II 

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. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Better Healthcare 

5 Through Information Technology Act’’. 
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1 SEC. 2. IMPROVING HEALTHCARE, QUALITY, SAFETY, AND 

2 EFFICIENCY. 

3 The Public Health Service Act (42 U.S.C. 201 et 

4 seq.) is amended by adding at the end the following: 

5 ‘‘TITLE XXIX—HEALTH 

6 INFORMATION TECHNOLOGY 

7 ‘‘SEC. 2901. PURPOSES. 

8 ‘‘It is the purpose of this title to improve the quality, 

9 safety, and efficiency of healthcare by— 

10 ‘‘(1) protecting the privacy and security of 

11 health information; 

12 ‘‘(2) fostering the widespread adoption of health 

13 information technology; 

14 ‘‘(3) establishing the public-private American 

15 Health Information Collaborative to identify uniform 

16 national data standards (including content, commu17 nication, and security) and implementation policies 

18 for the widespread adoption of health information 

19 technology; 

20 ‘‘(4) establishing health information network 

21 demonstration programs; 

22 ‘‘(5) awarding competitive grants to facilitate 

23 the purchase and enhance the utilization of qualified 

24 health information technology; and 

25 ‘‘(6) awarding competitive grants to States for 

26 the development of State loan programs to facilitate 
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1 the widespread adoption of health information tech2 nology. 

3 ‘‘SEC. 2902. DEFINITIONS. 

4 ‘‘In this title: 

5 ‘‘(1) COLLABORATIVE.—The term ‘Collabo6 rative’ means the public-private American Health In7 formation Collaborative established under section 

8 2904. 

9 ‘‘(2) HEALTHCARE PROVIDER.—The term 

10 ‘healthcare provider’ means a hospital, skilled nurs11 ing facility, home health entity, healthcare clinic, 

12 community health center, group practice (as defined 

13 in section 1877(h)(4) of the Social Security Act), a 

14 pharmacist, a pharmacy, a laboratory, a physician 

15 (as defined in section 1861(r) of the Social Security 

16 Act), a health facility operated by or pursuant to a 

17 contract with the Indian Health Service, a rural 

18 health clinic, and any other category of facility or 

19 clinician determined appropriate by the Secretary. 

20 ‘‘(3) HEALTH INFORMATION.—The term ‘health 

21 information’ means any information, whether oral or 

22 recorded in any form or medium, that— 

23 ‘‘(A) is created or received by a health care 

24 provider, health plan, public health authority, 
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1 employer, life insurer, school or university, or 

2 health care clearinghouse; and 

3 ‘‘(B) relates to the past, present, or future 

4 physical or mental health or condition of an in5 dividual, the provision of health care to an indi6 vidual, or the past, present, or future payment 

7 for the provision of health care to an individual. 

8 ‘‘(4) HEALTH INFORMATION NETWORK.—The 

9 term ‘health information network’ means an organi10 zation of health care providers and other entities es11 tablished for the purpose of linking health informa12 tion systems to enable the electronic sharing of 

13 health information. 

14 ‘‘(5) HEALTH INSURANCE ISSUER.—The term 

15 ‘health insurance issuer’ has the meaning given that 

16 term in section 2791. 

17 ‘‘(6) LABORATORY.—The term ‘laboratory’ has 

18 the meaning given that term in section 353. 

19 ‘‘(7) PHARMACIST.—The term ‘pharmacist’ has 

20 the meaning given that term in section 804 of the 

21 Federal Food, Drug, and Cosmetic Act. 

22 ‘‘(8) QUALIFIED HEALTH INFORMATION TECH23 NOLOGY.—The term ‘qualified health information 

24 technology’ means a computerized system (including 

25 hardware, software, and training) that— 
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1 ‘‘(A) protects the privacy and security of 

2 health information and properly encrypts such 

3 health information; 

4 ‘‘(B) maintains and provides permitted ac5 cess to patients’ health records in an electronic 

6 format; 

7 ‘‘(C) incorporates decision support soft8 ware to reduce medical errors and enhance 

9 healthcare quality; 

10 ‘‘(D) is consistent with the standards rec11 ommended by the collaborative; and 

12 ‘‘(E) allows for the reporting of quality 

13 measures. 

14 ‘‘(9) STATE.—The term ‘State’ means each of 

15 the several States, the District of Columbia, Puerto 

16 Rico, the Virgin Islands, Guam, American Samoa, 

17 and the Northern Mariana Islands. 

18 ‘‘SEC. 2903. OFFICE OF THE NATIONAL COORDINATOR OF 

19 HEALTH INFORMATION TECHNOLOGY. 

20 ‘‘(a) OFFICE OF NATIONAL HEALTH INFORMATION

21 TECHNOLOGY.—There is established within the Office of 

22 the Secretary an Office of the National Coordinator of 

23 Health Information Technology (referred to in this section 

24 as the ‘Office’). The Office shall be headed by a National 
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1 Coordinator who shall be appointed by the Secretary and 

2 shall report directly to the Secretary. 

3 ‘‘(b) PURPOSE.—It shall be the purpose of the Office 

4 to carry out programs and activities to develop a nation5 wide interoperable health information technology infra6 structure that— 

7 ‘‘(1) ensures that patients’ health information 

8 is secure and protected; 

9 ‘‘(2) improves healthcare quality, reduces med10 ical errors, and advances the delivery of patient-cen11 tered medical care; 

12 ‘‘(3) reduces healthcare costs resulting from in13 efficiency, medical errors, inappropriate care, and in14 complete information; 

15 ‘‘(4) ensures that appropriate information to 

16 help guide medical decisions is available at the time 

17 and place of care; 

18 ‘‘(5) promotes a more effective marketplace, 

19 greater competition, and increased choice through 

20 the wider availability of accurate information on 

21 healthcare costs, quality, and outcomes; 

22 ‘‘(6) improves the coordination of care and in23 formation among hospitals, laboratories, physician 

24 offices, and other entities through an effective infra-
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1 structure for the secure and authorized exchange of 

2 healthcare information; 

3 ‘‘(7) improves public health reporting and facili4 tates the early identification and rapid response to 

5 public health threats and emergencies, including bio6 terror events and infectious disease outbreaks; 

7 ‘‘(8) facilitates health research; and 

8 ‘‘(9) promotes prevention of chronic diseases. 

9 ‘‘(c) DUTIES OF THE NATIONAL COORDINATOR.— 

10 The National Coordinator shall— 

11 ‘‘(1) serve as a member of the public-private 

12 American Health Information Collaboration estab13 lished under section 2904; 

14 ‘‘(2) serve as the principal advisor to the Sec15 retary concerning the development, application, and 

16 use of health information technology; 

17 ‘‘(3) facilitate the adoption of a national system 

18 for the electronic exchange of health information; 

19 ‘‘(4) facilitate the adoption and implementation 

20 of standards for the electronic exchange of health in21 formation to reduce cost and improve healthcare 

22 quality; and 

23 ‘‘(5) submit the reports described under section 

24 2904(h). 

25 ‘‘(d) DETAIL OF FEDERAL EMPLOYEES.— 
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1 ‘‘(1) IN GENERAL.—Upon the request of the 

2 National Coordinator, the head of any Federal agen3 cy is authorized to detail, with or without reimburse4 ment from the Office, any of the personnel of such 

5 agency to the Office to assist it in carrying out its 

6 duties under this section. 

7 ‘‘(2) EFFECT OF DETAIL.—Any detail of per8 sonnel under paragraph (1) shall— 

9 ‘‘(A) not interrupt or otherwise affect the 

10 civil service status or privileges of the Federal 

11 employee; and 

12 ‘‘(B) be in addition to any other staff of 

13 the Department employed by the National Co14 ordinator. 

15 ‘‘(3) ACCEPTANCE OF DETAILEES.—Notwith16 standing any other provision of law, the Office may 

17 accept detailed personnel from other Federal agen18 cies without regard to whether the agency described 

19 under paragraph (1) is reimbursed. 

20 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated such sums as may be 

22 necessary to carry out the activities of the Office under 

23 this section for each of fiscal years 2006 through 2010. 
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1 ‘‘SEC. 2904. AMERICAN HEALTH INFORMATION COLLABO2 RATIVE. 

3 ‘‘(a) ESTABLISHMENT.—Not later than 60 days after 

4 the date of enactment of this title, and subject to the pro5 visions of this title, the Secretary shall establish the pub6 lic-private American Health Information Collaborative (re7 ferred to in this section as the ‘Collaborative’). 

8 ‘‘(b) COMPOSITION.—The Collaborative shall be com9 posed of— 

10 ‘‘(1) the Secretary, who shall serve as the chair11 person of the Collaborative; 

12 ‘‘(2) the Secretary of Defense, or his or her 

13 designee; 

14 ‘‘(3) the Secretary of Veterans Affairs, or his or 

15 her designee; 

16 ‘‘(4) the National Coordinator for Health Infor17 mation Technology; 

18 ‘‘(5) the Director of the National Institute of 

19 Standards and Technology; and 

20 ‘‘(6) one voting member from each of the fol21 lowing categories to be appointed by the Secretary 

22 from nominations submitted by the public: 

23 ‘‘(A) Patient advocates. 

24 ‘‘(B) Physicians. 

25 ‘‘(C) Hospitals. 

26 ‘‘(D) Pharmacists. 
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1 ‘‘(E) Health insurance plans. 

2 ‘‘(F) Standards development organizations. 

3 ‘‘(G) Technology vendors. 

4 ‘‘(H) Public health entities. 

5 ‘‘(I) Clinical research and academic enti6 ties. 

7 ‘‘(J) Employers. 

8 ‘‘(K) An Indian tribe or tribal organiza9 tion. 

10 ‘‘(L) State and local government agencies. 

11 ‘‘(c) RECOMMENDATIONS AND POLICIES.—The Col12 laborative shall make recommendations to identify uni13 form national policies to the Federal Government and pri14 vate entities to support the widespread adoption of health 

15 information technology, including— 

16 ‘‘(1) protecting the privacy and security of per17 sonal health information; 

18 ‘‘(2) measures to prevent unauthorized access 

19 to health information; 

20 ‘‘(3) measures to ensure accurate patient identi21 fication; 

22 ‘‘(4) methods to facilitate secure patient access 

23 to health information; 
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1 ‘‘(5) recommendations for a nationwide archi2 tecture that achieves interoperability of health infor3 mation technology systems; and 

4 ‘‘(6) other policies determined to be necessary 

5 by the Collaborative. 

6 ‘‘(d) STANDARDS.— 

7 ‘‘(1) IN GENERAL.—The Collaborative shall, on 

8 an ongoing basis— 

9 ‘‘(A) review existing standards (including 

10 content, communication, and security stand11 ards) for the electronic exchange of health in12 formation, including such standards adopted by 

13 the Secretary under paragraph (2)(A); 

14 ‘‘(B) identify deficiencies and omissions in 

15 such existing standards; and 

16 ‘‘(C) identify duplications and omissions in 

17 such existing standards; 

18 and recommend modifications to such standards as 

19 necessary. 

20 ‘‘(2) RECOMMENDATIONS.—The Collaborative 

21 shall recommend to the President the adoption by 

22 the Federal Government of— 

23 ‘‘(A) the standards adopted by the Consoli24 dated Health Informatics Initiative as of the 

25 date of enactment of this title; and 
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1 ‘‘(B) on an ongoing basis as appropriate, 

2 any additional standards or modifications rec3 ommended pursuant to the review described in 

4 paragraph (1). 

5 ‘‘(3) LIMITATION.—The standards described in 

6 this section shall not include any standards devel7 oped pursuant to the Health Insurance Portability 

8 and Accountability Act of 1996. 

9 ‘‘(e) ACTION BY THE PRESIDENT.—Upon receipt of 

10 a recommendation from the Collaborative under sub11 section (d)(2), the President shall review and if appro12 priate, provide for the adoption by the Federal Govern13 ment of such recommended standards. 

14 ‘‘(f) COORDINATION OF FEDERAL SPENDING.—Not 

15 later than 1 year after the adoption by the Federal Gov16 ernment of a recommendation as provided for in sub17 section (e), and in compliance with chapter 113 of title 

18 40, United States Code, no Federal agency shall expend 

19 Federal funds for the purchase of hardware, software, or 

20 support services for the electronic exchange of health in21 formation that is not consistent with applicable standards 

22 adopted by the Federal Government under subsection (e). 

23 ‘‘(g) COORDINATION OF FEDERAL DATA COLLEC24 TION.—Not later than 2 years after the adoption by the 

25 Federal Government of a recommendation as provided for 
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1 in subsection (e), all Federal agencies collecting health 

2 data for the purposes of surveillance, epidemiology, ad3 verse event reporting, or research shall comply with stand4 ards adopted under subsection (e). 

5 ‘‘(h) VOLUNTARY ADOPTION.—Any standards adopt6 ed by the Federal Government under subsection (e) shall 

7 be voluntary with respect to private entities. 

8 ‘‘(i) REPORTS.—The Secretary shall submit to the 

9 Committee on Health, Education, Labor, and Pensions 

10 and the Committee on Finance of the Senate and the 

11 Committee on Energy and Commerce and the Committee 

12 on Ways and Means of the House of Representatives, on 

13 an annual basis, a report that— 

14 ‘‘(1) describes the specific actions that have 

15 been taken to facilitate the adoption of a nationwide 

16 system for the electronic exchange of health informa17 tion; 

18 ‘‘(2) describes barriers to the adoption of such 

19 a nationwide system; and 

20 ‘‘(3) contains recommendations to achieve full 

21 implementation of such a nationwide system. 

22 ‘‘(j) APPLICATION OF FACA.—The Federal Advisory 

23 Committee Act (5 U.S.C. App.) shall apply to the Collabo24 rative, except that the term provided for under section 

25 14(a)(2) shall be 5 years. 
14 

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1 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as may be 

3 necessary to carry out this section for each of fiscal years 

4 2006 through 2010. 

5 ‘‘SEC. 2905. IMPLEMENTATION AND CERTIFICATION OF 

6 HEALTH INFORMATION STANDARDS. 

7 ‘‘(a) IMPLEMENTATION.— 

8 ‘‘(1) IN GENERAL.—The Secretary, based upon 

9 the recommendations of the Collaborative, shall de10 velop criteria to ensure uniform and consistent im11 plementation of any standards for the electronic ex12 change of health information voluntarily adopted by 

13 private entities in technical conformance with such 

14 standards adopted under this title. 

15 ‘‘(2) IMPLEMENTATION ASSISTANCE.—The Sec16 retary may recognize a private entity or entities to 

17 assist private entities in the implementation of the 

18 standards adopted under this title. 

19 ‘‘(b) CERTIFICATION.— 

20 ‘‘(1) IN GENERAL.—The Secretary, based upon 

21 the recommendations of the Collaborative, shall de22 velop criteria to ensure and certify that hardware, 

23 software, and support services that claim to be in 

24 compliance with any standard for the electronic ex25 change of health information adopted under this title 
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1 have established and maintained such compliance in 

2 technical conformance with such standards. 

3 ‘‘(2) CERTIFICATION ASSISTANCE.—The Sec4 retary may recognize a private entity or entities to 

5 assist in the certification described under paragraph 

6 (1). 

7 ‘‘SEC. 2906. COMPETITIVE GRANTS TO FACILITATE THE 

8 WIDESPREAD ADOPTION OF HEALTH INFOR9 MATION TECHNOLOGY. 

10 ‘‘(a) IN GENERAL.—The Secretary may award com11 petitive grants to eligible entities to facilitate the purchase 

12 and enhance the utilization of qualified health information 

13 technology systems to improve the quality and efficiency 

14 of healthcare. 

15 ‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 

16 under subsection (a) an entity shall— 

17 ‘‘(1) submit to the Secretary an application at 

18 such time, in such manner, and containing such in19 formation as the Secretary may require; 

20 ‘‘(2) submit to the Secretary a strategic plan 

21 for the implementation of data sharing and inter22 operability measures; 

23 ‘‘(3) be a— 

24 ‘‘(A) not for profit hospital; 
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1 ‘‘(B) group practice (including a single 

2 physician); or 

3 ‘‘(C) another healthcare provider not de4 scribed in subparagraph (A) or (B); 

5 ‘‘(4) adopt the standards adopted by the Fed6 eral Government under section 2904; 

7 ‘‘(5) submit to the Secretary a report on the de8 gree to which such entity has achieved the measures 

9 adopted under section 2909; 

10 ‘‘(6) demonstrate significant financial need; and 

11 ‘‘(7) provide matching funds in accordance with 

12 subsection (d). 

13 ‘‘(c) USE OF FUNDS.—Amounts received under a 

14 grant under this section shall be used to facilitate the pur15 chase and enhance the utilization of qualified health infor16 mation technology systems. 

17 ‘‘(d) MATCHING REQUIREMENT.—To be eligible for 

18 a grant under this section an entity shall contribute non19 Federal contributions to the costs of carrying out the ac20 tivities for which the grant is awarded in an amount equal 

21 to $1 for each $3 of Federal funds provided under the 

22 grant. 

23 ‘‘(e) PREFERENCE IN AWARDING GRANTS.—In 

24 awarding grants under this section the Secretary shall give 

25 preference to— 
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1 ‘‘(1) eligible entities that are located in rural, 

2 frontier, and other underserved areas as determined 

3 by the Secretary; 

4 ‘‘(2) eligible entities that will use grant funds to 

5 enhance secure data sharing across various health 

6 care settings or enhance interoperability with re7 gional or national health information networks; and 

8 ‘‘(3) with respect to an entity described in sub9 section (b)(3)(C), a not for profit healthcare pro10 vider. 

11 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this section, 

13 $25,000,000 for fiscal year 2006, $75,000,000 for fiscal 

14 year 2007, and such sums as may be necessary for each 

15 of fiscal years 2008 through 2010. 

16 ‘‘SEC. 2907. COMPETITIVE GRANTS TO STATES FOR THE DE17 VELOPMENT OF STATE LOAN PROGRAMS TO 

18 FACILITATE THE WIDESPREAD ADOPTION OF 

19 HEALTH INFORMATION TECHNOLOGY. 

20 ‘‘(a) IN GENERAL.—The Secretary may award com21 petitive grants to States for the establishment of State 

22 programs for loans to healthcare providers to facilitate the 

23 purchase and enhance the utilization of qualified health 

24 information technology. 
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1 ‘‘(b) ESTABLISHMENT OF FUND.—To be eligible to 

2 receive a competitive grant under this section, a State 

3 shall establish a qualified health information technology 

4 loan fund (referred to in this section as a ‘State loan 

5 fund’) and comply with the other requirements contained 

6 in this section. A grant to a State under this section shall 

7 be deposited in the State loan fund established by the 

8 State. No funds authorized by other provisions of this title 

9 to be used for other purposes specified in this title shall 

10 be deposited in any State loan fund. 

11 ‘‘(c) ELIGIBILITY.—To be eligible to receive a grant 

12 under subsection (a) a State shall— 

13 ‘‘(1) submit to the Secretary an application at 

14 such time, in such manner, and containing such in15 formation as the Secretary may require; 

16 ‘‘(2) submit to the Secretary a strategic plan in 

17 accordance with subsection (d); 

18 ‘‘(3) establish a qualified health information 

19 technology loan fund in accordance with subsection 

20 (b); 

21 ‘‘(4) require that healthcare providers receiving 

22 such loans consult with the Center for Best Prac23 tices established in section 914(d) to access the 

24 knowledge and experience of existing initiatives re-
19 

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1 garding the successful implementation and effective 

2 use of health information technology; 

3 ‘‘(5) require that healthcare providers receiving 

4 such loans adopt the standards adopted by the Fed5 eral Government under section 2904(d); 

6 ‘‘(6) submit to the Secretary a report on the de7 gree to which the State has achieved the measures 

8 under section 2909; and 

9 ‘‘(7) provide matching funds in accordance with 

10 subsection (h). 

11 ‘‘(d) STRATEGIC PLAN.— 

12 ‘‘(1) IN GENERAL.—A State that receives a 

13 grant under this section shall annually prepare a 

14 strategic plan that identifies the intended uses of 

15 amounts available to the State loan fund of the 

16 State. 

17 ‘‘(2) CONTENTS.—A strategic plan under para18 graph (1) shall include— 

19 ‘‘(A) a list of the projects to be assisted 

20 through the State loan fund in the first fiscal 

21 year that begins after the date on which the 

22 plan is submitted; 

23 ‘‘(B) a description of the criteria and 

24 methods established for the distribution of 

25 funds from the State loan fund; and 
20 

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1 ‘‘(C) a description of the financial status of 

2 the State loan fund and the short-term and 

3 long-term goals of the State loan fund. 

4 ‘‘(e) USE OF FUNDS.— 

5 ‘‘(1) IN GENERAL.—Amounts deposited in a 

6 State loan fund, including loan repayments and in7 terest earned on such amounts, shall be used only 

8 for awarding loans or loan guarantees, or as a 

9 source of reserve and security for leveraged loans, 

10 the proceeds of which are deposited in the State loan 

11 fund established under subsection (a). Loans under 

12 this section may be used by a healthcare provider to 

13 facilitate the purchase and enhance the utilization of 

14 qualified health information technology. 

15 ‘‘(2) LIMITATION.—Amounts received by a 

16 State under this section may not be used— 

17 ‘‘(A) for the purchase or other acquisition 

18 of any health information technology system 

19 that is not a qualified health information tech20 nology system; 

21 ‘‘(B) to conduct activities for which Fed22 eral funds are expended under this title, or the 

23 amendments made by the Better Healthcare 

24 Through Information Technology Act; or 
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1 ‘‘(C) for any purpose other than making 

2 loans to eligible entities under this section. 

3 ‘‘(f) TYPES OF ASSISTANCE.—Except as otherwise 

4 limited by applicable State law, amounts deposited into a 

5 State loan fund under this section may only be used for 

6 the following: 

7 ‘‘(1) To award loans that comply with the fol8 lowing: 

9 ‘‘(A) The interest rate for each loan shall 

10 be less than or equal to the market interest 

11 rate. 

12 ‘‘(B) The principal and interest payments 

13 on each loan shall commence not later than 1 

14 year after the loan was awarded, and each loan 

15 shall be fully amortized not later than 10 years 

16 after the date of the loan. 

17 ‘‘(C) The State loan fund shall be credited 

18 with all payments of principal and interest on 

19 each loan awarded from the fund. 

20 ‘‘(2) To guarantee, or purchase insurance for, 

21 a local obligation (all of the proceeds of which fi22 nance a project eligible for assistance under this sec23 tion) if the guarantee or purchase would improve 

24 credit market access or reduce the interest rate ap25 plicable to the obligation involved. 
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1 ‘‘(3) As a source of revenue or security for the 

2 payment of principal and interest on revenue or gen3 eral obligation bonds issued by the State if the pro4 ceeds of the sale of the bonds will be deposited into 

5 the State loan fund. 

6 ‘‘(4) To earn interest on the amounts deposited 

7 into the State loan fund. 

8 ‘‘(g) ADMINISTRATION OF STATE LOAN FUNDS.— 

9 ‘‘(1) COMBINED FINANCIAL ADMINISTRATION.— 

10 A State may (as a convenience and to avoid unnec11 essary administrative costs) combine, in accordance 

12 with State law, the financial administration of a 

13 State loan fund established under this section with 

14 the financial administration of any other revolving 

15 fund established by the State if otherwise not pro16 hibited by the law under which the State loan fund 

17 was established. 

18 ‘‘(2) COST OF ADMINISTERING FUND.—Each 

19 State may annually use not to exceed 4 percent of 

20 the funds provided to the State under a grant under 

21 this section to pay the reasonable costs of the ad22 ministration of the programs under this section, in23 cluding the recovery of reasonable costs expended to 

24 establish a State loan fund which are incurred after 

25 the date of enactment of this title. 
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1 ‘‘(3) GUIDANCE AND REGULATIONS.—The Sec2 retary shall publish guidance and promulgate regula3 tions as may be necessary to carry out the provisions 

4 of this section, including— 

5 ‘‘(A) provisions to ensure that each State 

6 commits and expends funds allotted to the 

7 State under this section as efficiently as pos8 sible in accordance with this title and applicable 

9 State laws; and 

10 ‘‘(B) guidance to prevent waste, fraud, and 

11 abuse. 

12 ‘‘(4) PRIVATE SECTOR CONTRIBUTIONS.— 

13 ‘‘(A) IN GENERAL.—A State loan fund es14 tablished under this section may accept con15 tributions from private sector entities, except 

16 that such entities may not specify the recipient 

17 or recipients of any loan issued under this sec18 tion. 

19 ‘‘(B) AVAILABILITY OF INFORMATION.—A 

20 State shall make publically available the iden21 tity of, and amount contributed by, any private 

22 sector entity under subparagraph (A) and may 

23 issue letters of commendation or make other 

24 awards (that have no financial value) to any 

25 such entity. 
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1 ‘‘(5) RESERVATION OF AMOUNTS.—A State 

2 may reserve not to exceed 40 percent of amounts in 

3 the State loan fund to issue loans to recipients who 

4 serve medically underserved areas. 

5 ‘‘(h) MATCHING REQUIREMENTS.— 

6 ‘‘(1) IN GENERAL.—The Secretary may not 

7 make a grant under subsection (a) to a State unless 

8 the State agrees to make available (directly or 

9 through donations from public or private entities) 

10 non-Federal contributions in cash toward the costs 

11 of the State program to be implemented under the 

12 grant in an amount equal to not less than $1 for 

13 each $1 of Federal funds provided under the grant. 

14 ‘‘(2) DETERMINATION OF AMOUNT OF NON15 FEDERAL CONTRIBUTION.—In determining the 

16 amount of non-Federal contributions that a State 

17 has provided pursuant to paragraph (1), the Sec18 retary may not include any amounts provided to the 

19 State by the Federal Government. 

20 ‘‘(i) PREFERENCE IN AWARDING GRANTS.—The Sec21 retary may give a preference in awarding grants under 

22 this section to States that adopt value-based purchasing 

23 programs to improve healthcare quality. 

24 ‘‘(j) REPORTS.—The Secretary shall annually submit 

25 to the Committee on Health, Education, Labor, and Pen-
25 

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1 sions and the Committee on Finance of the Senate, and 

2 the Committee on Energy and Commerce and the Com3 mittee on Ways and Means of the House of Representa4 tives, a report summarizing the reports received by the 

5 Secretary from each State that receives a grant under this 

6 section. 

7 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.— 

8 ‘‘(1) IN GENERAL.—For the purpose of making 

9 grants under subsection (a), there is authorized to 

10 be appropriated $50,000,000 for fiscal year 2006, 

11 $100,000,000 for fiscal year 2007, and such sums 

12 as may be necessary for each of fiscal years 2008 

13 through 2010. 

14 ‘‘(l) AVAILABILITY.—Amounts appropriated under 

15 paragraph (1) shall remain available through fiscal year 

16 2010. 

17 ‘‘SEC. 2908. DEMONSTRATION PROGRAM TO INTEGRATE IN18 FORMATION TECHNOLOGY INTO CLINICAL 

19 EDUCATION. 

20 ‘‘(a) IN GENERAL.—The Secretary may award grants 

21 under this section to carry out demonstration projects to 

22 develop academic programs integrating qualified health in23 formation technology systems in the clinical education of 

24 health professionals. Such awards shall be made on a com25 petitive basis and pursuant to peer review. 
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1 ‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 

2 under subsection (a), an entity shall— 

3 ‘‘(1) submit to the Secretary an application at 

4 such time, in such manner, and containing such in5 formation as the Secretary may require; 

6 ‘‘(2) submit to the Secretary a strategic plan 

7 for integrating qualified health information tech8 nology in the clinical education of health profes9 sionals and for ensuring the consistent utilization of 

10 decision support software to reduce medical errors 

11 and enhance healthcare quality; 

12 ‘‘(3) be— 

13 ‘‘(A) a health professions school; or 

14 ‘‘(B) an academic health center; 

15 ‘‘(4) provide for the collection of data regarding 

16 the effectiveness of the demonstration project to be 

17 funded under the grant in improving the safety of 

18 patients, the efficiency of health care delivery, and 

19 in increasing the likelihood that graduates of the 

20 grantee will adopt and incorporate health informa21 tion technology in the delivery of health care serv22 ices; and 

23 ‘‘(5) provide matching funds in accordance with 

24 subsection (c). 

25 ‘‘(c) MATCHING FUNDS.— 
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1 ‘‘(1) IN GENERAL.—The Secretary may award 

2 a grant to an entity under this section only if the 

3 entity agrees to make available non-Federal con4 tributions toward the costs of the program to be 

5 funded under the grant in an amount that is not 

6 less than $1 for each $2 of Federal funds provided 

7 under the grant. 

8 ‘‘(2) DETERMINATION OF AMOUNT CONTRIB9 UTED.—Non-Federal contributions under paragraph 

10 (1) may be in cash or in kind, fairly evaluated, in11 cluding equipment or services. Amounts provided by 

12 the Federal Government, or services assisted or sub13 sidized to any significant extent by the Federal Gov14 ernment, may not be included in determining the 

15 amount of such contributions. 

16 ‘‘(d) PREFERENCE IN AWARDING GRANTS.—In 

17 awarding grants under subsection (a), the Secretary shall 

18 give preference to applicants that— 

19 ‘‘(1) will use grant funds in collaboration with 

20 2 or more disciplines; and 

21 ‘‘(2) will use grant funds to integrate qualified 

22 health information technology into community-based 

23 clinical education experiences. 

24 ‘‘(e) EVALUATION.—The Secretary shall take such 

25 action as may be necessary to evaluate the projects funded 
28 

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1 under this section and publish, make available, and dis2 seminate the results of such evaluations on as wide a basis 

3 as is practicable. 

4 ‘‘(f) REPORTS.—Not later than 1 year after the date 

5 of enactment of this title, and annually thereafter, the Sec6 retary shall submit to the Committee on Health, Edu7 cation, Labor, and Pensions and the Committee on Fi8 nance of the Senate, and the Committee on Energy and 

9 Commerce and the Committee on Ways and Means of the 

10 House of Representatives a report that— 

11 ‘‘(1) describes the specific projects established 

12 under this section; and 

13 ‘‘(2) contains recommendations for Congress 

14 based on the evaluation conducted under subsection 

15 (e). 

16 ‘‘(g) LIMITATION.—Not more than 10 percent of 

17 amounts received under a grant awarded under this sec18 tion may be used for administrative expenses. 

19 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

20 is authorized to be appropriated to carry out this section, 

21 such sums as may be necessary for fiscal year 2006, 

22 $5,000,000 for fiscal year 2007, and such sums as may 

23 be necessary for each of fiscal years 2008 through 2010. 

24 ‘‘(i) SUNSET.—This section shall not apply after Sep25 tember 30, 2008. 
29 

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1 ‘‘SEC. 2909. QUALITY MEASUREMENT SYSTEMS. 

2 ‘‘(a) IN GENERAL.—The Secretary shall develop 

3 quality measurement systems for the purposes of meas4 uring the quality of care patients receive. 

5 ‘‘(b) REQUIREMENTS.—The Secretary shall ensure 

6 that the quality measurement systems developed under 

7 subsection (a) comply with the following: 

8 ‘‘(1) MEASURES.— 

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (B), the Secretary shall select measures 

11 of quality to be used by the Secretary under the 

12 systems. 

13 ‘‘(B) REQUIREMENTS.—In selecting the 

14 measures to be used under each system pursu15 ant to subparagraph (A), the Secretary shall, to 

16 the extent feasible, ensure that— 

17 ‘‘(i) such measures are evidence 

18 based, reliable and valid, and feasible to 

19 collect and report; 

20 ‘‘(ii) such measures include measures 

21 of process, structure, beneficiary experi22 ence, efficiency, and equity; 

23 ‘‘(iii) such measures include measures 

24 of overuse, underuse, and misuse of 

25 healthcare items and services; and 

26 ‘‘(iv) such measures include— 
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1 ‘‘(I) with respect to the initial 

2 year in which such measures are used, 

3 one or more elements of a qualified 

4 health information technology system 

5 as defined in section 2901; and 

6 ‘‘(II) with respect to subsequent 

7 years, additional elements of qualified 

8 health information technology systems 

9 as defined in section 2901. 

10 ‘‘(2) WEIGHTS OF MEASURES.—The Secretary 

11 shall assign weights to the measures used by the 

12 Secretary under each system established under sub13 section (a). 

14 ‘‘(3) MAINTENANCE.—The Secretary shall, as 

15 determined appropriate, but in no case more often 

16 than once during each 12-month period, update the 

17 quality measurement systems developed under sub18 section (a), including through— 

19 ‘‘(A) the addition of more accurate and 

20 precise measures under the systems and the re21 tirement of existing outdated measures under 

22 the systems; and 

23 ‘‘(B) the refinement of the weights as24 signed to measures under the systems. 
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1 ‘‘(c) REQUIRED CONSIDERATIONS IN DEVELOPING

2 AND UPDATING THE SYSTEMS.—In developing and updat3 ing the quality measurement systems under this section, 

4 the Secretary shall— 

5 ‘‘(1) consult with, and take into account the 

6 recommendations of, the entity that the Secretary 

7 has an arrangement with under subsection (e); 

8 ‘‘(2) consult with provider-based groups and 

9 clinical specialty societies; and 

10 ‘‘(3) take into account— 

11 ‘‘(A) the demonstrations required under 

12 this Act; 

13 ‘‘(B) the demonstration program under 

14 section 1866A of the Social Security Act; 

15 ‘‘(C) the demonstration program under 

16 section 1866C of such Act; 

17 ‘‘(D) any other demonstration or pilot pro18 gram conducted by the Secretary relating to 

19 measuring and rewarding quality and efficiency 

20 of care; and 

21 ‘‘(E) the report by the Institute of Medi22 cine of the National Academy of Sciences under 

23 section 238(b) of the Medicare Prescription 

24 Drug, Improvement, and Modernization Act of 

25 2003. 
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1 ‘‘(d) REQUIRED CONSIDERATIONS IN IMPLEMENTING

2 THE SYSTEMS.—In implementing the quality measure3 ment systems under this section, the Secretary shall take 

4 into account the recommendations of public-private enti5 ties— 

6 ‘‘(1) that are established to examine issues of 

7 data collection and reporting, including the feasi8 bility of collecting and reporting data on measures; 

9 and 

10 ‘‘(2) that involve representatives of health care 

11 providers, consumers, employers, and other individ12 uals and groups that are interested in quality of 

13 care. 

14 ‘‘(e) ARRANGEMENT WITH AN ENTITY TO PROVIDE

15 ADVICE AND RECOMMENDATIONS.— 

16 ‘‘(1) ARRANGEMENT.—On and after July 1, 

17 2006, the Secretary shall have in place an arrange18 ment with an entity that meets the requirements de19 scribed in paragraph (2) under which such entity 

20 provides the Secretary with advice on, and rec21 ommendations with respect to, the development and 

22 updating of the quality measurement systems under 

23 this section, including the assigning of weights to 

24 the measures under subsection (b)(2). 
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1 ‘‘(2) REQUIREMENTS DESCRIBED.—The re2 quirements described in this paragraph are the fol3 lowing: 

4 ‘‘(A) The entity is a private nonprofit enti5 ty governed by an executive director and a 

6 board. 

7 ‘‘(B) The members of the entity include 

8 representatives of— 

9 ‘‘(i)(I) health plans and providers re10 ceiving reimbursement under this title for 

11 the provision of items and services, includ12 ing health plans and providers with experi13 ence in the care of frail elderly and individ14 uals with multiple complex chronic condi15 tions; or 

16 ‘‘(II) groups representing such health 

17 plans and providers; 

18 ‘‘(ii) groups representing individuals 

19 entitled to benefits under part A of title 

20 XVIII of the Social Security Act or en21 rolled under part B of such title; 

22 ‘‘(iii) purchasers and employers or 

23 groups representing purchasers or employ24 ers; 
34 

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1 ‘‘(iv) organizations that focus on qual2 ity improvement as well as the measure3 ment and reporting of quality measures; 

4 ‘‘(v) State government health pro5 grams; 

6 ‘‘(vi) individuals skilled in the conduct 

7 and interpretation of biomedical, health 

8 services, and health economics research 

9 and with expertise in outcomes and effec10 tiveness research and technology assess11 ment; and 

12 ‘‘(vii) individuals or entities involved 

13 in the development and establishment of 

14 standards and certification for health in15 formation technology systems and clinical 

16 data. 

17 ‘‘(C) The membership of the entity is rep18 resentative of individuals with experience with 

19 urban health care issues and individuals with 

20 experience with rural and frontier health care 

21 issues. 

22 ‘‘(D) The entity does not charge a fee for 

23 membership for participation in the work of the 

24 entity related to the arrangement with the Sec25 retary under paragraph (1). If the entity does 
35 

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1 require a fee for membership for participation 

2 in other functions of the entity, there shall be 

3 no linkage between such fee and participation 

4 in the work of the entity related to such ar5 rangement with the Secretary. 

6 ‘‘(E) The entity— 

7 ‘‘(i) permits any member described in 

8 subparagraph (B) to vote on matters of 

9 the entity related to the arrangement with 

10 the Secretary under paragraph (1); and 

11 ‘‘(ii) ensures that such members have 

12 an equal vote on such matters. 

13 ‘‘(F) With respect to matters related to the 

14 arrangement with the Secretary under para15 graph (1), the entity conducts its business in an 

16 open and transparent manner and provides the 

17 opportunity for public comment. 

18 ‘‘(G) The entity operates as a voluntary 

19 consensus standards setting organization as de20 fined for purposes of section 12(d) of the Na21 tional Technology Transfer and Advancement 

22 Act of 1995 (Public Law 104–113) and Office 

23 of Management and Budget Revised Circular 

24 A–119 (published in the Federal Register on 

25 February 10, 1998). 
36 

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1 ‘‘SEC. 2910. APPLICABILITY OF PRIVACY AND SECURITY 

2 REGULATIONS. 

3 ‘‘The regulations promulgated by the Secretary under 

4 part C of title XI of the Social Security Act and sections 

5 261, 262, 263, and 264 of the Health Insurance Port6 ability and Accountability Act of 1996 with respect to the 

7 privacy, confidentiality, and security of health information 

8 shall— 

9 ‘‘(1) apply to any health information stored or 

10 transmitted in an electronic format on or after the 

11 date of enactment of this title; and 

12 ‘‘(2) apply to the implementation of standards, 

13 programs, and activities under this title. 

14 ‘‘SEC. 2911. STUDY OF REIMBURSEMENT INCENTIVES. 

15 ‘‘The Secretary shall carry out, or contract with a 

16 private entity to carry out, a study that examines methods 

17 to create efficient reimbursement incentives for improving 

18 healthcare quality in community health centers and other 

19 federally qualified health centers, rural health clinics, free 

20 clinics, and other programs reimbursed primarily on a cost 

21 basis deemed appropriate by the Secretary.’’. 

22 SEC. 3. CENTER FOR BEST PRACTICES. 

23 Section 914 of the Public Health Service Act (42 

24 U.S.C. 299b–3) is amended by adding at the end the fol25 lowing: 

26 ‘‘(d) CENTER FOR BEST PRACTICES.— 
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1 ‘‘(1) IN GENERAL.—The Secretary, acting 

2 through the Director, shall develop a Center for Best 

3 Practices to provide technical assistance and develop 

4 best practices to support and accelerate the efforts 

5 of States and healthcare providers to adopt, imple6 ment, and effectively use health information tech7 nology. 

8 ‘‘(2) CENTER FOR BEST PRACTICES.— 

9 ‘‘(A) IN GENERAL.—In carrying out para10 graph (1), the Director shall establish a vol11 untary Center for Best Practices (referred to in 

12 this subsection as the ‘Center’) for States and 

13 healthcare stakeholders seeking to facilitate mu14 tual learning and accelerate the pace of innova15 tion in, and implementation of, health informa16 tion technology. The Center shall support ac17 tivities to meet goals, including— 

18 ‘‘(i) providing for the widespread 

19 adoption of interoperable health informa20 tion technology; 

21 ‘‘(ii) providing for the establishment 

22 of regional and local health information 

23 networks to facilitate the development of 

24 interoperability across healthcare settings; 
38 

•S 1355 IS

1 ‘‘(iii) the development of solutions to 

2 barriers to the exchange of electronic 

3 health information; or 

4 ‘‘(iv) other activities identified by the 

5 States or health care stakeholders as a 

6 focus for developing and sharing best prac7 tices. 

8 ‘‘(B) PURPOSES.—The purpose of the Cen9 ter is to— 

10 ‘‘(i) provide a forum for the exchange 

11 of knowledge and experience; 

12 ‘‘(ii) accelerate the transfer of lessons 

13 learned from existing public and private 

14 sector initiatives, including those currently 

15 receiving Federal financial support; 

16 ‘‘(iii) assemble, analyze, and widely 

17 disseminate evidence and experience re18 lated to the adoption, implementation, and 

19 effective use of health information tech20 nology; 

21 ‘‘(iv) assure the timely provision of 

22 technical and expert assistance from the 

23 Agency and its contractors; 

24 ‘‘(v) accelerate the pace of health in25 formation technology innovation; and 
39 

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1 ‘‘(vi) provide technical assistance to 

2 entities developing applications for dem3 onstration grants under subsection (b). 

4 ‘‘(C) SUPPORT FOR ACTIVITIES.—To pro5 vide support for the activities of the Center, the 

6 Director shall— 

7 ‘‘(i) modify the requirements, if nec8 essary, that apply to the National Re9 source Center for Health Information 

10 Technology to provide the necessary infra11 structure to support the duties and activi12 ties of the Network and facilitate informa13 tion exchange across the public and private 

14 sectors; 

15 ‘‘(ii) expand the Agency’s focus on the 

16 adoption, implementation, and effective use 

17 of health information technology through 

18 the development of practical implementa19 tion guidance based upon existing knowl20 edge and support for rapid-cycle implemen21 tation research to address questions for 

22 which existing knowledge is insufficient; 

23 and 

24 ‘‘(iii) develop the capacity to identify 

25 and widely share in a timely manner inno-
40 

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1 vative approaches to advancing health in2 formation technology and its ultimate goal, 

3 the improvement of the quality, safety, and 

4 efficiency of health care. 

5 ‘‘(3) TECHNICAL ASSISTANCE TELEPHONE

6 NUMBER OR WEBSITE.—The Secretary shall estab7 lish a toll-free telephone number or Internet website 

8 to provide healthcare providers with a single point of 

9 contact to— 

10 ‘‘(A) learn about Federal grants and tech11 nical assistance services related to health infor12 mation technology; 

13 ‘‘(B) learn about qualified health informa14 tion software that has been certified to be in 

15 compliance with the standards adopted by the 

16 Federal Government under section 2904 and is 

17 available for commercial use; 

18 ‘‘(C) receive referrals to regional and local 

19 health information networks for assistance with 

20 health information technology; 

21 ‘‘(D) provide information regarding— 

22 ‘‘(i) the electronic submission of 

23 health data collected by Federal agencies; 

24 and 
41 

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1 ‘‘(ii) the uniform and consistent im2 plementation of standards; and 

3 ‘‘(E) disseminate additional information 

4 determined by the Secretary to be helpful to 

5 such providers. 

6 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

7 There are authorized to be appropriated to carry out 

8 this subsection, such sums as may be necessary for 

9 each of fiscal years 2006 through 2010.’’. 

10 SEC. 4. HEALTH INFORMATION NETWORK DEMONSTRA11 TION PROGRAM. 

12 Section 914 of the Public Health Service Act (42 

13 U.S.C. 299b–3), as amended by subsection (b), is further 

14 amended by adding at the end the following: 

15 ‘‘(e) HEALTH INFORMATION NETWORK DEMONSTRA16 TION PROGRAM.— 

17 ‘‘(1) IN GENERAL.—The Director may establish 

18 a demonstration program under which grants or 

19 contracts shall be awarded to support health infor20 mation network planning, implementation, and eval21 uation activities. 

22 ‘‘(2) ELIGIBILITY.—To be eligible to receive a 

23 grant or contract under the demonstration program 

24 under paragraph (1), an entity shall— 
42 

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1 ‘‘(A) submit to the Director an application 

2 at such time, in such manner, and containing 

3 such information as the Director may require; 

4 ‘‘(B) submit to the Director a strategic 

5 plan for the implementation of data sharing 

6 and interoperability measures across the various 

7 health care settings within the proposed net8 work; 

9 ‘‘(C) be a public or nonprofit private entity 

10 that is or represents a network or potential net11 work that includes healthcare providers and 

12 group health plans in a defined area of geo13 graphic proximity or organizational affinity, 

14 and that may include for profit entities so long 

15 as such an entity is not the grantee; 

16 ‘‘(D) demonstrate, where appropriate, the 

17 involvement and commitment of the appropriate 

18 State or States; 

19 ‘‘(E) specify a defined area of geographic 

20 proximity or organizational affinity that the 

21 health information network will encompass; 

22 ‘‘(F) demonstrate active participation in 

23 the best practice network described in sub24 section (d); 
43 

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1 ‘‘(G) demonstrate compliance with the data 

2 standards and technical policies adopted by the 

3 Federal Government under section 2904(e); 

4 ‘‘(H) submit to the Secretary a report on 

5 the degree to which such entity has achieved 

6 the measures under section 2909; 

7 ‘‘(I) demonstrate financial need; and 

8 ‘‘(J) agree to provide matching funds in 

9 accordance with paragraph (4). 

10 ‘‘(3) USE OF FUNDS.— 

11 ‘‘(A) IN GENERAL.—Amounts received 

12 under a grant under this subsection shall be 

13 used to establish and implement a regional or 

14 local health information network. 

15 ‘‘(B) LIMITATION.—Amounts received 

16 under a grant under this subsection may not be 

17 used to purchase a health information tech18 nology system that is not a qualified health in19 formation technology system. 

20 ‘‘(4) MATCHING REQUIREMENT.—To be eligible 

21 to receive a grant or contract under this subsection 

22 an entity shall contribute non-Federal funds to the 

23 costs of carrying out the activities for which the 

24 grant or contract is awarded in an amount equal to 
44 

•S 1355 IS

1 $1 for each of $2 of Federal funds, provided under 

2 the grant. 

3 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— 

4 There are authorized to be appropriated to carry out 

5 this subsection, $50,000,000 for fiscal year 2006, 

6 $70,000,000 for fiscal year 2007, and such sums as 

7 may be necessary for each of fiscal years 2008 

8 through 2010.’’. 

9 SEC. 5. EXCEPTION TO FEDERAL ANTI-KICKBACK AND 

10 STARK LAWS FOR THE PROVISION OF PER11 MITTED SUPPORT. 

12 (a) ANTI-KICKBACK.—Section 1128B(b) of the So13 cial Security Act (42 U.S.C. 1320a–7b(b)(3)) is amend14 ed— 

15 (1) in paragraph (3)— 

16 (A) in subparagraph (G), by striking 

17 ‘‘and’’ at the end; 

18 (B) in subparagraph (H), as added by sec19 tion 237(d) of the Medicare Prescription Drug, 

20 Improvement, and Modernization Act of 2003 

21 (Public Law 108–173; 117 Stat. 2213)— 

22 (i) by moving such subparagraph 2 

23 ems to the left; and 

24 (ii) by striking the period at the end 

25 and inserting a semicolon; 
45 

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1 (C) by redesignating subparagraph (H), as 

2 added by section 431(a) of the Medicare Pre3 scription Drug, Improvement, and Moderniza4 tion Act of 2003 (Public Law 108–173; 117 

5 Stat. 2287), as subparagraph (I); 

6 (D) in subparagraph (I), as so redesig7 nated— 

8 (i) by moving such subparagraph 2 

9 ems to the left; and 

10 (ii) by striking the period at the end 

11 and inserting ‘‘; and’’; and 

12 (E) by adding at the end the following 

13 new: 

14 ‘‘(J) during the 5-year period beginning on 

15 the date the Secretary issues the interim final 

16 rule under section 5(c)(1) of the Better 

17 Healthcare Through Information Technology 

18 Act, the provision, with or without charge, of 

19 any permitted support (as defined in paragraph 

20 (4)).’’; and 

21 (2) by adding at the end the following new 

22 paragraph: 

23 ‘‘(4) PERMITTED SUPPORT.— 

24 ‘‘(A) DEFINITION OF PERMITTED SUP25 PORT.—Subject to subparagraph (B), in this 
46 

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1 section, the term ‘permitted support’ means the 

2 provision of any equipment, item, information, 

3 right, license, intellectual property, software, 

4 training, or service used for developing, imple5 menting, operating, or facilitating the use of 

6 systems designed to improve the quality of 

7 health care and to promote the electronic ex8 change of health information. 

9 ‘‘(B) EXCEPTION.—The term ‘permitted 

10 support’ shall not include the provision of— 

11 ‘‘(i) any support that is determined in 

12 a manner that is related to the volume or 

13 value of any referrals or other business 

14 generated between the parties for which 

15 payment may be made in whole or in part 

16 under a Federal health care program; 

17 ‘‘(ii) any support that has more than 

18 incidental utility or value to the recipient 

19 beyond the exchange of health care infor20 mation; or 

21 ‘‘(iii) any health information tech22 nology system, product, or service that is 

23 not in compliance with data standards 

24 adopted by the Federal Government under 
47 

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1 section 2904 of the Public Health Service 

2 Act.’’. 

3 (b) STARK.—Section 1877(e) of the Social Security 

4 Act (42 U.S.C. 1395nn(e)) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(9) PERMITTED SUPPORT.—During the 5-year 

7 period beginning on the date the Secretary issues 

8 the interim final rule under section 5(c)(1) of the 

9 Better Healthcare Through Information Technology 

10 Act, the provision, with or without charge, of any 

11 permitted support (as defined in section 

12 1128B(b)(4)).’’. 

13 (c) REGULATIONS.—In order to carry out the amend14 ments made by this section— 

15 (1) the Secretary of Health and Human Serv16 ices shall issue an interim final rule with comment 

17 period by not later than the date that is 180 days 

18 after the date of enactment of this Act; and 

19 (2) the Secretary shall issue a final rule by not 

20 later than the date that is 180 days after the date 

21 that the interim final rule under paragraph (1) is 

22 issued. 

Æ