II 

109TH CONGRESS 

1ST SESSION S. 1952 

To provide grants for rural health information technology development 

activities. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2005 

Mr. COLEMAN (for himself, Mr. BAYH, Mr. CORNYN, and Mr. LUGAR) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To provide grants for rural health information technology 

development activities. 

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 ‘‘Critical Access to 

5 Health Information Technology Act of 2005’’. 

6 SEC. 2. HEALTH INFORMATION TECHNOLOGY GRANT PRO7 GRAM. 

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

9 Human Services (referred to in this section as the ‘‘Sec10 retary’’) shall establish and implement a program to 
2 

•S 1952 IS

1 award grants to increase access to health care in rural 

2 areas by improving health information technology, includ3 ing the reporting, monitoring, and evaluation required 

4 under this section. 

5 (b) STATE GRANTS.—The Secretary shall award 

6 grants to States to be used to carry out the State plan 

7 under subsection (e) through the awarding of subgrants 

8 to local entities within the State. Amounts awarded under 

9 such a grant may only be used in the fiscal year in which 

10 the grant is awarded or in the immediately subsequent fis11 cal year. 

12 (c) AMOUNT OF GRANT.—From amounts appro13 priated under subsection (k) for each fiscal year, the Sec14 retary shall award a grant to each State that complies 

15 with subsection (e) in an amount that is based on the total 

16 number of critical access hospitals in the State (as cer17 tified by the Secretary under section 1817(e) of the Social 

18 Security Act) bears to the total number of critical access 

19 hospitals in all States that comply with subsection (e). 

20 (d) LEAD AGENCY.—A State that receives a grant 

21 under this section shall designate a lead agency to— 

22 (1) administer, directly or through other gov23 ernmental or nongovernmental agencies, the finan24 cial assistance received under the grant; 
3 

•S 1952 IS

1 (2) develop, in consultation with appropriate 

2 representatives of units of general purpose local gov3 ernment and the hospital association of the State, 

4 the State plan; and 

5 (3) coordinate the expenditure of funds and 

6 provision of services under the grant with other Fed7 eral and State health care programs. 

8 (e) STATE PLAN.—To be eligible for a grant under 

9 this section, a State shall establish a State plan that 

10 shall— 

11 (1) identify the State’s lead agency; 

12 (2) provide that the State shall use the 

13 amounts provided to the State under the grant pro14 gram to address health information technology im15 provements and to pay administrative costs incurred 

16 in connection with providing the assistance to local 

17 grant recipients; 

18 (3) provide that benefits shall be available 

19 throughout the entire State; and 

20 (4) require that the lead agency consult with 

21 the hospital association of such State and rural hos22 pitals located in such State on the most appropriate 

23 ways to use the funds received under the grant. 

24 (f) AWARDING OF LOCAL GRANTS.— 
4 

•S 1952 IS

1 (1) IN GENERAL.—The lead agency of a State 

2 shall use amounts received under a grant under sub3 section (a) to award local grants on a competitive 

4 basis. In determining whether a local entity is eligi5 ble to receive a grant under this subsection, the lead 

6 agency shall utilize the following selection criteria: 

7 (A) The extent to which the entity dem8 onstrates a need to improve its health informa9 tion reporting and health information tech10 nology. 

11 (B) The extent to which the entity will 

12 serve a community with a significant low-in13 come or other medically underserved population. 

14 (2) APPLICATION AND APPROVAL.—To be eligi15 ble to receive a local grant under this subsection, an 

16 entity shall be a government-owned or private non17 profit hospital (including a non-Federal short-term 

18 general acute care facility that is a critical access 

19 hospital located outside a Metropolitan Statistical 

20 Area, in a rural census tract of a Metropolitan Sta21 tistical Area as determined under the most recent 

22 version of the Goldsmith Modification or the Rural23 Urban Commuting Area codes, as determined by the 

24 Office of Rural Health Policy of the Health Re25 sources and Services Administration, or is located in 
5 

•S 1952 IS

1 an area designated by any law or regulation of the 

2 State in which the hospital is located as a rural area 

3 (or is designated by such State as a rural hospital 

4 or organization)) that submits an application to the 

5 lead agency of the State that— 

6 (A) includes a description of how the hos7 pital intends to use the funds provided under 

8 the grant; 

9 (B) includes such information as the State 

10 lead agency may require to apply the selection 

11 criteria described in paragraph (1); 

12 (C) includes measurable objectives for the 

13 use of the funds provided under the grant; 

14 (D) includes a description of the manner in 

15 which the applicant will evaluate the effective16 ness of the activities carried out under the 

17 grant; 

18 (E) contains an agreement to maintain 

19 such records, make such reports, and cooperate 

20 with such reviews or audits as the lead agency 

21 and the Secretary may find necessary for pur22 poses of oversight of program activities and ex23 penditures; 
6 

•S 1952 IS

1 (F) contains a plan for sustaining the ac2 tivities after Federal support for the activities 

3 has ended; and 

4 (G) contains such other information and 

5 assurances as the Secretary may require. 

6 (3) USE OF AMOUNTS.— 

7 (A) IN GENERAL.—An entity shall use 

8 amounts received under a local grant under this 

9 section to— 

10 (i) offset the costs incurred by the en11 tity after December 31, 2005, that are re12 lated to clinical health care information 

13 systems and health information technology 

14 designed to improve quality of health care 

15 and patient safety; and 

16 (ii) offset costs incurred by the entity 

17 after December 31, 2005, that are related 

18 to enabling health information technology 

19 to be used for the collection and use of 

20 clinically specific data, promoting the 

21 interoperability of health care information 

22 across health care settings, including re23 porting to Federal and State agencies, and 

24 facilitating clinic decision support through 

25 the use of health information technology. 
7 

•S 1952 IS

1 (B) ELIGIBLE COSTS.—Costs that are eli2 gible to be offset under subparagraph (A) shall 

3 include the cost of— 

4 (i) purchasing, leasing, and installing 

5 computer software and hardware, including 

6 handheld computer technologies, and re7 lated services; 

8 (ii) making improvements to existing 

9 computer software and hardware; 

10 (iii) purchasing or leasing communica11 tions capabilities necessary for clinical data 

12 access, storage, and exchange; 

13 (iv) services associated with acquiring, 

14 implementing, operating, or optimizing the 

15 use of new or existing computer software 

16 and hardware and clinical health care in17 formation systems; 

18 (v) providing education and training 

19 to staff on information systems and tech20 nology designed to improve patient safety 

21 and quality of care; and 

22 (vi) purchasing, leasing, subscribing, 

23 integrating, or servicing clinical decision 

24 support tools that integrate patient-specific 

25 clinic data with well-established national 
8 

•S 1952 IS

1 treatment guidelines, and provide ongoing 

2 continuous quality improvement functions 

3 that allow providers to assess improvement 

4 rates over time and against averages for 

5 similar providers. 

6 (4) GRANT LIMIT.—The amount of a local 

7 grant under this subsection shall not exceed 

8 $250,000. 

9 (g) REPORTING, MONITORING, AND EVALUATION.— 

10 The lead agency of a State that receives a grant under 

11 this section shall annually report to the Secretary— 

12 (1) the amounts received under the grant; 

13 (2) the amounts allocated to State grant recipi14 ents under the grant; 

15 (3) the breakdown of types of expenditures 

16 made by the local grant recipients with such funds; 

17 and 

18 (4) such other information required by the Sec19 retary to assist the Secretary in monitoring the ef20 fectiveness of activities carried out under this grant. 

21 (h) REVIEW OF COMPLIANCE WITH STATE PLAN.— 

22 The Secretary shall review and monitor State compliance 

23 with the requirements of this section and the State plan 

24 submitted under subsection (e). If the Secretary, after rea25 sonable notice to a State and opportunity for a hearing, 
9 

•S 1952 IS

1 finds that there has been a failure by the State to comply 

2 substantially with any provision or requirement set forth 

3 in the State plan or the requirements of this section, the 

4 Secretary shall notify the lead agency involved of such 

5 finding and that no further payments to the State will be 

6 made with respect to the grant until the Secretary is satis7 fied that the State is in compliance or that the noncompli8 ance will be promptly corrected. 

9 (i) PREEMPTION OF CERTAIN LAWS.—The provisions 

10 of this section shall preempt applicable Federal and State 

11 procurement laws with respect to health information tech12 nology purchased under this section. 

13 (j) RELATION TO OTHER PROGRAMS.—Amounts ap14 propriated under this section shall be in addition to appro15 priations for Federal programs for Rural Hospital FLEX 

16 grants, Rural Health Outreach grants, and Small Rural 

17 Hospital Improvement Program grants. 

18 (k) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to carry out this section, 

20 $10,000,000 for each of fiscal years 2006 through 2008. 

21 SEC. 3. REPLACEMENT OF THE INTERNATIONAL STATIS22 TICAL CLASSIFICATION OF DISEASES. 

23 (a) IN GENERAL.—Not later than October 1, 2006, 

24 the Secretary of Health and Human Services shall promul25 gate a final rule concerning the replacement of the Inter-
10 

•S 1952 IS

1 national Statistical Classification of Diseases, 9th revision, 

2 Clinical Modification (referred to in this section as the 

3 ‘‘ICD–9–CM’’), under the regulation promulgated under 

4 section 1173(c) of the Social Security Act (42 U.S.C. 

5 1320d–2(c)), including for purposes of part A of title 

6 XVIII, or part B where appropriate, of such Act, with the 

7 use of each of the following: 

8 (1) The International Statistical Classification 

9 of Diseases and Related Health Problems, 10th revi10 sion, Clinical Modification (referred to in this section 

11 as ‘‘ICD–10–CM’’. 

12 (2) The International Statistical Classification 

13 of Diseases and Related Health Problems, 10th revi14 sion, Clinical Modification Coding System (referred 

15 to in this section as ‘‘ICD–10–PCS’’). 

16 (b) IMPLEMENTATION.— 

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

18 Human Services shall ensure that the rule promul19 gated under subsection (a) is implemented by not 

20 later than October 1, 2009. In carrying out the pre21 ceding sentence, the Secretary shall ensure that such 

22 rule ensure that Accredited Standards Committee 

23 X12 HIPAA transactions version (v) 4010 is up24 graded to a newer version 5010, and that the Na25 tional Council for Prescription Drug Programs Tele-
11 

•S 1952 IS

1 communications Standards version 5.1 is updated to 

2 a newer version (to be released by the named by the 

3 National Council for Prescription Drug Programs 

4 Telecommunications Standards) that supersedes, in 

5 part, existing legislation and regulations under the 

6 Health Insurance Portability and Accountability Act 

7 of 1996. 

8 (2) AUTHORITY.—The Secretary of Health and 

9 Human Services shall have the authority to adopt, 

10 without notice and comment rulemaking, standards 

11 for electronic health care transactions under section 

12 1173 of the Social Security Act (42 U.S.C. 1320d– 

13 2) that are recommended to the Secretary by the 

14 Accredited Standards Committee X12 of the Amer15 ican National Standards Institute in relation to the 

16 replacement of ICD–9–CM with ICD–10–CM and 

17 ICD–10–PCS. Such modifications shall be published 

18 in the Federal Register. 

19 (c) NOTICE OF INTENT.—Not later than 30 days 

20 after the date of enactment of this Act, the Secretary of 

21 Health and Human Services shall issue and publish in the 

22 Federal Register a Notice of Intent that— 

23 (1) adoption of Accredited Standards Com24 mittee X12 HIPAA transactions version (v) 5010 

25 shall occur not later than April 1, 2007, and compli-
12 

•S 1952 IS

1 ance with such rule shall apply to transactions oc2 curring on or after April 1, 2009; 

3 (2) adoption of the National Council for Pre4 scription Drug Programs Telecommunications 

5 Standards version 5.1 with a new version will occur 

6 not later than April 1, 2007, and compliance with 

7 such rule shall apply to transactions occurring on or 

8 after April 1, 2009; 

9 (3) adoption of ICD–10–CM and ICD–10–PCS 

10 will occur not later than October 1, 2006, and com11 pliance with such rules shall apply to transactions 

12 occurring on or after October 1, 2009; and 

13 (4) covered entities and health technology ven14 dors under the Health Insurance Potability and Ac15 countability Act of 1996 shall begin the process of 

16 planning for and implementing the updating of the 

17 new versions and editions referred to in this sub18 section. 

19 (d) ASSURANCES OF CODE AVAILABILITY.—The Sec20 retary of Health and Human Services shall take such ac21 tion as may be necessary to ensure that procedure codes 

22 are promptly available for assignment and use under ICD– 

23 9–CM until such time as ICD–9–CM is replaced as a code 

24 set standard under section 1173(c) of the Social Security 

25 Act with ICD–10–PCS. 
13 

•S 1952 IS

1 (e) DEADLINE.—Notwithstanding section 1172(f) of 

2 the Social Security Act (42 U.S.C. 1320d–1(f)), the Sec3 retary of Health and Human Services shall adopt the 

4 modifications provided for in this section without a rec5 ommendation of the National Committee on Vital and 

6 Health Statistics unless such recommendation is made to 

7 the Secretary on or before a date specified by the Sec8 retary as consistent with the implementation of the re9 placement of ICD–9–CM with ICD–10–CM and ICD-10- 

10 PCS for transactions occurring on or after October 1, 

11 2009. 

12 (f) LIMITATION ON JUDICIAL REVIEW.—The rule 

13 promulgated under subsection (a) shall not be subject to 

14 judicial review. 

15 (g) APPLICATION.—The rule promulgated under sub16 section (a) shall apply to transactions occurring on or 

17 after October 1, 2009. 

18 (h) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed as effecting the application of clas20 sification methodologies or codes, such as the Current 

21 Procedural Terminology (CPT) as maintained and distrib22 uted by the American Medical Association and the 

23 Healthcare Common Procedure Coding System (HCPCS) 

24 as maintained and distributed by the Department of 

25 Health and Human Services, other than under the Inter-
14 

•S 1952 IS

1 national Statistical Classification of Disease and Related 

2 Health Problems. 

Æ