BY

3 LAW.—Nothing in this section shall be construed to 

4 restrict the ability of any authority, including any 

5 local, State, or Federal law enforcement, narcotics 

6 control, licensure, disciplinary, or program authority, 

7 to perform functions otherwise authorized by law. 

8 ‘‘(2) NO PREEMPTION.—Nothing in this section 

9 shall be construed as preempting any State law, ex10 cept that no such law may relieve any person of a 

11 requirement otherwise applicable under this Act. 

12 ‘‘(3) ADDITIONAL PRIVACY PROTECTIONS.— 

13 Nothing in this section shall be construed as pre14 empting any State from imposing any additional pri15 vacy protections. 

16 ‘‘(4) CERTAIN CONFIDENTIALITY REQUIRE17 MENTS.—Nothing in this section shall be construed 

18 as superceding the confidentiality requirements of 

19 programs defined by and subject to part 2 of title 

20 42, Code of Federal Regulations. 

21 ‘‘(5) NO FEDERAL PRIVATE CAUSE OF AC22 TION.—Nothing in this section shall be construed to 

23 create a Federal private cause of action. 

24 ‘‘(i) RELATION TO HIPAA.—Except to the extent in25 consistent with this section, the provision of information 
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1 pursuant to subsection (c)(5), (c)(6), or (e) and the subse2 quent transfer of such information are subject to any re3 quirement that would otherwise apply under the regula4 tions promulgated pursuant to section 264(c) of the 

5 Health Insurance Portability and Accountability Act of 

6 1996. 

7 ‘‘(j) PREFERENCE.—Beginning January 1, 2007, the 

8 Secretary, in awarding any competitive grant that is re9 lated to drug abuse (as determined by the Secretary) to 

10 a State, shall give preference to any State with an applica11 tion approved under this section. 

12 ‘‘(k) STUDY.—Not later than 2 years after the date 

13 of the enactment of this section, the Secretary shall— 

14 ‘‘(1) complete a study that— 

15 ‘‘(A) determines the progress of States in 

16 establishing and implementing controlled sub17 stance monitoring programs under this section; 

18 ‘‘(B) determines the feasibility of imple19 menting a real-time electronic controlled sub20 stance monitoring program, including the costs 

21 associated with establishing such a program; 

22 and 

23 ‘‘(C) provides an analysis of the privacy 

24 protections in place for the information re25 ported to the controlled substance monitoring 
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1 program in each State receiving a grant for the 

2 establishment or operation of such program, 

3 and a comparison to the privacy requirements 

4 that apply to covered entities under regulations 

5 promulgated pursuant to section 264(c) of the 

6 Health Insurance Portability and Accountability 

7 Act of 1996, along with any recommendations 

8 for additional requirements for protection of 

9 this information; and 

10 ‘‘(2) submit a report to the Congress on the re11 sults of the study. 

12 ‘‘(l) ADVISORY COUNCIL.— 

13 ‘‘(1) ESTABLISHMENT.—A State may establish 

14 an advisory council to assist in the establishment 

15 and implementation of a controlled substance moni16 toring program under this section. 

17 ‘‘(2) SENSE OF CONGRESS.—It is the sense of 

18 the Congress that, in establishing an advisory coun19 cil under this subsection, a State should consult with 

20 appropriate professional boards and other interested 

21 parties. 

22 ‘‘(m) DEFINITIONS.—For purposes of this section: 

23 ‘‘(1) The term ‘bona fide patient’ means an in24 dividual who is a patient of the dispenser or practi25 tioner involved. 
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1 ‘‘(2) The term ‘controlled substance’ means a 

2 drug that is included in schedule II, III, or IV of 

3 section 202(c) of the Controlled Substance Act. 

4 ‘‘(3) The term ‘dispense’ means to deliver a 

5 controlled substance to an ultimate user or research 

6 subject by, or pursuant to the lawful order of, a 

7 practitioner, irrespective of whether the dispenser 

8 uses the Internet or other means to effect such deliv9 ery. 

10 ‘‘(4) The term ‘dispenser’ means a physician, 

11 pharmacist, or other individual who dispenses a con12 trolled substance to an ultimate user or research 

13 subject. 

14 ‘‘(5) The term ‘practitioner’ means a physician, 

15 dentist, veterinarian, scientific investigator, phar16 macy, hospital, or other person licensed, registered, 

17 or otherwise permitted, by the United States or the 

18 jurisdiction in which he or she practices or does re19 search, to distribute, dispense, conduct research with 

20 respect to, administer, or use in teaching or chemical 

21 analysis, a controlled substance in the course of pro22 fessional practice or research. 

23 ‘‘(6) The term ‘State’ means each of the 50 

24 States and the District of Columbia. 
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1 ‘‘(7) The term ‘ultimate user’ means a person 

2 who has lawfully obtained, and who possesses, a con3 trolled substance for his or her own use, for the use 

4 of a member of his or her household, or for the use 

5 of an animal owned by him or her or by a member 

6 of his or her household. 

7 ‘‘(n) AUTHORIZATION OF APPROPRIATIONS.—To 

8 carry out this section, there are authorized to be appro9 priated— 

10 ‘‘(1) $25,000,000 for each of fiscal years 2006 

11 and 2007; and 

12 ‘‘(2) $15,000,000 for each of fiscal years 2008, 

13 2009, and 2010.’’. 

Passed the House of Representatives October 5, 

2004. 

Attest: JEFF TRANDAHL, 

Clerk.