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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1355 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1355

To enhance the adoption of health information technology and to improve 
  the quality and reduce the costs of healthcare in the United States.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 30, 2005

Mr. Enzi (for himself, Mr. Kennedy, Mr. Grassley, Mr. Baucus, Mr. Dodd, 
 Mr. Alexander, Mr. Harkin, Mr. Isakson, Ms. Mikulski, Mr. DeWine, Mr. 
 Jeffords, Mr. Hatch, Mrs. Murray, Mr. Reed, Mr. Allen, Mr. Burns, Mr. 
    Crapo, Mr. DeMint, Mr. Santorum, Mr. Thomas, and Ms. Cantwell) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL

 
To enhance the adoption of health information technology and to improve 
  the quality and reduce the costs of healthcare in the United States.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Better Healthcare Through 
Information Technology Act''.

SEC. 2. IMPROVING HEALTHCARE, QUALITY, SAFETY, AND EFFICIENCY.

    The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by 
adding at the end the following:

              ``TITLE XXIX--HEALTH INFORMATION TECHNOLOGY

``SEC. 2901. PURPOSES.

    ``It is the purpose of this title to improve the quality, safety, 
and efficiency of healthcare by--
            ``(1) protecting the privacy and security of health 
        information;
            ``(2) fostering the widespread adoption of health 
        information technology;
            ``(3) establishing the public-private American Health 
        Information Collaborative to identify uniform national data 
        standards (including content, communication, and security) and 
        implementation policies for the widespread adoption of health 
        information technology;
            ``(4) establishing health information network demonstration 
        programs;
            ``(5) awarding competitive grants to facilitate the 
        purchase and enhance the utilization of qualified health 
        information technology; and
            ``(6) awarding competitive grants to States for the 
        development of State loan programs to facilitate the widespread 
        adoption of health information technology.

``SEC. 2902. DEFINITIONS.

    ``In this title:
            ``(1) Collaborative.--The term `Collaborative' means the 
        public-private American Health Information Collaborative 
        established under section 2904.
            ``(2) Healthcare provider.--The term `healthcare provider' 
        means a hospital, skilled nursing facility, home health entity, 
        healthcare clinic, community health center, group practice (as 
        defined in section 1877(h)(4) of the Social Security Act), a 
        pharmacist, a pharmacy, a laboratory, a physician (as defined 
        in section 1861(r) of the Social Security Act), a health 
        facility operated by or pursuant to a contract with the Indian 
        Health Service, a rural health clinic, and any other category 
        of facility or clinician determined appropriate by the 
        Secretary.
            ``(3) Health information.--The term `health information' 
        means any information, whether oral or recorded in any form or 
        medium, that--
                    ``(A) is created or received by a health care 
                provider, health plan, public health authority, 
                employer, life insurer, school or university, or health 
                care clearinghouse; and
                    ``(B) relates to the past, present, or future 
                physical or mental health or condition of an 
                individual, the provision of health care to an 
                individual, or the past, present, or future payment for 
                the provision of health care to an individual.
            ``(4) Health information network.--The term `health 
        information network' means an organization of health care 
        providers and other entities established for the purpose of 
        linking health information systems to enable the electronic 
        sharing of health information.
            ``(5) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given that term in section 2791.
            ``(6) Laboratory.--The term `laboratory' has the meaning 
        given that term in section 353.
            ``(7) Pharmacist.--The term `pharmacist' has the meaning 
        given that term in section 804 of the Federal Food, Drug, and 
        Cosmetic Act.
            ``(8) Qualified health information technology.--The term 
        `qualified health information technology' means a computerized 
        system (including hardware, software, and training) that--
                    ``(A) protects the privacy and security of health 
                information and properly encrypts such health 
                information;
                    ``(B) maintains and provides permitted access to 
                patients' health records in an electronic format;
                    ``(C) incorporates decision support software to 
                reduce medical errors and enhance healthcare quality;
                    ``(D) is consistent with the standards recommended 
                by the collaborative; and
                    ``(E) allows for the reporting of quality measures.
            ``(9) State.--The term `State' means each of the several 
        States, the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.

``SEC. 2903. OFFICE OF THE NATIONAL COORDINATOR OF HEALTH INFORMATION 
              TECHNOLOGY.

    ``(a) Office of National Health Information Technology.--There is 
established within the Office of the Secretary an Office of the 
National Coordinator of Health Information Technology (referred to in 
this section as the `Office'). The Office shall be headed by a National 
Coordinator who shall be appointed by the Secretary and shall report 
directly to the Secretary.
    ``(b) Purpose.--It shall be the purpose of the Office to carry out 
programs and activities to develop a nationwide interoperable health 
information technology infrastructure that--
            ``(1) ensures that patients' health information is secure 
        and protected;
            ``(2) improves healthcare quality, reduces medical errors, 
        and advances the delivery of patient-centered medical care;
            ``(3) reduces healthcare costs resulting from inefficiency, 
        medical errors, inappropriate care, and incomplete information;
            ``(4) ensures that appropriate information to help guide 
        medical decisions is available at the time and place of care;
            ``(5) promotes a more effective marketplace, greater 
        competition, and increased choice through the wider 
        availability of accurate information on healthcare costs, 
        quality, and outcomes;
            ``(6) improves the coordination of care and information 
        among hospitals, laboratories, physician offices, and other 
        entities through an effective infrastructure for the secure and 
        authorized exchange of healthcare information;
            ``(7) improves public health reporting and facilitates the 
        early identification and rapid response to public health 
        threats and emergencies, including bioterror events and 
        infectious disease outbreaks;
            ``(8) facilitates health research; and
            ``(9) promotes prevention of chronic diseases.
    ``(c) Duties of the National Coordinator.--The National Coordinator 
shall--
            ``(1) serve as a member of the public-private American 
        Health Information Collaboration established under section 
        2904;
            ``(2) serve as the principal advisor to the Secretary 
        concerning the development, application, and use of health 
        information technology;
            ``(3) facilitate the adoption of a national system for the 
        electronic exchange of health information;
            ``(4) facilitate the adoption and implementation of 
        standards for the electronic exchange of health information to 
        reduce cost and improve healthcare quality; and
            ``(5) submit the reports described under section 2904(h).
    ``(d) Detail of Federal Employees.--
            ``(1) In general.--Upon the request of the National 
        Coordinator, the head of any Federal agency is authorized to 
        detail, with or without reimbursement from the Office, any of 
        the personnel of such agency to the Office to assist it in 
        carrying out its duties under this section.
            ``(2) Effect of detail.--Any detail of personnel under 
        paragraph (1) shall--
                    ``(A) not interrupt or otherwise affect the civil 
                service status or privileges of the Federal employee; 
                and
                    ``(B) be in addition to any other staff of the 
                Department employed by the National Coordinator.
            ``(3) Acceptance of detailees.--Notwithstanding any other 
        provision of law, the Office may accept detailed personnel from 
        other Federal agencies without regard to whether the agency 
        described under paragraph (1) is reimbursed.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the activities 
of the Office under this section for each of fiscal years 2006 through 
2010.

``SEC. 2904. AMERICAN HEALTH INFORMATION COLLABORATIVE.

    ``(a) Establishment.--Not later than 60 days after the date of 
enactment of this title, and subject to the provisions of this title, 
the Secretary shall establish the public-private American Health 
Information Collaborative (referred to in this section as the 
`Collaborative').
    ``(b) Composition.--The Collaborative shall be composed of--
            ``(1) the Secretary, who shall serve as the chairperson of 
        the Collaborative;
            ``(2) the Secretary of Defense, or his or her designee;
            ``(3) the Secretary of Veterans Affairs, or his or her 
        designee;
            ``(4) the National Coordinator for Health Information 
        Technology;
            ``(5) the Director of the National Institute of Standards 
        and Technology; and
            ``(6) one voting member from each of the following 
        categories to be appointed by the Secretary from nominations 
        submitted by the public:
                    ``(A) Patient advocates.
                    ``(B) Physicians.
                    ``(C) Hospitals.
                    ``(D) Pharmacists.
                    ``(E) Health insurance plans.
                    ``(F) Standards development organizations.
                    ``(G) Technology vendors.
                    ``(H) Public health entities.
                    ``(I) Clinical research and academic entities.
                    ``(J) Employers.
                    ``(K) An Indian tribe or tribal organization.
                    ``(L) State and local government agencies.
    ``(c) Recommendations and Policies.--The Collaborative shall make 
recommendations to identify uniform national policies to the Federal 
Government and private entities to support the widespread adoption of 
health information technology, including--
            ``(1) protecting the privacy and security of personal 
        health information;
            ``(2) measures to prevent unauthorized access to health 
        information;
            ``(3) measures to ensure accurate patient identification;
            ``(4) methods to facilitate secure patient access to health 
        information;
            ``(5) recommendations for a nationwide architecture that 
        achieves interoperability of health information technology 
        systems; and
            ``(6) other policies determined to be necessary by the 
        Collaborative.
    ``(d) Standards.--
            ``(1) In general.--The Collaborative shall, on an ongoing 
        basis--
                    ``(A) review existing standards (including content, 
                communication, and security standards) for the 
                electronic exchange of health information, including 
                such standards adopted by the Secretary under paragraph 
                (2)(A);
                    ``(B) identify deficiencies and omissions in such 
                existing standards; and
                    ``(C) identify duplications and omissions in such 
                existing standards;
        and recommend modifications to such standards as necessary.
            ``(2) Recommendations.--The Collaborative shall recommend 
        to the President the adoption by the Federal Government of--
                    ``(A) the standards adopted by the Consolidated 
                Health Informatics Initiative as of the date of 
                enactment of this title; and
                    ``(B) on an ongoing basis as appropriate, any 
                additional standards or modifications recommended 
                pursuant to the review described in paragraph (1).
            ``(3) Limitation.--The standards described in this section 
        shall not include any standards developed pursuant to the 
        Health Insurance Portability and Accountability Act of 1996.
    ``(e) Action by the President.--Upon receipt of a recommendation 
from the Collaborative under subsection (d)(2), the President shall 
review and if appropriate, provide for the adoption by the Federal 
Government of such recommended standards.
    ``(f) Coordination of Federal Spending.--Not later than 1 year 
after the adoption by the Federal Government of a recommendation as 
provided for in subsection (e), and in compliance with chapter 113 of 
title 40, United States Code, no Federal agency shall expend Federal 
funds for the purchase of hardware, software, or support services for 
the electronic exchange of health information that is not consistent 
with applicable standards adopted by the Federal Government under 
subsection (e).
    ``(g) Coordination of Federal Data Collection.--Not later than 2 
years after the adoption by the Federal Government of a recommendation 
as provided for in subsection (e), all Federal agencies collecting 
health data for the purposes of surveillance, epidemiology, adverse 
event reporting, or research shall comply with standards adopted under 
subsection (e).
    ``(h) Voluntary Adoption.--Any standards adopted by the Federal 
Government under subsection (e) shall be voluntary with respect to 
private entities.
    ``(i) Reports.--The Secretary shall submit to the Committee on 
Health, Education, Labor, and Pensions and the Committee on Finance of 
the Senate and the Committee on Energy and Commerce and the Committee 
on Ways and Means of the House of Representatives, on an annual basis, 
a report that--
            ``(1) describes the specific actions that have been taken 
        to facilitate the adoption of a nationwide system for the 
        electronic exchange of health information;
            ``(2) describes barriers to the adoption of such a 
        nationwide system; and
            ``(3) contains recommendations to achieve full 
        implementation of such a nationwide system.
    ``(j) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) shall apply to the Collaborative, except that the term 
provided for under section 14(a)(2) shall be 5 years.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section 
for each of fiscal years 2006 through 2010.

``SEC. 2905. IMPLEMENTATION AND CERTIFICATION OF HEALTH INFORMATION 
              STANDARDS.

    ``(a) Implementation.--
            ``(1) In general.--The Secretary, based upon the 
        recommendations of the Collaborative, shall develop criteria to 
        ensure uniform and consistent implementation of any standards 
        for the electronic exchange of health information voluntarily 
        adopted by private entities in technical conformance with such 
        standards adopted under this title.
            ``(2) Implementation assistance.--The Secretary may 
        recognize a private entity or entities to assist private 
        entities in the implementation of the standards adopted under 
        this title.
    ``(b) Certification.--
            ``(1) In general.--The Secretary, based upon the 
        recommendations of the Collaborative, shall develop criteria to 
        ensure and certify that hardware, software, and support 
        services that claim to be in compliance with any standard for 
        the electronic exchange of health information adopted under 
        this title have established and maintained such compliance in 
        technical conformance with such standards.
            ``(2) Certification assistance.--The Secretary may 
        recognize a private entity or entities to assist in the 
        certification described under paragraph (1).

``SEC. 2906. COMPETITIVE GRANTS TO FACILITATE THE WIDESPREAD ADOPTION 
              OF HEALTH INFORMATION TECHNOLOGY.

    ``(a) In General.--The Secretary may award competitive grants to 
eligible entities to facilitate the purchase and enhance the 
utilization of qualified health information technology systems to 
improve the quality and efficiency of healthcare.
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a) an entity shall--
            ``(1) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require;
            ``(2) submit to the Secretary a strategic plan for the 
        implementation of data sharing and interoperability measures;
            ``(3) be a--
                    ``(A) not for profit hospital;
                    ``(B) group practice (including a single 
                physician); or
                    ``(C) another healthcare provider not described in 
                subparagraph (A) or (B);
            ``(4) adopt the standards adopted by the Federal Government 
        under section 2904;
            ``(5) submit to the Secretary a report on the degree to 
        which such entity has achieved the measures adopted under 
        section 2909;
            ``(6) demonstrate significant financial need; and
            ``(7) provide matching funds in accordance with subsection 
        (d).
    ``(c) Use of Funds.--Amounts received under a grant under this 
section shall be used to facilitate the purchase and enhance the 
utilization of qualified health information technology systems.
    ``(d) Matching Requirement.--To be eligible for a grant under this 
section an entity shall contribute non-Federal contributions to the 
costs of carrying out the activities for which the grant is awarded in 
an amount equal to $1 for each $3 of Federal funds provided under the 
grant.
    ``(e) Preference in Awarding Grants.--In awarding grants under this 
section the Secretary shall give preference to--
            ``(1) eligible entities that are located in rural, 
        frontier, and other underserved areas as determined by the 
        Secretary;
            ``(2) eligible entities that will use grant funds to 
        enhance secure data sharing across various health care settings 
        or enhance interoperability with regional or national health 
        information networks; and
            ``(3) with respect to an entity described in subsection 
        (b)(3)(C), a not for profit healthcare provider.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $25,000,000 for fiscal year 
2006, $75,000,000 for fiscal year 2007, and such sums as may be 
necessary for each of fiscal years 2008 through 2010.

``SEC. 2907. COMPETITIVE GRANTS TO STATES FOR THE DEVELOPMENT OF STATE 
              LOAN PROGRAMS TO FACILITATE THE WIDESPREAD ADOPTION OF 
              HEALTH INFORMATION TECHNOLOGY.

    ``(a) In General.--The Secretary may award competitive grants to 
States for the establishment of State programs for loans to healthcare 
providers to facilitate the purchase and enhance the utilization of 
qualified health information technology.
    ``(b) Establishment of Fund.--To be eligible to receive a 
competitive grant under this section, a State shall establish a 
qualified health information technology loan fund (referred to in this 
section as a `State loan fund') and comply with the other requirements 
contained in this section. A grant to a State under this section shall 
be deposited in the State loan fund established by the State. No funds 
authorized by other provisions of this title to be used for other 
purposes specified in this title shall be deposited in any State loan 
fund.
    ``(c) Eligibility.--To be eligible to receive a grant under 
subsection (a) a State shall--
            ``(1) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require;
            ``(2) submit to the Secretary a strategic plan in 
        accordance with subsection (d);
            ``(3) establish a qualified health information technology 
        loan fund in accordance with subsection (b);
            ``(4) require that healthcare providers receiving such 
        loans consult with the Center for Best Practices established in 
        section 914(d) to access the knowledge and experience of 
        existing initiatives regarding the successful implementation 
        and effective use of health information technology;
            ``(5) require that healthcare providers receiving such 
        loans adopt the standards adopted by the Federal Government 
        under section 2904(d);
            ``(6) submit to the Secretary a report on the degree to 
        which the State has achieved the measures under section 2909; 
        and
            ``(7) provide matching funds in accordance with subsection 
        (h).
    ``(d) Strategic Plan.--
            ``(1) In general.--A State that receives a grant under this 
        section shall annually prepare a strategic plan that identifies 
        the intended uses of amounts available to the State loan fund 
        of the State.
            ``(2) Contents.--A strategic plan under paragraph (1) shall 
        include--
                    ``(A) a list of the projects to be assisted through 
                the State loan fund in the first fiscal year that 
                begins after the date on which the plan is submitted;
                    ``(B) a description of the criteria and methods 
                established for the distribution of funds from the 
                State loan fund; and
                    ``(C) a description of the financial status of the 
                State loan fund and the short-term and long-term goals 
                of the State loan fund.
    ``(e) Use of Funds.--
            ``(1) In general.--Amounts deposited in a State loan fund, 
        including loan repayments and interest earned on such amounts, 
        shall be used only for awarding loans or loan guarantees, or as 
        a source of reserve and security for leveraged loans, the 
        proceeds of which are deposited in the State loan fund 
        established under subsection (a). Loans under this section may 
        be used by a healthcare provider to facilitate the purchase and 
        enhance the utilization of qualified health information 
        technology.
            ``(2) Limitation.--Amounts received by a State under this 
        section may not be used--
                    ``(A) for the purchase or other acquisition of any 
                health information technology system that is not a 
                qualified health information technology system;
                    ``(B) to conduct activities for which Federal funds 
                are expended under this title, or the amendments made 
                by the Better Healthcare Through Information Technology 
                Act; or
                    ``(C) for any purpose other than making loans to 
                eligible entities under this section.
    ``(f) Types of Assistance.--Except as otherwise limited by 
applicable State law, amounts deposited into a State loan fund under 
this section may only be used for the following:
            ``(1) To award loans that comply with the following:
                    ``(A) The interest rate for each loan shall be less 
                than or equal to the market interest rate.
                    ``(B) The principal and interest payments on each 
                loan shall commence not later than 1 year after the 
                loan was awarded, and each loan shall be fully 
                amortized not later than 10 years after the date of the 
                loan.
                    ``(C) The State loan fund shall be credited with 
                all payments of principal and interest on each loan 
                awarded from the fund.
            ``(2) To guarantee, or purchase insurance for, a local 
        obligation (all of the proceeds of which finance a project 
        eligible for assistance under this section) if the guarantee or 
        purchase would improve credit market access or reduce the 
        interest rate applicable to the obligation involved.
            ``(3) As a source of revenue or security for the payment of 
        principal and interest on revenue or general obligation bonds 
        issued by the State if the proceeds of the sale of the bonds 
        will be deposited into the State loan fund.
            ``(4) To earn interest on the amounts deposited into the 
        State loan fund.
    ``(g) Administration of State Loan Funds.--
            ``(1) Combined financial administration.--A State may (as a 
        convenience and to avoid unnecessary administrative costs) 
        combine, in accordance with State law, the financial 
        administration of a State loan fund established under this 
        section with the financial administration of any other 
        revolving fund established by the State if otherwise not 
        prohibited by the law under which the State loan fund was 
        established.
            ``(2) Cost of administering fund.--Each State may annually 
        use not to exceed 4 percent of the funds provided to the State 
        under a grant under this section to pay the reasonable costs of 
        the administration of the programs under this section, 
        including the recovery of reasonable costs expended to 
        establish a State loan fund which are incurred after the date 
        of enactment of this title.
            ``(3) Guidance and regulations.--The Secretary shall 
        publish guidance and promulgate regulations as may be necessary 
        to carry out the provisions of this section, including--
                    ``(A) provisions to ensure that each State commits 
                and expends funds allotted to the State under this 
                section as efficiently as possible in accordance with 
                this title and applicable State laws; and
                    ``(B) guidance to prevent waste, fraud, and abuse.
            ``(4) Private sector contributions.--
                    ``(A) In general.--A State loan fund established 
                under this section may accept contributions from 
                private sector entities, except that such entities may 
                not specify the recipient or recipients of any loan 
                issued under this section.
                    ``(B) Availability of information.--A State shall 
                make publically available the identity of, and amount 
                contributed by, any private sector entity under 
                subparagraph (A) and may issue letters of commendation 
                or make other awards (that have no financial value) to 
                any such entity.
            ``(5) Reservation of amounts.--A State may reserve not to 
        exceed 40 percent of amounts in the State loan fund to issue 
        loans to recipients who serve medically underserved areas.
    ``(h) Matching Requirements.--
            ``(1) In general.--The Secretary may not make a grant under 
        subsection (a) to a State unless the State agrees to make 
        available (directly or through donations from public or private 
        entities) non-Federal contributions in cash toward the costs of 
        the State program to be implemented under the grant in an 
        amount equal to not less than $1 for each $1 of Federal funds 
        provided under the grant.
            ``(2) Determination of amount of non-federal 
        contribution.--In determining the amount of non-Federal 
        contributions that a State has provided pursuant to paragraph 
        (1), the Secretary may not include any amounts provided to the 
        State by the Federal Government.
    ``(i) Preference in Awarding Grants.--The Secretary may give a 
preference in awarding grants under this section to States that adopt 
value-based purchasing programs to improve healthcare quality.
    ``(j) Reports.--The Secretary shall annually submit to the 
Committee on Health, Education, Labor, and Pensions and the Committee 
on Finance of the Senate, and the Committee on Energy and Commerce and 
the Committee on Ways and Means of the House of Representatives, a 
report summarizing the reports received by the Secretary from each 
State that receives a grant under this section.
    ``(k) Authorization of Appropriations.--
            ``(1) In general.--For the purpose of making grants under 
        subsection (a), there is authorized to be appropriated 
        $50,000,000 for fiscal year 2006, $100,000,000 for fiscal year 
        2007, and such sums as may be necessary for each of fiscal 
        years 2008 through 2010.
    ``(l) Availability.--Amounts appropriated under paragraph (1) shall 
remain available through fiscal year 2010.

``SEC. 2908. DEMONSTRATION PROGRAM TO INTEGRATE INFORMATION TECHNOLOGY 
              INTO CLINICAL EDUCATION.

    ``(a) In General.--The Secretary may award grants under this 
section to carry out demonstration projects to develop academic 
programs integrating qualified health information technology systems in 
the clinical education of health professionals. Such awards shall be 
made on a competitive basis and pursuant to peer review.
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require;
            ``(2) submit to the Secretary a strategic plan for 
        integrating qualified health information technology in the 
        clinical education of health professionals and for ensuring the 
        consistent utilization of decision support software to reduce 
        medical errors and enhance healthcare quality;
            ``(3) be--
                    ``(A) a health professions school; or
                    ``(B) an academic health center;
            ``(4) provide for the collection of data regarding the 
        effectiveness of the demonstration project to be funded under 
        the grant in improving the safety of patients, the efficiency 
        of health care delivery, and in increasing the likelihood that 
        graduates of the grantee will adopt and incorporate health 
        information technology in the delivery of health care services; 
        and
            ``(5) provide matching funds in accordance with subsection 
        (c).
    ``(c) Matching Funds.--
            ``(1) In general.--The Secretary may award a grant to an 
        entity under this section only if the entity agrees to make 
        available non-Federal contributions toward the costs of the 
        program to be funded under the grant in an amount that is not 
        less than $1 for each $2 of Federal funds provided under the 
        grant.
            ``(2) Determination of amount contributed.--Non-Federal 
        contributions under paragraph (1) may be in cash or in kind, 
        fairly evaluated, including equipment or services. Amounts 
        provided by the Federal Government, or services assisted or 
        subsidized to any significant extent by the Federal Government, 
        may not be included in determining the amount of such 
        contributions.
    ``(d) Preference in Awarding Grants.--In awarding grants under 
subsection (a), the Secretary shall give preference to applicants 
that--
            ``(1) will use grant funds in collaboration with 2 or more 
        disciplines; and
            ``(2) will use grant funds to integrate qualified health 
        information technology into community-based clinical education 
        experiences.
    ``(e) Evaluation.--The Secretary shall take such action as may be 
necessary to evaluate the projects funded under this section and 
publish, make available, and disseminate the results of such 
evaluations on as wide a basis as is practicable.
    ``(f) Reports.--Not later than 1 year after the date of enactment 
of this title, and annually thereafter, the Secretary shall submit to 
the Committee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate, and the Committee on Energy and 
Commerce and the Committee on Ways and Means of the House of 
Representatives a report that--
            ``(1) describes the specific projects established under 
        this section; and
            ``(2) contains recommendations for Congress based on the 
        evaluation conducted under subsection (e).
    ``(g) Limitation.--Not more than 10 percent of amounts received 
under a grant awarded under this section may be used for administrative 
expenses.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for fiscal year 2006, $5,000,000 for fiscal year 2007, and such sums as 
may be necessary for each of fiscal years 2008 through 2010.
    ``(i) Sunset.--This section shall not apply after September 30, 
2008.

``SEC. 2909. QUALITY MEASUREMENT SYSTEMS.

    ``(a) In General.--The Secretary shall develop quality measurement 
systems for the purposes of measuring the quality of care patients 
receive.
    ``(b) Requirements.--The Secretary shall ensure that the quality 
measurement systems developed under subsection (a) comply with the 
following:
            ``(1) Measures.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall select measures of quality to be used 
                by the Secretary under the systems.
                    ``(B) Requirements.--In selecting the measures to 
                be used under each system pursuant to subparagraph (A), 
                the Secretary shall, to the extent feasible, ensure 
                that--
                            ``(i) such measures are evidence based, 
                        reliable and valid, and feasible to collect and 
                        report;
                            ``(ii) such measures include measures of 
                        process, structure, beneficiary experience, 
                        efficiency, and equity;
                            ``(iii) such measures include measures of 
                        overuse, underuse, and misuse of healthcare 
                        items and services; and
                            ``(iv) such measures include--
                                    ``(I) with respect to the initial 
                                year in which such measures are used, 
                                one or more elements of a qualified 
                                health information technology system as 
                                defined in section 2901; and
                                    ``(II) with respect to subsequent 
                                years, additional elements of qualified 
                                health information technology systems 
                                as defined in section 2901.
            ``(2) Weights of measures.--The Secretary shall assign 
        weights to the measures used by the Secretary under each system 
        established under subsection (a).
            ``(3) Maintenance.--The Secretary shall, as determined 
        appropriate, but in no case more often than once during each 
        12-month period, update the quality measurement systems 
        developed under subsection (a), including through--
                    ``(A) the addition of more accurate and precise 
                measures under the systems and the retirement of 
                existing outdated measures under the systems; and
                    ``(B) the refinement of the weights assigned to 
                measures under the systems.
    ``(c) Required Considerations in Developing and Updating the 
Systems.--In developing and updating the quality measurement systems 
under this section, the Secretary shall--
            ``(1) consult with, and take into account the 
        recommendations of, the entity that the Secretary has an 
        arrangement with under subsection (e);
            ``(2) consult with provider-based groups and clinical 
        specialty societies; and
            ``(3) take into account--
                    ``(A) the demonstrations required under this Act;
                    ``(B) the demonstration program under section 1866A 
                of the Social Security Act;
                    ``(C) the demonstration program under section 1866C 
                of such Act;
                    ``(D) any other demonstration or pilot program 
                conducted by the Secretary relating to measuring and 
                rewarding quality and efficiency of care; and
                    ``(E) the report by the Institute of Medicine of 
                the National Academy of Sciences under section 238(b) 
                of the Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003.
    ``(d) Required Considerations in Implementing the Systems.--In 
implementing the quality measurement systems under this section, the 
Secretary shall take into account the recommendations of public-private 
entities--
            ``(1) that are established to examine issues of data 
        collection and reporting, including the feasibility of 
        collecting and reporting data on measures; and
            ``(2) that involve representatives of health care 
        providers, consumers, employers, and other individuals and 
        groups that are interested in quality of care.
    ``(e) Arrangement With an Entity to Provide Advice and 
Recommendations.--
            ``(1) Arrangement.--On and after July 1, 2006, the 
        Secretary shall have in place an arrangement with an entity 
        that meets the requirements described in paragraph (2) under 
        which such entity provides the Secretary with advice on, and 
        recommendations with respect to, the development and updating 
        of the quality measurement systems under this section, 
        including the assigning of weights to the measures under 
        subsection (b)(2).
            ``(2) Requirements described.--The requirements described 
        in this paragraph are the following:
                    ``(A) The entity is a private nonprofit entity 
                governed by an executive director and a board.
                    ``(B) The members of the entity include 
                representatives of--
                            ``(i)(I) health plans and providers 
                        receiving reimbursement under this title for 
                        the provision of items and services, including 
                        health plans and providers with experience in 
                        the care of frail elderly and individuals with 
                        multiple complex chronic conditions; or
                            ``(II) groups representing such health 
                        plans and providers;
                            ``(ii) groups representing individuals 
                        entitled to benefits under part A of title 
                        XVIII of the Social Security Act or enrolled 
                        under part B of such title;
                            ``(iii) purchasers and employers or groups 
                        representing purchasers or employers;
                            ``(iv) organizations that focus on quality 
                        improvement as well as the measurement and 
                        reporting of quality measures;
                            ``(v) State government health programs;
                            ``(vi) individuals skilled in the conduct 
                        and interpretation of biomedical, health 
                        services, and health economics research and 
                        with expertise in outcomes and effectiveness 
                        research and technology assessment; and
                            ``(vii) individuals or entities involved in 
                        the development and establishment of standards 
                        and certification for health information 
                        technology systems and clinical data.
                    ``(C) The membership of the entity is 
                representative of individuals with experience with 
                urban health care issues and individuals with 
                experience with rural and frontier health care issues.
                    ``(D) The entity does not charge a fee for 
                membership for participation in the work of the entity 
                related to the arrangement with the Secretary under 
                paragraph (1). If the entity does require a fee for 
                membership for participation in other functions of the 
                entity, there shall be no linkage between such fee and 
                participation in the work of the entity related to such 
                arrangement with the Secretary.
                    ``(E) The entity--
                            ``(i) permits any member described in 
                        subparagraph (B) to vote on matters of the 
                        entity related to the arrangement with the 
                        Secretary under paragraph (1); and
                            ``(ii) ensures that such members have an 
                        equal vote on such matters.
                    ``(F) With respect to matters related to the 
                arrangement with the Secretary under paragraph (1), the 
                entity conducts its business in an open and transparent 
                manner and provides the opportunity for public comment.
                    ``(G) The entity operates as a voluntary consensus 
                standards setting organization as defined for purposes 
                of section 12(d) of the National Technology Transfer 
                and Advancement Act of 1995 (Public Law 104-113) and 
                Office of Management and Budget Revised Circular A-119 
                (published in the Federal Register on February 10, 
                1998).

``SEC. 2910. APPLICABILITY OF PRIVACY AND SECURITY REGULATIONS.

    ``The regulations promulgated by the Secretary under part C of 
title XI of the Social Security Act and sections 261, 262, 263, and 264 
of the Health Insurance Portability and Accountability Act of 1996 with 
respect to the privacy, confidentiality, and security of health 
information shall--
            ``(1) apply to any health information stored or transmitted 
        in an electronic format on or after the date of enactment of 
        this title; and
            ``(2) apply to the implementation of standards, programs, 
        and activities under this title.

``SEC. 2911. STUDY OF REIMBURSEMENT INCENTIVES.

    ``The Secretary shall carry out, or contract with a private entity 
to carry out, a study that examines methods to create efficient 
reimbursement incentives for improving healthcare quality in community 
health centers and other federally qualified health centers, rural 
health clinics, free clinics, and other programs reimbursed primarily 
on a cost basis deemed appropriate by the Secretary.''.

SEC. 3. CENTER FOR BEST PRACTICES.

    Section 914 of the Public Health Service Act (42 U.S.C. 299b-3) is 
amended by adding at the end the following:
    ``(d) Center for Best Practices.--
            ``(1) In general.--The Secretary, acting through the 
        Director, shall develop a Center for Best Practices to provide 
        technical assistance and develop best practices to support and 
        accelerate the efforts of States and healthcare providers to 
        adopt, implement, and effectively use health information 
        technology.
            ``(2) Center for best practices.--
                    ``(A) In general.--In carrying out paragraph (1), 
                the Director shall establish a voluntary Center for 
                Best Practices (referred to in this subsection as the 
                `Center') for States and healthcare stakeholders 
                seeking to facilitate mutual learning and accelerate 
                the pace of innovation in, and implementation of, 
                health information technology. The Center shall support 
                activities to meet goals, including--
                            ``(i) providing for the widespread adoption 
                        of interoperable health information technology;
                            ``(ii) providing for the establishment of 
                        regional and local health information networks 
                        to facilitate the development of 
                        interoperability across healthcare settings;
                            ``(iii) the development of solutions to 
                        barriers to the exchange of electronic health 
                        information; or
                            ``(iv) other activities identified by the 
                        States or health care stakeholders as a focus 
                        for developing and sharing best practices.
                    ``(B) Purposes.--The purpose of the Center is to--
                            ``(i) provide a forum for the exchange of 
                        knowledge and experience;
                            ``(ii) accelerate the transfer of lessons 
                        learned from existing public and private sector 
                        initiatives, including those currently 
                        receiving Federal financial support;
                            ``(iii) assemble, analyze, and widely 
                        disseminate evidence and experience related to 
                        the adoption, implementation, and effective use 
                        of health information technology;
                            ``(iv) assure the timely provision of 
                        technical and expert assistance from the Agency 
                        and its contractors;
                            ``(v) accelerate the pace of health 
                        information technology innovation; and
                            ``(vi) provide technical assistance to 
                        entities developing applications for 
                        demonstration grants under subsection (b).
                    ``(C) Support for activities.--To provide support 
                for the activities of the Center, the Director shall--
                            ``(i) modify the requirements, if 
                        necessary, that apply to the National Resource 
                        Center for Health Information Technology to 
                        provide the necessary infrastructure to support 
                        the duties and activities of the Network and 
                        facilitate information exchange across the 
                        public and private sectors;
                            ``(ii) expand the Agency's focus on the 
                        adoption, implementation, and effective use of 
                        health information technology through the 
                        development of practical implementation 
                        guidance based upon existing knowledge and 
                        support for rapid-cycle implementation research 
                        to address questions for which existing 
                        knowledge is insufficient; and
                            ``(iii) develop the capacity to identify 
                        and widely share in a timely manner innovative 
                        approaches to advancing health information 
                        technology and its ultimate goal, the 
                        improvement of the quality, safety, and 
                        efficiency of health care.
            ``(3) Technical assistance telephone number or website.--
        The Secretary shall establish a toll-free telephone number or 
        Internet website to provide healthcare providers with a single 
        point of contact to--
                    ``(A) learn about Federal grants and technical 
                assistance services related to health information 
                technology;
                    ``(B) learn about qualified health information 
                software that has been certified to be in compliance 
                with the standards adopted by the Federal Government 
                under section 2904 and is available for commercial use;
                    ``(C) receive referrals to regional and local 
                health information networks for assistance with health 
                information technology;
                    ``(D) provide information regarding--
                            ``(i) the electronic submission of health 
                        data collected by Federal agencies; and
                            ``(ii) the uniform and consistent 
                        implementation of standards; and
                    ``(E) disseminate additional information determined 
                by the Secretary to be helpful to such providers.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        such sums as may be necessary for each of fiscal years 2006 
        through 2010.''.

SEC. 4. HEALTH INFORMATION NETWORK DEMONSTRATION PROGRAM.

    Section 914 of the Public Health Service Act (42 U.S.C. 299b-3), as 
amended by subsection (b), is further amended by adding at the end the 
following:
    ``(e) Health Information Network Demonstration Program.--
            ``(1) In general.--The Director may establish a 
        demonstration program under which grants or contracts shall be 
        awarded to support health information network planning, 
        implementation, and evaluation activities.
            ``(2) Eligibility.--To be eligible to receive a grant or 
        contract under the demonstration program under paragraph (1), 
        an entity shall--
                    ``(A) submit to the Director an application at such 
                time, in such manner, and containing such information 
                as the Director may require;
                    ``(B) submit to the Director a strategic plan for 
                the implementation of data sharing and interoperability 
                measures across the various health care settings within 
                the proposed network;
                    ``(C) be a public or nonprofit private entity that 
                is or represents a network or potential network that 
                includes healthcare providers and group health plans in 
                a defined area of geographic proximity or 
                organizational affinity, and that may include for 
                profit entities so long as such an entity is not the 
                grantee;
                    ``(D) demonstrate, where appropriate, the 
                involvement and commitment of the appropriate State or 
                States;
                    ``(E) specify a defined area of geographic 
                proximity or organizational affinity that the health 
                information network will encompass;
                    ``(F) demonstrate active participation in the best 
                practice network described in subsection (d);
                    ``(G) demonstrate compliance with the data 
                standards and technical policies adopted by the Federal 
                Government under section 2904(e);
                    ``(H) submit to the Secretary a report on the 
                degree to which such entity has achieved the measures 
                under section 2909;
                    ``(I) demonstrate financial need; and
                    ``(J) agree to provide matching funds in accordance 
                with paragraph (4).
            ``(3) Use of funds.--
                    ``(A) In general.--Amounts received under a grant 
                under this subsection shall be used to establish and 
                implement a regional or local health information 
                network.
                    ``(B) Limitation.--Amounts received under a grant 
                under this subsection may not be used to purchase a 
                health information technology system that is not a 
                qualified health information technology system.
            ``(4) Matching requirement.--To be eligible to receive a 
        grant or contract under this subsection an entity shall 
        contribute non-Federal funds to the costs of carrying out the 
        activities for which the grant or contract is awarded in an 
        amount equal to $1 for each of $2 of Federal funds, provided 
        under the grant.
            ``(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        $50,000,000 for fiscal year 2006, $70,000,000 for fiscal year 
        2007, and such sums as may be necessary for each of fiscal 
        years 2008 through 2010.''.

SEC. 5. EXCEPTION TO FEDERAL ANTI-KICKBACK AND STARK LAWS FOR THE 
              PROVISION OF PERMITTED SUPPORT.

    (a) Anti-Kickback.--Section 1128B(b) of the Social Security Act (42 
U.S.C. 1320a-7b(b)(3)) is amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (G), by striking ``and'' at the 
                end;
                    (B) in subparagraph (H), as added by section 237(d) 
                of the Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003 (Public Law 108-173; 117 
                Stat. 2213)--
                            (i) by moving such subparagraph 2 ems to 
                        the left; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon;
                    (C) by redesignating subparagraph (H), as added by 
                section 431(a) of the Medicare Prescription Drug, 
                Improvement, and Modernization Act of 2003 (Public Law 
                108-173; 117 Stat. 2287), as subparagraph (I);
                    (D) in subparagraph (I), as so redesignated--
                            (i) by moving such subparagraph 2 ems to 
                        the left; and
                            (ii) by striking the period at the end and 
                        inserting ``; and''; and
                    (E) by adding at the end the following new:
                    ``(J) during the 5-year period beginning on the 
                date the Secretary issues the interim final rule under 
                section 5(c)(1) of the Better Healthcare Through 
                Information Technology Act, the provision, with or 
                without charge, of any permitted support (as defined in 
                paragraph (4)).''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Permitted support.--
                    ``(A) Definition of permitted support.--Subject to 
                subparagraph (B), in this section, the term `permitted 
                support' means the provision of any equipment, item, 
                information, right, license, intellectual property, 
                software, training, or service used for developing, 
                implementing, operating, or facilitating the use of 
                systems designed to improve the quality of health care 
                and to promote the electronic exchange of health 
                information.
                    ``(B) Exception.--The term `permitted support' 
                shall not include the provision of--
                            ``(i) any support that is determined in a 
                        manner that is related to the volume or value 
                        of any referrals or other business generated 
                        between the parties for which payment may be 
                        made in whole or in part under a Federal health 
                        care program;
                            ``(ii) any support that has more than 
                        incidental utility or value to the recipient 
                        beyond the exchange of health care information; 
                        or
                            ``(iii) any health information technology 
                        system, product, or service that is not in 
                        compliance with data standards adopted by the 
                        Federal Government under section 2904 of the 
                        Public Health Service Act.''.
    (b) Stark.--Section 1877(e) of the Social Security Act (42 U.S.C. 
1395nn(e)) is amended by adding at the end the following new paragraph:
            ``(9) Permitted support.--During the 5-year period 
        beginning on the date the Secretary issues the interim final 
        rule under section 5(c)(1) of the Better Healthcare Through 
        Information Technology Act, the provision, with or without 
        charge, of any permitted support (as defined in section 
        1128B(b)(4)).''.
    (c) Regulations.--In order to carry out the amendments made by this 
section--
            (1) the Secretary of Health and Human Services shall issue 
        an interim final rule with comment period by not later than the 
        date that is 180 days after the date of enactment of this Act; 
        and
            (2) the Secretary shall issue a final rule by not later 
        than the date that is 180 days after the date that the interim 
        final rule under paragraph (1) is issued.
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