79–006 

111TH CONGRESS REPT. 111–7 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

ENERGY AND COMMERCE RECOVERY AND 

REINVESTMENT ACT 

JANUARY 26, 2009.—Ordered to be printed 

Mr. WAXMAN, from the Committee on Energy and Commmerce, 

submitted the following 

R E P O R T 

together with 

MINORITY AND DISSENTING VIEWS 

[To accompany H.R. 629] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 629) to provide energy and commerce provisions of 

the American Recovery and Reinvestment Act of 2009, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 72 

Background and Need for Legislation .................................................................... 172 

Legislative History .................................................................................................. 75 

Section-by-Section .................................................................................................... 76 

Explanation of Amendments ................................................................................... 94 

Committee Consideration ........................................................................................ 100 

Roll Call Votes ......................................................................................................... 100 

Application of Law to the Legislative Branch ....................................................... 122 

Statement of Oversight Findings and Recommendations of the Committee ...... 122 

Statement of General Performance Goals and Objectives .................................... 122 

Constitutional Authority Statement ...................................................................... 122 

Federal Advisory Committee Act ............................................................................ 122 

Unfunded Mandates Statement .............................................................................. 122 

Earmark Identification ............................................................................................ 122 

Committee Estimate ................................................................................................ 123 

Budget Authority and Congressional Budget Office Cost Estimate .................... 124 

Minority Views ......................................................................................................... 130 

Dissenting Views ..................................................................................................... 166 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 


dwashington3 on PROD1PC60 with HEARING
2 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Energy and Commerce Recovery and Reinvestment 

Act’’. 

SEC. 2. TABLE OF CONTENTS. 

The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents.se TITLE I—BROADBAND COMMUNICATIONS 

Sec. 1001. Inventory of Broadband Service Capability and Availability. 

Sec. 1002. Wireless and Broadband Deployment Grant Programs. 

Sec. 1003. National broadband plan. 

TITLE II—ENERGY 

Sec. 2001. Technical corrections to the Energy Independence and Security Act of 

2007. 

Sec. 2002. Amendments to title XIII of the Energy Independence and Security Act 

of 2007. 

Sec. 2003. Renewable energy and electric power transmission loan guarantee program. 

Sec. 2004. Weatherization Assistance Program amendments. 

Sec. 2005. Renewable electricity transmission study. 

Sec. 2006. Additional State energy grants. 

Sec. 2007. Inapplicability of limitation. 

TITLE III—HEALTH INSURANCE ASSISTANCE FOR THE UNEMPLOYED 

Sec. 3001. Short title and table of contents of title. 

Sec. 3002. Premium assistance for COBRA benefits and extension of COBRA benefits for older or long-term employees. 

Sec. 3003. Temporary optional Medicaid coverage for the unemployed. 

TITLE IV—HEALTH INFORMATION TECHNOLOGY 

Sec. 4001. Short title; table of contents of title. 

Subtitle A—Promotion of Health Information Technology 

PART 1—IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY

Sec. 4101. ONCHIT; standards development and adoption. 

Sec. 4102. Technical amendment. 

Sec. 4103. American technology required. 

PART 2—APPLICATION AND USE OF ADOPTED HEALTH INFORMATION TECHNOLOGY

STANDARDS; REPORTS

Sec. 4111. Coordination of Federal activities with adopted standards and implementation specifications. 

Sec. 4112. Application to private entities. 

Sec. 4113. Study and reports. 

Subtitle B—Testing of Health Information Technology 

Sec. 4201. National Institute for Standards and Technology testing. 

Sec. 4202. Research and development programs. 

Subtitle C—Incentives for the Use of Health Information Technology 

PART I—GRANTS AND LOANS FUNDING

Sec. 4301. Grant, loan, and demonstration programs. 

PART II—MEDICARE PROGRAM

Sec. 4311. Incentives for eligible professionals. 

Sec. 4312. Incentives for hospitals. 

Sec. 4313. Treatment of payments and savings; implementation funding. 

Sec. 4314. Study on application of EHR payment incentives for providers not receiving other incentive payments. 

PART III—MEDICAID FUNDING

Sec. 4321. Medicaid provider HIT adoption and operation payments; implementation funding. 


dwashington3 on PROD1PC60 with HEARING
3 

Subtitle D—Privacy 

Sec. 4400. Definitions. 

PART I—IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS

Sec. 4401. Application of security provisions and penalties to business associates of 

covered entities; annual guidance on security provisions. 

Sec. 4402. Notification in the case of breach. 

Sec. 4403. Education on Health Information Privacy. 

Sec. 4404. Application of privacy provisions and penalties to business associates of 

covered entities. 

Sec. 4405. Restrictions on certain disclosures and sales of health information; accounting of certain protected health information disclosures; access to 

certain information in electronic format. 

Sec. 4406. Conditions on certain contacts as part of health care operations. 

Sec. 4407. Temporary breach notification requirement for vendors of personal 

health records and other non-HIPAA covered entities. 

Sec. 4408. Business associate contracts required for certain entities. 

Sec. 4409. Clarification of application of wrongful disclosures criminal penalties. 

Sec. 4410. Improved enforcement. 

Sec. 4411. Audits. 

Sec. 4412. Securing individually identifiable health information. 

Sec. 4413. Special rule for information to reduce medication errors and improve patient safety. 

PART II—RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE

DATE; REPORTS

Sec. 4421. Relationship to other laws. 

Sec. 4422. Regulatory references. 

Sec. 4423. Effective date. 

Sec. 4424. Studies, reports, guidance. 

TITLE V—MEDICAID PROVISIONS 

Sec. 5000. Table of contents of title. 

Sec. 5001. Temporary increase of Medicaid FMAP. 

Sec. 5002. Moratoria on certain regulations. 

Sec. 5003. Transitional Medicaid assistance (TMA). 

Sec. 5004. State eligibility option for family planning services. 

Sec. 5005. Protections for Indians under Medicaid and CHIP. 

Sec. 5006. Consultation on Medicaid and CHIP. 

Sec. 5007. Temporary increase in DSH allotments during recession. 

TITLE I—BROADBAND COMMUNICATIONS 

SEC. 1001. INVENTORY OF BROADBAND SERVICE CAPABILITY AND AVAILABILITY. 

(a) ESTABLISHMENT.—To provide a comprehensive nationwide inventory of existing 

broadband service capability and availability, the National Telecommunications and 

Information Administration (‘‘NTIA’’) shall develop and maintain a broadband inventory map of the United States that identifies and depicts the geographic extent 

to which broadband service capability is deployed and available from a commercial 

provider or public provider throughout each State. 

(b) PUBLIC AVAILABILITY AND INTERACTIVITY.—Not later than 2 years after the 

date of enactment of this Act, the NTIA shall make the broadband inventory map 

developed and maintained pursuant to this section accessible by the public on a 

World Wide Web site of the NTIA in a form that is interactive and searchable. 

SEC. 1002. WIRELESS AND BROADBAND DEPLOYMENT GRANT PROGRAMS. 

(a) GRANTS AUTHORIZED.— 

(1) IN GENERAL.—The National Telecommunications and Information Administration (‘‘NTIA’’) is authorized to carry out a program to award grants to eligible entities for the non-recurring costs associated with the deployment of 

broadband infrastructure in rural, suburban, and urban areas, in accordance 

with the requirements of this section. 

(2) PROGRAM WEBSITE.—The NTIA shall develop and maintain a website to 

make publicly available information about the program described in paragraph 

(1), including— 

(A) each prioritization report submitted by a State under subsection (b); 


dwashington3 on PROD1PC60 with HEARING
4 

(B) a list of eligible entities that have applied for a grant under this section, and the area or areas the entity proposes to serve; and 

(C) the status of each such application, whether approved, denied, or 

pending. 

(b) STATE PRIORITIES.— (1) PRIORITIES REPORT SUBMISSION.—Not later than 75 days after the date of 

enactment of this section, each State intending to participate in the program 

under this section shall submit to the NTIA a report indicating the geographic 

areas of the State which— 

(A) for the purposes of determining the need for Wireless Deployment 

Grants under subsection (c), the State considers to have the greatest priority for— 

(i) wireless voice service in unserved areas; and 

(ii) advanced wireless broadband service in underserved areas; and 

(B) for the purposes of determining the need for Broadband Deployment 

Grants under subsection (d), the State considers to have the greatest priority for— 

(i) basic broadband service in unserved areas; and 

(ii) advanced broadband service in underserved areas. 

(2) LIMITATION.—The unserved and underserved areas identified by a State 

in the report required by this subsection shall not represent, in the aggregate, 

more than 20 percent of the population of such State. 

(c) WIRELESS DEPLOYMENT GRANTS.— 

(1) AUTHORIZED ACTIVITY.—The NTIA shall award Wireless Deployment 

Grants in accordance with this subsection from amounts authorized for Wireless 

Deployment Grants by this subtitle to eligible entities to deploy necessary infrastructure for the provision of wireless voice service or advanced wireless 

broadband service to end users in designated areas. 

(2) GRANT DISTRIBUTION.—The NTIA shall seek to distribute grants, to the extent possible, so that 25 percent of the grants awarded under this subsection 

shall be awarded to eligible entities for providing wireless voice service to 

unserved areas and 75 percent of grants awarded under this subsection shall 

be awarded to eligible entities for providing advanced wireless broadband service to underserved areas. 

(d) BROADBAND DEPLOYMENT GRANTS.— 

(1) AUTHORIZED ACTIVITY.—The NTIA shall award Broadband Deployment 

Grants in accordance with this subsection from amounts authorized for 

Broadband Deployment Grants by this subtitle to eligible entities to deploy necessary infrastructure for the provision of basic broadband service or advanced 

broadband service to end users in designated areas. 

(2) GRANT DISTRIBUTION.—The NTIA shall seek to distribute grants, to the extent possible, so that 25 percent of the grants awarded under this subsection 

shall be awarded to eligible entities for providing basic broadband service to 

unserved areas and 75 percent of grants awarded under this subsection shall 

be awarded to eligible entities for providing advanced broadband service to underserved areas. 

(e) GRANT REQUIREMENTS.—The NTIA shall— 

(1) adopt rules to protect against unjust enrichment; and 

(2) ensure that grant recipients— 

(A) meet buildout requirements; 

(B) maximize use of the supported infrastructure by the public; 

(C) operate basic and advanced broadband service networks on an open 

access basis; 

(D) operate advanced wireless broadband service on a wireless open access basis; and 

(E) adhere to the principles contained in the Federal Communications 

Commission’s broadband policy statement (FCC 05-151, adopted August 5, 

2005). 

(f) APPLICATIONS.— 

(1) SUBMISSION.—To be considered for a grant awarded under subsection (c) 

or (d), an eligible entity shall submit to the NTIA an application at such time, 

in such manner, and containing such information and assurances as the NTIA 

may require. Such an application shall include— 

(A) a cost-study estimate for serving the particular geographic area to be 

served by the entity; 

(B) a proposed build-out schedule to residential households and small 

businesses in the area; 

(C) for applicants for Wireless Deployment Grants under subsection (c), 

a build-out schedule for geographic coverage of such areas; and 


dwashington3 on PROD1PC60 with HEARING
5 

(D) any other requirements the NTIA deems necessary. 

(2) SELECTION.— 

(A) NOTIFICATION.—The NTIA shall notify each eligible entity that has 

submitted a complete application whether the entity has been approved or 

denied for a grant under this section in a timely fashion. 

(B) GRANT DISTRIBUTION CONSIDERATIONS.—In awarding grants under 

this section, the NTIA shall, to the extent practical— 

(i) award not less than one grant in each State; 

(ii) give substantial weight to whether an application is from an eligible entity to deploy infrastructure in an area that is an area— 

(I) identified by a State in a report submitted under subsection 

(b); or 

(II) in which the NTIA determines there will be a significant 

amount of public safety or emergency response use of the infrastructure; 

(iii) consider whether an application from an eligible entity to deploy 

infrastructure in an area— 

(I) will, if approved, increase the affordability of, or 

subscribership to, service to the greatest population of underserved 

users in the area; 

(II) will, if approved, enhance service for health care delivery, 

education, or children to the greatest population of underserved 

users in the area; 

(III) contains concrete plans for enhancing computer ownership 

or computer literacy in the area; 

(IV) is from a recipient of more than 20 percent matching grants 

from State, local, or private entities for service in the area and the 

extent of such commitment; 

(V) will, if approved, result in unjust enrichment because the eligible entity has applied for, or intends to apply for, support for the 

non-recurring costs through another Federal program for service in 

the area; and 

(VI) will, if approved, significantly improve interoperable 

broadband communications systems available for use by public 

safety and emergency response; and 

(iv) consider whether the eligible entity is a socially and economically 

disadvantaged small business concern, as defined under section 8(a) of 

the Small Business Act (15 U.S.C. 637). 

(g) COORDINATION AND CONSULTATION.—The NTIA shall coordinate with the Federal Communications Commission and shall consult with other appropriate Federal 

agencies in implementing this section. 

(h) REPORT REQUIRED.—The NTIA shall submit an annual report to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate for 5 years assessing the impact of the grants funded under this section on the basis of the objectives 

and criteria described in subsection (f)(2)(B)(iii). 

(i) RULEMAKING AUTHORITY.—The NTIA shall have the authority to prescribe such 

rules as necessary to carry out the purposes of this section. 

(j) DEFINITIONS.—For the purpose of this section— 

(1) the term ‘‘advanced broadband service’’ means a service delivering data to 

the end user transmitted at a speed of at least 45 megabits per second downstream and at least 15 megabits per second upstream; 

(2) the term ‘‘advanced wireless broadband service’’ means a wireless service 

delivering to the end user data transmitted at a speed of at least 3 megabits 

per second downstream and at least 1 megabit per second upstream over an 

end-to-end internet protocol wireless network; 

(3) the term ‘‘basic broadband service’’ means a service delivering data to the 

end user transmitted at a speed of at least 5 megabits per second downstream 

and at least 1 megabit per second upstream; 

(4) the term ‘‘eligible entity’’ means— 

(A) a provider of wireless voice service, advanced wireless broadband 

service, basic broadband service, or advanced broadband service, including 

a satellite carrier that provides any such service; 

(B) a State or unit of local government, or agency or instrumentality 

thereof, that is or intends to be a provider of any such service; and 

(C) any other entity, including construction companies, tower companies, 

backhaul companies, or other service providers, that the NTIA authorizes 

by rule to participate in the programs under this section, if such other entiVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
6 

ty is required to provide access to the supported infrastructure on a neutral, 

reasonable basis to maximize use; 

(5) the term ‘‘interoperable broadband communications systems’’ means communications systems which enable public safety agencies to share information 

among local, State, Federal, and tribal public safety agencies in the same area 

using voice or data signals via advanced wireless broadband service; 

(6) the term ‘‘open access’’ shall be defined by the Federal Communications 

Commission not later than 45 days after the date of enactment of this section; 

(7) the term ‘‘State’’ includes the District of Columbia and the territories and 

possessions; 

(8) the term ‘‘underserved area’’ shall be defined by the Federal Communications Commission not later than 45 days after the date of enactment of this section; 

(9) the term ‘‘unserved area’’ shall be defined by the Federal Communications 

Commission not later than 45 days after the date of enactment of this section; 

(10) the term ‘‘wireless open access’’ shall be defined by the Federal Communications Commission not later than 45 days after the date of enactment of this 

section; and 

(11) the term ‘‘wireless voice service’’ means the provision of two-way, realtime, voice communications using a mobile service. 

(k) REVIEW OF DEFINITIONS.—Not later than 3 months after the date the NTIA 

makes a broadband inventory map of the United States accessible to the public pursuant to section 1001(b), the Federal Communications Commission shall review the 

definitions of ‘‘underserved area’’ and ‘‘unserved area’’, as defined by the Commission within 45 days after the date of enactment of this Act (as required by paragraphs (8) and (9) of subsection (j)), and shall revise such definitions based on the 

data used by the NTIA to develop and maintain such map. 

SEC. 1003. NATIONAL BROADBAND PLAN. 

(a) REPORT REQUIRED.—Not later than 1 year after the date of enactment of this 

section, the Federal Communications Commission shall submit to the Committee on 

Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate, a report containing a national 

broadband plan. 

(b) CONTENTS OF PLAN.—The national broadband plan required by this section 

shall seek to ensure that all people of the United States have access to broadband 

capability and shall establish benchmarks for meeting that goal. The plan shall also 

include— 

(1) an analysis of the most effective and efficient mechanisms for ensuring 

broadband access by all people of the United States; 

(2) a detailed strategy for achieving affordability of such service and maximum utilization of broadband infrastructure and service by the public; and 

(3) a plan for use of broadband infrastructure and services in advancing consumer welfare, civic participation, public safety and homeland security, community development, health care delivery, energy independence and efficiency, education, worker training, private sector investment, entrepreneurial activity, job 

creation and economic growth, and other national purposes. 

TITLE II—ENERGY 

SEC. 2001. TECHNICAL CORRECTIONS TO THE ENERGY INDEPENDENCE AND SECURITY ACT 

OF 2007. 

(a) Section 543(a) of the Energy Independence and Security Act of 2007 (42 U.S.C. 

17153(a)) is amended— 

(1) by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), 

respectively; and 

(2) by striking paragraph (1) and inserting the following: 

‘‘(1) 34 percent to eligible units of local government–alternative 1, in accordance with subsection (b); 

‘‘(2) 34 percent to eligible units of local government–alternative 2, in accordance with subsection (b);’’. 

(b) Section 543(b) of the Energy Independence and Security Act of 2007 (42 U.S.C. 

17153(b)) is amended by striking ‘‘subsection (a)(1)’’ and inserting ‘‘subsection (a)(1) 

or (2)’’. 

(c) Section 548(a)(1) of the Energy Independence and Security Act of 2007 (42 

U.S.C. 17158(a)(1)) is amending by striking ‘‘; provided’’ and all that follows through 

‘‘541(3)(B)’’. 


dwashington3 on PROD1PC60 with HEARING
7 

SEC. 2002. AMENDMENTS TO TITLE XIII OF THE ENERGY INDEPENDENCE AND SECURITY ACT 

OF 2007. 

Title XIII of the Energy Independence and Security Act of 2007 (42 U.S.C. 17381 

and following) is amended as follows: 

(1) By amending subparagraph (A) of section 1304(b)(3) to read as follows: 

‘‘(A) IN GENERAL.—In carrying out the initiative, the Secretary shall provide financial support to smart grid demonstration projects in urban, suburban, and rural areas, including areas where electric system assets are controlled by tax-exempt entities and areas where electric system assets are 

controlled by investor-owned utilities.’’. 

(2) By amending subparagraph (C) of section 1304(b)(3) to read as follows: 

‘‘(C) FEDERAL SHARE OF COST OF TECHNOLOGY INVESTMENTS.—The Secretary shall provide to an electric utility described in subparagraph (B) or 

to other parties financial assistance for use in paying an amount equal to 

not more than 50 percent of the cost of qualifying advanced grid technology 

investments made by the electric utility or other party to carry out a demonstration project.’’. 

(3) By inserting after section 1304(b)(3)(D) the following new subparagraphs: 

‘‘(E) AVAILABILITY OF DATA.—The Secretary shall establish and maintain 

a smart grid information clearinghouse in a timely manner which will make 

data from smart grid demonstration projects and other sources available to 

the public. As a condition of receiving financial assistance under this subsection, a utility or other participant in a smart grid demonstration project 

shall provide such information as the Secretary may require to become 

available through the smart grid information clearinghouse in the form and 

within the timeframes as directed by the Secretary. The Secretary shall assure that business proprietary information and individual customer information is not included in the information made available through the clearinghouse. 

‘‘(F) OPEN INTERNET-BASED PROTOCOLS AND STANDARDS.—The Secretary 

shall require as a condition of receiving funding under this subsection that 

demonstration projects utilize open Internet-based protocols and standards 

if available.’’. 

(4) By amending paragraph (2) of section 1304(c) to read as follows: 

‘‘(2) to carry out subsection (b), such sums as may be necessary.’’. 

(5) By amending subsection (a) of section 1306 by striking ‘‘reimbursement of 

one-fifth (20 percent)’’ and inserting ‘‘grants of up to one-half (50 percent)’’. 

(6) By striking the last sentence of subsection (b)(9) of section 1306. 

(7) By striking ‘‘are eligible for’’ in subsection (c)(1) of section 1306 and inserting ‘‘utilize’’. 

(8) By amending subsection (e) of section 1306 to read as follows: 

‘‘(e) PROCEDURES AND RULES.—The Secretary shall— 

‘‘(1) establish within 60 days after the enactment of the Energy and Commerce Recovery and Reinvestment Act procedures by which applicants can obtain grants of not more than one-half of their documented costs; 

‘‘(2) require as a condition of receiving a grant under this section that grant 

recipients utilize open Internet-based protocols and standards if available; 

‘‘(3) establish procedures to ensure that there is no duplication or multiple 

payment or recovery for the same investment or costs, that the grant goes to 

the party making the actual expenditures for qualifying smart grid investments, 

and that the grants made have significant effect in encouraging and facilitating 

the development of a smart grid; 

‘‘(4) maintain public records of grants made, recipients, and qualifying smart 

grid investments which have received grants; 

‘‘(5) establish procedures to provide advance payment of moneys up to the full 

amount of the grant award; and 

‘‘(6) have and exercise the discretion to deny grants for investments that do 

not qualify in the reasonable judgment of the Secretary.’’. 

SEC. 2003. RENEWABLE ENERGY AND ELECTRIC POWER TRANSMISSION LOAN GUARANTEE 

PROGRAM. 

(a) AMENDMENT.—Title XVII of the Energy Policy Act of 2005 (42 U.S.C. 16511 

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

‘‘SEC. 1705. TEMPORARY PROGRAM FOR RAPID DEPLOYMENT OF RENEWABLE ENERGY AND 

ELECTRIC POWER TRANSMISSION PROJECTS. 

‘‘(a) IN GENERAL.—Notwithstanding section 1703, the Secretary may make guarantees under this section only for commercial technology projects under subsection 

(b) that will commence construction not later than September 30, 2011. 


dwashington3 on PROD1PC60 with HEARING
8 

‘‘(b) CATEGORIES.—Projects from only the following categories shall be eligible for 

support under this section: 

‘‘(1) Renewable energy systems, including incremental hydropower, that generate electricity. 

‘‘(2) Electric power transmission systems, including upgrading and 

reconductoring projects. 

‘‘(3) Leading edge biofuel projects that will use technologies performing at the 

pilot or demonstration scale that the Secretary determines are likely to become 

commercial technologies and will produce transportation fuels that substantially 

reduce life-cycle greenhouse gas emissions compared to other transportation 

fuels. 

‘‘(c) FACTORS RELATING TO ELECTRIC POWER TRANSMISSION SYSTEMS.—In determining to make guarantees to projects described in subsection (b)(2), the Secretary 

shall consider the following factors: 

‘‘(1) The viability of the project without guarantees. 

‘‘(2) The availability of other Federal and State incentives. 

‘‘(3) The importance of the project in meeting reliability needs. 

‘‘(4) The effect of the project in meeting a State or region’s environment (including climate change) and energy goals. 

‘‘(d) WAGE RATE REQUIREMENTS.—The Secretary shall require that each recipient 

of support under this section provide reasonable assurance that all laborers and mechanics employed in the performance of the project for which the assistance is provided, including those employed by contractors or subcontractors, will be paid wages 

at rates not less than those prevailing on similar work in the locality as determined 

by the Secretary of Labor in accordance with subchapter IV of chapter 31 of part 

A of subtitle II of title 40, United States Code (commonly referred to as the ‘DavisBacon Act’). 

‘‘(e) LIMITATION.—Funding under this section for projects described in subsection (b)(3) shall not exceed $500,000,000. 

‘‘(f) SUNSET.—The authority to enter into guarantees under this section shall expire on September 30, 2011.’’. 

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents for the Energy Policy 

Act of 2005 is amended by inserting after the item relating to section 1704 the following new item: 

‘‘Sec. 1705. Temporary program for rapid deployment of renewable energy and electric power transmission projects.’’. 

SEC. 2004. WEATHERIZATION ASSISTANCE PROGRAM AMENDMENTS. 

(a) INCOME LEVEL.—Section 412(7) of the Energy Conservation and Production 

Act (42 U.S.C. 6862(7)) is amended by striking ‘‘150 percent’’ both places it appears 

and inserting ‘‘200 percent’’. 

(b) ASSISTANCE LEVEL PER DWELLING UNIT.— Section 415(c)(1) of the Energy Con- servation and Production Act (42 U.S.C. 6865(c)(1)) is amended by striking ‘‘$2,500’’ 

and inserting ‘‘$5,000’’. 

(c) EFFECTIVE USE OF FUNDS.—In providing funds made available by this Act for 

the Weatherization Assistance Program, the Secretary may encourage States to give 

priority to using such funds for the most cost-effective efficiency activities, which 

may include insulation of attics, if, in the Secretary’s view, such use of funds would 

increase the effectiveness of the program. 

SEC. 2005. RENEWABLE ELECTRICITY TRANSMISSION STUDY. 

In completing the 2009 National Electric Transmission Congestion Study, the Secretary of Energy shall include— 

(1) an analysis of the significant potential sources of renewable energy that 

are constrained in accessing appropriate market areas by lack of adequate 

transmission capacity; 

(2) an analysis of the reasons for failure to develop the adequate transmission 

capacity; 

(3) recommendations for achieving adequate transmission capacity; 

(4) an analysis of the extent to which legal challenges filed at the State and 

Federal level are delaying the construction of transmission necessary to access 

renewable energy; and 

(5) an explanation of assumptions and projections made in the Study, including— 

(A) assumptions and projections relating to energy efficiency improvements in each load center; 

(B) assumptions and projections regarding the location and type of projected new generation capacity; and 

(C) assumptions and projections regarding projected deployment of distributed generation infrastructure. 


dwashington3 on PROD1PC60 with HEARING
9 

SEC. 2006. ADDITIONAL STATE ENERGY GRANTS. 

(a) IN GENERAL.—Amounts appropriated for the State Energy Program under the 

American Recovery and Reinvestment Act of 2009 shall be available to the Secretary 

of Energy for making additional grants under part D of title III of the Energy Policy 

and Conservation Act (42 U.S.C. 6321 et seq.). The Secretary shall make grants 

under this section in excess of the base allocation established for a State under regulations issued pursuant to the authorization provided in section 365(f) of such Act 

only if the governor of the recipient State notifies the Secretary of Energy that the 

governor will seek, to the extent of his or her authority, to ensure that each of the 

following will occur: 

(1) The applicable State regulatory authority will implement the following 

regulatory policies for each electric and gas utility with respect to which the 

State regulatory authority has ratemaking authority: 

(A) Policies that ensure that a utility’s recovery of prudent fixed costs of 

service is timely and independent of its retail sales, without in the process 

shifting prudent costs from variable to fixed charges. This cost shifting constraint shall not apply to rate designs adopted prior to the date of enactment of this Act. 

(B) Cost recovery for prudent investments by utilities in energy efficiency. 

(C) An earnings opportunity for utilities associated with cost-effective energy efficiency savings. 

(2) The State, or the applicable units of local government that have authority 

to adopt building codes, will implement the following: 

(A) A building energy code (or codes) for residential buildings that meets 

or exceeds the most recently published International Energy Conservation 

Code, or achieves equivalent or greater energy savings. 

(B) A building energy code (or codes) for commercial buildings throughout 

the State that meets or exceeds the ANSI/ASHRAE/IESNA Standard 90.1- 

2007, or achieves equivalent or greater energy savings. 

(C) A plan for the jurisdiction achieving compliance with the building energy code or codes described in subparagraphs (A) and (B) within 8 years 

of the date of enactment of this Act in at least 90 percent of new and renovated residential and commercial building space. Such plan shall include 

active training and enforcement programs and measurement of the rate of 

compliance each year. 

(3) The State will to the extent practicable prioritize the grants toward funding energy efficiency and renewable energy programs, including— 

(A) the expansion of existing energy efficiency programs approved by the 

State or the appropriate regulatory authority, including energy efficiency 

retrofits of buildings and industrial facilities, that are funded— 

(i) by the State; or 

(ii) through rates under the oversight of the applicable regulatory authority, to the extent applicable; 

(B) the expansion of existing programs, approved by the State or the appropriate regulatory authority, to support renewable energy projects and 

deployment activities, including programs operated by entities which have 

the authority and capability to manage and distribute grants, loans, performance incentives, and other forms of financial assistance; and 

(C) cooperation and joint activities between States to advance more efficient and effective use of this funding to support the priorities described in 

this paragraph. 

(b) STATE MATCH.—The State cost share requirement under the item relating to 

‘‘DEPARTMENT OF ENERGY; energy conservation’’ in title II of the Department 

of the Interior and Related Agencies Appropriations Act, 1985 (42 U.S.C. 6323a; 98 

Stat. 1861) shall not apply to assistance provided under this section. 

(c) EQUIPMENT AND MATERIALS FOR ENERGY EFFICIENCY MEASURES.—No limitation on the percentage of funding that may be used for the purchase and installation 

of equipment and materials for energy efficiency measures under grants provided 

under part D of title III of the Energy Policy and Conservation Act (42 U.S.C. 6321 

et seq.) shall apply to assistance provided under this section. 

SEC. 2007. INAPPLICABILITY OF LIMITATION. 

The limitations in section 399A(f)(2), (3), and (4) of the Energy Policy and Conservation Act (42 U.S.C. 6371h-1(f)(2), (3), and (4)) shall not apply to grants funded 

with appropriations provided by this Act, except that such grant funds shall be 

available for not more than an amount equal to 80 percent of the costs of the project 

for which the grant is provided. 


dwashington3 on PROD1PC60 with HEARING
10 

TITLE III—HEALTH INSURANCE ASSISTANCE 

FOR THE UNEMPLOYED 

SEC. 3001. SHORT TITLE AND TABLE OF CONTENTS OF TITLE. 

(a) SHORT TITLE OF TITLE.—This title may be cited as the ‘‘Health Insurance Assistance for the Unemployed Act of 2009’’. 

(b) TABLE OF CONTENTS OF TITLE.—The table of contents of this title is as follows: 

Sec. 3001. Short title and table of contents of title. 

Sec. 3002. Premium assistance for COBRA benefits and extension of COBRA benefits for older or long-term employees. 

Sec. 3003. Temporary optional Medicaid coverage for the unemployed. 

SEC. 3002. PREMIUM ASSISTANCE FOR COBRA BENEFITS AND EXTENSION OF COBRA BENEFITS FOR OLDER OR LONG-TERM EMPLOYEES. 

(a) PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE FOR INDIVIDUALS

AND THEIR FAMILIES.— 

(1) PROVISION OF PREMIUM ASSISTANCE.— 

(A) REDUCTION OF PREMIUMS PAYABLE.—In the case of any premium for 

a period of coverage beginning on or after the date of the enactment of this 

Act for COBRA continuation coverage with respect to any assistance eligible individual, such individual shall be treated for purposes of any COBRA 

continuation provision as having paid the amount of such premium if such 

individual pays 35 percent of the amount of such premium (as determined 

without regard to this subsection). 

(B) PREMIUM REIMBURSEMENT.—For provisions providing the balance of 

such premium, see section 6431 of the Internal Revenue Code of 1986, as 

added by paragraph (12). 

(2) LIMITATION OF PERIOD OF PREMIUM ASSISTANCE.— 

(A) IN GENERAL.—Paragraph (1)(A) shall not apply with respect to any assistance eligible individual for months of coverage beginning on or after the 

earlier of— 

(i) the first date that such individual is eligible for coverage under 

any other group health plan (other than coverage consisting of only 

dental, vision, counseling, or referral services (or a combination thereof), coverage under a health reimbursement arrangement or a health 

flexible spending arrangement, or coverage of treatment that is furnished in an on-site medical facility maintained by the employer and 

that consists primarily of first-aid services, prevention and wellness 

care, or similar care (or a combination thereof)) or is eligible for benefits under title XVIII of the Social Security Act, or 

(ii) the earliest of— 

(I) the date which is 12 months after the first day of the first 

month that paragraph (1)(A) applies with respect to such individual, 

(II) the date following the expiration of the maximum period of 

continuation coverage required under the applicable COBRA continuation coverage provision, or 

(III) the date following the expiration of the period of continuation coverage allowed under paragraph (4)(B)(ii). 

(B) TIMING OF ELIGIBILITY FOR ADDITIONAL COVERAGE.—For purposes of 

subparagraph (A)(i), an individual shall not be treated as eligible for coverage under a group health plan before the first date on which such individual could be covered under such plan. 

(C) NOTIFICATION REQUIREMENT.—An assistance eligible individual shall 

notify in writing the group health plan with respect to which paragraph 

(1)(A) applies if such paragraph ceases to apply by reason of subparagraph 

(A)(i). Such notice shall be provided to the group health plan in such time 

and manner as may be specified by the Secretary of Labor. 

(3) ASSISTANCE ELIGIBLE INDIVIDUAL.—For purposes of this section, the term 

‘‘assistance eligible individual’’ means any qualified beneficiary if— 

(A) at any time during the period that begins with September 1, 2008, 

and ends with December 31, 2009, such qualified beneficiary is eligible for 

COBRA continuation coverage, 

(B) such qualified beneficiary elects such coverage, 

(C) the qualifying event with respect to the COBRA continuation coverage 

consists of the involuntary termination of the covered employee’s employment and occurred during such period, and 


dwashington3 on PROD1PC60 with HEARING
11 

(D) at the time of the election such qualified beneficiary’s annual income 

is less than $1,000,000. 

(4) EXTENSION OF ELECTION PERIOD AND EFFECT ON COVERAGE.— 

(A) IN GENERAL.—Notwithstanding section 605(a) of the Employee Retirement Income Security Act of 1974, section 4980B(f)(5)(A) of the Internal 

Revenue Code of 1986, section 2205(a) of the Public Health Service Act, and 

section 8905a(c)(2) of title 5, United States Code, in the case of an individual who is a qualified beneficiary described in paragraph (3)(A) as of the 

date of the enactment of this Act and has not made the election referred 

to in paragraph (3)(B) as of such date, such individual may elect the 

COBRA continuation coverage under the COBRA continuation coverage 

provisions containing such sections during the 60-day period commencing 

with the date on which the notification required under paragraph (7)(C) is 

provided to such individual. 

(B) COMMENCEMENT OF COVERAGE; NO REACH-BACK.—Any COBRA continuation coverage elected by a qualified beneficiary during an extended 

election period under subparagraph (A)— 

(i) shall commence on the date of the enactment of this Act, and 

(ii) shall not extend beyond the period of COBRA continuation coverage that would have been required under the applicable COBRA continuation coverage provision if the coverage had been elected as required under such provision. 

(C) PREEXISTING CONDITIONS.—With respect to a qualified beneficiary 

who elects COBRA continuation coverage pursuant to subparagraph (A), 

the period— 

(i) beginning on the date of the qualifying event, and 

(ii) ending with the day before the date of the enactment of this Act, 

shall be disregarded for purposes of determining the 63-day periods referred 

to in section 701)(2) of the Employee Retirement Income Security Act of 

1974, section 9801(c)(2) of the Internal Revenue Code of 1986, and section 

2701(c)(2) of the Public Health Service Act. 

(5) EXPEDITED REVIEW OF DENIALS OF PREMIUM ASSISTANCE.—In any case in 

which an individual requests treatment as an assistance eligible individual and 

is denied such treatment by the group health plan by reason of such individual’s 

ineligibility for COBRA continuation coverage, the Secretary of Labor (or the 

Secretary of Health and Human services in connection with COBRA continuation coverage which is provided other than pursuant to part 6 of subtitle B of 

title I of the Employee Retirement Income Security Act of 1974), in consultation 

with the Secretary of the Treasury, shall provide for expedited review of such 

denial. An individual shall be entitled to such review upon application to such 

Secretary in such form and manner as shall be provided by such Secretary. 

Such Secretary shall make a determination regarding such individual’s eligibility within 10 business days after receipt of such individual’s application for 

review under this paragraph. 

(6) DISREGARD OF SUBSIDIES FOR PURPOSES OF FEDERAL AND STATE PROGRAMS.—Notwithstanding any other provision of law, any premium reduction 

with respect to an assistance eligible individual under this subsection shall not 

be considered income or resources in determining eligibility for, or the amount 

of assistance or benefits provided under, any other public benefit provided 

under Federal law or the law of any State or political subdivision thereof. 

(7) NOTICES TO INDIVIDUALS.— 

(A) GENERAL NOTICE.— 

(i) IN GENERAL.—In the case of notices provided under section 606(4) 

of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1166(4)), section 4980B(f)(6)(D) of the Internal Revenue Code of 1986, 

section 2206(4) of the Public Health Service Act (42 U.S.C. 300bb–6(4)), 

or section 8905a(f)(2)(A) of title 5, United States Code, with respect to 

individuals who, during the period described in paragraph (3)(A), become entitled to elect COBRA continuation coverage, such notices shall 

include an additional notification to the recipient of the availability of 

premium reduction with respect to such coverage under this subsection. 

(ii) ALTERNATIVE NOTICE.—In the case of COBRA continuation coverage to which the notice provision under such sections does not apply, 

the Secretary of Labor, in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services, shall, in coordination with administrators of the group health plans (or other entities) 

that provide or administer the COBRA continuation coverage involved, 

provide rules requiring the provision of such notice. 


dwashington3 on PROD1PC60 with HEARING
12 

(iii) FORM.—The requirement of the additional notification under this 

subparagraph may be met by amendment of existing notice forms or by 

inclusion of a separate document with the notice otherwise required. 

(B) SPECIFIC REQUIREMENTS.—Each additional notification under subparagraph (A) shall include— 

(i) the forms necessary for establishing eligibility for premium reduction under this subsection, 

(ii) the name, address, and telephone number necessary to contact 

the plan administrator and any other person maintaining relevant information in connection with such premium reduction, 

(iii) a description of the extended election period provided for in paragraph (4)(A), 

(iv) a description of the obligation of the qualified beneficiary under 

paragraph (2)(C) to notify the plan providing continuation coverage of 

eligibility for subsequent coverage under another group health plan or 

eligibility for benefits under title XVIII of the Social Security Act and 

the penalty provided for failure to so notify the plan, and 

(v) a description, displayed in a prominent manner, of the qualified 

beneficiary’s right to a reduced premium and any conditions on entitlement to the reduced premium. 

(C) NOTICE RELATING TO RETROACTIVE COVERAGE.—In the case of an individual described in paragraph (3)(A) who has elected COBRA continuation 

coverage as of the date of enactment of this Act or an individual described 

in paragraph (4)(A), the administrator of the group health plan (or other 

entity) involved shall provide (within 60 days after the date of enactment 

of this Act) for the additional notification required to be provided under 

subparagraph (A). 

(D) MODEL NOTICES.—Not later than 30 days after the date of enactment 

of this Act, the Secretary of the Labor, in consultation with the Secretary 

of the Treasury and the Secretary of Health and Human Services, shall prescribe models for the additional notification required under this paragraph. 

(8) SAFEGUARDS.—The Secretary of the Treasury shall provide such rules, procedures, regulations, and other guidance as may be necessary and appropriate 

to prevent fraud and abuse under this subsection. 

(9) OUTREACH.—The Secretary of Labor, in consultation with the Secretary of 

the Treasury and the Secretary of Health and Human Services, shall provide 

outreach consisting of public education and enrollment assistance relating to 

premium reduction provided under this subsection. Such outreach shall target 

employers, group health plan administrators, public assistance programs, 

States, insurers, and other entities as determined appropriate by such Secretaries. Such outreach shall include an initial focus on those individuals electing 

continuation coverage who are referred to in paragraph (7)(C). Information on 

such premium reduction, including enrollment, shall also be made available on 

website of the Departments of Labor, Treasury, and Health and Human Services. 

(10) DEFINITIONS.—For purposes of this subsection— 

(A) ADMINISTRATOR.—The term ‘‘administrator’’ has the meaning given 

such term in section 3(16) of the Employee Retirement Income Security Act 

of 1974. 

(B) COBRA CONTINUATION COVERAGE.—The term ‘‘COBRA continuation 

coverage’’ means continuation coverage provided pursuant to part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 

(other than under section 609), title XXII of the Public Health Service Act, 

section 4980B of the Internal Revenue Code of 1986 (other than subsection 

(f)(1) of such section insofar as it relates to pediatric vaccines), or section 

8905a of title 5, United States Code, or under a State program that provides continuation coverage comparable to such continuation coverage. Such 

term does not include coverage under a health flexible spending arrangement. 

(C) COBRA CONTINUATION PROVISION.—The term ‘‘COBRA continuation 

provision’’ means the provisions of law described in subparagraph (B). 

(D) COVERED EMPLOYEE.—The term ‘‘covered employee’’ has the meaning 

given such term in section 607(2) of the Employee Retirement Income Security Act of 1974. 

(E) QUALIFIED BENEFICIARY.—The term ‘‘qualified beneficiary’’ has the 

meaning given such term in section 607(3) of the Employee Retirement Income Security Act of 1974. 


dwashington3 on PROD1PC60 with HEARING
13 

(F) GROUP HEALTH PLAN.—The term ‘‘group health plan’’ has the meaning 

given such term in section 607(1) of the Employee Retirement Income Security Act of 1974. 

(G) STATE.—The term ‘‘State’’ includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and 

the Commonwealth of the Northern Mariana Islands. 

(11) REPORTS.— 

(A) INTERIM REPORT.—The Secretary of the Treasury shall submit an interim report to the Committee on Education and Labor, the Committee on 

Ways and Means, and the Committee on Energy and Commerce of the 

House of Representatives and the Committee on Health, Education, Labor, 

and Pensions and the Committee on Finance of the Senate regarding the 

premium reduction provided under this subsection that includes— 

(i) the number of individuals provided such assistance as of the date 

of the report; and 

(ii) the total amount of expenditures incurred (with administrative 

expenditures noted separately) in connection with such assistance as of 

the date of the report. 

(B) FINAL REPORT.—As soon as practicable after the last period of COBRA 

continuation coverage for which premium reduction is provided under this 

section, the Secretary of the Treasury shall submit a final report to each 

Committee referred to in subparagraph (A) that includes— 

(i) the number of individuals provided premium reduction under this 

section; 

(ii) the average dollar amount (monthly and annually) of premium reductions provided to such individuals; and 

(iii) the total amount of expenditures incurred (with administrative 

expenditures noted separately) in connection with premium reduction 

under this section. 

(12) COBRA PREMIUM ASSISTANCE.— 

(A) IN GENERAL.—Subchapter B of chapter 65 of the Internal Revenue 

Code of 1986 is amended by adding at the end the following new section: 

‘‘SEC. 6431. COBRA PREMIUM ASSISTANCE. 

‘‘(a) IN GENERAL.—The entity to whom premiums are payable under COBRA continuation coverage shall be reimbursed for the amount of premiums not paid by plan 

beneficiaries by reason of section 3002(a) of the Health Insurance Assistance for the 

Unemployed Act of 2009. Such amount shall be treated as a credit against the requirement of such entity to make deposits of payroll taxes. To the extent that such 

amount exceeds the amount of such taxes, the Secretary shall pay to such entity 

the amount of such excess. No payment may be made under this subsection to an 

entity with respect to any assistance eligible individual until after such entity has 

received the reduced premium from such individual required under section 

3002(a)(1)(A) of such Act. 

‘‘(b) PAYROLL TAXES.—For purposes of this section, the term ‘payroll taxes’ 

means— 

‘‘(1) amounts required to be deducted and withheld for the payroll period 

under section 3401 (relating to wage withholding), 

‘‘(2) amounts required to be deducted for the payroll period under section 

3102 (relating to FICA employee taxes), and 

‘‘(3) amounts of the taxes imposed for the payroll period under section 3111 

(relating to FICA employer taxes). 

‘‘(c) TREATMENT OF CREDIT.—Except as otherwise provided by the Secretary, the 

credit described in subsection (a) shall be applied as though the employer had paid 

to the Secretary, on the day that the qualified beneficiary’s premium payment is received, an amount equal to such credit. 

‘‘(d) TREATMENT OF PAYMENT.—For purposes of section 1324(b)(2) of title 31, 

United States Code, any payment under this section shall be treated in the same 

manner as a refund of the credit under section 35. 

‘‘(e) REPORTING.— 

‘‘(1) IN GENERAL.—Each entity entitled to reimbursement under subsection (a) 

for any period shall submit such reports as the Secretary may require, including— 

‘‘(A) an attestation of involuntary termination of employment for each 

covered employee on the basis of whose termination entitlement to reimbursement is claimed under subsection (a), and 

‘‘(B) a report of the amount of payroll taxes offset under subsection (a) 

for the reporting period and the estimated offsets of such taxes for the subVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
14 

sequent reporting period in connection with reimbursements under subsection (a). 

‘‘(2) TIMING OF REPORTS RELATING TO AMOUNT OF PAYROLL TAXES.—Reports required under paragraph (1)(B) shall be submitted at the same time as deposits 

of taxes imposed by chapters 21, 22, and 24 or at such time as is specified by 

the Secretary. 

‘‘(f) REGULATIONS.—The Secretary may issue such regulations or other guidance 

as may be necessary or appropriate to carry out this section, including the requirement to report information or the establishment of other methods for verifying the 

correct amounts of payments and credits under this section.’’. 

(B) SOCIAL SECURITY TRUST FUNDS HELD HARMLESS.—In determining any 

amount transferred or appropriated to any fund under the Social Security 

Act, section 6431 of the Internal Revenue Code of 1986 shall not be taken 

into account. 

(C) CLERICAL AMENDMENT.—The table of sections for subchapter B of 

chapter 65 of the Internal Revenue Code of 1986 is amended by adding at 

the end the following new item: 

‘‘Sec. 6431. COBRA premium assistance.’’. 

(D) EFFECTIVE DATE.—The amendments made by this paragraph shall 

apply to premiums to which subsection (a)(1)(A) applies. 

(13) PENALTY FOR FAILURE TO NOTIFY HEALTH PLAN OF CESSATION OF ELIGIBILITY FOR PREMIUM ASSISTANCE.— 

(A) IN GENERAL.—Part I of subchapter B of chapter 68 of the Internal 

Revenue Code of 1986 is amended by adding at the end the following new 

section: 

‘‘SEC. 6720C. PENALTY FOR FAILURE TO NOTIFY HEALTH PLAN OF CESSATION OF ELIGIBILITY FOR COBRA PREMIUM ASSISTANCE. 

‘‘(a) IN GENERAL.—Any person required to notify a group health plan under section 3002(a)(2)(C)) of the Health Insurance Assistance for the Unemployed Act of 

2009 who fails to make such a notification at such time and in such manner as the 

Secretary of Labor may require shall pay a penalty of 110 percent of the premium 

reduction provided under such section after termination of eligibility under such 

subsection. 

‘‘(b) REASONABLE CAUSE EXCEPTION.—No penalty shall be imposed under subsection (a) with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.’’. 

(B) CLERICAL AMENDMENT.—The table of sections of part I of subchapter 

B of chapter 68 of such Code is amended by adding at the end the following 

new item: 

‘‘Sec. 6720C. Penalty for failure to notify health plan of cessation of eligibility for 

COBRA premium assistance.’’. 

(C) EFFECTIVE DATE.—The amendments made by this paragraph shall 

apply to failures occurring after the date of the enactment of this Act. 

(14) COORDINATION WITH HCTC.— 

(A) IN GENERAL.—Subsection (g) of section 35 of the Internal Revenue 

Code of 1986 is amended by redesignating paragraph (9) as paragraph (10) 

and inserting after paragraph (8) the following new paragraph: 

‘‘(9) COBRA PREMIUM ASSISTANCE.—In the case of an assistance eligible individual who receives premium reduction for COBRA continuation coverage under 

section 3002(a) of the Health Insurance Assistance for the Unemployed Act of 

2009 for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month.’’. 

(B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall 

apply to taxable years ending after the date of the enactment of this Act. 

(15) EXCLUSION OF COBRA PREMIUM ASSISTANCE FROM GROSS INCOME.— 

(A) IN GENERAL.—Part III of subchapter B of chapter 1 of the Internal 

Revenue Code of 1986 is amended by inserting after section 139B the following new section: 

‘‘SEC. 139C. COBRA PREMIUM ASSISTANCE. 

‘‘In the case of an assistance eligible individual (as defined in section 3002 of the 

Health Insurance Assistance for the Unemployed Act of 2009), gross income does not 

include any premium reduction provided under subsection (a) of such section.’’. 

(B) CLERICAL AMENDMENT.—The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item 

relating to section 139B the following new item: 

‘‘Sec. 139C. COBRA premium assistance.’’. 


dwashington3 on PROD1PC60 with HEARING
15 

(C) EFFECTIVE DATE.—The amendments made by this paragraph shall 

apply to taxable years ending after the date of the enactment of this Act. 

(b) EXTENSION OF COBRA BENEFITS FOR OLDER OR LONG-TERM EMPLOYEES.— 

(1) ERISA AMENDMENT.—Section 602(2)(A) of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new 

clauses: 

‘‘(x) SPECIAL RULE FOR OLDER OR LONG-TERM EMPLOYEES GENERALLY.—In the case of a qualifying event described in section 603(2) 

with respect to a covered employee who (as of such qualifying event) 

has attained age 55 or has completed 10 or more years of service with 

the entity that is the employer at the time of the qualifying event, 

clauses (i) and (ii) shall not apply. 

‘‘(xi) YEAR OF SERVICE.— For purposes of this subparagraph, the term 

‘year of service’ shall have the meaning provided in section 202(a)(3).’’. 

(2) IRC AMENDMENT.—Clause (i) of section 4980B(f)(2)(B) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subclauses: 

‘‘(X) SPECIAL RULE FOR OLDER OR LONG-TERM EMPLOYEES GENERALLY.—In the case of a qualifying event described in paragraph 

(3)(B) with respect to a covered employee who (as of such qualifying event) has attained age 55 or has completed 10 or more years 

of service with the entity that is the employer at the time of the 

qualifying event, subclauses (I) and (II) shall not apply. 

‘‘(XI) YEAR OF SERVICE.— For purposes of this clause, the term 

‘year of service’ shall have the meaning provided in section 

202(a)(3) of the Employee Retirement Income Security Act of 

1974.’’. 

(3) PHSA AMENDMENT.—Section 2202(2)(A) of the Public Health Service Act 

is amended by adding at the end the following new clauses: 

‘‘(viii) SPECIAL RULE FOR OLDER OR LONG-TERM EMPLOYEES GENERALLY.—In the case of a qualifying event described in section 2203(2) 

with respect to a covered employee who (as of such qualifying event) 

has attained age 55 or has completed 10 or more years of service with 

the entity that is the employer at the time of the qualifying event, 

clauses (i) and (ii) shall not apply. 

‘‘(ix) YEAR OF SERVICE.— For purposes of this subparagraph, the term 

‘year of service’ shall have the meaning provided in section 202(a)(3) of 

the Employee Retirement Income Security Act of 1974.’’. 

(4) EFFECTIVE DATE OF AMENDMENTS.—The amendments made by this subsection shall apply to periods of coverage which would (without regard to the 

amendments made by this section) end on or after the date of the enactment 

of this Act. 

SEC. 3003. TEMPORARY OPTIONAL MEDICAID COVERAGE FOR THE UNEMPLOYED. 

(a) IN GENERAL.—Section 1902 of the Social Security Act (42 U.S.C. 1396b) is 

amended— 

(1) in subsection (a)(10)(A)(ii)— 

(A) by striking ‘‘or’’ at the end of subclause (XVIII); 

(B) by adding ‘‘or’’ at the end of subclause (XIX); and 

(C) by adding at the end the following new subclause 

‘‘(XX) who are described in subsection (dd)(1) (relating to certain 

unemployed individuals and their families);’’; and 

(2) by adding at the end the following new subsection: 

‘‘(dd)(1) Individuals described in this paragraph are— 

‘‘(A) individuals who— 

‘‘(i) are within one or more of the categories described in paragraph (2), as 

elected under the State plan; and 

‘‘(ii) meet the applicable requirements of paragraph (3); and 

‘‘(B) individuals who— 

‘‘(i) are the spouse, or dependent child under 19 years of age, of an individual 

described in subparagraph (A); and 

‘‘(ii) meet the requirement of paragraph (3)(B). 

‘‘(2) The categories of individuals described in this paragraph are each of the following: 

‘‘(A) Individuals who are receiving unemployment compensation benefits. 

‘‘(B) Individuals who were receiving, but have exhausted, unemployment compensation benefits on or after July 1, 2008. 

‘‘(C) Individuals who are involuntarily unemployed and were involuntarily 

separated from employment on or after September 1, 2008, and before January 


dwashington3 on PROD1PC60 with HEARING
16 

1, 2011, whose family gross income does not exceed a percentage specified by 

the State (not to exceed 200 percent) of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved, and who, but for subsection 

(a)(10)(A)(ii)(XX), are not eligible for medical assistance under this title or 

health assistance under title XXI. 

‘‘(D) Individuals who are involuntarily unemployed and were involuntarily 

separated from employment on or after September 1, 2008, and before January 

1, 2011, who are members of households participating in the supplemental nutrition assistance program established under the Food and Nutrition Act of 

2008 (7 U.S.C. 2011 et seq), and who, but for subsection (a)(10)(A)(ii)(XX), are 

not eligible for medical assistance under this title or health assistance under 

title XXI. 

A State plan may elect one or more of the categories described in this paragraph 

but may not elect the category described in subparagraph (B) unless the State plan 

also elects the category described in subparagraph (A). 

‘‘(3) The requirements of this paragraph with respect to an individual are the following: 

‘‘(A) In the case of individuals within a category described in subparagraph 

(A) or (B) of paragraph (2), the individual was involuntarily separated from employment on or after September 1, 2008, and before January 1, 2011, or meets 

such comparable requirement as the Secretary specifies through rule, guidance, 

or otherwise in the case of an individual who was an independent contractor. 

‘‘(B) The individual is not otherwise covered under creditable coverage, as defined in section 2701(c) of the Public Health Service Act (42 U.S.C. 300gg(c)), 

but applied without regard to paragraph (1)(F) of such section and without regard to coverage provided by reason of the application of subsection 

(a)(10)(A)(ii)(XX). 

‘‘(4)(A) No income or resources test shall be applied with respect to any category 

of individuals described in subparagraph (A), (B), or (D) of paragraph (2) who are 

eligible for medical assistance only by reason of the application of subsection 

(a)(10)(A)(ii)(XX). 

‘‘(B) Nothing in this subsection shall be construed to prevent a State from imposing a resource test for the category of individuals described in paragraph (2)(C)). 

‘‘(C) In the case of individuals provided medical assistance by reason of the application of subsection (a)(10)(A)(ii)(XX), the requirements of subsections (i)(22) and (x) 

shall not apply.’’. 

(b) 100 PERCENT FEDERAL MATCHING RATE.— 

(1) FMAP FOR TIME-LIMITED PERIOD.—The third sentence of section 1905(b) 

of such Act (42 U.S.C. 1396d(b)) is amended by inserting before the period at 

the end the following: ‘‘and for items and services furnished on or after the date 

of enactment of this Act and before January 1, 2011, to individuals who are eligible for medical assistance only by reason of the application of section 

1902(a)(10)(A)(ii)(XX)’’. 

(2) CERTAIN ENROLLMENT-RELATED ADMINISTRATIVE COSTS.—Notwithstanding 

any other provision of law, for purposes of applying section 1903(a) of the Social 

Security Act (42 U.S.C. 1396b(a)), with respect to expenditures incurred on or 

after the date of the enactment of this Act and before January 1, 2011, for costs 

of administration (including outreach and the modification and operation of eligibility information systems) attributable to eligibility determination and enrollment of individuals who are eligible for medical assistance only by reason of the 

application of section 1902(a)(10)(A)(ii)(XX) of such Act, as added by subsection 

(a)(1), the Federal matching percentage shall be 100 percent instead of the 

matching percentage otherwise applicable. 

(c) CONFORMING AMENDMENTS.—(1) Section 1903(f)(4) of such Act (42 U.S.C. 

1396c(f)(4)) is amended by inserting ‘‘1902(a)(10)(A)(ii)(XX), or’’ after 

‘‘1902(a)(10)(A)(ii)(XIX),’’. 

(2) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is amended, in the matter preceding paragraph (1)— 

(A) by striking ‘‘or’’ at the end of clause (xii); 

(B) by adding ‘‘or’’ at the end of clause (xiii); and 

(C) by inserting after clause (xiii) the following new clause: 

‘‘(xiv) individuals described in section 1902(dd)(1),’’. 


dwashington3 on PROD1PC60 with HEARING
17 

TITLE IV—HEALTH INFORMATION 

TECHNOLOGY 

SEC. 4001. SHORT TITLE; TABLE OF CONTENTS OF TITLE. 

(a) SHORT TITLE.—This title may be cited as the ‘‘Health Information Technology 

for Economic and Clinical Health Act’’ or the ‘‘HITECH Act’’. 

(b) TABLE OF CONTENTS OF TITLE.—The table of contents of this title is as follows: 

Sec. 4001. Short title; table of contents of title. 

Subtitle A—Promotion of Health Information Technology 

PART I—IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY

Sec. 4101. ONCHIT; standards development and adoption. 

‘‘TITLE XXX—HEALTH INFORMATION TECHNOLOGY AND QUALITY 

‘‘Sec. 3000. Definitions. 

‘‘Subtitle A—Promotion of Health Information Technology 

‘‘Sec. 3001. Office of the National Coordinator for Health Information Technology. 

‘‘Sec. 3002. HIT Policy Committee. 

‘‘Sec. 3003. HIT Standards Committee. 

‘‘Sec. 3004. Process for adoption of endorsed recommendations; adoption of initial set of standards, implementation specifications, and certification criteria. 

‘‘Sec. 3005. Application and use of adopted standards and implementation specifications by Federal agencies. 

‘‘Sec. 3006. Voluntary application and use of adopted standards and implementation specifications by private entities. 

‘‘Sec. 3007. Federal health information technology. 

‘‘Sec. 3008. Transitions. 

‘‘Sec. 3009. Relation to HIPAA privacy and security law. 

‘‘Sec. 3010. Authorization for appropriations. 

Sec. 4102. Technical amendment. 

Sec. 4103. American technology required. 

PART II—APPLICATION AND USE OF ADOPTED HEALTH INFORMATION TECHNOLOGY

STANDARDS; REPORTS

Sec. 4111. Coordination of Federal activities with adopted standards and implementation specifications. 

Sec. 4112. Application to private entities. 

Sec. 4113. Study and reports. 

Subtitle B—Testing of Health Information Technology 

Sec. 4201. National Institute for Standards and Technology testing. 

Sec. 4202. Research and development programs. 

Subtitle C—Incentives for the Use of Health Information Technology 

PART I—GRANTS AND LOANS FUNDING

Sec. 4301. Grant, loan, and demonstration programs. 

‘‘Subtitle B—Incentives for the Use of Health Information Technology 

‘‘Sec. 3011. Immediate funding to strengthen the health information technology 

infrastructure. 

‘‘Sec. 3012. Health information technology implementation assistance. 

‘‘Sec. 3013. State grants to promote health information technology. 

‘‘Sec. 3014. Competitive grants to States and Indian tribes for the development 

of loan programs to facilitate the widespread adoption of certified 

EHR technology. 

‘‘Sec. 3015. Demonstration program to integrate information technology into 

clinical education. 

‘‘Sec. 3016. Information technology professionals on health care. 

‘‘Sec. 3017. General grant and loan provisions. 

‘‘Sec. 3018. Authorization for appropriations. 


dwashington3 on PROD1PC60 with HEARING
18 

PART II—MEDICARE PROGRAM

Sec. 4311. Incentives for eligible professionals. 

Sec. 4312. Incentives for hospitals. 

Sec. 4313. Treatment of payments and savings; implementation funding. 

Sec. 4314. Study on application of EHR payment incentives for providers not receiving other incentive payments. 

PART III—MEDICAID FUNDING

Sec. 4321. Medicaid provider HIT adoption and operation payments; implementation funding. 

Subtitle D—Privacy 

Sec. 4400. Definitions. 

PART I—IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS

Sec. 4401. Application of security provisions and penalties to business associates of 

covered entities; annual guidance on security provisions. 

Sec. 4402. Notification in the case of breach. 

Sec. 4403. Education on Health Information Privacy. 

Sec. 4404. Application of privacy provisions and penalties to business associates of 

covered entities. 

Sec. 4405. Restrictions on certain disclosures and sales of health information; accounting of certain protected health information disclosures; access to 

certain information in electronic format. 

Sec. 4406. Conditions on certain contacts as part of health care operations. 

Sec. 4407. Temporary breach notification requirement for vendors of personal 

health records and other non-HIPAA covered entities. 

Sec. 4408. Business associate contracts required for certain entities. 

Sec. 4409. Clarification of application of wrongful disclosures criminal penalties. 

Sec. 4410. Improved enforcement. 

Sec. 4411. Audits. 

Sec. 4412. Securing individually identifiable health information. 

Sec. 4413. Special rule for information to reduce medication errors and improve patient safety. 

PART II—RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE

DATE; REPORTS

Sec. 4421. Relationship to other laws. 

Sec. 4422. Regulatory references. 

Sec. 4423. Effective date. 

Sec. 4424. Studies, reports, guidance. 

Subtitle A—Promotion of Health Information 

Technology 

PART 1—IMPROVING HEALTH CARE QUALITY, SAFETY, 

AND EFFICIENCY 

SEC. 4101. ONCHIT; STANDARDS DEVELOPMENT AND ADOPTION. 

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

the end the following: 

‘‘TITLE XXX—HEALTH INFORMATION 

TECHNOLOGY AND QUALITY 

‘‘SEC. 3000. DEFINITIONS. 

‘‘In this title: 

‘‘(1) CERTIFIED EHR TECHNOLOGY.—The term ‘certified EHR technology’ means 

a qualified electronic health record that is certified pursuant to section 

3001(c)(5) as meeting standards adopted under section 3004 that are applicable 

to the type of record involved (as determined by the Secretary, such as an ambulatory electronic health record for office-based physicians or an inpatient hospital electronic health record for hospitals). 


dwashington3 on PROD1PC60 with HEARING
19 

‘‘(2) ENTERPRISE INTEGRATION.—The term ‘enterprise integration’ means the 

electronic linkage of health care providers, health plans, the government, and 

other interested parties, to enable the electronic exchange and use of health information among all the components in the health care infrastructure in accordance with applicable law, and such term includes related application protocols 

and other related standards. 

‘‘(3) HEALTH CARE PROVIDER.—The term ‘health care provider’ means a hospital, skilled nursing facility, nursing facility, home health entity or other long 

term care facility, health care clinic, Federally qualified 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 practitioner (as described in section 1842(b)(18)(C) 

of the Social Security Act), a provider operated by, or under contract with, the 

Indian Health Service or by an Indian tribe (as defined in the Indian Self-Determination and Education Assistance Act), tribal organization, or urban Indian 

organization (as defined in section 4 of the Indian Health Care Improvement 

Act), a rural health clinic, a covered entity under section 340B, an ambulatory 

surgical center described in section 1833(i) of the Social Security Act, and any 

other category of facility or clinician determined appropriate by the Secretary. 

‘‘(4) HEALTH INFORMATION.—The term ‘health information’ has the meaning 

given such term in section 1171(4) of the Social Security Act. 

‘‘(5) HEALTH INFORMATION TECHNOLOGY.—The term ‘health information technology’ means hardware, software, integrated technologies and related licenses, 

intellectual property, upgrades, and packaged solutions sold as services that are 

specifically designed for use by health care entities for the electronic creation, 

maintenance, or exchange of health information. 

‘‘(6) HEALTH PLAN.—The term ‘health plan’ has the meaning given such term 

in section 1171(5) of the Social Security Act. 

‘‘(7) HIT POLICY COMMITTEE.—The term ‘HIT Policy Committee’ means such 

Committee established under section 3002(a). 

‘‘(8) HIT STANDARDS COMMITTEE.—The term ‘HIT Standards Committee’ 

means such Committee established under section 3003(a). 

‘‘(9) INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.—The term ‘individually identifiable health information’ has the meaning given such term in section 1171(6) of the Social Security Act. 

‘‘(10) LABORATORY.—The term ‘laboratory’ has the meaning given such term 

in section 353(a). 

‘‘(11) NATIONAL COORDINATOR.—The term ‘National Coordinator’ means the 

head of the Office of the National Coordinator for Health Information Technology established under section 3001(a). 

‘‘(12) PHARMACIST.—The term ‘pharmacist’ has the meaning given such term 

in section 804(2) of the Federal Food, Drug, and Cosmetic Act. 

‘‘(13) QUALIFIED ELECTRONIC HEALTH RECORD.—The term ‘qualified electronic 

health record’ means an electronic record of health-related information on an 

individual that— 

‘‘(A) includes patient demographic and clinical health information, such 

as medical history and problem lists; and 

‘‘(B) has the capacity— 

‘‘(i) to provide clinical decision support; 

‘‘(ii) to support physician order entry; 

‘‘(iii) to capture and query information relevant to health care quality; and 

‘‘(iv) to exchange electronic health information with, and integrate 

such information from other sources. 

‘‘(14) 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. 

‘‘Subtitle A—Promotion of Health Information 

Technology 

‘‘SEC. 3001. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY. 

‘‘(a) ESTABLISHMENT.—There is established within the Department of Health and 

Human Services an Office of the National Coordinator for Health Information Technology (referred to in this section as the ‘Office’). The Office shall be headed by a 


dwashington3 on PROD1PC60 with HEARING
20 

National Coordinator who shall be appointed by the Secretary and shall report directly to the Secretary. 

‘‘(b) PURPOSE.—The National Coordinator shall perform the duties under subsection (c) in a manner consistent with the development of a nationwide health information technology infrastructure that allows for the electronic use and exchange 

of information and that— 

‘‘(1) ensures that each patient’s health information is secure and protected, in 

accordance with applicable law; 

‘‘(2) improves health care quality, reduces medical errors, reduces health disparities, and advances the delivery of patient-centered medical care; 

‘‘(3) reduces health care costs resulting from inefficiency, medical errors, inappropriate care, duplicative care, and incomplete information; 

‘‘(4) provides appropriate information to help guide medical decisions at the 

time and place of care; 

‘‘(5) ensures the inclusion of meaningful public input in such development of 

such infrastructure; 

‘‘(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 health care information; 

‘‘(7) improves public health activities and facilitates the early identification 

and rapid response to public health threats and emergencies, including bioterror 

events and infectious disease outbreaks; 

‘‘(8) facilitates health and clinical research and health care quality; 

‘‘(9) promotes prevention of chronic diseases; 

‘‘(10) promotes a more effective marketplace, greater competition, greater systems analysis, increased consumer choice, and improved outcomes in health 

care services; and 

‘‘(11) improves efforts to reduce health disparities. 

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

‘‘(1) STANDARDS.—The National Coordinator shall review and determine 

whether to endorse each standard, implementation specification, and certification criterion for the electronic exchange and use of health information that 

is recommended by the HIT Standards Committee under section 3003 for purposes of adoption under section 3004. The Coordinator shall make such determination, and report to the Secretary such determination, not later than 45 

days after the date the recommendation is received by the Coordinator. 

‘‘(2) HIT POLICY COORDINATION.— 

‘‘(A) IN GENERAL.—The National Coordinator shall coordinate health information technology policy and programs of the Department with those of 

other relevant executive branch agencies with a goal of avoiding duplication 

of efforts and of helping to ensure that each agency undertakes health information technology activities primarily within the areas of its greatest expertise and technical capability and in a manner towards a coordinated national goal. 

‘‘(B) HIT POLICY AND STANDARDS COMMITTEES.—The National Coordinator 

shall be a leading member in the establishment and operations of the HIT 

Policy Committee and the HIT Standards Committee and shall serve as a 

liaison among those two Committees and the Federal Government. 

‘‘(3) STRATEGIC PLAN.— 

‘‘(A) IN GENERAL.—The National Coordinator shall, in consultation with 

other appropriate Federal agencies (including the National Institute of 

Standards and Technology), update the Federal Health IT Strategic Plan 

(developed as of June 3, 2008) to include specific objectives, milestones, and 

metrics with respect to the following: 

‘‘(i) The electronic exchange and use of health information and the 

enterprise integration of such information. 

‘‘(ii) The utilization of an electronic health record for each person in 

the United States by 2014. 

‘‘(iii) The incorporation of privacy and security protections for the 

electronic exchange of an individual’s individually identifiable health 

information. 

‘‘(iv) Ensuring security methods to ensure appropriate authorization 

and electronic authentication of health information and specifying technologies or methodologies for rendering health information unusable, 

unreadable, or indecipherable. 

‘‘(v) Specifying a framework for coordination and flow of recommendations and policies under this subtitle among the Secretary, the National 

Coordinator, the HIT Policy Committee, the HIT Standards Committee, 

and other health information exchanges and other relevant entities. 


dwashington3 on PROD1PC60 with HEARING
21 

‘‘(vi) Methods to foster the public understanding of health information technology. 

‘‘(vii) Strategies to enhance the use of health information technology 

in improving the quality of health care, reducing medical errors, reducing health disparities, improving public health, and improving the continuity of care among health care settings. 

‘‘(B) COLLABORATION.—The strategic plan shall be updated through collaboration of public and private entities. 

‘‘(C) MEASURABLE OUTCOME GOALS.—The strategic plan update shall include measurable outcome goals. 

‘‘(D) PUBLICATION.—The National Coordinator shall republish the strategic plan, including all updates. 

‘‘(4) WEBSITE.—The National Coordinator shall maintain and frequently update an Internet website on which there is posted information on the work, 

schedules, reports, recommendations, and other information to ensure transparency in promotion of a nationwide health information technology infrastructure. 

‘‘(5) CERTIFICATION.— 

‘‘(A) IN GENERAL.—The National Coordinator, in consultation with the Director of the National Institute of Standards and Technology, shall develop 

a program (either directly or by contract) for the voluntary certification of 

health information technology as being in compliance with applicable certification criteria adopted under this subtitle. Such program shall include 

testing of the technology in accordance with section 4201(b) of the HITECH 

Act. 

‘‘(B) CERTIFICATION CRITERIA DESCRIBED.—In this title, the term ‘certification criteria’ means, with respect to standards and implementation specifications for health information technology, criteria to establish that the 

technology meets such standards and implementation specifications. 

‘‘(6) REPORTS AND PUBLICATIONS.— 

‘‘(A) REPORT ON ADDITIONAL FUNDING OR AUTHORITY NEEDED.—Not later 

than 12 months after the date of the enactment of this title, the National 

Coordinator shall submit to the appropriate committees of jurisdiction of 

the House of Representatives and the Senate a report on any additional 

funding or authority the Coordinator or the HIT Policy Committee or HIT 

Standards Committee requires to evaluate and develop standards, implementation specifications, and certification criteria, or to achieve full participation of stakeholders in the adoption of a nationwide health information 

technology infrastructure that allows for the electronic use and exchange of 

health information. 

‘‘(B) IMPLEMENTATION REPORT.—The National Coordinator shall prepare a 

report that identifies lessons learned from major public and private health 

care systems in their implementation of health information technology, including information on whether the technologies and practices developed by 

such systems may be applicable to and usable in whole or in part by other 

health care providers. 

‘‘(C) ASSESSMENT OF IMPACT OF HIT ON COMMUNITIES WITH HEALTH DISPARITIES AND UNINSURED, UNDERINSURED, AND MEDICALLY UNDERSERVED

AREAS.—The National Coordinator shall assess and publish the impact of 

health information technology in communities with health disparities and 

in areas with a high proportion of individuals who are uninsured, underinsured, and medically underserved individuals (including urban and rural 

areas) and identify practices to increase the adoption of such technology by 

health care providers in such communities. 

‘‘(D) EVALUATION OF BENEFITS AND COSTS OF THE ELECTRONIC USE AND

EXCHANGE OF HEALTH INFORMATION.—The National Coordinator shall 

evaluate and publish evidence on the benefits and costs of the electronic use 

and exchange of health information and assess to whom these benefits and 

costs accrue. 

‘‘(E) RESOURCE REQUIREMENTS.—The National Coordinator shall estimate 

and publish resources required annually to reach the goal of utilization of 

an electronic health record for each person in the United States by 2014, 

including the required level of Federal funding, expectations for regional, 

State, and private investment, and the expected contributions by volunteers 

to activities for the utilization of such records. 

‘‘(7) ASSISTANCE.—The National Coordinator may provide financial assistance 

to consumer advocacy groups and not-for-profit entities that work in the public 

interest for purposes of defraying the cost to such groups and entities to particiVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00021 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
22 

pate under, whether in whole or in part, the National Technology Transfer Act 

of 1995 (15 U.S.C. 272 note). 

‘‘(8) GOVERNANCE FOR NATIONWIDE HEALTH INFORMATION NETWORK.—The National Coordinator shall establish a governance mechanism for the nationwide 

health information network. 

‘‘(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) CHIEF PRIVACY OFFICER OF THE OFFICE OF THE NATIONAL COORDINATOR.—Not 

later than 12 months after the date of the enactment of this title, the Secretary 

shall appoint a Chief Privacy Officer of the Office of the National Coordinator, 

whose duty it shall be to advise the National Coordinator on privacy, security, and 

data stewardship of electronic health information and to coordinate with other Federal agencies (and similar privacy officers in such agencies), with State and regional 

efforts, and with foreign countries with regard to the privacy, security, and data 

stewardship of electronic individually identifiable health information. 

‘‘SEC. 3002. HIT POLICY COMMITTEE. 

‘‘(a) ESTABLISHMENT.—There is established a HIT Policy Committee to make policy recommendations to the National Coordinator relating to the implementation of 

a nationwide health information technology infrastructure, including implementation of the strategic plan described in section 3001(c)(3). 

‘‘(b) DUTIES.— 

‘‘(1) RECOMMENDATIONS ON HEALTH INFORMATION TECHNOLOGY INFRASTRUCTURE.—The HIT Policy Committee shall recommend a policy framework for the 

development and adoption of a nationwide health information technology infrastructure that permits the electronic exchange and use of health information as 

is consistent with the strategic plan under section 3001(c)(3) and that includes 

the recommendations under paragraph (2). The Committee shall update such 

recommendations and make new recommendations as appropriate. 

‘‘(2) SPECIFIC AREAS OF STANDARD DEVELOPMENT.— 

‘‘(A) IN GENERAL.—The HIT Policy Committee shall recommend the areas 

in which standards, implementation specifications, and certification criteria 

are needed for the electronic exchange and use of health information for 

purposes of adoption under section 3004 and shall recommend an order of 

priority for the development, harmonization, and recognition of such standards, specifications, and certification criteria among the areas so recommended. Such standards and implementation specifications shall include 

named standards, architectures, and software schemes for the authentication and security of individually identifiable health information and other 

information as needed to ensure the reproducible development of common 

solutions across disparate entities. 

‘‘(B) AREAS REQUIRED FOR CONSIDERATION.—For purposes of subparagraph (A), the HIT Policy Committee shall make recommendations for at 

least the following areas: 

‘‘(i) Technologies that protect the privacy of health information and 

promote security in a qualified electronic health record, including for 

the segmentation and protection from disclosure of specific and sensitive individually identifiable health information with the goal of minimizing the reluctance of patients to seek care (or disclose information 

about a condition) because of privacy concerns, in accordance with applicable law, and for the use and disclosure of limited data sets of such 

information. 

‘‘(ii) A nationwide health information technology infrastructure that 

allows for the electronic use and accurate exchange of health information. 

‘‘(iii) The utilization of a certified electronic health record for each 

person in the United States by 2014. 


dwashington3 on PROD1PC60 with HEARING
23 

‘‘(iv) Technologies that as a part of a qualified electronic health 

record allow for an accounting of disclosures made by a covered entity 

(as defined for purposes of regulations promulgated under section 

264(c) of the Health Insurance Portability and Accountability Act of 

1996) for purposes of treatment, payment, and health care operations 

(as such terms are defined for purposes of such regulations). 

‘‘(v) The use of certified electronic health records to improve the quality of health care, such as by promoting the coordination of health care 

and improving continuity of health care among health care providers, 

by reducing medical errors, by improving population health, by reducing health disparities, and by advancing research and education. 

‘‘(C) OTHER AREAS FOR CONSIDERATION.—In making recommendations 

under subparagraph (A), the HIT Policy Committee may consider the following additional areas: 

‘‘(i) The appropriate uses of a nationwide health information infrastructure, including for purposes of— 

‘‘(I) the collection of quality data and public reporting; 

‘‘(II) biosurveillance and public health; 

‘‘(III) medical and clinical research; and 

‘‘(IV) drug safety. 

‘‘(ii) Self-service technologies that facilitate the use and exchange of 

patient information and reduce wait times. 

‘‘(iii) Telemedicine technologies, in order to reduce travel requirements for patients in remote areas. 

‘‘(iv) Technologies that facilitate home health care and the monitoring 

of patients recuperating at home. 

‘‘(v) Technologies that help reduce medical errors. 

‘‘(vi) Technologies that facilitate the continuity of care among health 

settings. 

‘‘(vii) Technologies that meet the needs of diverse populations. 

‘‘(viii) Any other technology that the HIT Policy Committee finds to 

be among the technologies with the greatest potential to improve the 

quality and efficiency of health care. 

‘‘(3) FORUM.—The HIT Policy Committee shall serve as a forum for broad 

stakeholder input with specific expertise in policies relating to the matters described in paragraphs (1) and (2). 

‘‘(c) MEMBERSHIP AND OPERATIONS.— 

‘‘(1) IN GENERAL.—The National Coordinator shall provide leadership in the 

establishment and operations of the HIT Policy Committee. 

‘‘(2) MEMBERSHIP.—The membership of the HIT Policy Committee shall at 

least reflect providers, ancillary healthcare workers, consumers, purchasers, 

health plans, technology vendors, researchers, relevant Federal agencies, and 

individuals with technical expertise on health care quality, privacy and security, 

and on the electronic exchange and use of health information. 

‘‘(3) CONSIDERATION.—The National Coordinator shall ensure that the relevant recommendations and comments from the National Committee on Vital 

and Health Statistics are considered in the development of policies. 

‘‘(d) APPLICATION OF FACA.—The Federal Advisory Committee Act (5 U.S.C. 

App.), other than section 14 of such Act, shall apply to the HIT Policy Committee. 

‘‘(e) PUBLICATION.—The Secretary shall provide for publication in the Federal Register and the posting on the Internet website of the Office of the National Coordinator for Health Information Technology of all policy recommendations made by the 

HIT Policy Committee under this section. 

‘‘SEC. 3003. HIT STANDARDS COMMITTEE. 

‘‘(a) ESTABLISHMENT.—There is established a committee to be known as the HIT 

Standards Committee to recommend to the National Coordinator standards, implementation specifications, and certification criteria for the electronic exchange and 

use of health information for purposes of adoption under section 3004, consistent 

with the implementation of the strategic plan described in section 3001(c)(3) and beginning with the areas listed in section 3002(b)(2)(B) in accordance with policies developed by the HIT Policy Committee. 

‘‘(b) DUTIES.— 

‘‘(1) STANDARDS DEVELOPMENT.— 

‘‘(A) IN GENERAL.—The HIT Standards Committee shall recommend to 

the National Coordinator standards, implementation specifications, and certification criteria described in subsection (a) that have been developed, harmonized, or recognized by the HIT Standards Committee. The HIT Standards Committee shall update such recommendations and make new recVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
24 

ommendations as appropriate, including in response to a notification sent 

under section 3004(b)(2). Such recommendations shall be consistent with 

the latest recommendations made by the HIT Policy Committee. 

‘‘(B) PILOT TESTING OF STANDARDS AND IMPLEMENTATION SPECIFICA- TIONS.—In the development, harmonization, or recognition of standards and 

implementation specifications, the HIT Standards Committee shall, as appropriate, provide for the testing of such standards and specifications by 

the National Institute for Standards and Technology under section 4201 of 

the HITECH Act. 

‘‘(C) CONSISTENCY.—The standards, implementation specifications, and 

certification criteria recommended under this subsection shall be consistent 

with the standards for information transactions and data elements adopted 

pursuant to section 1173 of the Social Security Act. 

‘‘(2) FORUM.—The HIT Standards Committee shall serve as a forum for the 

participation of a broad range of stakeholders to provide input on the development, harmonization, and recognition of standards, implementation specifications, and certification criteria necessary for the development and adoption of 

a nationwide health information technology infrastructure that allows for the 

electronic use and exchange of health information. 

‘‘(3) SCHEDULE.—Not later than 90 days after the date of the enactment of 

this title, the HIT Standards Committee shall develop a schedule for the assessment of policy recommendations developed by the HIT Policy Committee under 

section 3002. The HIT Standards Committee shall update such schedule annually. The Secretary shall publish such schedule in the Federal Register. 

‘‘(4) PUBLIC INPUT.—The HIT Standards Committee shall conduct open public 

meetings and develop a process to allow for public comment on the schedule described in paragraph (3) and recommendations described in this subsection. 

Under such process comments shall be submitted in a timely manner after the 

date of publication of a recommendation under this subsection. 

‘‘(c) MEMBERSHIP AND OPERATIONS.— ‘‘(1) IN GENERAL.—The National Coordinator shall provide leadership in the 

establishment and operations of the HIT Standards Committee. 

‘‘(2) MEMBERSHIP.—The membership of the HIT Standards Committee shall 

at least reflect providers, ancillary healthcare workers, consumers, purchasers, 

health plans, technology vendors, researchers, relevant Federal agencies, and 

individuals with technical expertise on health care quality, privacy and security, 

and on the electronic exchange and use of health information. 

‘‘(3) CONSIDERATION.—The National Coordinator shall ensure that the relevant recommendations and comments from the National Committee on Vital 

and Health Statistics are considered in the development of standards. 

‘‘(4) ASSISTANCE.—For the purposes of carrying out this section, the Secretary 

may provide or ensure that financial assistance is provided by the HIT Standards Committee to defray in whole or in part any membership fees or dues 

charged by such Committee to those consumer advocacy groups and not for profit entities that work in the public interest as a part of their mission. 

‘‘(d) APPLICATION OF FACA.—The Federal Advisory Committee Act (5 U.S.C. 

App.), other than section 14, shall apply to the HIT Standards Committee. 

‘‘(e) PUBLICATION.—The Secretary shall provide for publication in the Federal Register and the posting on the Internet website of the Office of the National Coordinator for Health Information Technology of all recommendations made by the HIT 

Standards Committee under this section. 

‘‘SEC. 3004. PROCESS FOR ADOPTION OF ENDORSED RECOMMENDATIONS; ADOPTION OF INITIAL SET OF STANDARDS, IMPLEMENTATION SPECIFICATIONS, AND CERTIFICATION CRITERIA. 

‘‘(a) PROCESS FOR ADOPTION OF ENDORSED RECOMMENDATIONS.— 

‘‘(1) REVIEW OF ENDORSED STANDARDS, IMPLEMENTATION SPECIFICATIONS, AND

CERTIFICATION CRITERIA.—Not later than 90 days after the date of receipt of 

standards, implementation specifications, or certification criteria endorsed 

under section 3001(c), the Secretary, in consultation with representatives of 

other relevant Federal agencies, shall jointly review such standards, implementation specifications, or certification criteria and shall determine whether or not 

to propose adoption of such standards, implementation specifications, or certification criteria. 

‘‘(2) DETERMINATION TO ADOPT STANDARDS, IMPLEMENTATION SPECIFICATIONS, 

AND CERTIFICATION CRITERIA.—If the Secretary determines— 

‘‘(A) to propose adoption of any grouping of such standards, implementation specifications, or certification criteria, the Secretary shall, by regulation, determine whether or not to adopt such grouping of standards, implementation specifications, or certification criteria; or 


dwashington3 on PROD1PC60 with HEARING
25 

‘‘(B) not to propose adoption of any grouping of standards, implementation specifications, or certification criteria, the Secretary shall notify the 

National Coordinator and the HIT Standards Committee in writing of such 

determination and the reasons for not proposing the adoption of such recommendation. 

‘‘(3) PUBLICATION.—The Secretary shall provide for publication in the Federal 

Register of all determinations made by the Secretary under paragraph (1). 

‘‘(b) ADOPTION OF INITIAL SET OF STANDARDS, IMPLEMENTATION SPECIFICATIONS, 

AND CERTIFICATION CRITERIA.— 

‘‘(1) IN GENERAL.—Not later than December 31, 2009, the Secretary shall, 

through the rulemaking process described in section 3003, adopt an initial set 

of standards, implementation specifications, and certification criteria for the 

areas required for consideration under section 3002(b)(2)(B). 

‘‘(2) APPLICATION OF CURRENT STANDARDS, IMPLEMENTATION SPECIFICATIONS, 

AND CERTIFICATION CRITERIA.—The standards, implementation specifications, 

and certification criteria adopted before the date of the enactment of this title 

through the process existing through the Office of the National Coordinator for 

Health Information Technology may be applied towards meeting the requirement of paragraph (1). 

‘‘SEC. 3005. APPLICATION AND USE OF ADOPTED STANDARDS AND IMPLEMENTATION SPECIFICATIONS BY FEDERAL AGENCIES. 

‘‘For requirements relating to the application and use by Federal agencies of the 

standards and implementation specifications adopted under section 3004, see section 

4111 of the HITECH Act. 

‘‘SEC. 3006. VOLUNTARY APPLICATION AND USE OF ADOPTED STANDARDS AND IMPLEMENTATION SPECIFICATIONS BY PRIVATE ENTITIES. 

‘‘(a) IN GENERAL.—Except as provided under section 4112 of the HITECH Act, any 

standard or implementation specification adopted under section 3004 shall be voluntary with respect to private entities. 

‘‘(b) RULE OF CONSTRUCTION.—Nothing in this subtitle shall be construed to require that a private entity that enters into a contract with the Federal Government 

apply or use the standards and implementation specifications adopted under section 

3004 with respect to activities not related to the contract. 

‘‘SEC. 3007. FEDERAL HEALTH INFORMATION TECHNOLOGY. 

‘‘(a) IN GENERAL.—The National Coordinator shall support the development, routine updating, and provision of qualified EHR technology (as defined in section 

3000) consistent with subsections (b) and (c) unless the Secretary determines that 

the needs and demands of providers are being substantially and adequately met 

through the marketplace. 

‘‘(b) CERTIFICATION.—In making such EHR technology publicly available, the National Coordinator shall ensure that the qualified EHR technology described in subsection (a) is certified under the program developed under section 3001(c)(3) to be 

in compliance with applicable standards adopted under section 3003(a). 

‘‘(c) AUTHORIZATION TO CHARGE A NOMINAL FEE.—The National Coordinator may 

impose a nominal fee for the adoption by a health care provider of the health information technology system developed or approved under subsection (a) and (b). Such 

fee shall take into account the financial circumstances of smaller providers, low income providers, and providers located in rural or other medically underserved areas. 

‘‘(d) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to require that a private or government entity adopt or use the technology provided 

under this section. 

‘‘SEC. 3008. TRANSITIONS. 

‘‘(a) ONCHIT.—To the extent consistent with section 3001, all functions, personnel, assets, liabilities, and administrative actions applicable to the National Coordinator for Health Information Technology appointed under Executive Order 

13335 or the Office of such National Coordinator on the date before the date of the 

enactment of this title shall be transferred to the National Coordinator appointed 

under section 3001(a) and the Office of such National Coordinator as of the date of 

the enactment of this title. 

‘‘(b) AHIC.— 

‘‘(1) To the extent consistent with sections 3002 and 3003, all functions, personnel, assets, and liabilities applicable to the AHIC Successor, Inc. doing business as the National eHealth Collaborative as of the day before the date of the 

enactment of this title shall be transferred to the HIT Policy Committee or the 

HIT Standards Committee, established under section 3002(a) or 3003(a), as appropriate, as of the date of the enactment of this title. 


dwashington3 on PROD1PC60 with HEARING
26 

‘‘(2) In carrying out section 3003(b)(1)(A), until recommendations are made by 

the HIT Policy Committee, recommendations of the HIT Standards Committee 

shall be consistent with the most recent recommendations made by such AHIC 

Successor, Inc. 

‘‘(c) RULES OF CONSTRUCTION.— 

‘‘(1) ONCHIT.—Nothing in section 3001 or subsection (a) shall be construed 

as requiring the creation of a new entity to the extent that the Office of the 

National Coordinator for Health Information Technology established pursuant 

to Executive Order 13335 is consistent with the provisions of section 3001. 

‘‘(2) AHIC.—Nothing in sections 3002 or 3003 or subsection (b) shall be construed as prohibiting the AHIC Successor, Inc. doing business as the National 

eHealth Collaborative from modifying its charter, duties, membership, and any 

other structure or function required to be consistent with section 3002 and 3003 

in a manner that would permit the Secretary to choose to recognize such AHIC 

Successor, Inc. as the HIT Policy Committee or the HIT Standards Committee. 

‘‘SEC. 3009. RELATION TO HIPAA PRIVACY AND SECURITY LAW. 

‘‘(a) IN GENERAL.—With respect to the relation of this title to HIPAA privacy and 

security law: 

‘‘(1) This title may not be construed as having any effect on the authorities 

of the Secretary under HIPAA privacy and security law. 

‘‘(2) The purposes of this title include ensuring that the health information 

technology standards and implementation specifications adopted under section 

3004 take into account the requirements of HIPAA privacy and security law. 

‘‘(b) DEFINITION.—For purposes of this section, the term ‘HIPAA privacy and security law’ means— 

‘‘(1) the provisions of part C of title XI of the Social Security Act, section 264 

of the Health Insurance Portability and Accountability Act of 1996, and subtitle 

D of title IV of the HITECH Act; and 

‘‘(2) regulations under such provisions. 

‘‘SEC. 3010. AUTHORIZATION FOR APPROPRIATIONS. 

‘‘There is authorized to be appropriated to the Office of the National Coordinator 

for Health Information Technology to carry out this subtitle $250,000,000 for fiscal 

year 2009.’’. 

SEC. 4102. TECHNICAL AMENDMENT. 

Section 1171(5) of the Social Security Act (42 U.S.C. 1320d) is amended by striking ‘‘or C’’ and inserting ‘‘C, or D’’. 

SEC. 4103. AMERICAN TECHNOLOGY REQUIRED. 

(a) REQUIREMENT.—Any funds made available to carry out this title and the 

amendments made by this title (including through grants, contracts, loans, payments under title XVIII or XIX of the Social Security Act, or other assistance) may 

be used to purchase health information technology only if such technology is manufactured, including the engineering and programming of any software, in the United 

States substantially all from articles, materials, or supplies mined, produced, or 

manufactured, as the case may be, in the United States. 

(b) DEFINITION.—In this section, the term ‘‘health information technology’’ has the 

meaning given to that term in section 3000 of the Public Health Service Act, as 

added by section 4101. 

PART 2—APPLICATION AND USE OF ADOPTED HEALTH 

INFORMATION TECHNOLOGY STANDARDS; REPORTS 

SEC. 4111. COORDINATION OF FEDERAL ACTIVITIES WITH ADOPTED STANDARDS AND IMPLEMENTATION SPECIFICATIONS. 

(a) SPENDING ON HEALTH INFORMATION TECHNOLOGY SYSTEMS.—As each agency 

(as defined in the Executive Order issued on August 22, 2006, relating to promoting 

quality and efficient health care in Federal government administered or sponsored 

health care programs) implements, acquires, or upgrades health information technology systems used for the direct exchange of individually identifiable health information between agencies and with non-Federal entities, it shall utilize, where available, health information technology systems and products that meet standards and 

implementation specifications adopted under section 3004 of the Public Health Service Act, as added by section 4101. 

(b) FEDERAL INFORMATION COLLECTION ACTIVITIES.—With respect to a standard 

or implementation specification adopted under section 3004 of the Public Health 

Service Act, as added by section 4101, the President shall take measures to ensure 


dwashington3 on PROD1PC60 with HEARING
27 

that Federal activities involving the broad collection and submission of health information are consistent with such standard or implementation specification, respectively, within three years after the date of such adoption. 

(c) APPLICATION OF DEFINITIONS.—The definitions contained in section 3000 of the 

Public Health Service Act, as added by section 4101, shall apply for purposes of this 

part. 

SEC. 4112. APPLICATION TO PRIVATE ENTITIES. 

Each agency (as defined in such Executive Order issued on August 22, 2006, relating to promoting quality and efficient health care in Federal government administered or sponsored health care programs) shall require in contracts or agreements 

with health care providers, health plans, or health insurance issuers that as each 

provider, plan, or issuer implements, acquires, or upgrades health information technology systems, it shall utilize, where available, health information technology systems and products that meet standards and implementation specifications adopted 

under section 3004 of the Public Health Service Act, as added by section 4101. 

SEC. 4113. STUDY AND REPORTS. 

(a) REPORT ON ADOPTION OF NATIONWIDE SYSTEM.—Not later than 2 years after 

the date of the enactment of this Act and annually thereafter, the Secretary of 

Health and Human Services shall submit to the appropriate committees of jurisdiction of the House of Representatives and the Senate a report that— 

(1) describes the specific actions that have been taken by the Federal Government and private entities to facilitate the adoption of a nationwide system for 

the electronic use and 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. 

(b) REIMBURSEMENT INCENTIVE STUDY AND REPORT.— 

(1) STUDY.—The Secretary of Health and Human Services shall carry out, or 

contract with a private entity to carry out, a study that examines methods to 

create efficient reimbursement incentives for improving health care quality in 

Federally qualified health centers, rural health clinics, and free clinics. 

(2) REPORT.—Not later than 2 years after the date of the enactment of this 

Act, the Secretary of Health and Human Services shall submit to the appropriate committees of jurisdiction of the House of Representatives and the Senate 

a report on the study carried out under paragraph (1). 

(c) AGING SERVICES TECHNOLOGY STUDY AND REPORT.— 

(1) IN GENERAL.—The Secretary of Health and Human Services shall carry 

out, or contract with a private entity to carry out, a study of matters relating 

to the potential use of new aging services technology to assist seniors, individuals with disabilities, and their caregivers throughout the aging process. 

(2) MATTERS TO BE STUDIED.—The study under paragraph (1) shall include— 

(A) an evaluation of— 

(i) methods for identifying current, emerging, and future health technology that can be used to meet the needs of seniors and individuals 

with disabilities and their caregivers across all aging services settings, 

as specified by the Secretary; 

(ii) methods for fostering scientific innovation with respect to aging 

services technology within the business and academic communities; and 

(iii) developments in aging services technology in other countries that 

may be applied in the United States; and 

(B) identification of— 

(i) barriers to innovation in aging services technology and devising 

strategies for removing such barriers; and 

(ii) barriers to the adoption of aging services technology by health 

care providers and consumers and devising strategies to removing such 

barriers. 

(3) REPORT.—Not later than 24 months after the date of the enactment of this 

Act, the Secretary shall submit to the appropriate committees of jurisdiction of 

the House of Representatives and of the Senate a report on the study carried 

out under paragraph (1). 

(4) DEFINITIONS.—For purposes of this subsection: 

(A) AGING SERVICES TECHNOLOGY.—The term ‘‘aging services technology’’ 

means health technology that meets the health care needs of seniors, individuals with disabilities, and the caregivers of such seniors and individuals. 

(B) SENIOR.—The term ‘‘senior’’ has such meaning as specified by the Secretary. 


dwashington3 on PROD1PC60 with HEARING
28 

Subtitle B—Testing of Health Information 

Technology 

SEC. 4201. NATIONAL INSTITUTE FOR STANDARDS AND TECHNOLOGY TESTING. 

(a) PILOT TESTING OF STANDARDS AND IMPLEMENTATION SPECIFICATIONS.—In coordination with the HIT Standards Committee established under section 3003 of the 

Public Health Service Act, as added by section 4101, with respect to the development of standards and implementation specifications under such section, the Director of the National Institute for Standards and Technology shall test such standards 

and implementation specifications, as appropriate, in order to assure the efficient 

implementation and use of such standards and implementation specifications. 

(b) VOLUNTARY TESTING PROGRAM.—In coordination with the HIT Standards Committee established under section 3003 of the Public Health Service Act, as added 

by section 4101, with respect to the development of standards and implementation 

specifications under such section, the Director of the National Institute of Standards 

and Technology shall support the establishment of a conformance testing infrastructure, including the development of technical test beds. The development of this conformance testing infrastructure may include a program to accredit independent, 

non-Federal laboratories to perform testing. 

SEC. 4202. RESEARCH AND DEVELOPMENT PROGRAMS. 

(a) HEALTH CARE INFORMATION ENTERPRISE INTEGRATION RESEARCH CENTERS.— (1) IN GENERAL.—The Director of the National Institute of Standards and 

Technology, in consultation with the Director of the National Science Foundation and other appropriate Federal agencies, shall establish a program of assistance to institutions of higher education (or consortia thereof which may include 

nonprofit entities and Federal Government laboratories) to establish multidisciplinary Centers for Health Care Information Enterprise Integration. 

(2) REVIEW; COMPETITION.—Grants shall be awarded under this subsection on 

a merit-reviewed, competitive basis. 

(3) PURPOSE.—The purposes of the Centers described in paragraph (1) shall 

be— 

(A) to generate innovative approaches to health care information enterprise integration by conducting cutting-edge, multidisciplinary research on 

the systems challenges to health care delivery; and 

(B) the development and use of health information technologies and other 

complementary fields. 

(4) RESEARCH AREAS.—Research areas may include— 

(A) interfaces between human information and communications technology systems; 

(B) voice-recognition systems; 

(C) software that improves interoperability and connectivity among 

health information systems; 

(D) software dependability in systems critical to health care delivery; 

(E) measurement of the impact of information technologies on the quality 

and productivity of health care; 

(F) health information enterprise management; 

(G) health information technology security and integrity; and 

(H) relevant health information technology to reduce medical errors. 

(5) APPLICATIONS.—An institution of higher education (or a consortium thereof) seeking funding under this subsection shall submit an application to the Director of the National Institute of Standards and Technology at such time, in 

such manner, and containing such information as the Director may require. The 

application shall include, at a minimum, a description of— 

(A) the research projects that will be undertaken by the Center established pursuant to assistance under paragraph (1) and the respective contributions of the participating entities; 

(B) how the Center will promote active collaboration among scientists and 

engineers from different disciplines, such as information technology, biologic sciences, management, social sciences, and other appropriate disciplines; 

(C) technology transfer activities to demonstrate and diffuse the research 

results, technologies, and knowledge; and 

(D) how the Center will contribute to the education and training of researchers and other professionals in fields relevant to health information 

enterprise integration. 

(b) NATIONAL INFORMATION TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM.—The National High-Performance Computing Program established by section 


dwashington3 on PROD1PC60 with HEARING
29 

101 of the High-Performance Computing Act of 1991 (15 U.S.C. 5511) shall coordinate Federal research and development programs related to the development and 

deployment of health information technology, including activities related to— 

(1) computer infrastructure; 

(2) data security; 

(3) development of large-scale, distributed, reliable computing systems; 

(4) wired, wireless, and hybrid high-speed networking; 

(5) development of software and software-intensive systems; 

(6) human-computer interaction and information management technologies; 

and 

(7) the social and economic implications of information technology. 

Subtitle C—Incentives for the Use of Health 

Information Technology 

PART I—GRANTS AND LOANS FUNDING 

SEC. 4301. GRANT, LOAN, AND DEMONSTRATION PROGRAMS. 

Title XXX of the Public Health Service Act, as added by section 4101, is amended 

by adding at the end the following new subtitle: 

‘‘Subtitle B—Incentives for the Use of Health 

Information Technology 

‘‘SEC. 3011. IMMEDIATE FUNDING TO STRENGTHEN THE HEALTH INFORMATION TECHNOLOGY INFRASTRUCTURE. 

‘‘(a) IN GENERAL.—The Secretary shall, using amounts appropriated under section 

3018, invest in the infrastructure necessary to allow for and promote the electronic 

exchange and use of health information for each individual in the United States consistent with the goals outlined in the strategic plan developed by the National Coordinator (and as available) under section 3001. To the greatest extent practicable, the 

Secretary shall ensure that any funds so appropriated shall be used for the acquisition of health information technology that meets standards and certification criteria 

adopted before the date of the enactment of this title until such date as the standards are adopted under section 3004. The Secretary shall invest funds through the 

different agencies with expertise in such goals, such as the Office of the National 

Coordinator for Health Information Technology, the Health Resources and Services 

Administration, the Agency for Healthcare Research and Quality, the Centers of 

Medicare & Medicaid Services, the Centers for Disease Control and Prevention, and 

the Indian Health Service to support the following: 

‘‘(1) Health information technology architecture that will support the nationwide electronic exchange and use of health information in a secure, private, and 

accurate manner, including connecting health information exchanges, and which 

may include updating and implementing the infrastructure necessary within 

different agencies of the Department of Health and Human Services to support 

the electronic use and exchange of health information. 

‘‘(2) Development and adoption of appropriate certified electronic health 

records for categories of providers, as defined in section 3000, not eligible for 

support under title XVIII or XIX of the Social Security Act for the adoption of 

such records. 

‘‘(3) Training on and dissemination of information on best practices to integrate health information technology, including electronic health records, into a 

provider’s delivery of care, consistent with best practices learned from the 

Health Information Technology Research Center developed under section 

3012(b), including community health centers receiving assistance under section 

330, covered entities under section 340B, and providers participating in one or 

more of the programs under titles XVIII, XIX, and XXI of the Social Security 

Act (relating to Medicare, Medicaid, and the State Children’s Health Insurance 

Program). 

‘‘(4) Infrastructure and tools for the promotion of telemedicine, including coordination among Federal agencies in the promotion of telemedicine. 

‘‘(5) Promotion of the interoperability of clinical data repositories or registries. 

‘‘(6) Promotion of technologies and best practices that enhance the protection 

of health information by all holders of individually identifiable health information. 


dwashington3 on PROD1PC60 with HEARING
30 

‘‘(7) Improvement and expansion of the use of health information technology 

by public health departments. 

‘‘(8) Provision of $300 million to support regional or sub-national efforts towards health information exchange. 

‘‘(b) COORDINATION.—The Secretary shall ensure funds under this section are used 

in a coordinated manner with other health information promotion activities. 

‘‘(c) ADDITIONAL USE OF FUNDS.—In addition to using funds as provided in subsection (a), the Secretary may use amounts appropriated under section 3018 to carry 

out health information technology activities that are provided for under laws in effect on the date of the enactment of this title. 

‘‘SEC. 3012. HEALTH INFORMATION TECHNOLOGY IMPLEMENTATION ASSISTANCE. 

‘‘(a) HEALTH INFORMATION TECHNOLOGY EXTENSION PROGRAM.—To assist health 

care providers to adopt, implement, and effectively use certified EHR technology 

that allows for the electronic exchange and use of health information, the Secretary, 

acting through the Office of the National Coordinator, shall establish a health information technology extension program to provide health information technology assistance services to be carried out through the Department of Health and Human 

Services. The National Coordinator shall consult with other Federal agencies with 

demonstrated experience and expertise in information technology services, such as 

the National Institute of Standards and Technology, in developing and implementing this program. 

‘‘(b) HEALTH INFORMATION TECHNOLOGY RESEARCH CENTER.— 

‘‘(1) IN GENERAL.—The Secretary shall create a Health Information Technology Research Center (in this section referred to as the ‘Center’) to provide 

technical assistance and develop or recognize best practices to support and accelerate efforts to adopt, implement, and effectively utilize health information 

technology that allows for the electronic exchange and use of information in 

compliance with standards, implementation specifications, and certification criteria adopted under section 3004. 

‘‘(2) INPUT.—The Center shall incorporate input from— 

‘‘(A) other Federal agencies with demonstrated experience and expertise 

in information technology services such as the National Institute of Standards and Technology; 

‘‘(B) users of health information technology, such as providers and their 

support and clerical staff and others involved in the care and care coordination of patients, from the health care and health information technology industry; and 

‘‘(C) others as appropriate. 

‘‘(3) PURPOSES.—The purposes of the Center are to— 

‘‘(A) provide a forum for the exchange of knowledge and experience; 

‘‘(B) accelerate the transfer of lessons learned from existing public and 

private sector initiatives, including those currently receiving Federal financial support; 

‘‘(C) assemble, analyze, and widely disseminate evidence and experience 

related to the adoption, implementation, and effective use of health information technology that allows for the electronic exchange and use of information including through the regional centers described in subsection (c); 

‘‘(D) provide technical assistance for the establishment and evaluation of 

regional and local health information networks to facilitate the electronic 

exchange of information across health care settings and improve the quality 

of health care; 

‘‘(E) provide technical assistance for the development and dissemination 

of solutions to barriers to the exchange of electronic health information; and 

‘‘(F) learn about effective strategies to adopt and utilize health information technology in medically underserved communities. 

‘‘(c) HEALTH INFORMATION TECHNOLOGY REGIONAL EXTENSION CENTERS.— 

‘‘(1) IN GENERAL.—The Secretary shall provide assistance for the creation and 

support of regional centers (in this subsection referred to as ‘regional centers’) 

to provide technical assistance and disseminate best practices and other information learned from the Center to support and accelerate efforts to adopt, implement, and effectively utilize health information technology that allows for 

the electronic exchange and use of information in compliance with standards, 

implementation specifications, and certification criteria adopted under section 

3004. Activities conducted under this subsection shall be consistent with the 

strategic plan developed by the National Coordinator, (and, as available) under 

section 3001. 

‘‘(2) AFFILIATION.—Regional centers shall be affiliated with any United Statesbased nonprofit institution or organization, or group thereof, that applies and 


dwashington3 on PROD1PC60 with HEARING
31 

is awarded financial assistance under this section. Individual awards shall be 

decided on the basis of merit. 

‘‘(3) OBJECTIVE.—The objective of the regional centers is to enhance and promote the adoption of health information technology through— 

‘‘(A) assistance with the implementation, effective use, upgrading, and ongoing maintenance of health information technology, including electronic 

health records, to healthcare providers nationwide; 

‘‘(B) broad participation of individuals from industry, universities, and 

State governments; 

‘‘(C) active dissemination of best practices and research on the implementation, effective use, upgrading, and ongoing maintenance of health information technology, including electronic health records, to health care providers in order to improve the quality of healthcare and protect the privacy 

and security of health information; 

‘‘(D) participation, to the extent practicable, in health information exchanges; and 

‘‘(E) utilization, when appropriate, of the expertise and capability that exists in Federal agencies other than the Department; and 

‘‘(F) integration of health information technology, including electronic 

health records, into the initial and ongoing training of health professionals 

and others in the healthcare industry that would be instrumental to improving the quality of healthcare through the smooth and accurate electronic use and exchange of health information. 

‘‘(4) REGIONAL ASSISTANCE.—Each regional center shall aim to provide assistance and education to all providers in a region, but shall prioritize any direct 

assistance first to the following: 

‘‘(A) Public or not-for-profit hospitals or critical access hospitals. 

‘‘(B) Federally qualified health centers (as defined in section 1861(aa)(4) 

of the Social Security Act). 

‘‘(C) Entities that are located in rural and other areas that serve uninsured, underinsured, and medically underserved individuals (regardless of 

whether such area is urban or rural). 

‘‘(D) Individual or small group practices (or a consortium thereof) that are 

primarily focused on primary care. 

‘‘(5) FINANCIAL SUPPORT.—The Secretary may provide financial support to any 

regional center created under this subsection for a period not to exceed four 

years. The Secretary may not provide more than 50 percent of the capital and 

annual operating and maintenance funds required to create and maintain such 

a center, except in an instance of national economic conditions which would 

render this cost-share requirement detrimental to the program and upon notification to Congress as to the justification to waive the cost-share requirement. 

‘‘(6) NOTICE OF PROGRAM DESCRIPTION AND AVAILABILITY OF FUNDS.—The Secretary shall publish in the Federal Register, not later than 90 days after the 

date of the enactment of this title, a draft description of the program for establishing regional centers under this subsection. Such description shall include 

the following: 

‘‘(A) A detailed explanation of the program and the programs goals. 

‘‘(B) Procedures to be followed by the applicants. 

‘‘(C) Criteria for determining qualified applicants. 

‘‘(D) Maximum support levels expected to be available to centers under 

the program. 

‘‘(7) APPLICATION REVIEW.—The Secretary shall subject each application under 

this subsection to merit review. In making a decision whether to approve such 

application and provide financial support, the Secretary shall consider at a minimum the merits of the application, including those portions of the application 

regarding— 

‘‘(A) the ability of the applicant to provide assistance under this subsection and utilization of health information technology appropriate to the 

needs of particular categories of health care providers; 

‘‘(B) the types of service to be provided to health care providers; 

‘‘(C) geographical diversity and extent of service area; and 

‘‘(D) the percentage of funding and amount of in-kind commitment from 

other sources. 

‘‘(8) BIENNIAL EVALUATION.—Each regional center which receives financial assistance under this subsection shall be evaluated biennially by an evaluation 

panel appointed by the Secretary. Each evaluation panel shall be composed of 

private experts, none of whom shall be connected with the center involved, and 

of Federal officials. Each evaluation panel shall measure the involved center’s 

performance against the objective specified in paragraph (3). The Secretary 


dwashington3 on PROD1PC60 with HEARING
32 

shall not continue to provide funding to a regional center unless its evaluation 

is overall positive. 

‘‘(9) CONTINUING SUPPORT.—After the second year of assistance under this 

subsection, a regional center may receive additional support under this subsection if it has received positive evaluations and a finding by the Secretary 

that continuation of Federal funding to the center was in the best interest of 

provision of health information technology extension services. 

‘‘SEC. 3013. STATE GRANTS TO PROMOTE HEALTH INFORMATION TECHNOLOGY. 

‘‘(a) IN GENERAL.—The Secretary, acting through the National Coordinator, shall 

establish a program in accordance with this section to facilitate and expand the electronic movement and use of health information among organizations according to 

nationally recognized standards. 

‘‘(b) PLANNING GRANTS.—The Secretary may award a grant to a State or qualified 

State-designated entity (as described in subsection (f)) that submits an application 

to the Secretary at such time, in such manner, and containing such information as 

the Secretary may specify, for the purpose of planning activities described in subsection (d). 

‘‘(c) IMPLEMENTATION GRANTS.—The Secretary may award a grant to a State or 

qualified State designated entity that— 

‘‘(1) has submitted, and the Secretary has approved, a plan described in subsection (e) (regardless of whether such plan was prepared using amounts awarded under subsection (b); and 

‘‘(2) submits an application at such time, in such manner, and containing such 

information as the Secretary may specify. 

‘‘(d) USE OF FUNDS.—Amounts received under a grant under subsection (c) shall 

be used to conduct activities to facilitate and expand the electronic movement and 

use of health information among organizations according to nationally recognized 

standards through activities that include— 

‘‘(1) enhancing broad and varied participation in the authorized and secure 

nationwide electronic use and exchange of health information; 

‘‘(2) identifying State or local resources available towards a nationwide effort 

to promote health information technology; 

‘‘(3) complementing other Federal grants, programs, and efforts towards the 

promotion of health information technology; 

‘‘(4) providing technical assistance for the development and dissemination of 

solutions to barriers to the exchange of electronic health information; 

‘‘(5) promoting effective strategies to adopt and utilize health information 

technology in medically underserved communities; 

‘‘(6) assisting patients in utilizing health information technology; 

‘‘(7) encouraging clinicians to work with Health Information Technology Regional Extension Centers as described in section 3012, to the extent they are 

available and valuable; 

‘‘(8) supporting public health agencies’ authorized use of and access to electronic health information; 

‘‘(9) promoting the use of electronic health records for quality improvement 

including through quality measures reporting; and 

‘‘(10) such other activities as the Secretary may specify. 

‘‘(e) PLAN.— 

‘‘(1) IN GENERAL.—A plan described in this subsection is a plan that describes 

the activities to be carried out by a State or by the qualified State-designated 

entity within such State to facilitate and expand the electronic movement and 

use of health information among organizations according to nationally recognized standards and implementation specifications. 

‘‘(2) REQUIRED ELEMENTS.—A plan described in paragraph (1) shall— 

‘‘(A) be pursued in the public interest; 

‘‘(B) be consistent with the strategic plan developed by the National Coordinator, (and, as available) under section 3001; 

‘‘(C) include a description of the ways the State or qualified State-designated entity will carry out the activities described in subsection (b); and 

‘‘(D) contain such elements as the Secretary may require. 

‘‘(f) QUALIFIED STATE-DESIGNATED ENTITY.—For purposes of this section, to be a 

qualified State-designated entity, with respect to a State, an entity shall— 

‘‘(1) be designated by the State as eligible to receive awards under this section; 

‘‘(2) be a not-for-profit entity with broad stakeholder representation on its governing board; 


dwashington3 on PROD1PC60 with HEARING
33 

‘‘(3) demonstrate that one of its principal goals is to use information technology to improve health care quality and efficiency through the authorized and 

secure electronic exchange and use of health information; 

‘‘(4) adopt nondiscrimination and conflict of interest policies that demonstrate 

a commitment to open, fair, and nondiscriminatory participation by stakeholders; and 

‘‘(5) conform to such other requirements as the Secretary may establish. 

‘‘(g) REQUIRED CONSULTATION.—In carrying out activities described in subsections 

(b) and (c), a State or qualified State-designated entity shall consult with and consider the recommendations of— 

‘‘(1) health care providers (including providers that provide services to low income and underserved populations); 

‘‘(2) health plans; 

‘‘(3) patient or consumer organizations that represent the population to be 

served; 

‘‘(4) health information technology vendors; 

‘‘(5) health care purchasers and employers; 

‘‘(6) public health agencies; 

‘‘(7) health professions schools, universities and colleges; 

‘‘(8) clinical researchers; 

‘‘(9) other users of health information technology such as the support and clerical staff of providers and others involved in the care and care coordination of 

patients; and 

‘‘(10) such other entities, as may be determined appropriate by the Secretary. 

‘‘(h) CONTINUOUS IMPROVEMENT.—The Secretary shall annually evaluate the activities conducted under this section and shall, in awarding grants under this section, implement the lessons learned from such evaluation in a manner so that 

awards made subsequent to each such evaluation are made in a manner that, in 

the determination of the Secretary, will lead towards the greatest improvement in 

quality of care, decrease in costs, and the most effective authorized and secure electronic exchange of health information. 

‘‘(i) REQUIRED MATCH.— 

‘‘(1) IN GENERAL.—For a fiscal year (beginning with fiscal year 2011), the Secretary may not make a grant under this section to a State unless the State 

agrees to make available non-Federal contributions (which may include in-kind 

contributions) toward the costs of a grant awarded under subsection (c) in an 

amount equal to— 

‘‘(A) for fiscal year 2011, not less than $1 for each $10 of Federal funds 

provided under the grant; 

‘‘(B) for fiscal year 2012, not less than $1 for each $7 of Federal funds 

provided under the grant; and 

‘‘(C) for fiscal year 2013 and each subsequent fiscal year, not less than 

$1 for each $3 of Federal funds provided under the grant. 

‘‘(2) AUTHORITY TO REQUIRE STATE MATCH FOR FISCAL YEARS BEFORE FISCAL

YEAR 2011.—For any fiscal year during the grant program under this section before fiscal year 2011, the Secretary may determine the extent to which there 

shall be required a non-Federal contribution from a State receiving a grant 

under this section. 

‘‘SEC. 3014. COMPETITIVE GRANTS TO STATES AND INDIAN TRIBES FOR THE DEVELOPMENT 

OF LOAN PROGRAMS TO FACILITATE THE WIDESPREAD ADOPTION OF CERTIFIED 

EHR TECHNOLOGY. 

‘‘(a) IN GENERAL.—The National Coordinator may award competitive grants to eligible entities for the establishment of programs for loans to health care providers 

to conduct the activities described in subsection (e). 

‘‘(b) ELIGIBLE ENTITY DEFINED.—For purposes of this subsection, the term ‘eligible 

entity’ means a State or Indian tribe (as defined in the Indian Self-Determination 

and Education Assistance Act) that— 

‘‘(1) submits to the National Coordinator an application at such time, in such 

manner, and containing such information as the National Coordinator may require; 

‘‘(2) submits to the National Coordinator a strategic plan in accordance with 

subsection (d) and provides to the National Coordinator assurances that the entity will update such plan annually in accordance with such subsection; 

‘‘(3) provides assurances to the National Coordinator that the entity will establish a Loan Fund in accordance with subsection (c); 

‘‘(4) provides assurances to the National Coordinator that the entity will not 

provide a loan from the Loan Fund to a health care provider unless the provider 

agrees to— 


dwashington3 on PROD1PC60 with HEARING
34 

‘‘(A) submit reports on quality measures adopted by the Federal Government (by not later than 90 days after the date on which such measures are 

adopted), to— 

‘‘(i) the Administrator of the Centers for Medicare & Medicaid Services (or his or her designee), in the case of an entity participating in 

the Medicare program under title XVIII of the Social Security Act or 

the Medicaid program under title XIX of such Act; or 

‘‘(ii) the Secretary in the case of other entities; 

‘‘(B) demonstrate to the satisfaction of the Secretary (through criteria established by the Secretary) that any certified EHR technology purchased, 

improved, or otherwise financially supported under a loan under this section is used to exchange health information in a manner that, in accordance 

with law and standards (as adopted under section 3004) applicable to the 

exchange of information, improves the quality of health care, such as promoting care coordination; and 

‘‘(C) comply with such other requirements as the entity or the Secretary 

may require; 

‘‘(D) include a plan on how health care providers involved intend to maintain and support the certified EHR technology over time; 

‘‘(E) include a plan on how the health care providers involved intend to 

maintain and support the certified EHR technology that would be purchased with such loan, including the type of resources expected to be involved and any such other information as the State or Indian Tribe, respectively, may require; and 

‘‘(5) agrees to provide matching funds in accordance with subsection (h). 

‘‘(c) ESTABLISHMENT OF FUND.—For purposes of subsection (b)(3), an eligible entity 

shall establish a certified EHR technology loan fund (referred to in this subsection 

as a ‘Loan Fund’) and comply with the other requirements contained in this section. 

A grant to an eligible entity under this section shall be deposited in the Loan Fund 

established by the eligible entity. No funds authorized by other provisions of this 

title to be used for other purposes specified in this title shall be deposited in any 

Loan Fund. 

‘‘(d) STRATEGIC PLAN.— 

‘‘(1) IN GENERAL.—For purposes of subsection (b)(2), a strategic plan of an eligible entity under this subsection shall identify the intended uses of amounts 

available to the Loan Fund of such entity. 

‘‘(2) CONTENTS.—A strategic plan under paragraph (1), with respect to a Loan 

Fund of an eligible entity, shall include for a year the following: 

‘‘(A) A list of the projects to be assisted through the Loan Fund during 

such year. 

‘‘(B) A description of the criteria and methods established for the distribution of funds from the Loan Fund during the year. 

‘‘(C) A description of the financial status of the Loan Fund as of the date 

of submission of the plan. 

‘‘(D) The short-term and long-term goals of the Loan Fund. 

‘‘(e) USE OF FUNDS.—Amounts deposited in a Loan Fund, including loan repayments and interest earned on such amounts, shall be used only for awarding loans 

or loan guarantees, making reimbursements described in subsection (g)(4)(A), or as 

a source of reserve and security for leveraged loans, the proceeds of which are deposited in the Loan Fund established under subsection (c). Loans under this section 

may be used by a health care provider to— 

‘‘(1) facilitate the purchase of certified EHR technology; 

‘‘(2) enhance the utilization of certified EHR technology; 

‘‘(3) train personnel in the use of such technology; or 

‘‘(4) improve the secure electronic exchange of health information. 

‘‘(f) TYPES OF ASSISTANCE.—Except as otherwise limited by applicable State law, 

amounts deposited into a 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 not exceed the market interest 

rate. 

‘‘(B) The principal and interest payments on each loan shall commence 

not later than 1 year after the date the loan was awarded, and each loan 

shall be fully amortized not later than 10 years after the date of the loan. 

‘‘(C) The Loan Fund shall be credited with all payments of principal and 

interest on each loan awarded from the Loan 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 subsection) if 


dwashington3 on PROD1PC60 with HEARING
35 

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 eligible entity if the 

proceeds of the sale of the bonds will be deposited into the Loan Fund. 

‘‘(4) To earn interest on the amounts deposited into the Loan Fund. 

‘‘(5) To make reimbursements described in subsection (g)(4)(A). 

‘‘(g) ADMINISTRATION OF LOAN FUNDS.— ‘‘(1) COMBINED FINANCIAL ADMINISTRATION.—An eligible entity may (as a convenience and to avoid unnecessary administrative costs) combine, in accordance 

with applicable State law, the financial administration of a Loan Fund established under this subsection with the financial administration of any other revolving fund established by the entity if otherwise not prohibited by the law 

under which the Loan Fund was established. 

‘‘(2) COST OF ADMINISTERING FUND.—Each eligible entity may annually use 

not to exceed 4 percent of the funds provided to the entity 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 Loan Fund which are incurred after the date of the enactment of this 

title. 

‘‘(3) GUIDANCE AND REGULATIONS.—The National Coordinator 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 eligible entity commits and expends 

funds allotted to the entity 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 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 

subsection. An eligible entity may agree to reimburse a private sector entity 

for any contribution made under this subparagraph, except that the amount 

of such reimbursement may not be greater than the principal amount of the 

contribution made. 

‘‘(B) AVAILABILITY OF INFORMATION.—An eligible entity shall make publicly 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. 

‘‘(h) MATCHING REQUIREMENTS.— ‘‘(1) IN GENERAL.—The National Coordinator may not make a grant under 

subsection (a) to an eligible entity unless the entity agrees to make available 

(directly or through donations from public or private entities) non-Federal contributions in cash to the costs of carrying out the activities for which the grant 

is awarded in an amount equal to not less than $1 for each $5 of Federal funds 

provided under the grant. 

‘‘(2) DETERMINATION OF AMOUNT OF NON-FEDERAL CONTRIBUTION.—In determining the amount of non-Federal contributions that an eligible entity has provided pursuant to subparagraph (A), the National Coordinator may not include 

any amounts provided to the entity by the Federal Government. 

‘‘(i) EFFECTIVE DATE.—The Secretary may not make an award under this section 

prior to January 1, 2010. 

‘‘SEC. 3015. 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 curricula integrating certified EHR 

technology 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 certified EHR 

technology in the clinical education of health professionals to reduce medical errors and enhance health care quality; 

‘‘(3) be— 

‘‘(A) a school of medicine, osteopathic medicine, dentistry, or pharmacy, 

a graduate program in behavioral or mental health, or any other graduate 

health professions school; 


dwashington3 on PROD1PC60 with HEARING
36 

‘‘(B) a graduate school of nursing or physician assistant studies; 

‘‘(C) a consortium of two or more schools described in subparagraph (A) 

or (B); or 

‘‘(D) an institution with a graduate medical education program in medicine, osteopathic medicine, dentistry, pharmacy, nursing, or physician assistance studies; 

‘‘(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 certified EHR technology, in the delivery of health care services; and 

‘‘(5) provide matching funds in accordance with subsection (d). 

‘‘(c) USE OF FUNDS.— ‘‘(1) IN GENERAL.—With respect to a grant under subsection (a), an eligible entity shall— 

‘‘(A) use grant funds in collaboration with 2 or more disciplines; and 

‘‘(B) use grant funds to integrate certified EHR technology into community-based clinical education. 

‘‘(2) LIMITATION.—An eligible entity shall not use amounts received under a 

grant under subsection (a) to purchase hardware, software, or services. 

‘‘(d) FINANCIAL SUPPORT.—The Secretary may not provide more than 50 percent 

of the costs of any activity for which assistance is provided under subsection (a), except in an instance of national economic conditions which would render the costshare requirement under this subsection detrimental to the program and upon notification to Congress as to the justification to waive the cost-share requirement. 

‘‘(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 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). 

‘‘SEC. 3016. INFORMATION TECHNOLOGY PROFESSIONALS ON HEALTH CARE. 

‘‘(a) IN GENERAL.—The Secretary, in consultation with the Director of the National Science Foundation, shall provide assistance to institutions of higher education (or consortia thereof) to establish or expand medical health informatics education programs, including certification, undergraduate, and masters degree programs, for both health care and information technology students to ensure the rapid 

and effective utilization and development of health information technologies (in the 

United States health care infrastructure). 

‘‘(b) ACTIVITIES.—Activities for which assistance may be provided under subsection 

(a) may include the following: 

‘‘(1) Developing and revising curricula in medical health informatics and related disciplines. 

‘‘(2) Recruiting and retaining students to the program involved. 

‘‘(3) Acquiring equipment necessary for student instruction in these programs, 

including the installation of testbed networks for student use. 

‘‘(4) Establishing or enhancing bridge programs in the health informatics 

fields between community colleges and universities. 

‘‘(c) PRIORITY.—In providing assistance under subsection (a), the Secretary shall 

give preference to the following: 

‘‘(1) Existing education and training programs. 

‘‘(2) Programs designed to be completed in less than six months. 

‘‘(d) FINANCIAL SUPPORT.—The Secretary may not provide more than 50 percent 

of the costs of any activity for which assistance is provided under subsection (a), except in an instance of national economic conditions which would render the costshare requirement under this subsection detrimental to the program and upon notification to Congress as to the justification to waive the cost-share requirement. 

‘‘SEC. 3017. GENERAL GRANT AND LOAN PROVISIONS. 

‘‘(a) REPORTS.—The Secretary may require that an entity receiving assistance 

under this subtitle shall submit to the Secretary, not later than the date that is 1 

year after the date of receipt of such assistance, a report that includes— 

‘‘(1) an analysis of the effectiveness of the activities for which the entity receives such assistance, as compared to the goals for such activities; and 


dwashington3 on PROD1PC60 with HEARING
37 

‘‘(2) an analysis of the impact of the project on health care quality and safety. 

‘‘(b) REQUIREMENT TO IMPROVE QUALITY OF CARE AND DECREASE IN COSTS.—The 

National Coordinator shall annually evaluate the activities conducted under this 

subtitle and shall, in awarding grants, implement the lessons learned from such 

evaluation in a manner so that awards made subsequent to each such evaluation 

are made in a manner that, in the determination of the National Coordinator, will 

result in the greatest improvement in the quality and efficiency of health care. 

‘‘SEC. 3018. AUTHORIZATION FOR APPROPRIATIONS. 

‘‘For the purposes of carrying out this subtitle, there is authorized to be appropriated such sums as may be necessary for each of the fiscal years 2009 through 

2013. Amounts so appropriated shall remain available until expended.’’. 

PART II—MEDICARE PROGRAM 

SEC. 4311. INCENTIVES FOR ELIGIBLE PROFESSIONALS. 

(a) INCENTIVE PAYMENTS.—Section 1848 of the Social Security Act (42 U.S.C. 

1395w–4) is amended by adding at the end the following new subsection: 

‘‘(o) INCENTIVES FOR ADOPTION AND MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.— 

‘‘(1) INCENTIVE PAYMENTS.— 

‘‘(A) IN GENERAL.—Subject to the succeeding subparagraphs of this paragraph, with respect to covered professional services furnished by an eligible 

professional during a payment year (as defined in subparagraph (E)), if the 

eligible professional is a meaningful EHR user (as determined under paragraph (2)) for the reporting period with respect to such year, in addition to 

the amount otherwise paid under this part, there also shall be paid to the 

eligible professional (or to an employer or facility in the cases described in 

clause (A) of section 1842(b)(6)), from the Federal Supplementary Medical 

Insurance Trust Fund established under section 1841 an amount equal to 

75 percent of the Secretary’s estimate (based on claims submitted not later 

than 2 months after the end of the payment year) of the allowed charges 

under this part for all such covered professional services furnished by the 

eligible professional during such year. 

‘‘(B) LIMITATIONS ON AMOUNTS OF INCENTIVE PAYMENTS.— 

‘‘(i) IN GENERAL.—In no case shall the amount of the incentive payment provided under this paragraph for an eligible professional for a 

payment year exceed the applicable amount specified under this subparagraph with respect to such eligible professional and such year. 

‘‘(ii) AMOUNT.—Subject to clause (iii), the applicable amount specified 

in this subparagraph for an eligible professional is as follows: 

‘‘(I) For the first payment year for such professional, $15,000. 

‘‘(II) For the second payment year for such professional, $12,000. 

‘‘(III) For the third payment year for such professional, $8,000. 

‘‘(IV) For the fourth payment year for such professional, $4,000. 

‘‘(V) For the fifth payment year for such professional, $2,000. 

‘‘(VI) For any succeeding payment year for such professional, $0. 

‘‘(iii) PHASE DOWN FOR ELIGIBLE PROFESSIONALS FIRST ADOPTING EHR

AFTER 2013.—If the first payment year for an eligible professional is 

after 2013, then the amount specified in this subparagraph for a payment year for such professional is the same as the amount specified in 

clause (ii) for such payment year for an eligible professional whose first 

payment year is 2013. If the first payment year for an eligible professional is after 2015 then the applicable amount specified in this subparagraph for such professional for such year and any subsequent year 

shall be $0. 

‘‘(C) NON-APPLICATION TO HOSPITAL-BASED ELIGIBLE PROFESSIONALS.— 

‘‘(i) IN GENERAL.—No incentive payment may be made under this 

paragraph in the case of a hospital-based eligible professional. 

‘‘(ii) HOSPITAL-BASED ELIGIBLE PROFESSIONAL.—For purposes of clause 

(i), the term ‘hospital-based eligible professional’ means, with respect to 

covered professional services furnished by an eligible professional during the reporting period for a payment year, an eligible professional, 

such as a pathologist, anesthesiologist, or emergency physician, who 

furnishes substantially all of such services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and 

equipment, including computer equipment, of the hospital. 

‘‘(D) PAYMENT.— 


dwashington3 on PROD1PC60 with HEARING
38 

‘‘(i) FORM OF PAYMENT.—The payment under this paragraph may be 

in the form of a single consolidated payment or in the form of such 

periodic installments as the Secretary may specify. 

‘‘(ii) COORDINATION OF APPLICATION OF LIMITATION FOR PROFES- SIONALS IN DIFFERENT PRACTICES.—In the case of an eligible professional furnishing covered professional services in more than one practice (as specified by the Secretary), the Secretary shall establish rules 

to coordinate the incentive payments, including the application of the 

limitation on amounts of such incentive payments under this paragraph, among such practices. 

‘‘(iii) COORDINATION WITH MEDICAID.—The Secretary shall seek, to the 

maximum extent practicable, to avoid duplicative requirements from 

Federal and State Governments to demonstrate meaningful use of certified EHR technology under this title and title XIX. In doing so, the 

Secretary may deem satisfaction of State requirements for such meaningful use for a payment year under title XIX to be sufficient to qualify 

as meaningful use under this subsection and subsection (a)(7) and vice 

versa. The Secretary may also adjust the reporting periods under such 

title and such subsections in order to carry out this clause. 

‘‘(E) PAYMENT YEAR DEFINED.— ‘‘(i) IN GENERAL.—For purposes of this subsection, the term ‘payment 

year’ means a year beginning with 2011. 

‘‘(ii) FIRST, SECOND, ETC. PAYMENT YEAR.—The term ‘first payment 

year’ means, with respect to covered professional services furnished by 

an eligible professional, the first year for which an incentive payment 

is made for such services under this subsection. The terms ‘second payment year’, ‘third payment year’, ‘fourth payment year’, and ‘fifth payment year’ mean, with respect to covered professional services furnished by such eligible professional, each successive year immediately 

following the first payment year for such professional. 

‘‘(2) MEANINGFUL EHR USER.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1), an eligible professional 

shall be treated as a meaningful EHR user for a reporting period for a payment year (or, for purposes of subsection (a)(7), for a reporting period under 

such subsection for a year) if each of the following requirements is met: 

‘‘(i) MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.—The eligible 

professional demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (C)(i), that during such period the professional is using certified EHR technology in a meaningful manner, 

which shall include the use of electronic prescribing as determined to 

be appropriate by the Secretary. 

‘‘(ii) INFORMATION EXCHANGE.—The eligible professional demonstrates 

to the satisfaction of the Secretary, in accordance with subparagraph 

(C)(i), that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such 

as promoting care coordination. 

‘‘(iii) REPORTING ON MEASURES USING EHR.—Subject to subparagraph 

(B)(ii) and using such certified EHR technology, the eligible professional submits information for such period, in a form and manner specified by the Secretary, on such clinical quality measures and such other 

measures as selected by the Secretary under subparagraph (B)(i). 

The Secretary may provide for the use of alternative means for meeting the 

requirements of clauses (i), (ii), and (iii) in the case of an eligible professional furnishing covered professional services in a group practice (as defined by the Secretary). The Secretary shall seek to improve the use of electronic health records and health care quality over time by requiring more 

stringent measures of meaningful use selected under this paragraph. 

‘‘(B) REPORTING ON MEASURES.— 

‘‘(i) SELECTION.—The Secretary shall select measures for purposes of 

subparagraph (A)(iii) but only consistent with the following: 

‘‘(I) The Secretary shall provide preference to clinical quality 

measures that have been endorsed by the entity with a contract 

with the Secretary under section 1890(a). 

‘‘(II) Prior to any measure being selected under this subparagraph, the Secretary shall publish in the Federal Register such 

measure and provide for a period of public comment on such measure. 


dwashington3 on PROD1PC60 with HEARING
39 

‘‘(ii) LIMITATION.—The Secretary may not require the electronic reporting of information on clinical quality measures under subparagraph 

(A)(iii) unless the Secretary has the capacity to accept the information 

electronically, which may be on a pilot basis. 

‘‘(iii) COORDINATION OF REPORTING OF INFORMATION.—In selecting 

such measures, and in establishing the form and manner for reporting 

measures under subparagraph (A)(iii), the Secretary shall seek to avoid 

redundant or duplicative reporting otherwise required, including reporting under subsection (k)(2)(C). 

‘‘(C) DEMONSTRATION OF MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY

AND INFORMATION EXCHANGE.— ‘‘(i) IN GENERAL.—A professional may satisfy the demonstration requirement of clauses (i) and (ii) of subparagraph (A) through means 

specified by the Secretary, which may include— 

‘‘(I) an attestation; 

‘‘(II) the submission of claims with appropriate coding (such as 

a code indicating that a patient encounter was documented using 

certified EHR technology); 

‘‘(III) a survey response; 

‘‘(IV) reporting under subparagraph (A)(iii); and 

‘‘(V) other means specified by the Secretary. 

‘‘(ii) USE OF PART D DATA.—Notwithstanding sections 1860D– 

15(d)(2)(B) and 1860D–15(f)(2), the Secretary may use data regarding 

drug claims submitted for purposes of section 1860D–15 that are necessary for purposes of subparagraph (A). 

‘‘(3) APPLICATION.— 

‘‘(A) PHYSICIAN REPORTING SYSTEM RULES.—Paragraphs (5), (6), and (8) of 

subsection (k) shall apply for purposes of this subsection in the same manner as they apply for purposes of such subsection. 

‘‘(B) COORDINATION WITH OTHER PAYMENTS.—The provisions of this subsection shall not be taken into account in applying the provisions of subsection (m) of this section and of section 1833(m) and any payment under 

such provisions shall not be taken into account in computing allowable 

charges under this subsection. 

‘‘(C) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the determination of any incentive payment under this subsection and the payment adjustment under subsection (a)(7), including the determination of a meaningful EHR user under paragraph (2), a limitation under paragraph (1)(B), and 

the exception under subsection (a)(7)(B). 

‘‘(D) POSTING ON WEBSITE.—The Secretary shall post on the Internet 

website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, business addresses, and business 

phone numbers of the eligible professionals who are meaningful EHR users 

and, as determined appropriate by the Secretary, of group practices receiving incentive payments under paragraph (1). 

‘‘(4) CERTIFIED EHR TECHNOLOGY DEFINED.—For purposes of this section, the 

term ‘certified EHR technology’ means a qualified electronic health record (as 

defined in 3000(13) of the Public Health Service Act) that is certified pursuant 

to section 3001(c)(5) of such Act as meeting standards adopted under section 

3004 of such Act that are applicable to the type of record involved (as determined by the Secretary, such as an ambulatory electronic health record for office-based physicians or an inpatient hospital electronic health record for hospitals). 

‘‘(5) DEFINITIONS.—For purposes of this subsection: 

‘‘(A) COVERED PROFESSIONAL SERVICES.—The term ‘covered professional 

services’ has the meaning given such term in subsection (k)(3). 

‘‘(B) ELIGIBLE PROFESSIONAL.—The term ‘eligible professional’ means a 

physician, as defined in section 1861(r). 

‘‘(C) REPORTING PERIOD.—The term ‘reporting period’ means any period 

(or periods), with respect to a payment year, as specified by the Secretary.’’. 

(b) INCENTIVE PAYMENT ADJUSTMENT.—Section 1848(a) of the Social Security Act 

(42 U.S.C. 1395w–4(a)) is amended by adding at the end the following new paragraph: 

‘‘(7) INCENTIVES FOR MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.— 

‘‘(A) ADJUSTMENT.— 

‘‘(i) IN GENERAL.—Subject to subparagraphs (B) and (D), with respect 

to covered professional services furnished by an eligible professional 

during 2016 or any subsequent payment year, if the eligible profesVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
40 

sional is not a meaningful EHR user (as determined under subsection 

(o)(2)) for a reporting period for the year, the fee schedule amount for 

such services furnished by such professional during the year (including 

the fee schedule amount for purposes of determining a payment based 

on such amount) shall be equal to the applicable percent of the fee 

schedule amount that would otherwise apply to such services under 

this subsection (determined after application of paragraph (3) but without regard to this paragraph). 

‘‘(ii) APPLICABLE PERCENT.—Subject to clause (iii), for purposes of 

clause (i), the term ‘applicable percent’ means— 

‘‘(I) for 2016, 99 percent; 

‘‘(II) for 2017, 98 percent; and 

‘‘(III) for 2018 and each subsequent year, 97 percent. 

‘‘(iii) AUTHORITY TO DECREASE APPLICABLE PERCENTAGE FOR 2019 AND

SUBSEQUENT YEARS.—For 2019 and each subsequent year, if the Secretary finds that the proportion of eligible professionals who are meaningful EHR users (as determined under subsection (o)(2)) is less than 

75 percent, the applicable percent shall be decreased by 1 percentage 

point from the applicable percent in the preceding year, but in no case 

shall the applicable percent be less than 95 percent. 

‘‘(B) SIGNIFICANT HARDSHIP EXCEPTION.—The Secretary may, on a caseby-case basis, exempt an eligible professional from the application of the 

payment adjustment under subparagraph (A) if the Secretary determines, 

subject to annual renewal, that compliance with the requirement for being 

a meaningful EHR user would result in a significant hardship, such as in 

the case of an eligible professional who practices in a rural area without 

sufficient Internet access. In no case may an eligible professional be granted an exemption under this subparagraph for more than 5 years. 

‘‘(C) APPLICATION OF PHYSICIAN REPORTING SYSTEM RULES.—Paragraphs 

(5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph 

in the same manner as they apply for purposes of such subsection. 

‘‘(D) NON-APPLICATION TO HOSPITAL-BASED ELIGIBLE PROFESSIONALS.—No 

payment adjustment may be made under subparagraph (A) in the case of 

hospital-based eligible professionals (as defined in subsection (o)(1)(C)(ii)). 

‘‘(E) DEFINITIONS.—For purposes of this paragraph: 

‘‘(i) COVERED PROFESSIONAL SERVICES.—The term ‘covered professional services’ has the meaning given such term in subsection (k)(3). 

‘‘(ii) ELIGIBLE PROFESSIONAL.—The term ‘eligible professional’ means 

a physician, as defined in section 1861(r). 

‘‘(iii) REPORTING PERIOD.—The term ‘reporting period’ means, with respect to a year, a period specified by the Secretary.’’. 

(c) APPLICATION TO CERTAIN HMO-AFFILIATED ELIGIBLE PROFESSIONALS.—Section 

1853 of the Social Security Act (42 U.S.C. 1395w–23) is amended by adding at the 

end the following new subsection: 

‘‘(l) APPLICATION OF ELIGIBLE PROFESSIONAL INCENTIVES FOR CERTAIN MA ORGANIZATIONS FOR ADOPTION AND MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.— 

‘‘(1) IN GENERAL.—Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of sections 1848(o) and 1848(a)(7) shall 

apply with respect to eligible professionals described in paragraph (2) of the organization who the organization attests under paragraph (6) to be meaningful 

EHR users in a similar manner as they apply to eligible professionals under 

such sections. Incentive payments under paragraph (3) shall be made to and 

payment adjustments under paragraph (4) shall apply to such qualifying organizations. 

‘‘(2) ELIGIBLE PROFESSIONAL DESCRIBED.—With respect to a qualifying MA organization, an eligible professional described in this paragraph is an eligible 

professional (as defined for purposes of section 1848(o)) who— 

‘‘(A)(i) is employed by the organization; or 

‘‘(ii)(I) is employed by, or is a partner of, an entity that through contract 

with the organization furnishes at least 80 percent of the entity’s patient 

care services to enrollees of such organization; and 

‘‘(II) furnishes at least 75 percent of the professional services of the eligible professional to enrollees of the organization; and 

‘‘(B) furnishes, on average, at least 20 hours per week of patient care 

services. 

‘‘(3) ELIGIBLE PROFESSIONAL INCENTIVE PAYMENTS.— 

‘‘(A) IN GENERAL.—In applying section 1848(o) under paragraph (1), instead of the additional payment amount under section 1848(o)(1)(A) and 

subject to subparagraph (B), the Secretary may substitute an amount deterVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00040 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
41 

mined by the Secretary to the extent feasible and practical to be similar to 

the estimated amount in the aggregate that would be payable if payment 

for services furnished by such professionals was payable under part B instead of this part. 

‘‘(B) AVOIDING DUPLICATION OF PAYMENTS.— 

‘‘(i) IN GENERAL.—If an eligible professional described in paragraph 

(2) is eligible for the maximum incentive payment under section 

1848(o)(1)(A) for the same payment period, the payment incentive shall 

be made only under such section and not under this subsection. 

‘‘(ii) METHODS.—In the case of an eligible professional described in 

paragraph (2) who is eligible for an incentive payment under section 

1848(o)(1)(A) but is not described in clause (i) for the same payment period, the Secretary shall develop a process— 

‘‘(I) to ensure that duplicate payments are not made with respect 

to an eligible professional both under this subsection and under 

section 1848(o)(1)(A); and 

‘‘(II) to collect data from Medicare Advantage organizations to 

ensure against such duplicate payments. 

‘‘(C) FIXED SCHEDULE FOR APPLICATION OF LIMITATION ON INCENTIVE PAYMENTS FOR ALL ELIGIBLE PROFESSIONALS.—In applying section 

1848(o)(1)(B)(ii) under subparagraph (A), in accordance with rules specified 

by the Secretary, a qualifying MA organization shall specify a year (not earlier than 2011) that shall be treated as the first payment year for all eligible professionals with respect to such organization. 

‘‘(4) PAYMENT ADJUSTMENT.— 

‘‘(A) IN GENERAL.—In applying section 1848(a)(7) under paragraph (1), instead of the payment adjustment being an applicable percent of the fee 

schedule amount for a year under such section, subject to subparagraph 

(D), the payment adjustment under paragraph (1) shall be equal to the percent specified in subparagraph (B) for such year of the payment amount 

otherwise provided under this section for such year. 

‘‘(B) SPECIFIED PERCENT.—The percent specified under this subparagraph 

for a year is 100 percent minus a number of percentage points equal to the 

product of— 

‘‘(i) the number of percentage points by which the applicable percent 

(under section 1848(a)(7)(A)(ii)) for the year is less than 100 percent; 

and 

‘‘(ii) the Medicare physician expenditure proportion specified in subparagraph (C) for the year. 

‘‘(C) MEDICARE PHYSICIAN EXPENDITURE PROPORTION.—The Medicare physician expenditure proportion under this subparagraph for a year is the 

Secretary’s estimate of the proportion, of the expenditures under parts A 

and B that are not attributable to this part, that are attributable to expenditures for physicians’ services. 

‘‘(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the case that a qualifying MA organization attests that not all eligible professionals are meaningful EHR users with respect to a year, the Secretary shall apply the payment adjustment under this paragraph based on the proportion of such eligible professionals that are not meaningful EHR users for such year. 

‘‘(5) QUALIFYING MA ORGANIZATION DEFINED.—In this subsection and subsection (m), the term ‘qualifying MA organization’ means a Medicare Advantage 

organization that is organized as a health maintenance organization (as defined 

in section 2791(b)(3) of the Public Health Service Act). 

‘‘(6) MEANINGFUL EHR USER ATTESTATION.—For purposes of this subsection 

and subsection (m), a qualifying MA organization shall submit an attestation, 

in a form and manner specified by the Secretary which may include the submission of such attestation as part of submission of the initial bid under section 

1854(a)(1)(A)(iv), identifying— 

‘‘(A) whether each eligible professional described in paragraph (2), with 

respect to such organization is a meaningful EHR user (as defined in section 1848(o)(2)) for a year specified by the Secretary; and 

‘‘(B) whether each eligible hospital described in subsection (m)(1), with respect to such organization, is a meaningful EHR user (as defined in section 

1886(n)(3)) for an applicable period specified by the Secretary.’’. 

(d) CONFORMING AMENDMENTS.—Section 1853 of the Social Security Act (42 

U.S.C. 1395w–23) is amended— 

(1) in subsection (a)(1)(A), by striking ‘‘and (i)’’ and inserting ‘‘(i), and (l)’’; 

(2) in subsection (c)— 


dwashington3 on PROD1PC60 with HEARING
42 

(A) in paragraph (1)(D)(i), by striking ‘‘section 1886(h)’’ and inserting 

‘‘sections 1848(o) and 1886(h)’’; and 

(B) in paragraph (6)(A), by inserting after ‘‘under part B,’’ the following: 

‘‘excluding expenditures attributable to subsections (a)(7) and (o) of section 

1848,’’; and 

(3) in subsection (f), by inserting ‘‘and for payments under subsection (l)’’ after 

‘‘with the organization’’. 

(e) CONFORMING AMENDMENTS TO E-PRESCRIBING.— 

(1) Section 1848(a)(5)(A) of the Social Security Act (42 U.S.C. 1395w– 

4(a)(5)(A)) is amended— 

(A) in clause (i), by striking ‘‘or any subsequent year’’ and inserting ‘‘, 

2013, 2014, or 2015’’; and 

(B) in clause (ii), by striking ‘‘and each subsequent year’’ and inserting 

‘‘and 2015’’. 

(2) Section 1848(m)(2) of such Act (42 U.S.C. 1395w–4(m)(2)) is amended— 

(A) in subparagraph (A), by striking ‘‘For 2009’’ and inserting ‘‘Subject to 

subparagraph (D), for 2009’’; and 

(B) by adding at the end the following new subparagraph: 

‘‘(D) LIMITATION WITH RESPECT TO EHR INCENTIVE PAYMENTS.—The provisions of this paragraph shall not apply to an eligible professional (or, in the 

case of a group practice under paragraph (3)(C), to the group practice) if, 

for the reporting period the eligible professional (or group practice) receives 

an incentive payment under subsection (o)(1)(A) with respect to a certified 

EHR technology (as defined in subsection (o)(4)) that has the capability of 

electronic prescribing.’’. 

SEC. 4312. INCENTIVES FOR HOSPITALS. 

(a) INCENTIVE PAYMENT.—Section 1886 of the Social Security Act (42 U.S.C. 

1395ww) is amended by adding at the end the following new subsection: 

‘‘(n) INCENTIVES FOR ADOPTION AND MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.— 

‘‘(1) IN GENERAL.—Subject to the succeeding provisions of this subsection, with 

respect to inpatient hospital services furnished by an eligible hospital during a 

payment year (as defined in paragraph (2)(G)), if the eligible hospital is a meaningful EHR user (as determined under paragraph (3)) for the reporting period 

with respect to such year, in addition to the amount otherwise paid under this 

section, there also shall be paid to the eligible hospital, from the Federal Hospital Insurance Trust Fund established under section 1817, an amount equal to 

the applicable amount specified in paragraph (2)(A) for the hospital for such 

payment year. 

‘‘(2) PAYMENT AMOUNT.— 

‘‘(A) IN GENERAL.—Subject to the succeeding subparagraphs of this paragraph, the applicable amount specified in this subparagraph for an eligible 

hospital for a payment year is equal to the product of the following: 

‘‘(i) INITIAL AMOUNT.—The sum of— 

‘‘(I) the base amount specified in subparagraph (B); plus 

‘‘(II) the discharge related amount specified in subparagraph (C) 

for a 12-month period selected by the Secretary with respect to 

such payment year. 

‘‘(ii) MEDICARE SHARE.—The Medicare share as specified in subparagraph (D) for the hospital for a period selected by the Secretary with 

respect to such payment year. 

‘‘(iii) TRANSITION FACTOR.—The transition factor specified in subparagraph (E) for the hospital for the payment year. 

‘‘(B) BASE AMOUNT.—The base amount specified in this subparagraph is 

$2,000,000. 

‘‘(C) DISCHARGE RELATED AMOUNT.—The discharge related amount specified in this subparagraph for a 12-month period selected by the Secretary 

shall be determined as the sum of the amount, based upon total discharges 

(regardless of any source of payment) for the period, for each discharge up 

to the 23,000th discharge as follows: 

‘‘(i) For the 1,150th through the 9,200nd discharge, $200. 

‘‘(ii) For the 9,201st through the 13,800th discharge, 50 percent of the 

amount specified in clause (i). 

‘‘(iii) For the 13,801st through the 23,000th discharge, 30 percent of 

the amount specified in clause (i). 

‘‘(D) MEDICARE SHARE.—The Medicare share specified under this subparagraph for a hospital for a period selected by the Secretary for a payment 

year is equal to the fraction— 


dwashington3 on PROD1PC60 with HEARING
43 

‘‘(i) the numerator of which is the sum (for such period and with respect to the hospital) of— 

‘‘(I) the number of inpatient-bed-days (as established by the Secretary) which are attributable to individuals with respect to whom 

payment may be made under part A; and 

‘‘(II) the number of inpatient-bed-days (as so established) which 

are attributable to individuals who are enrolled with a Medicare 

Advantage organization under part C; and 

‘‘(ii) the denominator of which is the product of— 

‘‘(I) the total number of inpatient-bed-days with respect to the 

hospital during such period; and 

‘‘(II) the total amount of the hospital’s charges during such period, not including any charges that are attributable to charity care 

(as such term is used for purposes of hospital cost reporting under 

this title), divided by the total amount of the hospital’s charges 

during such period. 

Insofar as the Secretary determines that data are not available on charity 

care necessary to calculate the portion of the formula specified in clause 

(ii)(II), the Secretary shall use data on uncompensated care and may adjust 

such data so as to be an appropriate proxy for charity care including a 

downward adjustment to eliminate bad debt data from uncompensated care 

data. In the absence of the data necessary, with respect to a hospital, for 

the Secretary to compute the amount described in clause (ii)(II), the amount 

under such clause shall be deemed to be 1. In the absence of data, with respect to a hospital, necessary to compute the amount described in clause 

(i)(II), the amount under such clause shall be deemed to be 0. 

‘‘(E) TRANSITION FACTOR SPECIFIED.— 

‘‘(i) IN GENERAL.—Subject to clause (ii), the transition factor specified 

in this subparagraph for an eligible hospital for a payment year is as 

follows: 

‘‘(I) For the first payment year for such hospital, 1. 

‘‘(II) For the second payment year for such hospital, 3⁄4. 

‘‘(III) For the third payment year for such hospital, 1⁄2. 

‘‘(IV) For the fourth payment year for such hospital, 1⁄4. 

‘‘(V) For any succeeding payment year for such hospital, 0. 

‘‘(ii) PHASE DOWN FOR ELIGIBLE HOSPITALS FIRST ADOPTING EHR AFTER

2013.—If the first payment year for an eligible hospital is after 2013, 

then the transition factor specified in this subparagraph for a payment 

year for such hospital is the same as the amount specified in clause (i) 

for such payment year for an eligible hospital for which the first payment year is 2013. If the first payment year for an eligible hospital is 

after 2015 then the transition factor specified in this subparagraph for 

such hospital and for such year and any subsequent year shall be 0. 

‘‘(F) FORM OF PAYMENT.—The payment under this subsection for a payment year may be in the form of a single consolidated payment or in the 

form of such periodic installments as the Secretary may specify. 

‘‘(G) PAYMENT YEAR DEFINED.— 

‘‘(i) IN GENERAL.—For purposes of this subsection, the term ‘payment 

year’ means a fiscal year beginning with fiscal year 2011. 

‘‘(ii) FIRST, SECOND, ETC. PAYMENT YEAR.—The term ‘first payment 

year’ means, with respect to inpatient hospital services furnished by an 

eligible hospital, the first fiscal year for which an incentive payment is 

made for such services under this subsection. The terms ‘second payment year’, ‘third payment year’, and ‘fourth payment year’ mean, with 

respect to an eligible hospital, each successive year immediately following the first payment year for that hospital. 

‘‘(3) MEANINGFUL EHR USER.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1), an eligible hospital 

shall be treated as a meaningful EHR user for a reporting period for a payment year (or, for purposes of subsection (b)(3)(B)(ix), for a reporting period 

under such subsection for a fiscal year) if each of the following requirements are met: 

‘‘(i) MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.—The eligible 

hospital demonstrates to the satisfaction of the Secretary, in accordance 

with subparagraph (C)(i), that during such period the hospital is using 

certified EHR technology in a meaningful manner. 

‘‘(ii) INFORMATION EXCHANGE.—The eligible hospital demonstrates to 

the satisfaction of the Secretary, in accordance with subparagraph 

(C)(i), that during such period such certified EHR technology is conVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
44 

nected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such 

as promoting care coordination. 

‘‘(iii) REPORTING ON MEASURES USING EHR.—Subject to subparagraph 

(B)(ii) and using such certified EHR technology, the eligible hospital 

submits information for such period, in a form and manner specified by 

the Secretary, on such clinical quality measures and such other measures as selected by the Secretary under subparagraph (B)(i). 

The Secretary shall seek to improve the use of electronic health records and 

health care quality over time by requiring more stringent measures of 

meaningful use selected under this paragraph. 

‘‘(B) REPORTING ON MEASURES.— 

‘‘(i) SELECTION.—The Secretary shall select measures for purposes of 

subparagraph (A)(iii) but only consistent with the following: 

‘‘(I) The Secretary shall provide preference to clinical quality 

measures that have been selected for purposes of applying subsection (b)(3)(B)(viii) or that have been endorsed by the entity with 

a contract with the Secretary under section 1890(a). 

‘‘(II) Prior to any measure (other than a clinical quality measure 

that has been selected for purposes of applying subsection 

(b)(3)(B)(viii)) being selected under this subparagraph, the Secretary shall publish in the Federal Register such measure and provide for a period of public comment on such measure. 

‘‘(ii) LIMITATIONS.—The Secretary may not require the electronic reporting of information on clinical quality measures under subparagraph 

(A)(iii) unless the Secretary has the capacity to accept the information 

electronically, which may be on a pilot basis. 

‘‘(iii) COORDINATION OF REPORTING OF INFORMATION.—In selecting 

such measures, and in establishing the form and manner for reporting 

measures under subparagraph (A)(iii), the Secretary shall seek to avoid 

redundant or duplicative reporting with reporting otherwise required, 

including reporting under subsection (b)(3)(B)(viii). 

‘‘(C) DEMONSTRATION OF MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY

AND INFORMATION EXCHANGE.— 

‘‘(i) IN GENERAL.—A hospital may satisfy the demonstration requirement of clauses (i) and (ii) of subparagraph (A) through means specified 

by the Secretary, which may include— 

‘‘(I) an attestation; 

‘‘(II) the submission of claims with appropriate coding (such as 

a code indicating that inpatient care was documented using certified EHR technology); 

‘‘(III) a survey response; 

‘‘(IV) reporting under subparagraph (A)(iii); and 

‘‘(V) other means specified by the Secretary. 

‘‘(ii) USE OF PART D DATA.—Notwithstanding sections 1860D– 

15(d)(2)(B) and 1860D–15(f)(2), the Secretary may use data regarding 

drug claims submitted for purposes of section 1860D–15 that are necessary for purposes of subparagraph (A). 

‘‘(4) APPLICATION.— 

‘‘(A) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the determination of any incentive payment under this subsection and the payment adjustment under subsection (b)(3)(B)(ix), including the determination of a 

meaningful EHR user under paragraph (3), determination of measures applicable to services furnished by eligible hospitals under this subsection, 

and the exception under subsection (b)(3)(B)(ix)(II). 

‘‘(B) POSTING ON WEBSITE.—The Secretary shall post on the Internet 

website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names of the eligible hospitals that are 

meaningful EHR users under this subsection or subsection (b)(3)(B)(ix) and 

other relevant data as determined appropriate by the Secretary. The Secretary shall ensure that a hospital has the opportunity to review the other 

relevant data that are to be made public with respect to the hospital prior 

to such data being made public. 

‘‘(5) CERTIFIED EHR TECHNOLOGY DEFINED.—The term ‘certified EHR technology’ has the meaning given such term in section 1848(o)(4). 

‘‘(6) DEFINITIONS.—For purposes of this subsection: 


dwashington3 on PROD1PC60 with HEARING
45 

‘‘(A) ELIGIBLE HOSPITAL.—The term ‘eligible hospital’ means a subsection 

(d) hospital. 

‘‘(B) REPORTING PERIOD.—The term ‘reporting period’ means any period 

(or periods), with respect to a payment year, as specified by the Secretary.’’. 

(b) INCENTIVE MARKET BASKET ADJUSTMENT.—Section 1886(b)(3)(B) of the Social 

Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended— 

(1) in clause (viii)(I), by inserting ‘‘(or, beginning with fiscal year 2016, by onequarter)’’ after ‘‘2.0 percentage points’’; and 

(2) by adding at the end the following new clause: 

‘‘(ix)(I) For purposes of clause (i) for fiscal year 2016 and each subsequent fiscal 

year, in the case of an eligible hospital (as defined in subsection (n)(6)(A)) that is 

not a meaningful EHR user (as defined in subsection (n)(3)) for the reporting period 

for such fiscal year, three-quarters of the applicable percentage increase otherwise 

applicable under clause (i) for such fiscal year shall be reduced by 331⁄3 percent for 

fiscal year 2016, 662⁄3 percent for fiscal year 2017, and 100 percent for fiscal year 

2018 and each subsequent fiscal year. Such reduction shall apply only with respect 

to the fiscal year involved and the Secretary shall not take into account such reduction in computing the applicable percentage increase under clause (i) for a subsequent fiscal year. 

‘‘(II) The Secretary may, on a case-by-case basis, exempt a subsection (d) hospital 

from the application of subclause (I) with respect to a fiscal year if the Secretary 

determines, subject to annual renewal, that requiring such hospital to be a meaningful EHR user during such fiscal year would result in a significant hardship, such 

as in the case of a hospital in a rural area without sufficient Internet access. In 

no case may a hospital be granted an exemption under this subclause for more than 

5 years. 

‘‘(III) For fiscal year 2016 and each subsequent fiscal year, a State in which hospitals are paid for services under section 1814(b)(3) shall adjust the payments to 

each subsection (d) hospital in the State that is not a meaningful EHR user (as defined in subsection (n)(3)) in a manner that is designed to result in an aggregate 

reduction in payments to hospitals in the State that is equivalent to the aggregate 

reduction that would have occurred if payments had been reduced to each subsection (d) hospital in the State in a manner comparable to the reduction under the 

previous provisions of this clause. The State shall report to the Secretary the methodology it will use to make the payment adjustment under the previous sentence. 

‘‘(IV) For purposes of this clause, the term ‘reporting period’ means, with respect 

to a fiscal year, any period (or periods), with respect to the fiscal year, as specified 

by the Secretary.’’. 

(c) APPLICATION TO CERTAIN HMO-AFFILIATED ELIGIBLE HOSPITALS.—Section 1853 

of the Social Security Act (42 U.S.C. 1395w-23), as amended by section 4311(c), is 

further amended by adding at the end the following new subsection: 

‘‘(m) APPLICATION OF ELIGIBLE HOSPITAL INCENTIVES FOR CERTAIN MA ORGANIZATIONS FOR ADOPTION AND MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY.— 

‘‘(1) APPLICATION.—Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of sections 1886(n) and 1886(b)(3)(B)(ix) 

shall apply with respect to eligible hospitals described in paragraph (2) of the 

organization which the organization attests under subsection (l)(6) to be meaningful EHR users in a similar manner as they apply to eligible hospitals under 

such sections. Incentive payments under paragraph (3) shall be made to and 

payment adjustments under paragraph (4) shall apply to such qualifying organizations. 

‘‘(2) ELIGIBLE HOSPITAL DESCRIBED.—With respect to a qualifying MA organization, an eligible hospital described in this paragraph is an eligible hospital 

that is under common corporate governance with such organization and serves 

individuals enrolled under an MA plan offered by such organization. 

‘‘(3) ELIGIBLE HOSPITAL INCENTIVE PAYMENTS.— 

‘‘(A) IN GENERAL.—In applying section 1886(n)(2) under paragraph (1), instead of the additional payment amount under section 1886(n)(2), there 

shall be substituted an amount determined by the Secretary to be similar 

to the estimated amount in the aggregate that would be payable if payment 

for services furnished by such hospitals was payable under part A instead 

of this part. In implementing the previous sentence, the Secretary— 

‘‘(i) shall, insofar as data to determine the discharge related amount 

under section 1886(n)(2)(C) for an eligible hospital are not available to 

the Secretary, use such alternative data and methodology to estimate 

such discharge related amount as the Secretary determines appropriate; and 

‘‘(ii) shall, insofar as data to determine the medicare share described 

in section 1886(n)(2)(D) for an eligible hospital are not available to the 


dwashington3 on PROD1PC60 with HEARING
46 

Secretary, use such alternative data and methodology to estimate such 

share, which data and methodology may include use of the inpatient 

bed days (or discharges) with respect to an eligible hospital during the 

appropriate period which are attributable to both individuals for whom 

payment may be made under part A or individuals enrolled in an MA 

plan under a Medicare Advantage organization under this part as a 

proportion of the total number of patient-bed-days (or discharges) with 

respect to such hospital during such period. 

‘‘(B) AVOIDING DUPLICATION OF PAYMENTS.— ‘‘(i) IN GENERAL.—In the case of a hospital that for a payment year 

is an eligible hospital described in paragraph (2), is an eligible hospital 

under section 1886(n), and for which at least one-third of their discharges (or bed-days) of Medicare patients for the year are covered 

under part A, payment for the payment year shall be made only under 

section 1886(n) and not under this subsection. 

‘‘(ii) METHODS.—In the case of a hospital that is an eligible hospital 

described in paragraph (2) and also is eligible for an incentive payment 

under section 1886(n) but is not described in clause (i) for the same 

payment period, the Secretary shall develop a process— 

‘‘(I) to ensure that duplicate payments are not made with respect 

to an eligible hospital both under this subsection and under section 

1886(n); and 

‘‘(II) to collect data from Medicare Advantage organizations to 

ensure against such duplicate payments. 

‘‘(4) PAYMENT ADJUSTMENT.— 

‘‘(A) Subject to paragraph (3), in the case of a qualifying MA organization 

(as defined in section 1853(l)(5)), if, according to the attestation of the organization submitted under subsection (l)(6) for an applicable period, one or 

more eligible hospitals (as defined in section 1886(n)(6)(A)) that are under 

common corporate governance with such organization and that serve individuals enrolled under a plan offered by such organization are not meaningful EHR users (as defined in section 1886(n)(3)) with respect to a period, 

the payment amount payable under this section for such organization for 

such period shall be the percent specified in subparagraph (B) for such period of the payment amount otherwise provided under this section for such 

period. 

‘‘(B) SPECIFIED PERCENT.—The percent specified under this subparagraph 

for a year is 100 percent minus a number of percentage points equal to the 

product of— 

‘‘(i) the number of the percentage point reduction effected under section 1886(b)(3)(B)(ix)(I) for the period; and 

‘‘(ii) the Medicare hospital expenditure proportion specified in subparagraph (C) for the year. 

‘‘(C) MEDICARE HOSPITAL EXPENDITURE PROPORTION.—The Medicare hospital expenditure proportion under this subparagraph for a year is the Secretary’s estimate of the proportion, of the expenditures under parts A and 

B that are not attributable to this part, that are attributable to expenditures for inpatient hospital services. 

‘‘(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the case that a qualifying MA organization attests that not all eligible hospitals are meaningful 

EHR users with respect to an applicable period, the Secretary shall apply 

the payment adjustment under this paragraph based on a methodology 

specified by the Secretary, taking into account the proportion of such eligible hospitals, or discharges from such hospitals, that are not meaningful 

EHR users for such period.’’. 

(d) CONFORMING AMENDMENTS.— 

(1) Section 1814(b) of the Social Security Act (42 U.S.C. 1395f(b)) is amended— 

(A) in paragraph (3), in the matter preceding subparagraph (A), by inserting ‘‘, subject to section 1886(d)(3)(B)(ix)(III),’’ after ‘‘then’’; and 

(B) by adding at the end the following: ‘‘For purposes of applying paragraph (3), there shall be taken into account incentive payments, and payment adjustments under subsection (b)(3)(B)(ix) or (n) of section 1886.’’. 

(2) Section 1851(i)(1) of the Social Security Act (42 U.S.C. 1395w–21(i)(1)) is 

amended by striking ‘‘and 1886(h)(3)(D)’’ and inserting ‘‘1886(h)(3)(D), and 

1853(m)’’. 

(3) Section 1853 of the Social Security Act (42 U.S.C. 1395w–23), as amended 

by section 4311(d)(1), is amended— 

(A) in subsection (c)— 


dwashington3 on PROD1PC60 with HEARING
47 

(i) in paragraph (1)(D)(i), by striking ‘‘1848(o)’’ and inserting ‘‘, 

1848(o), and 1886(n)’’; and 

(ii) in paragraph (6)(A), by inserting ‘‘and subsections (b)(3)(B)(ix) 

and (n) of section 1886’’ after ‘‘section 1848’’; and 

(B) in subsection (f), by inserting ‘‘and subsection (m)’’ after ‘‘under subsection (l)’’. 

SEC. 4313. TREATMENT OF PAYMENTS AND SAVINGS; IMPLEMENTATION FUNDING. 

(a) PREMIUM HOLD HARMLESS.— (1) IN GENERAL.—Section 1839(a)(1) of the Social Security Act (42 U.S.C. 

1395r(a)(1)) is amended by adding at the end the following: ‘‘In applying this 

paragraph there shall not be taken into account additional payments under section 1848(o) and section 1853(l)(3) and the Government contribution under section 1844(a)(3).’’. 

(2) PAYMENT.—Section 1844(a) of such Act (42 U.S.C. 1395w(a)) is amended— 

(A) in paragraph (2), by striking the period at the end and inserting ‘‘; 

plus’’; and 

(B) by adding at the end the following new paragraph: 

‘‘(3) a Government contribution equal to the amount of payment incentives 

payable under sections 1848(o) and 1853(l)(3).’’. 

(b) MEDICARE IMPROVEMENT FUND.—Section 1898 of the Social Security Act (42 

U.S.C. 1395iii), as added by section 7002(a) of the Supplemental Appropriations Act, 

2008 (Public Law 110–252) and as amended by section 188(a)(2) of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275; 122 Stat. 

2589) and by section 6 of the QI Program Supplemental Funding Act of 2008, is 

amended— 

(1) in subsection (a)— 

(A) by inserting ‘‘medicare’’ before ‘‘fee-for-service’’; and 

(B) by inserting before the period at the end the following: ‘‘including, but 

not limited to, an increase in the conversion factor under section 1848(d) 

to address, in whole or in part, any projected shortfall in the conversion factor for 2014 relative to the conversion factor for 2008 and adjustments to 

payments for items and services furnished by providers of services and suppliers under such original medicare fee-for-service program’’; and 

(2) in subsection (b)— 

(A) in paragraph (1), by striking ‘‘during fiscal year 2014,’’ and all that 

follows and inserting the following: ‘‘during— 

‘‘(A) fiscal year 2014, $22,290,000,000; and 

‘‘(B) fiscal year 2020 and each subsequent fiscal year, the Secretary’s estimate, as of July 1 of the fiscal year, of the aggregate reduction in expenditures under this title during the preceding fiscal year directly resulting 

from the reduction in payment amounts under sections 1848(a)(7), 

1853(l)(4), 1853(m)(4), and 1886(b)(3)(B)(ix).’’; and 

(B) by adding at the end the following new paragraph: 

‘‘(4) NO EFFECT ON PAYMENTS IN SUBSEQUENT YEARS.—In the case that expenditures from the Fund are applied to, or otherwise affect, a payment rate 

for an item or service under this title for a year, the payment rate for such item 

or service shall be computed for a subsequent year as if such application or effect had never occurred.’’. 

(c) IMPLEMENTATION FUNDING.—In addition to funds otherwise available, out of 

any funds in the Treasury not otherwise appropriated, there are appropriated to the 

Secretary of Health and Human Services for the Center for Medicare & Medicaid 

Services Program Management Account, $60,000,000 for each of fiscal years 2009 

through 2015 and $30,000,000 for each succeeding fiscal year through fiscal year 

2019, which shall be available for purposes of carrying out the provisions of (and 

amendments made by) this part. Amounts appropriated under this subsection for a 

fiscal year shall be available until expended. 

SEC. 4314. STUDY ON APPLICATION OF EHR PAYMENT INCENTIVES FOR PROVIDERS NOT RECEIVING OTHER INCENTIVE PAYMENTS. 

(a) STUDY.— 

(1) IN GENERAL.—The Secretary of Health and Human Services shall conduct 

a study to determine the extent to which and manner in which payment incentives (such as under title XVIII or XIX of the Social Security Act) and other 

funding for purposes of implementing and using certified EHR technology (as 

defined in section 3000 of the Public Health Service Act) should be made available to health care providers who are receiving minimal or no payment incentives or other funding under this Act, under title XVIII or XIX of the Social Security Act, or otherwise, for such purposes. 

(2) DETAILS OF STUDY.—Such study shall include an examination of— 


dwashington3 on PROD1PC60 with HEARING
48 

(A) the adoption rates of certified EHR technology by such health care 

providers; 

(B) the clinical utility of such technology by such health care providers; 

(C) whether the services furnished by such health care providers are appropriate for or would benefit from the use of such technology; 

(D) the extent to which such health care providers work in settings that 

might otherwise receive an incentive payment or other funding under this 

Act, title XVIII or XIX of the Social Security Act, or otherwise; 

(E) the potential costs and the potential benefits of making payment incentives and other funding available to such health care providers; and 

(F) any other issues the Secretary deems to be appropriate. 

(b) REPORT.—Not later than June 30, 2010, the Secretary shall submit to Congress a report on the findings and conclusions of the study conducted under subsection (a). 

PART III—MEDICAID FUNDING 

SEC. 4321. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAYMENTS; IMPLEMENTATION FUNDING. 

(a) IN GENERAL.—Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 

amended— 

(1) in subsection (a)(3)— 

(A) by striking ‘‘and’’ at the end of subparagraph (D); 

(B) by striking ‘‘plus’’ at the end of subparagraph (E) and inserting ‘‘and’’; 

and 

(C) by adding at the end the following new subparagraph: 

‘‘(F)(i) 100 percent of so much of the sums expended during such quarter 

as are attributable to payments for certified EHR technology (and support 

services including maintenance and training that is for, or is necessary for 

the adoption and operation of, such technology) by Medicaid providers described in subsection (t)(1); and 

‘‘(ii) 90 percent of so much of the sums expended during such quarter as 

are attributable to payments for reasonable administrative expenses related 

to the administration of payments described in clause (i) if the State meets 

the condition described in subsection (t)(9); plus’’; and 

(2) by inserting after subsection (s) the following new subsection: 

‘‘(t)(1) For purposes of subsection (a)(3)(F), the payments for certified EHR technology (and support services including maintenance that is for, or is necessary for 

the operation of, such technology) by Medicaid providers described in this paragraph 

are payments made by the State in accordance with this subsection of 85 percent 

of the net allowable costs of Medicaid providers (as defined in paragraph (2)) for 

such technology (and support services). 

‘‘(2) In this subsection and subsection (a)(3)(F), the term ‘Medicaid provider’ 

means— 

‘‘(A) an eligible professional (as defined in paragraph (3)(B)) who is not hospital-based and has at least 30 percent of the professional’s patient volume (as 

estimated in accordance with standards established by the Secretary) attributable to individuals who are receiving medical assistance under this title; and 

‘‘(B)(i) a children’s hospital, (ii) an acute-care hospital that is not described 

in clause (i) and that has at least 10 percent of the hospital’s patient volume 

(as estimated in accordance with standards established by the Secretary) attributable to individuals who are receiving medical assistance under this title, or 

(iii) a Federally-qualified health center or rural health clinic that has at least 

30 percent of the center’s or clinic’s patient volume (as estimated in accordance 

with standards established by the Secretary) attributable to individuals who are 

receiving medical assistance under this title. 

An eligible professional shall not qualify as a Medicaid provider under this subsection unless the eligible professional has waived, in a manner specified by the Secretary, any right to payment under section 1848(o) with respect to the adoption or 

support of certified EHR technology by the professional. In applying clauses (ii) and 

(iii) of subparagraph (B), the standards established by the Secretary for patient volume shall include individuals enrolled in a Medicaid managed care plan (under section 1903(m) or section 1932). 

‘‘(3) In this subsection and subsection (a)(3)(F): 

‘‘(A) The term ‘certified EHR technology’ means a qualified electronic health 

record (as defined in 3000(13) of the Public Health Service Act) that is certified 

pursuant to section 3001(c)(5) of such Act as meeting standards adopted under 

section 3004 of such Act that are applicable to the type of record involved (as 


dwashington3 on PROD1PC60 with HEARING
49 

determined by the Secretary, such as an ambulatory electronic health record for 

office-based physicians or an inpatient hospital electronic health record for hospitals). 

‘‘(B) The term ‘eligible professional’ means a physician as defined in paragraphs (1) and (2) of section 1861(r), and includes a nurse mid-wife and a nurse 

practitioner. 

‘‘(C) The term ‘hospital-based’ means, with respect to an eligible professional, 

a professional (such as a pathologist, anesthesiologist, or emergency physician) 

who furnishes substantially all of the individual’s professional services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including computer equipment, of the hospital. 

‘‘(4)(A) The term ‘allowable costs’ means, with respect to certified EHR technology 

of a Medicaid provider, costs of such technology (and support services including 

maintenance and training that is for, or is necessary for the adoption and operation 

of, such technology) as determined by the Secretary to be reasonable. 

‘‘(B) The term ‘net allowable costs’ means allowable costs reduced by any payment 

that is made to the Medicaid provider involved from any other source that is directly attributable to payment for certified EHR technology or services described in 

subparagraph (A). 

‘‘(C) In no case shall— 

‘‘(i) the aggregate allowable costs under this subsection (covering one or more 

years) with respect to a Medicaid provider described in paragraph (2)(A) for purchase and initial implementation of certified EHR technology (and services described in subparagraph (A)) exceed $25,000 or include costs over a period of 

longer than 5 years; 

‘‘(ii) for costs not described in clause (i) relating to the operation, maintenance, or use of certified EHR technology, the annual allowable costs under this 

subsection with respect to such a Medicaid provider for costs not described in 

clause (i) for any year exceed $10,000; 

‘‘(iii) payment described in paragraph (1) for costs described in clause (ii) be 

made with respect to such a Medicaid provider over a period of more than 5 

years; 

‘‘(iv) the aggregate allowable costs under this subsection with respect to such 

a Medicaid provider for all costs exceed $75,000; or 

‘‘(v) the allowable costs, whether for purchase and initial implementation, 

maintenance, or otherwise, for a Medicaid provider described in paragraph 

(2)(B) exceed such aggregate or annual limitation as the Secretary shall establish, based on an amount determined by the Secretary as being adequate to 

adopt and maintain certified EHR technology, consistent with paragraph (6). 

‘‘(5) Payments described in paragraph (1) are not in accordance with this subsection unless the following requirements are met: 

‘‘(A) The State provides assurances satisfactory to the Secretary that amounts 

received under subsection (a)(3)(F) with respect to costs of a Medicaid provider 

are paid directly to such provider without any deduction or rebate. 

‘‘(B) Such Medicaid provider is responsible for payment of the costs described 

in such paragraph that are not provided under this title. 

‘‘(C) With respect to payments to such Medicaid provider for costs other than 

costs related to the initial adoption of certified EHR technology, the Medicaid 

provider demonstrates meaningful use of certified EHR technology through a 

means that is approved by the State and acceptable to the Secretary, and that 

may be based upon the methodologies applied under section 1848(o) or 1886(n). 

‘‘(D) To the extent specified by the Secretary, the certified EHR technology is 

compatible with State or Federal administrative management systems. 

‘‘(6)(A) In no case shall the payments described in paragraph (1), with respect to 

a hospital, exceed in the aggregate the product of— 

‘‘(i) the overall hospital EHR amount for the hospital computed under subparagraph (B); and 

‘‘(ii) the Medicaid share for such hospital computed under subparagraph (C). 

‘‘(B) For purposes of this paragraph, the overall hospital EHR amount, with respect to a hospital, is the sum of the applicable amounts specified in section 

1886(n)(2)(A) for such hospital for the first 4 payment years (as estimated by the 

Secretary) determined as if the Medicare share specified in clause (ii) of such section 

were 1. The Secretary shall publish in the Federal Register the overall hospital 

EHR amount for each hospital eligible for payments under this subsection. In computing amounts under clause (ii) for payment years after the first payment year, 

the Secretary shall assume that in subsequent payment years discharges increase 

at the average annual rate of growth of the most recent 3 years for which discharge 

data are available per year. 


dwashington3 on PROD1PC60 with HEARING
50 

‘‘(C) The Medicaid share computed under this subparagraph, for a hospital for a 

period specified by the Secretary, shall be calculated in the same manner as the 

Medicare share under section 1886(n)(2)(D) for such a hospital and period, except 

that there shall be substituted for the numerator under clause (i) of such section 

the amount that is equal to the number of inpatient-bed-days (as established by the 

Secretary) which are attributable to individuals who are receiving medical assistance under this title and who are not described in section 1886(n)(2)(D)(i). In computing inpatient-bed-days under the previous sentence, the Secretary shall take into 

account inpatient-bed-days attributable to inpatient-bed-days that are paid for individuals enrolled in a Medicaid managed care plan (under section 1903(m) or section 

1932). 

‘‘(7) With respect to health care providers other than hospitals, the Secretary shall 

ensure coordination of the different programs for payment of such health care providers for adoption or use of health information technology (including certified EHR 

technology), as well as payments for such health care providers provided under this 

title or title XVIII, to assure no duplication of funding. 

‘‘(8) In carrying out paragraph (5)(C), the State and Secretary shall seek, to the 

maximum extent practicable, to avoid duplicative requirements from Federal and 

State Governments to demonstrate meaningful use of certified EHR technology 

under this title and title XVIII. In doing so, the Secretary may deem satisfaction 

of requirements for such meaningful use for a payment year under title XVIII to 

be sufficient to qualify as meaningful use under this subsection. The Secretary may 

also specify the reporting periods under this subsection in order to carry out this 

paragraph. 

‘‘(9) In order to be provided Federal financial participation under subsection 

(a)(3)(F)(ii), a State must demonstrate to the satisfaction of the Secretary, that the 

State— 

‘‘(A) is using the funds provided for the purposes of administering payments 

under this subsection, including tracking of meaningful use by Medicaid providers; 

‘‘(B) is conducting adequate oversight of the program under this subsection, 

including routine tracking of meaningful use attestations and reporting mechanisms; and 

‘‘(C) is pursuing initiatives to encourage the adoption of certified EHR technology to promote health care quality and the exchange of health care information under this title, subject to applicable laws and regulations governing such 

exchange. 

‘‘(10) The Secretary shall periodically submit reports to the Committee on Energy 

and Commerce of the House of Representatives and the Committee on Finance of 

the Senate on status, progress, and oversight of payments under paragraph (1).’’. 

(b) IMPLEMENTATION FUNDING.—In addition to funds otherwise available, out of 

any funds in the Treasury not otherwise appropriated, there are appropriated to the 

Secretary of Health and Human Services for the Center for Medicare & Medicaid 

Services Program Management Account, $40,000,000 for each of fiscal years 2009 

through 2015 and $20,000,000 for each succeeding fiscal year through fiscal year 

2019, which shall be available for purposes of carrying out the provisions of (and 

the amendments made by) this part. Amounts appropriated under this subsection 

for a fiscal year shall be available until expended. 

Subtitle D—Privacy 

SEC. 4400. DEFINITIONS. 

In this subtitle, except as specified otherwise: 

(1) BREACH.—The term ‘‘breach’’ means the unauthorized acquisition, access, 

use, or disclosure of protected health information which compromises the security, privacy, or integrity of protected health information maintained by or on 

behalf of a person. Such term does not include any unintentional acquisition, 

access, use, or disclosure of such information by an employee or agent of the 

covered entity or business associate involved if such acquisition, access, use, or 

disclosure, respectively, was made in good faith and within the course and scope 

of the employment or other contractual relationship of such employee or agent, 

respectively, with the covered entity or business associate and if such information is not further acquired, accessed, used, or disclosed by such employee or 

agent. 

(2) BUSINESS ASSOCIATE.—The term ‘‘business associate’’ has the meaning 

given such term in section 160.103 of title 45, Code of Federal Regulations. 

(3) COVERED ENTITY.—The term ‘‘covered entity’’ has the meaning given such 

term in section 160.103 of title 45, Code of Federal Regulations. 


dwashington3 on PROD1PC60 with HEARING
51 

(4) DISCLOSE.—The terms ‘‘disclose’’ and ‘‘disclosure’’ have the meaning given 

the term ‘‘disclosure’’ in section 160.103 of title 45, Code of Federal Regulations. 

(5) ELECTRONIC HEALTH RECORD.—The term ‘‘electronic health record’’ means 

an electronic record of health-related information on an individual that is created, gathered, managed, and consulted by authorized health care clinicians and 

staff. 

(6) HEALTH CARE OPERATIONS.—The term ‘‘health care operation’’ has the 

meaning given such term in section 164.501 of title 45, Code of Federal Regulations. 

(7) HEALTH CARE PROVIDER.—The term ‘‘health care provider’’ has the meaning given such term in section 160.103 of title 45, Code of Federal Regulations. 

(8) HEALTH PLAN.—The term ‘‘health plan’’ has the meaning given such term 

in section 1171(5) of the Social Security Act. 

(9) NATIONAL COORDINATOR.—The term ‘‘National Coordinator’’ means the 

head of the Office of the National Coordinator for Health Information Technology established under section 3001(a) of the Public Health Service Act, as 

added by section 4101. 

(10) PAYMENT.—The term ‘‘payment’’ has the meaning given such term in section 164.501 of title 45, Code of Federal Regulations. 

(11) PERSONAL HEALTH RECORD.—The term ‘‘personal health record’’ means an 

electronic record of individually identifiable health information on an individual 

that can be drawn from multiple sources and that is managed, shared, and controlled by or for the individual. 

(12) PROTECTED HEALTH INFORMATION.—The term ‘‘protected health information’’ has the meaning given such term in section 160.103 of title 45, Code of 

Federal Regulations. 

(13) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Health and 

Human Services. 

(14) SECURITY.—The term ‘‘security’’ has the meaning given such term in section 164.304 of title 45, Code of Federal Regulations. 

(15) 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. 

(16) TREATMENT.—The term ‘‘treatment’’ has the meaning given such term in 

section 164.501 of title 45, Code of Federal Regulations. 

(17) USE.—The term ‘‘use’’ has the meaning given such term in section 

160.103 of title 45, Code of Federal Regulations. 

(18) VENDOR OF PERSONAL HEALTH RECORDS.—The term ‘‘vendor of personal 

health records’’ means an entity, other than a covered entity (as defined in 

paragraph (3)), that offers or maintains a personal health record. 

PART I—IMPROVED PRIVACY PROVISIONS AND 

SECURITY PROVISIONS 

SEC. 4401. APPLICATION OF SECURITY PROVISIONS AND PENALTIES TO BUSINESS ASSOCIATES OF COVERED ENTITIES; ANNUAL GUIDANCE ON SECURITY PROVISIONS. 

(a) APPLICATION OF SECURITY PROVISIONS.—Sections 164.308, 164.310, 164.312, 

and 164.316 of title 45, Code of Federal Regulations, shall apply to a business associate of a covered entity in the same manner that such sections apply to the covered 

entity. The additional requirements of this title that relate to security and that are 

made applicable with respect to covered entities shall also be applicable to such a 

business associate and shall be incorporated into the business associate agreement 

between the business associate and the covered entity. 

(b) APPLICATION OF CIVIL AND CRIMINAL PENALTIES.—In the case of a business associate that violates any security provision specified in subsection (a), sections 1176 

and 1177 of the Social Security Act (42 U.S.C. 1320d-5, 1320d-6) shall apply to the 

business associate with respect to such violation in the same manner such sections 

apply to a covered entity that violates such security provision. 

(c) ANNUAL GUIDANCE.—For the first year beginning after the date of the enactment of this Act and annually thereafter, the Secretary of Health and Human Services shall, in consultation with industry stakeholders, annually issue guidance on 

the most effective and appropriate technical safeguards for use in carrying out the 

sections referred to in subsection (a) and the security standards in subpart C of part 

164 of title 45, Code of Federal Regulations, as such provisions are in effect as of 

the date before the enactment of this Act. 


dwashington3 on PROD1PC60 with HEARING
52 

SEC. 4402. NOTIFICATION IN THE CASE OF BREACH. 

(a) IN GENERAL.—A covered entity that accesses, maintains, retains, modifies, 

records, stores, destroys, or otherwise holds, uses, or discloses unsecured protected 

health information (as defined in subsection (h)(1)) shall, in the case of a breach of 

such information that is discovered by the covered entity, notify each individual 

whose unsecured protected health information has been, or is reasonably believed 

by the covered entity to have been, accessed, acquired, or disclosed as a result of 

such breach. 

(b) NOTIFICATION OF COVERED ENTITY BY BUSINESS ASSOCIATE.—A business associate of a covered entity that accesses, maintains, retains, modifies, records, stores, 

destroys, or otherwise holds, uses, or discloses unsecured protected health information shall, following the discovery of a breach of such information, notify the covered 

entity of such breach. Such notice shall include the identification of each individual 

whose unsecured protected health information has been, or is reasonably believed 

by the business associate to have been, accessed, acquired, or disclosed during such 

breach. 

(c) BREACHES TREATED AS DISCOVERED.—For purposes of this section, a breach 

shall be treated as discovered by a covered entity or by a business associate as of 

the first day on which such breach is known to such entity or associate, respectively, 

(including any person, other than the individual committing the breach, that is an 

employee, officer, or other agent of such entity or associate, respectively) or should 

reasonably have been known to such entity or associate (or person) to have occurred. 

(d) TIMELINESS OF NOTIFICATION.— 

(1) IN GENERAL.—Subject to subsection (g), all notifications required under 

this section shall be made without unreasonable delay and in no case later than 

60 calendar days after the discovery of a breach by the covered entity involved 

(or business associate involved in the case of a notification required under subsection (b)). 

(2) BURDEN OF PROOF.—The covered entity involved (or business associate involved in the case of a notification required under subsection (b)), shall have 

the burden of demonstrating that all notifications were made as required under 

this part, including evidence demonstrating the necessity of any delay. 

(e) METHODS OF NOTICE.— 

(1) INDIVIDUAL NOTICE.—Notice required under this section to be provided to 

an individual, with respect to a breach, shall be provided promptly and in the 

following form: 

(A) Written notification by first-class mail to the individual (or the next 

of kin of the individual if the individual is deceased) at the last known address of the individual or the next of kin, respectively, or, if specified as a 

preference by the individual, by electronic mail. The notification may be 

provided in one or more mailings as information is available. 

(B) In the case in which there is insufficient, or out-of-date contact information (including a phone number, email address, or any other form of appropriate communication) that precludes direct written (or, if specified by 

the individual under subparagraph (A), electronic) notification to the individual, a substitute form of notice shall be provided, including, in the case 

that there are 10 or more individuals for which there is insufficient or outof-date contact information, a conspicuous posting for a period determined 

by the Secretary on the home page of the Web site of the covered entity 

involved or notice in major print or broadcast media, including major media 

in geographic areas where the individuals affected by the breach likely reside. Such a notice in media or web posting will include a toll-free phone 

number where an individual can learn whether or not the individual’s unsecured protected health information is possibly included in the breach. 

(C) In any case deemed by the covered entity involved to require urgency 

because of possible imminent misuse of unsecured protected health information, the covered entity, in addition to notice provided under subparagraph 

(A), may provide information to individuals by telephone or other means, 

as appropriate. 

(2) MEDIA NOTICE.—Notice shall be provided to prominent media outlets serving a State or jurisdiction, following the discovery of a breach described in subsection (a), if the unsecured protected health information of more than 500 residents of such State or jurisdiction is, or is reasonably believed to have been, 

accessed, acquired, or disclosed during such breach. 

(3) NOTICE TO SECRETARY.—Notice shall be provided to the Secretary by covered entities of unsecured protected health information that has been acquired 

or disclosed in a breach. If the breach was with respect to 500 or more individuals than such notice must be provided immediately. If the breach was with respect to less than 500 individuals, the covered entity involved may maintain a 


dwashington3 on PROD1PC60 with HEARING
53 

log of any such breach occurring and annually submit such a log to the Secretary documenting such breaches occurring during the year involved. 

(4) POSTING ON HHS PUBLIC WEBSITE.—The Secretary shall make available to 

the public on the Internet website of the Department of Health and Human 

Services a list that identifies each covered entity involved in a breach described 

in subsection (a) in which the unsecured protected health information of more 

than 500 individuals is acquired or disclosed. 

(f) CONTENT OF NOTIFICATION.—Regardless of the method by which notice is provided to individuals under this section, notice of a breach shall include, to the extent 

possible, the following: 

(1) A brief description of what happened, including the date of the breach and 

the date of the discovery of the breach, if known. 

(2) A description of the types of unsecured protected health information that 

were involved in the breach (such as full name, Social Security number, date 

of birth, home address, account number, or disability code). 

(3) The steps individuals should take to protect themselves from potential 

harm resulting from the breach. 

(4) A brief description of what the covered entity involved is doing to investigate the breach, to mitigate losses, and to protect against any further 

breaches. 

(5) Contact procedures for individuals to ask questions or learn additional information, which shall include a toll-free telephone number, an e-mail address, 

Web site, or postal address. 

(g) DELAY OF NOTIFICATION AUTHORIZED FOR LAW ENFORCEMENT PURPOSES.—If 

a law enforcement official determines that a notification, notice, or posting required 

under this section would impede a criminal investigation or cause damage to national security, such notification, notice, or posting shall be delayed in the same 

manner as provided under section 164.528(a)(2) of title 45, Code of Federal Regulations, in the case of a disclosure covered under such section. 

(h) UNSECURED PROTECTED HEALTH INFORMATION.— 

(1) DEFINITION.— 

(A) IN GENERAL.—Subject to subparagraph (B), for purposes of this section, the term ‘‘unsecured protected health information’’ means protected 

health information that is not secured through the use of a technology or 

methodology specified by the Secretary in the guidance issued under paragraph (2). 

(B) EXCEPTION IN CASE TIMELY GUIDANCE NOT ISSUED.—In the case that 

the Secretary does not issue guidance under paragraph (2) by the date specified in such paragraph, for purposes of this section, the term ‘‘unsecured 

protected health information’’ shall mean protected health information that 

is not secured by a technology standard that renders protected health information unusable, unreadable, or indecipherable to unauthorized individuals 

and is developed or endorsed by a standards developing organization that 

is accredited by the American National Standards Institute. 

(2) GUIDANCE.—For purposes of paragraph (1) and section 407(f)(3), not later 

than the date that is 60 days after the date of the enactment of this Act, the 

Secretary shall, after consultation with stakeholders, issue (and annually update) guidance specifying the technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals. 

(i) REPORT TO CONGRESS ON BREACHES.— 

(1) IN GENERAL.—Not later than 12 months after the date of the enactment 

of this Act and annually thereafter, the Secretary shall prepare and submit to 

the Committee on Finance and the Committee on Health, Education, Labor, and 

Pensions of the Senate and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report containing the information described in paragraph (2) regarding breaches for which 

notice was provided to the Secretary under subsection (e)(3). 

(2) INFORMATION.—The information described in this paragraph regarding 

breaches specified in paragraph (1) shall include— 

(A) the number and nature of such breaches; and 

(B) actions taken in response to such breaches. 

(j) REGULATIONS; EFFECTIVE DATE.—To carry out this section, the Secretary of 

Health and Human Services shall promulgate interim final regulations by not later 

than the date that is 180 days after the date of the enactment of this title. The provisions of this section shall apply to breaches that are discovered on or after the 

date that is 30 days after the date of publication of such interim final regulations. 


dwashington3 on PROD1PC60 with HEARING
54 

SEC. 4403. EDUCATION ON HEALTH INFORMATION PRIVACY. 

(a) REGIONAL OFFICE PRIVACY ADVISORS.—Not later than 6 months after the date 

of the enactment of this Act, the Secretary shall designate an individual in each regional office of the Department of Health and Human Services to offer guidance and 

education to covered entities, business associates, and individuals on their rights 

and responsibilities related to Federal privacy and security requirements for protected health information. 

(b) EDUCATION INITIATIVE ON USES OF HEALTH INFORMATION.—Not later than 12 

months after the date of the enactment of this Act, the Office for Civil Rights within 

the Department of Health and Human Services shall develop and maintain a multifaceted national education initiative to enhance public transparency regarding the 

uses of protected health information, including programs to educate individuals 

about the potential uses of their protected health information, the effects of such 

uses, and the rights of individuals with respect to such uses. Such programs shall 

be conducted in a variety of languages and present information in a clear and understandable manner. 

SEC. 4404. APPLICATION OF PRIVACY PROVISIONS AND PENALTIES TO BUSINESS ASSOCIATES 

OF COVERED ENTITIES. 

(a) APPLICATION OF CONTRACT REQUIREMENTS.—In the case of a business associate of a covered entity that obtains or creates protected health information pursuant to a written contract (or other written arrangement) described in section 

164.502(e)(2) of title 45, Code of Federal Regulations, with such covered entity, the 

business associate may use and disclose such protected health information only if 

such use or disclosure, respectively, is in compliance with each applicable requirement of section 164.504(e) of such title. The additional requirements of this subtitle 

that relate to privacy and that are made applicable with respect to covered entities 

shall also be applicable to such a business associate and shall be incorporated into 

the business associate agreement between the business associate and the covered 

entity. 

(b) APPLICATION OF KNOWLEDGE ELEMENTS ASSOCIATED WITH CONTRACTS.—Section 164.504(e)(1)(ii) of title 45, Code of Federal Regulations, shall apply to a business associate described in subsection (a), with respect to compliance with such subsection, in the same manner that such section applies to a covered entity, with respect to compliance with the standards in sections 164.502(e) and 164.504(e) of such 

title, except that in applying such section 164.504(e)(1)(ii) each reference to the business associate, with respect to a contract, shall be treated as a reference to the covered entity involved in such contract. 

(c) APPLICATION OF CIVIL AND CRIMINAL PENALTIES.—In the case of a business associate that violates any provision of subsection (a) or (b), the provisions of sections 

1176 and 1177 of the Social Security Act (42 U.S.C. 1320d-5, 1320d-6) shall apply 

to the business associate with respect to such violation in the same manner as such 

provisions apply to a person who violates a provision of part C of title XI of such 

Act. 

SEC. 4405. RESTRICTIONS ON CERTAIN DISCLOSURES AND SALES OF HEALTH INFORMATION; 

ACCOUNTING OF CERTAIN PROTECTED HEALTH INFORMATION DISCLOSURES; ACCESS TO CERTAIN INFORMATION IN ELECTRONIC FORMAT. 

(a) REQUESTED RESTRICTIONS ON CERTAIN DISCLOSURES OF HEALTH INFORMATION.—In the case that an individual requests under paragraph (a)(1)(i)(A) of section 

164.522 of title 45, Code of Federal Regulations, that a covered entity restrict the 

disclosure of the protected health information of the individual, notwithstanding 

paragraph (a)(1)(ii) of such section, the covered entity must comply with the requested restriction if— 

(1) except as otherwise required by law, the disclosure is to a health plan for 

purposes of carrying out payment or health care operations (and is not for purposes of carrying out treatment); and 

(2) the protected health information pertains solely to a health care item or 

service for which the health care provider involved has been paid out of pocket 

in full. 

(b) DISCLOSURES REQUIRED TO BE LIMITED TO THE LIMITED DATA SET OR THE

MINIMUM NECESSARY.— 

(1) IN GENERAL.— 

(A) IN GENERAL.—Subject to subparagraph (B), a covered entity shall be 

treated as being in compliance with section 164.502(b)(1) of title 45, Code 

of Federal Regulations, with respect to the use, disclosure, or request of 

protected health information described in such section, only if the covered 

entity limits such protected health information, to the extent practicable, to 

the limited data set (as defined in section 164.514(e)(2) of such title) or, if 


dwashington3 on PROD1PC60 with HEARING
55 

needed by such entity, to the minimum necessary to accomplish the intended purpose of such use, disclosure, or request, respectively. 

(B) GUIDANCE.—Not later than 18 months after the date of the enactment 

of this section, the Secretary shall issue guidance on what constitutes ‘‘minimum necessary’’ for purposes of subpart E of part 164 of title 45, Code of 

Federal Regulation. In issuing such guidance the Secretary shall take into 

consideration the guidance under section 4424(c). 

(C) SUNSET.—Subparagraph (A) shall not apply on and after the effective 

date on which the Secretary issues the guidance under subparagraph (B). 

(2) DETERMINATION OF MINIMUM NECESSARY.—For purposes of paragraph (1), 

in the case of the disclosure of protected health information, the covered entity 

or business associate disclosing such information shall determine what constitutes the minimum necessary to accomplish the intended purpose of such disclosure. 

(3) APPLICATION OF EXCEPTIONS.—The exceptions described in section 

164.502(b)(2) of title 45, Code of Federal Regulations, shall apply to the requirement under paragraph (1) as of the effective date described in section 4423 in 

the same manner that such exceptions apply to section 164.502(b)(1) of such 

title before such date. 

(4) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed as 

affecting the use, disclosure, or request of protected health information that has 

been de-identified. 

(c) ACCOUNTING OF CERTAIN PROTECTED HEALTH INFORMATION DISCLOSURES REQUIRED IF COVERED ENTITY USES ELECTRONIC HEALTH RECORD.— 

(1) IN GENERAL.—In applying section 164.528 of title 45, Code of Federal Regulations, in the case that a covered entity uses or maintains an electronic health 

record with respect to protected health information— 

(A) the exception under paragraph (a)(1)(i) of such section shall not apply 

to disclosures through an electronic health record made by such entity of 

such information; and 

(B) an individual shall have a right to receive an accounting of disclosures described in such paragraph of such information made by such covered entity during only the three years prior to the date on which the accounting is requested. 

(2) REGULATIONS.—The Secretary shall promulgate regulations on what information shall be collected about each disclosure referred to in paragraph (1)(A) 

not later than 18 months after the date on which the Secretary adopts standards on accounting for disclosure described in the section 3002(b)(2)(B)(iv) of the 

Public Health Service Act, as added by section 4101. Such regulations shall only 

require such information to be collected through an electronic health record in 

a manner that takes into account the interests of individuals in learning the 

circumstances under which their protected health information is being disclosed 

and takes into account the administrative burden of accounting for such disclosures. 

(3) CONSTRUCTION.—Nothing in this subsection shall be construed as requiring a covered entity to account for disclosures of protected health information 

that are not made by such covered entity or by a business associate acting on 

behalf of the covered entity. 

(4) EFFECTIVE DATE.— 

(A) CURRENT USERS OF ELECTRONIC RECORDS.—In the case of a covered 

entity insofar as it acquired an electronic health record as of January 1, 

2009, paragraph (1) shall apply to disclosures, with respect to protected 

health information, made by the covered entity from such a record on and 

after January 1, 2014. 

(B) OTHERS.—In the case of a covered entity insofar as it acquires an 

electronic health record after January 1, 2009, paragraph (1) shall apply to 

disclosures, with respect to protected health information, made by the covered entity from such record on and after the later of the following: 

(i) January 1, 2011; or 

(ii) the date that it acquires an electronic health record. 

(d) REVIEW OF HEALTH CARE OPERATIONS.—Not later than 18 months after the 

date of the enactment of this title, the Secretary shall promulgate regulations to 

eliminate from the definition of health care operations under section 164.501 of title 

45, Code of Federal Regulations, those activities that can reasonably and efficiently 

be conducted through the use of information that is de-identified (in accordance with 

the requirements of section 164.514(b) of such title) or that should require a valid 

authorization for use or disclosure. In promulgating such regulations, the Secretary 

may choose to narrow or clarify activities that the Secretary chooses to retain in 

the definition of health care operations and the Secretary shall take into account 


dwashington3 on PROD1PC60 with HEARING
56 

the report under section 424(d). In such regulations the Secretary shall specify the 

date on which such regulations shall apply to disclosures made by a covered entity, 

but in no case would such date be sooner than the date that is 24 months after the 

date of the enactment of this section. 

(e) PROHIBITION ON SALE OF ELECTRONIC HEALTH RECORDS OR PROTECTED

HEALTH INFORMATION.— 

(1) IN GENERAL.—Except as provided in paragraph (2), a covered entity or 

business associate shall not directly or indirectly receive remuneration in exchange for any protected health information of an individual unless the covered 

entity obtained from the individual, in accordance with section 164.508 of title 

45, Code of Federal Regulations, a valid authorization that includes, in accordance with such section, a specification of whether the protected health information can be further exchanged for remuneration by the entity receiving protected health information of that individual. 

(2) EXCEPTIONS.—Paragraph (1) shall not apply in the following cases: 

(A) The purpose of the exchange is for research or public health activities 

(as described in sections 164.501, 164.512(i), and 164.512(b) of title 45, Code 

of Federal Regulations) and the price charged reflects the costs of preparation and transmittal of the data for such purpose. 

(B) The purpose of the exchange is for the treatment of the individual 

and the price charges reflects not more than the costs of preparation and 

transmittal of the data for such purpose. 

(C) The purpose of the exchange is the health care operation specifically 

described in subparagraph (iv) of paragraph (6) of the definition of health 

care operations in section 164.501 of title 45, Code of Federal Regulations. 

(D) The purpose of the exchange is for remuneration that is provided by 

a covered entity to a business associate for activities involving the exchange 

of protected health information that the business associate undertakes on 

behalf of and at the specific request of the covered entity pursuant to a 

business associate agreement. 

(E) The purpose of the exchange is to provide an individual with a copy 

of the individual’s protected health information pursuant to section 164.524 

of title 45, Code of Federal Regulations. 

(F) The purpose of the exchange is otherwise determined by the Secretary 

in regulations to be similarly necessary and appropriate as the exceptions 

provided in subparagraphs (A) through (E). 

(3) REGULATIONS.—The Secretary shall promulgate regulations to carry out 

paragraph (this subsection, including exceptions described in paragraph (2), not 

later than 18 months after the date of the enactment of this title. 

(4) EFFECTIVE DATE.—Paragraph (1) shall apply to exchanges occurring on or 

after the date that is 6 months after the date of the promulgation of final regulations implementing this subsection. 

(f) ACCESS TO CERTAIN INFORMATION IN ELECTRONIC FORMAT.—In applying section 164.524 of title 45, Code of Federal Regulations, in the case that a covered entity uses or maintains an electronic health record with respect to protected health information of an individual— 

(1) the individual shall have a right to obtain from such covered entity a copy 

of such information in an electronic format; and 

(2) notwithstanding paragraph (c)(4) of such section, any fee that the covered 

entity may impose for providing such individual with a copy of such information 

(or a summary or explanation of such information) if such copy (or summary 

or explanation) is in an electronic form shall not be greater than the entity’s 

labor costs in responding to the request for the copy (or summary or explanation). 

SEC. 4406. CONDITIONS ON CERTAIN CONTACTS AS PART OF HEALTH CARE OPERATIONS. 

(a) MARKETING.— 

(1) IN GENERAL.—A communication by a covered entity or business associate 

that is about a product or service and that encourages recipients of the communication to purchase or use the product or service shall not be considered a 

health care operation for purposes of subpart E of part 164 of title 45, Code of 

Federal Regulations, unless the communication is made as described in subparagraph (i), (ii), or (iii) of paragraph (1) of the definition of marketing in section 164.501 of such title. 

(2) PAYMENT FOR CERTAIN COMMUNICATIONS.—A covered entity or business associate may not receive direct or indirect payment in exchange for making any 

communication described in subparagraph (i), (ii), or (iii) of paragraph (1) of the 

definition of marketing in section 164.501 of title 45, Code of Federal Regulations, except— 


dwashington3 on PROD1PC60 with HEARING
57 

(A) a business associate of a covered entity may receive payment from the 

covered entity for making any such communication on behalf of the covered 

entity that is consistent with the written contract (or other written arrangement) described in section 164.502(e)(2) of such title between such business 

associate and covered entity; or 

(B) a covered entity may receive payment in exchange for making any 

such communication if the entity obtains from the recipient of the communication, in accordance with section 164.508 of title 45, Code of Federal 

Regulations, a valid authorization (as described in paragraph (b) of such 

section) with respect to such communication. 

(b) FUNDRAISING.—Fundraising for the benefit of a covered entity shall not be considered a health care operation for purposes of section 164.501 of title 45, Code of 

Federal Regulations. 

(c) EFFECTIVE DATE.—This section shall apply to contracting occurring on or after 

the effective date specified under section 4423. 

SEC. 4407. TEMPORARY BREACH NOTIFICATION REQUIREMENT FOR VENDORS OF PERSONAL 

HEALTH RECORDS AND OTHER NON-HIPAA COVERED ENTITIES. 

(a) IN GENERAL.—In accordance with subsection (c), each vendor of personal 

health records, following the discovery of a breach of security of unsecured PHR 

identifiable health information that is in a personal health record maintained or offered by such vendor, and each entity described in clause (ii) or (iii) of section 

4424(b)(1)(A), following the discovery of a breach of security of such information that 

is obtained through a product or service provided by such entity, shall— 

(1) notify each individual who is a citizen or resident of the United States 

whose unsecured PHR identifiable health information was acquired by an unauthorized person as a result of such a breach of security; and 

(2) notify the Federal Trade Commission. 

(b) NOTIFICATION BY THIRD PARTY SERVICE PROVIDERS.—A third party service provider that provides services to a vendor of personal health records or to an entity 

described in clause (ii) or (iii) of section 4424(b)(1)(A) in connection with the offering 

or maintenance of a personal health record or a related product or service and that 

accesses, maintains, retains, modifies, records, stores, destroys, or otherwise holds, 

uses, or discloses unsecured PHR identifiable health information in such a record 

as a result of such services shall, following the discovery of a breach of security of 

such information, notify such vendor or entity, respectively, of such breach. Such notice shall include the identification of each individual whose unsecured PHR identifiable health information has been, or is reasonably believed to have been, accessed, 

acquired, or disclosed during such breach. 

(c) APPLICATION OF REQUIREMENTS FOR TIMELINESS, METHOD, AND CONTENT OF

NOTIFICATIONS.—Subsections (c), (d), (e), and (f) of section 402 shall apply to a notification required under subsection (a) and a vendor of personal health records, an 

entity described in subsection (a) and a third party service provider described in 

subsection (b), with respect to a breach of security under subsection (a) of unsecured 

PHR identifiable health information in such records maintained or offered by such 

vendor, in a manner specified by the Federal Trade Commission. 

(d) NOTIFICATION OF THE SECRETARY.—Upon receipt of a notification of a breach 

of security under subsection (a)(2), the Federal Trade Commission shall notify the 

Secretary of such breach. 

(e) ENFORCEMENT.—A violation of subsection (a) or (b) shall be treated as an unfair and deceptive act or practice in violation of a regulation under section 

18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) regarding 

unfair or deceptive acts or practices. 

(f) DEFINITIONS.—For purposes of this section: 

(1) BREACH OF SECURITY.—The term ‘‘breach of security’’ means, with respect 

to unsecured PHR identifiable health information of an individual in a personal 

health record, acquisition of such information without the authorization of the 

individual. 

(2) PHR IDENTIFIABLE HEALTH INFORMATION.—The term ‘‘PHR identifiable 

health information’’ means individually identifiable health information, as defined in section 1171(6) of the Social Security Act (42 U.S.C. 1320d(6)), and includes, with respect to an individual, information— 

(A) that is provided by or on behalf of the individual; and 

(B) that identifies the individual or with respect to which there is a reasonable basis to believe that the information can be used to identify the individual. 

(3) UNSECURED PHR IDENTIFIABLE HEALTH INFORMATION.— 

(A) IN GENERAL.—Subject to subparagraph (B), the term ‘‘unsecured PHR 

identifiable health information’’ means PHR identifiable health information 


dwashington3 on PROD1PC60 with HEARING
58 

that is not protected through the use of a technology or methodology specified by the Secretary in the guidance issued under section 4402(h)(2). 

(B) EXCEPTION IN CASE TIMELY GUIDANCE NOT ISSUED.—In the case that 

the Secretary does not issue guidance under section 4402(h)(2) by the date 

specified in such section, for purposes of this section, the term ‘‘unsecured 

PHR identifiable health information’’ shall mean PHR identifiable health 

information that is not secured by a technology standard that renders protected health information unusable, unreadable, or indecipherable to unauthorized individuals and that is developed or endorsed by a standards developing organization that is accredited by the American National Standards Institute. 

(g) REGULATIONS; EFFECTIVE DATE; SUNSET.— 

(1) REGULATIONS; EFFECTIVE DATE.—To carry out this section, the Secretary 

of Health and Human Services shall promulgate interim final regulations by not 

later than the date that is 180 days after the date of the enactment of this section. The provisions of this section shall apply to breaches of security that are 

discovered on or after the date that is 30 days after the date of publication of 

such interim final regulations. 

(2) SUNSET.—The provisions of this section shall not apply to breaches of security occurring on or after the earlier of the following the dates: 

(A) The date on which a standard relating to requirements for entities 

that are not covered entities that includes requirements relating to breach 

notification has been promulgated by the Secretary. 

(B) The date on which a standard relating to requirements for entities 

that are not covered entities that includes requirements relating to breach 

notification has been promulgated by the Federal Trade Commission and 

has taken effect. 

SEC. 4408. BUSINESS ASSOCIATE CONTRACTS REQUIRED FOR CERTAIN ENTITIES. 

Each organization, with respect to a covered entity, that provides data transmission of protected health information to such entity (or its business associate) and 

that requires access on a routine basis to such protected health information, such 

as a Health Information Exchange Organization, Regional Health Information Organization, E-prescribing Gateway, or each vendor that contracts with a covered entity 

to allow that covered entity to offer a personal health record to patients as part of 

its electronic health record, is required to enter into a written contract (or other 

written arrangement) described in section 164.502(e)(2) of title 45, Code of Federal 

Regulations and a written contract (or other arrangement) described in section 

164.308(b) of such title, with such entity and shall be treated as a business associate 

of the covered entity for purposes of the provisions of this subtitle and subparts C 

and E of part 164 of title 45, Code of Federal Regulations, as such provisions are 

in effect as of the date of enactment of this title. 

SEC. 4409. CLARIFICATION OF APPLICATION OF WRONGFUL DISCLOSURES CRIMINAL PENALTIES. 

Section 1177(a) of the Social Security Act (42 U.S.C. 1320d–6(a)) is amended by 

adding at the end the following new sentence: ‘‘For purposes of the previous sentence, a person (including an employee or other individual) shall be considered to 

have obtained or disclosed individually identifiable health information in violation 

of this part if the information is maintained by a covered entity (as defined in the 

HIPAA privacy regulation described in section 1180(b)(3)) and the individual obtained or disclosed such information without authorization.’’. 

SEC. 4410. IMPROVED ENFORCEMENT. 

(a) IN GENERAL.—Section 1176 of the Social Security Act (42 U.S.C. 1320d-5) is 

amended— 

(1) in subsection (b)(1), by striking ‘‘the act constitutes an offense punishable 

under section 1177’’ and inserting ‘‘a penalty has been imposed under section 

1177 with respect to such act’’; and 

(2) by adding at the end the following new subsection: 

‘‘(c) NONCOMPLIANCE DUE TO WILLFUL NEGLECT.— 

‘‘(1) IN GENERAL.—A violation of a provision of this part due to willful neglect 

is a violation for which the Secretary is required to impose a penalty under subsection (a)(1). 

‘‘(2) REQUIRED INVESTIGATION.—For purposes of paragraph (1), the Secretary 

shall formally investigate any complaint of a violation of a provision of this part 

if a preliminary investigation of the facts of the complaint indicate such a possible violation due to willful neglect.’’. 

(b) EFFECTIVE DATE; REGULATIONS.— 


dwashington3 on PROD1PC60 with HEARING
59 

(1) The amendments made by subsection (a) shall apply to penalties imposed 

on or after the date that is 24 months after the date of the enactment of this 

title. 

(2) Not later than 18 months after the date of the enactment of this title, the 

Secretary of Health and Human Services shall promulgate regulations to implement such amendments. 

(c) DISTRIBUTION OF CERTAIN CIVIL MONETARY PENALTIES COLLECTED.— 

(1) IN GENERAL.—Subject to the regulation promulgated pursuant to paragraph (3), any civil monetary penalty or monetary settlement collected with respect to an offense punishable under this subtitle or section 1176 of the Social 

Security Act (42 U.S.C. 1320d-5) insofar as such section relates to privacy or 

security shall be transferred to the Office of Civil Rights of the Department of 

Health and Human Services to be used for purposes of enforcing the provisions 

of this subtitle and subparts C and E of part 164 of title 45, Code of Federal 

Regulations, as such provisions are in effect as of the date of enactment of this 

Act. 

(2) GAO REPORT.—Not later than 18 months after the date of the enactment 

of this title, the Comptroller General shall submit to the Secretary a report including recommendations for a methodology under which an individual who is 

harmed by an act that constitutes an offense referred to in paragraph (1) may 

receive a percentage of any civil monetary penalty or monetary settlement collected with respect to such offense. 

(3) ESTABLISHMENT OF METHODOLOGY TO DISTRIBUTE PERCENTAGE OF CMPS

COLLECTED TO HARMED INDIVIDUALS.—Not later than 3 years after the date of 

the enactment of this title, the Secretary shall establish by regulation and 

based on the recommendations submitted under paragraph (2), a methodology 

under which an individual who is harmed by an act that constitutes an offense 

referred to in paragraph (1) may receive a percentage of any civil monetary penalty or monetary settlement collected with respect to such offense. 

(4) APPLICATION OF METHODOLOGY.—The methodology under paragraph (3) 

shall be applied with respect to civil monetary penalties or monetary settlements imposed on or after the effective date of the regulation. 

(d) TIERED INCREASE IN AMOUNT OF CIVIL MONETARY PENALTIES.— 

(1) IN GENERAL.—Section 1176(a)(1) of the Social Security Act (42 U.S.C. 

1320d-5(a)(1)) is amended by striking ‘‘who violates a provision of this part a 

penalty of not more than’’ and all that follows and inserting the following: ‘‘who 

violates a provision of this part— 

‘‘(A) in the case of a violation of such provision in which it is established 

that the person did not know (and by exercising reasonable diligence would 

not have known) that such person violated such provision, a penalty for 

each such violation of an amount that is at least the amount described in 

paragraph (3)(A) but not to exceed the amount described in paragraph 

(3)(D); 

‘‘(B) in the case of a violation of such provision in which it is established 

that the violation was due to reasonable cause and not to willful neglect, 

a penalty for each such violation of an amount that is at least the amount 

described in paragraph (3)(B) but not to exceed the amount described in 

paragraph (3)(D); and 

‘‘(C) in the case of a violation of such provision in which it is established 

that the violation was due to willful neglect— 

‘‘(i) if the violation is corrected as described in subsection (b)(3)(A), 

a penalty in an amount that is at least the amount described in paragraph (3)(C) but not to exceed the amount described in paragraph 

(3)(D); and 

‘‘(ii) if the violation is not corrected as described in such subsection, 

a penalty in an amount that is at least the amount described in paragraph (3)(D). 

In determining the amount of a penalty under this section for a violation, 

the Secretary shall base such determination on the nature and extent of the 

violation and the nature and extent of the harm resulting from such violation.’’. 

(2) TIERS OF PENALTIES DESCRIBED.—Section 1176(a) of such Act (42 U.S.C. 

1320d-5(a)) is further amended by adding at the end the following new paragraph: 

‘‘(3) TIERS OF PENALTIES DESCRIBED.—For purposes of paragraph (1), with respect to a violation by a person of a provision of this part— 

‘‘(A) the amount described in this subparagraph is $100 for each such violation, except that the total amount imposed on the person for all such vioVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00059 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
60 

lations of an identical requirement or prohibition during a calendar year 

may not exceed $25,000; ‘‘(B) the amount described in this subparagraph is $1,000 for each such 

violation, except that the total amount imposed on the person for all such 

violations of an identical requirement or prohibition during a calendar year 

may not exceed $100,000; ‘‘(C) the amount described in this subparagraph is $10,000 for each such 

violation, except that the total amount imposed on the person for all such 

violations of an identical requirement or prohibition during a calendar year 

may not exceed $250,000; and ‘‘(D) the amount described in this subparagraph is $50,000 for each such 

violation, except that the total amount imposed on the person for all such 

violations of an identical requirement or prohibition during a calendar year 

may not exceed $1,500,000.’’. 

(3) CONFORMING AMENDMENTS.—Section 1176(b) of such Act (42 U.S.C. 1320d5(b)) is amended— 

(A) by striking paragraph (2) and redesignating paragraphs (3) and (4) 

as paragraphs (2) and (3), respectively; and 

(B) in paragraph (2), as so redesignated— 

(i) in subparagraph (A), by striking ‘‘in subparagraph (B), a penalty 

may not be imposed under subsection (a) if’’ and all that follows 

through ‘‘the failure to comply is corrected’’ and inserting ‘‘in subparagraph (B) or subsection (a)(1)(C), a penalty may not be imposed under 

subsection (a) if the failure to comply is corrected’’; and 

(ii) in subparagraph (B), by striking ‘‘(A)(ii)’’ and inserting ‘‘(A)’’ each 

place it appears. 

(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply 

to violations occurring after the date of the enactment of this title. 

(e) ENFORCEMENT THROUGH STATE ATTORNEYS GENERAL.— 

(1) IN GENERAL.—Section 1176 of the Social Security Act (42 U.S.C. 1320d– 

5) is amended by adding at the end the following new subsection: 

‘‘(c) ENFORCEMENT BY STATE ATTORNEYS GENERAL.— 

‘‘(1) CIVIL ACTION.—Except as provided in subsection (b), in any case in which 

the attorney general of a State has reason to believe that an interest of one or 

more of the residents of that State has been or is threatened or adversely affected by any person who violates a provision of this part, the attorney general 

of the State, as parens patriae, may bring a civil action on behalf of such residents of the State in a district court of the United States of appropriate jurisdiction— 

‘‘(A) to enjoin further such violation by the defendant; or 

‘‘(B) to obtain damages on behalf of such residents of the State, in an 

amount equal to the amount determined under paragraph (2). 

‘‘(2) STATUTORY DAMAGES.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1)(B), the amount determined under this paragraph is the amount calculated by multiplying the 

number of violations by up to $100. For purposes of the preceding sentence, 

in the case of a continuing violation, the number of violations shall be determined consistent with the HIPAA privacy regulations (as defined in section 1180(b)(3)) for violations of subsection (a). 

‘‘(B) LIMITATION.—The total amount of damages imposed on the person 

for all violations of an identical requirement or prohibition during a calendar year may not exceed $25,000. 

‘‘(C) REDUCTION OF DAMAGES.—In assessing damages under subparagraph 

(A), the court may consider the factors the Secretary may consider in determining the amount of a civil money penalty under subsection (a) under the 

HIPAA privacy regulations. 

‘‘(3) ATTORNEY FEES.—In the case of any successful action under paragraph 

(1), the court, in its discretion, may award the costs of the action and reasonable 

attorney fees to the State. 

‘‘(4) NOTICE TO SECRETARY.—The State shall serve prior written notice of any 

action under paragraph (1) upon the Secretary and provide the Secretary with 

a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Secretary shall have the right— 

‘‘(A) to intervene in the action; 

‘‘(B) upon so intervening, to be heard on all matters arising therein; and 

‘‘(C) to file petitions for appeal. 

‘‘(5) CONSTRUCTION.—For purposes of bringing any civil action under paragraph (1), nothing in this section shall be construed to prevent an attorney genVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00060 Fmt 6659 Sfmt 6621 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
61 

eral of a State from exercising the powers conferred on the attorney general by 

the laws of that State. 

‘‘(6) VENUE; SERVICE OF PROCESS.— 

‘‘(A) VENUE.—Any action brought under paragraph (1) may be brought in 

the district court of the United States that meets applicable requirements 

relating to venue under section 1391 of title 28, United States Code. 

‘‘(B) SERVICE OF PROCESS.—In an action brought under paragraph (1), 

process may be served in any district in which the defendant— 

‘‘(i) is an inhabitant; or 

‘‘(ii) maintains a physical place of business. 

‘‘(7) LIMITATION ON STATE ACTION WHILE FEDERAL ACTION IS PENDING.—If the 

Secretary has instituted an action against a person under subsection (a) with 

respect to a specific violation of this part, no State attorney general may bring 

an action under this subsection against the person with respect to such violation during the pendency of that action. 

‘‘(8) APPLICATION OF CMP STATUTE OF LIMITATION.—A civil action may not be 

instituted with respect to a violation of this part unless an action to impose a 

civil money penalty may be instituted under subsection (a) with respect to such 

violation consistent with the second sentence of section 1128A(c)(1).’’. 

(2) CONFORMING AMENDMENTS.—Subsection (b) of such section, as amended 

by subsection (d)(3), is amended— 

(A) in paragraph (1), by striking ‘‘A penalty may not be imposed under 

subsection (a)’’ and inserting ‘‘No penalty may be imposed under subsection 

(a) and no damages obtained under subsection (c)’’; 

(B) in paragraph (2)(A)— 

(i) in the matter before clause (i), by striking ‘‘a penalty may not be 

imposed under subsection (a)’’ and inserting ‘‘no penalty may be imposed under subsection (a) and no damages obtained under subsection 

(c)’’; and 

(ii) in clause (ii), by inserting ‘‘or damages’’ after ‘‘the penalty’’; 

(C) in paragraph (2)(B)(i), by striking ‘‘The period’’ and inserting ‘‘With 

respect to the imposition of a penalty by the Secretary under subsection (a), 

the period’’; and 

(D) in paragraph (3), by inserting ‘‘and any damages under subsection (c)’’ 

after ‘‘any penalty under subsection (a)’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply 

to violations occurring after the date of the enactment of this Act. 

(f) ALLOWING CONTINUED USE OF CORRECTIVE ACTION.—Such section is further 

amended by adding at the end the following new subsection: 

‘‘(d) ALLOWING CONTINUED USE OF CORRECTIVE ACTION.—Nothing in this section 

shall be construed as preventing the Office of Civil Rights of the Department of 

Health and Human Services from continuing, in its discretion, to use corrective action without a penalty in cases where the person did not know (and by exercising 

reasonable diligence would not have known) of the violation involved.’’. 

SEC. 4411. AUDITS. 

The Secretary shall provide for periodic audits to ensure that covered entities and 

business associates that are subject to the requirements of this subtitle and subparts C and E of part 164 of title 45, Code of Federal Regulations, as such provisions are in effect as of the date of enactment of this Act, comply with such requirements. 

SEC. 4412. SECURING INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION. 

Notwithstanding the previous provisions of this title, a covered entity or business 

associate must use a technology standard that renders protected health information 

unusable, unreadable, or indecipherable to unauthorized individuals and is developed or endorsed by a standards developing organization that is accredited by the 

American National Standards Institute to secure individually identifiable health information that is transmitted in the nationwide health information network supported in this title or physically transported outside of a covered entity’s or business 

associate’s secured, physical perimeter, including information transported on removable media and on portable devices. The Secretary may establish implementation 

criteria such that smaller covered entities with fewer resources are granted a longer 

period of time to comply with these requirements. 

SEC. 4413. SPECIAL RULE FOR INFORMATION TO REDUCE MEDICATION ERRORS AND IMPROVE PATIENT SAFETY. 

Nothing under this subtitle shall prevent a pharmacist from collecting and sharing information with patients in order to reduce medication errors and improve patient safety as long as any renumeration received for making such communication 


dwashington3 on PROD1PC60 with HEARING
62 

is reasonable and cost-based. Within 180 days of the date of the enactment of this 

Act, the Secretary shall promulgate regulations implementing this section. 

PART II—RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE DATE; REPORTS 

SEC. 4421. RELATIONSHIP TO OTHER LAWS. 

(a) APPLICATION OF HIPAA STATE PREEMPTION.—Section 1178 of the Social Security Act (42 U.S.C. 1320d–7) shall apply to a provision or requirement under this 

subtitle in the same manner that such section applies to a provision or requirement 

under part C of title XI of such Act or a standard or implementation specification 

adopted or established under sections 1172 through 1174 of such Act. 

(b) HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT.—The standards 

governing the privacy and security of individually identifiable health information 

promulgated by the Secretary under sections 262(a) and 264 of the Health Insurance Portability and Accountability Act of 1996 shall remain in effect to the extent 

that they are consistent with this subtitle. The Secretary shall by rule amend such 

Federal regulations as required to make such regulations consistent with this subtitle. 

SEC. 4422. REGULATORY REFERENCES. 

Each reference in this subtitle to a provision of the Code of Federal Regulations 

refers to such provision as in effect on the date of the enactment of this title (or 

to the most recent update of such provision). 

SEC. 4423. EFFECTIVE DATE. 

Except as otherwise specifically provided, the provisions of part I shall take effect 

on the date that is 12 months after the date of the enactment of this title. 

SEC. 4424. STUDIES, REPORTS, GUIDANCE. 

(a) REPORT ON COMPLIANCE.— (1) IN GENERAL.—For the first year beginning after the date of the enactment 

of this Act and annually thereafter, the Secretary shall prepare and submit to 

the Committee on Health, Education, Labor, and Pensions of the Senate and 

the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report concerning complaints of alleged 

violations of law, including the provisions of this subtitle as well as the provisions of subparts C and E of part 164 of title 45, Code of Federal Regulations, 

(as such provisions are in effect as of the date of enactment of this Act) relating 

to privacy and security of health information that are received by the Secretary 

during the year for which the report is being prepared. Each such report shall 

include, with respect to such complaints received during the year— 

(A) the number of such complaints; 

(B) the number of such complaints resolved informally, a summary of the 

types of such complaints so resolved, and the number of covered entities 

that received technical assistance from the Secretary during such year in 

order to achieve compliance with such provisions and the types of such 

technical assistance provided; 

(C) the number of such complaints that have resulted in the imposition 

of civil monetary penalties or have been resolved through monetary settlements, including the nature of the complaints involved and the amount 

paid in each penalty or settlement; 

(D) the number of compliance reviews conducted and the outcome of each 

such review; 

(E) the number of subpoenas or inquiries issued; 

(F) the Secretary’s plan for improving compliance with and enforcement 

of such provisions for the following year; and 

(G) the number of audits performed and a summary of audit findings pursuant to section 4411. 

(2) AVAILABILITY TO PUBLIC.—Each report under paragraph (1) shall be made 

available to the public on the Internet website of the Department of Health and 

Human Services. 

(b) STUDY AND REPORT ON APPLICATION OF PRIVACY AND SECURITY REQUIREMENTS

TO NON-HIPAA COVERED ENTITIES.— 

(1) STUDY.—Not later than one year after the date of the enactment of this 

title, the Secretary, in consultation with the Federal Trade Commission, shall 

conduct a study, and submit a report under paragraph (2), on privacy and security requirements for entities that are not covered entities or business associates as of the date of the enactment of this title, including— 


dwashington3 on PROD1PC60 with HEARING
63 

(A) requirements relating to security, privacy, and notification in the case 

of a breach of security or privacy (including the applicability of an exemption to notification in the case of individually identifiable health information that has been rendered unusable, unreadable, or indecipherable 

through technologies or methodologies recognized by appropriate professional organization or standard setting bodies to provide effective security 

for the information) that should be applied to— 

(i) vendors of personal health records; 

(ii) entities that offer products or services through the website of a 

vendor of personal health records; 

(iii) entities that are not covered entities and that offer products or 

services through the websites of covered entities that offer individuals 

personal health records; 

(iv) entities that are not covered entities and that access information 

in a personal health record or send information to a personal health 

record; and 

(v) third party service providers used by a vendor or entity described 

in clause (i), (ii), (iii), or (iv) to assist in providing personal health 

record products or services; 

(B) a determination of which Federal government agency is best equipped 

to enforce such requirements recommended to be applied to such vendors, 

entities, and service providers under subparagraph (A); and 

(C) a timeframe for implementing regulations based on such findings. 

(2) REPORT.—The Secretary shall submit to the Committee on Finance, the 

Committee on Health, Education, Labor, and Pensions, and the Committee on 

Commerce of the Senate and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report on 

the findings of the study under paragraph (1) and shall include in such report 

recommendations on the privacy and security requirements described in such 

paragraph. 

(c) GUIDANCE ON IMPLEMENTATION SPECIFICATION TO DE-IDENTIFY PROTECTED

HEALTH INFORMATION.—Not later than 12 months after the date of the enactment 

of this title, the Secretary shall, in consultation with stakeholders, issue guidance 

on how best to implement the requirements for the de-identification of protected 

health information under section 164.514(b) of title 45, Code of Federal Regulations. 

(d) GAO REPORT ON TREATMENT DISCLOSURES.—Not later than one year after the 

date of the enactment of this title, the Comptroller General of the United States 

shall submit to the Committee on Health, Education, Labor, and Pensions of the 

Senate and the Committee on Ways and Means and the Committee on Energy and 

Commerce of the House of Representatives a report on the best practices related to 

the disclosure among health care providers of protected health information of an individual for purposes of treatment of such individual. Such report shall include an 

examination of the best practices implemented by States and by other entities, such 

as health information exchanges and regional health information organizations, an 

examination of the extent to which such best practices are successful with respect 

to the quality of the resulting health care provided to the individual and with respect to the ability of the health care provider to manage such best practices, and 

an examination of the use of electronic informed consent for disclosing protected 

health information for treatment, payment, and health care operations. 

TITLE V—MEDICAID PROVISIONS 

SEC. 5000. TABLE OF CONTENTS OF TITLE. 

The table of contents of this title is as follows: 

Sec. 5000. Table of contents of title. 

Sec. 5001. Temporary increase of Medicaid FMAP. 

Sec. 5002. Moratoria on certain regulations. 

Sec. 5003. Transitional Medicaid assistance (TMA). 

Sec. 5004. State eligibility option for family planning services. 

Sec. 5005. Protections for Indians under Medicaid and CHIP. 

Sec. 5006. Consultation on Medicaid and CHIP. 

Sec. 5007. Temporary increase in DSH allotments during recession. 

SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP. 

(a) PERMITTING MAINTENANCE OF FMAP.—Subject to subsections (e), (f), and (g), 

if the FMAP determined without regard to this section for a State for— 


dwashington3 on PROD1PC60 with HEARING
64 

(1) fiscal year 2009 is less than the FMAP as so determined for fiscal year 

2008, the FMAP for the State for fiscal year 2008 shall be substituted for the 

State’s FMAP for fiscal year 2009, before the application of this section; 

(2) fiscal year 2010 is less than the FMAP as so determined for fiscal year 

2008 or fiscal year 2009 (after the application of paragraph (1)), the greater of 

such FMAP for the State for fiscal year 2008 or fiscal year 2009 shall be substituted for the State’s FMAP for fiscal year 2010, before the application of this 

section; and 

(3) fiscal year 2011 is less than the FMAP as so determined for fiscal year 

2008, fiscal year 2009 (after the application of paragraph (1)), or fiscal year 

2010 (after the application of paragraph (2)), the greatest of such FMAP for the 

State for fiscal year 2008, fiscal year 2009, or fiscal year 2010 shall be substituted for the State’s FMAP for fiscal year 2011, before the application of this 

section, but only for the first calendar quarter in fiscal year 2011. 

(b) GENERAL 4.9 PERCENTAGE POINT INCREASE.— 

(1) IN GENERAL.—Subject to subsections (e), (f), and (g) and paragraph (2), for 

each State for calendar quarters during the recession adjustment period (as defined in subsection (h)(2)), the FMAP (after the application of subsection (a)) 

shall be increased (without regard to any limitation otherwise specified in section 1905(b) of the Social Security Act) by 4.9 percentage points. 

(2) SPECIAL ELECTION FOR TERRITORIES.—In the case of a State that is not one 

of the 50 States or the District of Columbia, paragraph (1) shall only apply if 

the State makes a one-time election, in a form and manner specified by the Secretary and for the entire recession adjustment period, to apply the increase in 

FMAP under paragraph (1) and a 10 percent increase under subsection (d) instead of applying a 20 percent increase under subsection (d). 

(c) ADDITIONAL ADJUSTMENT TO REFLECT INCREASE IN UNEMPLOYMENT.— 

(1) IN GENERAL.—Subject to subsections (e), (f), and (g), in the case of a State 

that is a high unemployment State (as defined in paragraph (2)) for a calendar 

quarter during the recession adjustment period, the FMAP (taking into account 

the application of subsections (a) and (b)) for such quarter shall be further increased by the high unemployment percentage point adjustment specified in 

paragraph (3) for the State for the quarter. 

(2) HIGH UNEMPLOYMENT STATE.— 

(A) IN GENERAL.—In this subsection, subject to subparagraph (B), the 

term ‘‘high unemployment State’’ means, with respect to a calendar quarter 

in the recession adjustment period, a State that is 1 of the 50 States or the 

District of Columbia and for which the State unemployment increase percentage (as computed under paragraph (5)) for the quarter is not less than 

1.5 percentage points. 

(B) MAINTENANCE OF STATUS.—If a State is a high unemployment State 

for a calendar quarter, it shall remain a high unemployment State for each 

subsequent calendar quarter ending before July 1, 2010. 

(3) HIGH UNEMPLOYMENT PERCENTAGE POINT ADJUSTMENT.— 

(A) IN GENERAL.—The high unemployment percentage point adjustment 

specified in this paragraph for a high unemployment State for a quarter is 

equal to the product of— 

(i) the SMAP for such State and quarter (determined after the application of subsection (a) and before the application of subsection (b)); 

and 

(ii) subject to subparagraph (B), the State unemployment reduction 

factor specified in paragraph (4) for the State and quarter. 

(B) MAINTENANCE OF ADJUSTMENT LEVEL FOR CERTAIN QUARTERS.—In no 

case shall the State unemployment reduction factor applied under subparagraph (A)(ii) for a State for a quarter (beginning on or after January 1, 

2009, and ending before July 1, 2010) be less than the State unemployment 

reduction factor applied to the State for the previous quarter (taking into 

account the application of this subparagraph). 

(4) STATE UNEMPLOYMENT REDUCTION FACTOR.—In the case of a high unemployment State for which the State unemployment increase percentage (as computed under paragraph (5)) with respect to a calendar quarter is— 

(A) not less than 1.5, but is less than 2.5, percentage points, the State 

unemployment reduction factor for the State and quarter is 6 percent; 

(B) not less than 2.5, but is less than 3.5, percentage points, the State 

unemployment reduction factor for the State and quarter is 12 percent; or 

(C) not less than 3.5 percentage points, the State unemployment reduction factor for the State and quarter is 14 percent. 

(5) COMPUTATION OF STATE UNEMPLOYMENT INCREASE PERCENTAGE.— 


dwashington3 on PROD1PC60 with HEARING
65 

(A) IN GENERAL.—In this subsection, the ‘‘State unemployment increase 

percentage’’ for a State for a calendar quarter is equal to the number of percentage points (if any) by which— 

(i) the average monthly unemployment rate for the State for months 

in the most recent previous 3-consecutive-month period for which data 

are available, subject to subparagraph (C); exceeds 

(ii) the lowest average monthly unemployment rate for the State for 

any 3-consecutive-month period preceding the period described in 

clause (i) and beginning on or after January 1, 2006. 

(B) AVERAGE MONTHLY UNEMPLOYMENT RATE DEFINED.—In this paragraph, the term ‘‘average monthly unemployment rate’’ means the average 

of the monthly number unemployed, divided by the average of the monthly 

civilian labor force, seasonally adjusted, as determined based on the most 

recent monthly publications of the Bureau of Labor Statistics of the Department of Labor. 

(C) SPECIAL RULE.—With respect to— 

(i) the first 2 calendar quarters of the recession adjustment period, 

the most recent previous 3-consecutive-month period described in subparagraph (A)(i) shall be the 3-consecutive-month period beginning 

with October 2008; and 

(ii) the last 2 calendar quarters of the recession adjustment period, 

the most recent previous 3-consecutive-month period described in such 

subparagraph shall be the 3-consecutive-month period beginning with 

December 2009. 

(d) INCREASE IN CAP ON MEDICAID PAYMENTS TO TERRITORIES.—Subject to subsections (f) and (g) , with respect to entire fiscal years occurring during the recession 

adjustment period and with respect to fiscal years only a portion of which occurs 

during such period (and in proportion to the portion of the fiscal year that occurs 

during such period), the amounts otherwise determined for Puerto Rico, the Virgin 

Islands, Guam, the Northern Mariana Islands, and American Samoa under subsections (f) and (g) of section 1108 of the Social Security Act (42 U.S.C. 1308) shall 

each be increased by 20 percent (or, in the case of an election under subsection 

(b)(2), 10 percent). 

(e) SCOPE OF APPLICATION.—The increases in the FMAP for a State under this 

section shall apply for purposes of title XIX of the Social Security Act and— 

(1) the increases applied under subsections (a), (b), and (c) shall not apply 

with respect— 

(A) to payments under parts A, B, and D of title IV or title XXI of such 

Act (42 U.S.C. 601 et seq. and 1397aa et seq.); 

(B) to payments under title XIX of such Act that are based on the enhanced FMAP described in section 2105(b) of such Act (42 U.S.C. 

1397ee(b)); and 

(C) to payments for disproportionate share hospital (DSH) payment adjustments under section 1923 of such Act (42 U.S.C. 1396r–4); and 

(2) the increase provided under subsection (c) shall not apply with respect to 

payments under part E of title IV of such Act. 

(f) STATE INELIGIBILITY AND LIMITATION.— 

(1) IN GENERAL.—Subject to paragraphs (2) and (3), a State is not eligible for 

an increase in its FMAP under subsection (a), (b), or (c), or an increase in a 

cap amount under subsection (d), if eligibility standards, methodologies, or procedures under its State plan under title XIX of the Social Security Act (including any waiver under such title or under section 1115 of such Act (42 U.S.C. 

1315)) are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) as in effect on July 1, 2008. 

(2) STATE REINSTATEMENT OF ELIGIBILITY PERMITTED.—Subject to paragraph 

(3), a State that has restricted eligibility standards, methodologies, or procedures under its State plan under title XIX of the Social Security Act (including 

any waiver under such title or under section 1115 of such Act (42 U.S.C. 1315)) 

after July 1, 2008, is no longer ineligible under paragraph (1) beginning with 

the first calendar quarter in which the State has reinstated eligibility standards, methodologies, or procedures that are no more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or 

waiver) as in effect on July 1, 2008. 

(3) SPECIAL RULES.—A State shall not be ineligible under paragraph (1)— 

(A) before July 1, 2009, on the basis of a restriction that was applied after 

July 1, 2008, and before the date of the enactment of this Act; or 

(B) on the basis of a restriction that was effective under State law as of 

July 1, 2008, and would have been in effect as of such date, but for a delay 


dwashington3 on PROD1PC60 with HEARING
66 

(of not longer than 1 calendar quarter) in the approval of a request for a 

new waiver under section 1115 of such Act with respect to such restriction. 

(4) STATE’S APPLICATION TOWARD RAINY DAY FUND.—A State is not eligible for 

an increase in its FMAP under subsection (b) or (c), or an increase in a cap 

amount under subsection (d), if any amounts attributable (directly or indirectly) 

to such increase are deposited or credited into any reserve or rainy day fund 

of the State. 

(5) RULE OF CONSTRUCTION.—Nothing in paragraph (1) or (2) shall be construed as affecting a State’s flexibility with respect to benefits offered under the 

State Medicaid program under title XIX of the Social Security Act (42 U.S.C. 

1396 et seq.) (including any waiver under such title or under section 1115 of 

such Act (42 U.S.C. 1315)). 

(6) NO WAIVER AUTHORITY.—The Secretary may not waive the application of 

this subsection or subsection (g) under section 1115 of the Social Security Act 

or otherwise. 

(g) REQUIREMENT FOR CERTAIN STATES.—In the case of a State that requires political subdivisions within the State to contribute toward the non-Federal share of expenditures under the State Medicaid plan required under section 1902(a)(2) of the 

Social Security Act (42 U.S.C. 1396a(a)(2)), the State is not eligible for an increase 

in its FMAP under subsection (a), (b), or (c), or an increase in a cap amount under 

subsection (d), if it requires that such political subdivisions pay a greater percentage 

of the non-Federal share of such expenditures for quarters during the recession adjustment period, than the percentage that would have been required by the State 

under such plan on September 30, 2008, prior to application of this section. 

(h) DEFINITIONS.—In this section, except as otherwise provided: 

(1) FMAP.—The term ‘‘FMAP’’ means the Federal medical assistance percentage, as defined in section 1905(b) of the Social Security Act (42 U.S.C. 

1396d(b)), as determined without regard to this section except as otherwise 

specified. 

(2) RECESSION ADJUSTMENT PERIOD.—The term ‘‘recession adjustment period’’ 

means the period beginning on October 1, 2008, and ending on December 31, 

2010. 

(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Health and 

Human Services. 

(4) SMAP.—The term ‘‘SMAP’’ means, for a State, 100 percent minus the Federal medical assistance percentage. 

(5) STATE.—The term ‘‘State’’ has the meaning given such term in section 

1101(a)(1) of the Social Security Act (42 U.S.C. 1301(a)(1)) for purposes of title 

XIX of the Social Security Act (42 U.S.C. 1396 et seq.). 

(i) SUNSET.—This section shall not apply to items and services furnished after the 

end of the recession adjustment period. 

SEC. 5002. MORATORIA ON CERTAIN REGULATIONS. 

(a) EXTENSION OF MORATORIA ON CERTAIN MEDICAID REGULATIONS.—The following sections are each amended by striking ‘‘April 1, 2009’’ and inserting ‘‘July 

1, 2009’’: 

(1) Section 7002(a)(1) of the U.S. Troop Readiness, Veterans’ Care, Katrina 

Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110– 

28), as amended by section 7001(a)(1) of the Supplemental Appropriations Act, 

2008 (Public Law 110–252). 

(2) Section 206 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 

(Public Law 110-173), as amended by section 7001(a)(2) of the Supplemental 

Appropriations Act, 2008 (Public Law 110–252). 

(3) Section 7001(a)(3)(A) of the Supplemental Appropriations Act, 2008 (Public 

Law 110–252). 

(b) ADDITIONAL MEDICAID MORATORIUM.—Notwithstanding any other provision of 

law, with respect to expenditures for services furnished during the period beginning 

on December 8, 2008 and ending on June 30, 2009, the Secretary of Health and 

Human Services shall not take any action (through promulgation of regulation, 

issuance of regulatory guidance, use of Federal payment audit procedures, or other 

administrative action, policy, or practice, including a Medical Assistance Manual 

transmittal or letter to State Medicaid directors) to implement the final regulation 

relating to clarification of the definition of outpatient hospital facility services under 

the Medicaid program published on November 7, 2008 (73 Federal Register 66187). 

SEC. 5003. TRANSITIONAL MEDICAID ASSISTANCE (TMA). 

(a) 18-MONTH EXTENSION.— 

(1) IN GENERAL.—Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act 

(42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)) are each amended by striking ‘‘September 

30, 2003’’ and inserting ‘‘December 31, 2010’’. 


dwashington3 on PROD1PC60 with HEARING
67 

(2) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on July 1, 2009. 

(b) STATE OPTION OF INITIAL 12-MONTH ELIGIBILITY.—Section 1925 of the Social 

Security Act (42 U.S.C. 1396r–6) is amended— 

(1) in subsection (a)(1), by inserting ‘‘but subject to paragraph (5)’’ after ‘‘Notwithstanding any other provision of this title’’; 

(2) by adding at the end of subsection (a) the following: 

‘‘(5) OPTION OF 12-MONTH INITIAL ELIGIBILITY PERIOD.—A State may elect to 

treat any reference in this subsection to a 6-month period (or 6 months) as a 

reference to a 12-month period (or 12 months). In the case of such an election, 

subsection (b) shall not apply.’’; and 

(3) in subsection (b)(1), by inserting ‘‘but subject to subsection (a)(5)’’ after 

‘‘Notwithstanding any other provision of this title’’. 

(c) REMOVAL OF REQUIREMENT FOR PREVIOUS RECEIPT OF MEDICAL ASSISTANCE.— 

Section 1925(a)(1) of such Act (42 U.S.C. 1396r–6(a)(1)), as amended by subsection 

(b)(1), is further amended— 

(1) by inserting ‘‘subparagraph (B) and’’ before ‘‘paragraph (5)’’; 

(2) by redesignating the matter after ‘‘REQUIREMENT.—’’ as a subparagraph 

(A) with the heading ‘‘IN GENERAL.—’’ and with the same indentation as subparagraph (B) (as added by paragraph (3)); and 

(3) by adding at the end the following: 

‘‘(B) STATE OPTION TO WAIVE REQUIREMENT FOR 3 MONTHS BEFORE RECEIPT

OF MEDICAL ASSISTANCE.—A State may, at its option, elect also to apply 

subparagraph (A) in the case of a family that was receiving such aid for 

fewer than three months or that had applied for and was eligible for such 

aid for fewer than 3 months during the 6 immediately preceding months 

described in such subparagraph.’’. 

(d) CMS REPORT ON ENROLLMENT AND PARTICIPATION RATES UNDER TMA.—Section 1925 of such Act (42 U.S.C. 1396r–6), as amended by this section, is further 

amended by adding at the end the following new subsection: 

‘‘(g) COLLECTION AND REPORTING OF PARTICIPATION INFORMATION.— 

‘‘(1) COLLECTION OF INFORMATION FROM STATES.—Each State shall collect and 

submit to the Secretary (and make publicly available), in a format specified by 

the Secretary, information on average monthly enrollment and average monthly 

participation rates for adults and children under this section and of the number 

and percentage of children who become ineligible for medical assistance under 

this section whose medical assistance is continued under another eligibility category or who are enrolled under the State’s child health plan under title XXI. 

Such information shall be submitted at the same time and frequency in which 

other enrollment information under this title is submitted to the Secretary. 

‘‘(2) ANNUAL REPORTS TO CONGRESS.—Using the information submitted under 

paragraph (1), the Secretary shall submit to Congress annual reports concerning enrollment and participation rates described in such paragraph.’’. 

(e) EFFECTIVE DATE.—The amendments made by subsections (b) through (d) shall 

take effect on July 1, 2009. 

SEC. 5004. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES. 

(a) COVERAGE AS OPTIONAL CATEGORICALLY NEEDY GROUP.— 

(1) IN GENERAL.—Section 1902(a)(10)(A)(ii) of the Social Security Act (42 

U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 3003(a) of the Health Insurance Assistance for the Unemployed Act of 2009, is amended— 

(A) in subclause (XIX), by striking ‘‘or’’ at the end; 

(B) in subclause (XX), by adding ‘‘or’’ at the end; and 

(C) by adding at the end the following new subclause: 

‘‘(XXI) who are described in subsection (ee) (relating to individuals who meet 

certain income standards);’’. 

(2) GROUP DESCRIBED.—Section 1902 of such Act (42 U.S.C. 1396a), as amended by section 3003(a) of the Health Insurance Assistance for the Unemployed 

Act of 2009, is amended by adding at the end the following new subsection: 

‘‘(ee)(1) Individuals described in this subsection are individuals— 

‘‘(A) whose income does not exceed an income eligibility level established 

by the State that does not exceed the highest income eligibility level established under the State plan under this title (or under its State child health 

plan under title XXI) for pregnant women; and 

‘‘(B) who are not pregnant. 

‘‘(2) At the option of a State, individuals described in this subsection may include individuals who, had individuals applied on or before January 1, 2007, 

would have been made eligible pursuant to the standards and processes imposed by that State for benefits described in clause (XV) of the matter following 


dwashington3 on PROD1PC60 with HEARING
68 

subparagraph (G) of section subsection (a)(10) pursuant to a waiver granted 

under section 1115. 

‘‘(3) At the option of a State, for purposes of subsection (a)(17)(B), in determining eligibility for services under this subsection, the State may consider only 

the income of the applicant or recipient.’’. 

(3) LIMITATION ON BENEFITS.—Section 1902(a)(10) of the Social Security Act 

(42 U.S.C. 1396a(a)(10)) is amended in the matter following subparagraph (G)— 

(A) by striking ‘‘and (XIV)’’ and inserting ‘‘(XIV)’’; and 

(B) by inserting ‘‘, and (XV) the medical assistance made available to an 

individual described in subsection (ee) shall be limited to family planning 

services and supplies described in section 1905(a)(4)(C) including medical 

diagnosis and treatment services that are provided pursuant to a family 

planning service in a family planning setting’’ after ‘‘cervical cancer’’. 

(4) CONFORMING AMENDMENTS.—Section 1905(a) of the Social Security Act (42 

U.S.C. 1396d(a)), as amended by section 3003(c)(2) of the Health Insurance Assistance for the Unemployed Act of 2009, is amended in the matter preceding 

paragraph (1)— 

(A) in clause (xiii), by striking ‘‘or’’ at the end; 

(B) in clause (xiv), by adding ‘‘or’’ at the end; and 

(C) by inserting after clause (xiii) the following: 

‘‘(xv) individuals described in section 1902(ee),’’. 

(b) PRESUMPTIVE ELIGIBILITY.— 

(1) IN GENERAL.—Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 

is amended by inserting after section 1920B the following: 

‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING SERVICES

‘‘SEC. 1920C. (a) STATE OPTION.—State plan approved under section 1902 may 

provide for making medical assistance available to an individual described in section 

1902(ee) (relating to individuals who meet certain income eligibility standard) during a presumptive eligibility period. In the case of an individual described in section 

1902(ee), such medical assistance shall be limited to family planning services and 

supplies described in 1905(a)(4)(C) and, at the State’s option, medical diagnosis and 

treatment services that are provided in conjunction with a family planning service 

in a family planning setting. 

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

‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The term ‘presumptive eligibility period’ means, with respect to an individual described in subsection (a), the period 

that— 

‘‘(A) begins with the date on which a qualified entity determines, on the 

basis of preliminary information, that the individual is described in section 

1902(ee); and 

‘‘(B) ends with (and includes) the earlier of— 

‘‘(i) the day on which a determination is made with respect to the eligibility of such individual for services under the State plan; or 

‘‘(ii) in the case of such an individual who does not file an application 

by the last day of the month following the month during which the entity makes the determination referred to in subparagraph (A), such last 

day. 

‘‘(2) QUALIFIED ENTITY.— 

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the term ‘qualified entity’ 

means any entity that— 

‘‘(i) is eligible for payments under a State plan approved under this 

title; and 

‘‘(ii) is determined by the State agency to be capable of making determinations of the type described in paragraph (1)(A). 

‘‘(B) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed as preventing a State from limiting the classes of entities that may 

become qualified entities in order to prevent fraud and abuse. 

‘‘(c) ADMINISTRATION.— 

‘‘(1) IN GENERAL.—The State agency shall provide qualified entities with— 

‘‘(A) such forms as are necessary for an application to be made by an individual described in subsection (a) for medical assistance under the State 

plan; and 

‘‘(B) information on how to assist such individuals in completing and filing such forms. 

‘‘(2) NOTIFICATION REQUIREMENTS.—A qualified entity that determines under 

subsection (b)(1)(A) that an individual described in subsection (a) is presumptively eligible for medical assistance under a State plan shall— 


dwashington3 on PROD1PC60 with HEARING
69 

‘‘(A) notify the State agency of the determination within 5 working days 

after the date on which determination is made; and 

‘‘(B) inform such individual at the time the determination is made that 

an application for medical assistance is required to be made by not later 

than the last day of the month following the month during which the determination is made. 

‘‘(3) APPLICATION FOR MEDICAL ASSISTANCE.—In the case of an individual described in subsection (a) who is determined by a qualified entity to be presumptively eligible for medical assistance under a State plan, the individual shall 

apply for medical assistance by not later than the last day of the month following the month during which the determination is made. 

‘‘(d) PAYMENT.—Notwithstanding any other provision of law, medical assistance 

that— 

‘‘(1) is furnished to an individual described in subsection (a)— 

‘‘(A) during a presumptive eligibility period; 

‘‘(B) by a entity that is eligible for payments under the State plan; and 

‘‘(2) is included in the care and services covered by the State plan, 

shall be treated as medical assistance provided by such plan for purposes of clause 

(4) of the first sentence of section 1905(b).’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 1902(a)(47) of the Social Security Act (42 U.S.C. 1396a(a)(47)) 

is amended by inserting before the semicolon at the end the following: ‘‘and 

provide for making medical assistance available to individuals described in 

subsection (a) of section 1920C during a presumptive eligibility period in accordance with such section’’. 

(B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 1396b(u)(1)(D)(v)) is 

amended— 

(i) by striking ‘‘or for’’ and inserting ‘‘for’’; and 

(ii) by inserting before the period the following: ‘‘, or for medical assistance provided to an individual described in subsection (a) of section 

1920C during a presumptive eligibility period under such section’’. 

(c) CLARIFICATION OF COVERAGE OF FAMILY PLANNING SERVICES AND SUPPLIES.— 

Section 1937(b) of the Social Security Act (42 U.S.C. 1396u–7(b)) is amended by adding at the end the following: 

‘‘(5) COVERAGE OF FAMILY PLANNING SERVICES AND SUPPLIES.—Notwithstanding the previous provisions of this section, a State may not provide for 

medical assistance through enrollment of an individual with benchmark coverage or benchmark-equivalent coverage under this section unless such coverage 

includes for any individual described in section 1905(a)(4)(C), medical assistance 

for family planning services and supplies in accordance with such section.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section take effect on the 

date of the enactment of this Act and shall apply to items and services furnished 

on or after such date. 

SEC. 5005. PROTECTIONS FOR INDIANS UNDER MEDICAID AND CHIP. 

(a) PREMIUMS AND COST SHARING PROTECTION UNDER MEDICAID.— 

(1) IN GENERAL.—Section 1916 of the Social Security Act (42 U.S.C. 1396o) is 

amended— 

(A) in subsection (a), in the matter preceding paragraph (1), by striking 

‘‘and (i)’’ and inserting ‘‘, (i), and (j)’’; and 

(B) by adding at the end the following new subsection: 

‘‘(j) NO PREMIUMS OR COST SHARING FOR INDIANS FURNISHED ITEMS OR SERVICES

DIRECTLY BY INDIAN HEALTH PROGRAMS OR THROUGH REFERRAL UNDER CONTRACT

HEALTH SERVICES.— 

‘‘(1) NO COST SHARING FOR ITEMS OR SERVICES FURNISHED TO INDIANS

THROUGH INDIAN HEALTH PROGRAMS.— 

‘‘(A) IN GENERAL.—No enrollment fee, premium, or similar charge, and no 

deduction, copayment, cost sharing, or similar charge shall be imposed 

against an Indian who is furnished an item or service directly by the Indian 

Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization or through referral under contract health services for which payment may be made under this title. 

‘‘(B) NO REDUCTION IN AMOUNT OF PAYMENT TO INDIAN HEALTH PROVIDERS.—Payment due under this title to the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization, or a health 

care provider through referral under contract health services for the furnishing of an item or service to an Indian who is eligible for assistance 

under such title, may not be reduced by the amount of any enrollment fee, 

premium, or similar charge, or any deduction, copayment, cost sharing, or 


dwashington3 on PROD1PC60 with HEARING
70 

similar charge that would be due from the Indian but for the operation of 

subparagraph (A). 

‘‘(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed 

as restricting the application of any other limitations on the imposition of premiums or cost sharing that may apply to an individual receiving medical assistance under this title who is an Indian.’’. 

(2) CONFORMING AMENDMENT.—Section 1916A(b)(3) of such Act (42 U.S.C. 

1396o–1(b)(3)) is amended— 

(A) in subparagraph (A), by adding at the end the following new clause: 

‘‘(vi) An Indian who is furnished an item or service directly by the 

Indian Health Service, an Indian Tribe, Tribal Organization or Urban 

Indian Organization or through referral under contract health services.’’; and 

(B) in subparagraph (B), by adding at the end the following new clause: 

‘‘(ix) Items and services furnished to an Indian directly by the Indian 

Health Service, an Indian Tribe, Tribal Organization or Urban Indian 

Organization or through referral under contract health services.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on October 1, 2009. 

(b) TREATMENT OF CERTAIN PROPERTY FROM RESOURCES FOR MEDICAID AND CHIP 

ELIGIBILITY.— 

(1) MEDICAID.—Section 1902 of the Social Security Act (42 U.S.C. 1396a), as 

amended by section 3003(a) of the Health Insurance Assistance for the Unemployed Act of 2009 and section 5004, is amended by adding at the end the following new subsection: 

‘‘(ff) Notwithstanding any other requirement of this title or any other provision 

of Federal or State law, a State shall disregard the following property from resources for purposes of determining the eligibility of an individual who is an Indian 

for medical assistance under this title: 

‘‘(1) Property, including real property and improvements, that is held in trust, 

subject to Federal restrictions, or otherwise under the supervision of the Secretary of the Interior, located on a reservation, including any federally recognized Indian Tribe’s reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska Native regions established by the Alaska Native 

Claims Settlement Act, and Indian allotments on or near a reservation as designated and approved by the Bureau of Indian Affairs of the Department of the 

Interior. 

‘‘(2) For any federally recognized Tribe not described in paragraph (1), property located within the most recent boundaries of a prior Federal reservation. 

‘‘(3) Ownership interests in rents, leases, royalties, or usage rights related to 

natural resources (including extraction of natural resources or harvesting of 

timber, other plants and plant products, animals, fish, and shellfish) resulting 

from the exercise of federally protected rights. 

‘‘(4) Ownership interests in or usage rights to items not covered by paragraphs (1) through (3) that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional lifestyle according to applicable tribal law or custom.’’. 

(2) APPLICATION TO CHIP.—Section 2107(e)(1) of such Act (42 U.S.C. 

1397gg(e)(1)) is amended by adding at the end the following new subparagraph: 

‘‘(E) Section 1902(ff) (relating to disregard of certain property for purposes of making eligibility determinations).’’. 

(c) CONTINUATION OF CURRENT LAW PROTECTIONS OF CERTAIN INDIAN PROPERTY

FROM MEDICAID ESTATE RECOVERY.—Section 1917(b)(3) of the Social Security Act 

(42 U.S.C. 1396p(b)(3)) is amended— 

(1) by inserting ‘‘(A)’’ after ‘‘(3)’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(B) The standards specified by the Secretary under subparagraph (A) 

shall require that the procedures established by the State agency under 

subparagraph (A) exempt income, resources, and property that are exempt 

from the application of this subsection as of April 1, 2003, under manual 

instructions issued to carry out this subsection (as in effect on such date) 

because of the Federal responsibility for Indian Tribes and Alaska Native 

Villages. Nothing in this subparagraph shall be construed as preventing the 

Secretary from providing additional estate recovery exemptions under this 

title for Indians.’’. 

SEC. 5006. CONSULTATION ON MEDICAID AND CHIP. 

(a) IN GENERAL.—Section 1139 of the Social Security Act (42 U.S.C. 1320b–9) is 

amended to read as follows: 


dwashington3 on PROD1PC60 with HEARING
71 

‘‘CONSULTATION WITH TRIBAL TECHNICAL ADVISORY GROUP (TTAG)

‘‘SEC. 1139. 

‘‘The Secretary shall maintain within the Centers for Medicaid & Medicare Services (CMS) a Tribal Technical Advisory Group, which was first established in accordance with requirements of the charter dated September 30, 2003, and the Secretary 

shall include in such Group a representative of the Urban Indian Organizations and 

the Service. The representative of the Urban Indian Organization shall be deemed 

to be an elected officer of a tribal government for purposes of applying section 204(b) 

of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1534(b)).’’. 

(b) SOLICITATION OF ADVICE UNDER MEDICAID AND CHIP.— 

(1) MEDICAID STATE PLAN AMENDMENT.—Section 1902(a) of the Social Security 

Act (42 U.S.C. 1396a(a)) is amended— 

(A) in paragraph (70), by striking ‘‘and’’ at the end; 

(B) in paragraph (71), by striking the period at the end and inserting ‘‘; 

and’’; and 

(C) by inserting after paragraph (71), the following new paragraph: 

‘‘(72) in the case of any State in which 1 or more Indian Health Programs 

or Urban Indian Organizations furnishes health care services, provide for a 

process under which the State seeks advice on a regular, ongoing basis from 

designees of such Indian Health Programs and Urban Indian Organizations on 

matters relating to the application of this title that are likely to have a direct 

effect on such Indian Health Programs and Urban Indian Organizations and 

that— 

‘‘(A) shall include solicitation of advice prior to submission of any plan 

amendments, waiver requests, and proposals for demonstration projects 

likely to have a direct effect on Indians, Indian Health Programs, or Urban 

Indian Organizations; and 

‘‘(B) may include appointment of an advisory committee and of a designee 

of such Indian Health Programs and Urban Indian Organizations to the 

medical care advisory committee advising the State on its State plan under 

this title.’’. 

(2) APPLICATION TO CHIP.—Section 2107(e)(1) of such Act (42 U.S.C. 

1397gg(e)(1)), as amended by section 5005(b), is amended by adding at the end 

the following new subparagraph: 

‘‘(F) Section 1902(a)(72) (relating to requiring certain States to seek advice from designees of Indian Health Programs and Urban Indian Organizations).’’. 

(c) RULE OF CONSTRUCTION.—Nothing in the amendments made by this section 

shall be construed as superseding existing advisory committees, working groups, 

guidance, or other advisory procedures established by the Secretary of Health and 

Human Services or by any State with respect to the provision of health care to Indians. 

SEC. 5007. TEMPORARY INCREASE IN DSH ALLOTMENTS DURING RECESSION. 

Section 1923(f)(3) of the Social Security Act (42 U.S.C. 1396r-4(f)(3)) is amended— 

(1) in subparagraph (A), by striking ‘‘paragraph (6)’’ and inserting ‘‘paragraph 

(6) and subparagraph (E)’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(E) TEMPORARY INCREASE IN ALLOTMENTS DURING RECESSION.— 

‘‘(i) IN GENERAL.—Subject to clause (ii), the DSH allotment for any 

State— 

‘‘(I) for fiscal year 2009 is equal to 102.5 percent of the DSH allotment that would be determined under this paragraph for the 

State for fiscal year 2009 without application of this subparagraph, 

notwithstanding subparagraph (B); 

‘‘(II) for fiscal year 2010 is equal to 102.5 percent of the the DSH 

allotment for the State for fiscal year 2009, as determined under 

subclause (I); and 

‘‘(III) for each succeeding fiscal year is equal to the DSH allotment for the State under this paragraph determined without applying subclauses (I) and (II). 

‘‘(ii) APPLICATION.—Clause (i) shall not apply to a State for a year in 

the case that the DSH allotment for such State for such year under this 

paragraph determined without applying clause (i) would grow higher 

than the DSH allotment specified under clause (i) for the State for such 

year.’’. 


dwashington3 on PROD1PC60 with HEARING
72 

1For instance, the United States ranks 15th in broadband penetration among OECD nations. 

See http://www.oecd.org/dataoecd/21/35/39574709.x1s. 

PURPOSE AND SUMMARY

H.R. 629, the Energy and Commerce Recovery and Investment 

Act, was introduced by Rep Henry A. Waxman on January 22, 

2009. The purpose of the bill is to promote recovery in the nation’s 

foundering economy by investing in the following areas: (1) 

broadband infrastructure so that businesses and households in 

rural and other underserved areas can link to the global economy; 

(2) clean energy technologies that will put people to work, clean our 

environment, and reduce our dependence on foreign oil; and (3) 

health to create new jobs related to health information technology, 

provide health insurance assistance for workers hurt by the recession, and strengthen a key safety net by increasing the federal contribution to Medicaid. 

BACKGROUND AND NEED FOR LEGISLATION

BROADBAND

Broadband infrastructure is the foundation of the digital economy. The broadband networks that must be constructed throughout 

the nation will be as important to the nation’s economic success as 

the postal roads, canals, rail lines, and interstate highways of the 

past. Unfortunately, the United States has fallen behind other nations in terms of broadband deployment and adoption.1 This legislation will put people to work building new broadband infrastructure. The Communications Workers of America estimate that a $5 

billion investment in broadband will result in 100,000 new jobs, 

and it will begin the process of restoring the United States’ position 

as the leading broadband nation in the world. 

The legislation requires the grant administrator to attempt to 

award 25% of available funds to areas with either no wireless voice 

service or no basic broadband service so that these unserved areas 

can begin the process of building communications infrastructure. 

The measure also requires the grant administrator to attempt to 

award 75% of the funds to areas in need of an upgrade of existing 

wireless and wireline broadband facilities. The aim of these provisions is to stimulate job creation in all parts of the country and to 

not limit the expected economic development to certain regions. 

These provisions will help ensure that all Americans have a chance 

to benefit from new and upgraded infrastructure. 

ENERGY

In the ‘‘American Recovery and Reinvestment Act,’’ the House 

Appropriations Committee has proposed to provide approximately 

$30 billion for energy-related programs created by the Committee 

on Energy and Commerce. This investment would create new jobs, 

increase the efficiency of the nation’s existing infrastructure and 

upgrade critical energy infrastructure. This effort would serve as 

the foundation for renewed economic growth that is consistent with 

meeting our energy and environmental challenges. 

In light of the levels of funding proposed for these programs and 

the intention to move the appropriated funds rapidly into active 

use, the Committee on Energy and Commerce considered whether 


dwashington3 on PROD1PC60 with HEARING
73 

2 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2009 to 2019, 

at 1 (Jan. 2009). 3 Id., Table B–1. 4 J. Holahan, A. Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured, Kaiser 

Commission on Medicaid and the Uninsured, at 4 (Jan. 2009). 5 Both are preliminary estimates that reflect the total number of people over the course of CY 

2009 that receive benefits from sections 3002 and 3003. These are mutually exclusive groups, 

so they are additive and take into account interactions between both sections. 

amendments to the authorizing language creating these programs 

should be adopted to assure that the funds were used to their full 

intended effect. Specifically, the Energy and Commerce Committee 

considered and amended portions of the provisions that make up 

Sections 5001, 5002, 5003, 5005, and 5007 of the ‘‘American Recovery and Reinvestment Act’’ approved by the Appropriations Committee, and added new provisions with respect to conditions that 

should apply other programs for which authorization language 

changes had not been proposed by the Appropriations Committee. 

HEALTH

1. Health Insurance assistance for the unemployed 

According to the Congressional Budget Office (CBO), the United 

States is in a recession that ‘‘will probably be the longest and deepest since World War II.’’ 2 CBO estimates that the unemployment 

rate, which was 5.7% in 2008, is projected to increase to 8.3% in 

2009 and 9% into 2010.3

Each 1 percentage point increase in unemployment translates 

into a 0.6 percentage point increase in the number of nonelderly 

adults without health insurance coverage. Put another way, if, as 

projected, the unemployment rate rises to 9%, the number of uninsured adults will increase by 4.8 million.4

The bill contains two provisions to address this foreseeable increase in the number of unemployed Americans without health insurance coverage. It provides temporary subsidies for COBRA premiums to enable workers who have been involuntarily terminated 

from their jobs to maintain the coverage they had through work. 

To address the needs of those workers (and their families) that do 

not have access to COBRA coverage, the bill also creates a temporary option for states to extend health care coverage to displaced 

workers through their Medicaid programs. 

CBO estimates that these two provisions will provide health care 

coverage to a total of 8.2 million unemployed workers and dependents in 2009. Of these, 7 million will be covered through COBRA; 

the remaining 1.2 million will be covered through Medicaid.5

CBO estimates these provisions will cost $40.2 billion over the 

next 5 years. Of this amount, over 90 percent will be spent during 

2009 and 2010, maximizing the economic impact of this spending 

during the recession. 

2. Health information technology 

The U.S. health care system is characterized by systemic quality 

and efficiency shortcomings. The system’s quality problems are evidenced by high rates of medical and medication errors and a lack 

of adherence to practice guidelines. In a 2000 study, the Institute 

of Medicine (IOM) found that as many as 98,000 people die each 


dwashington3 on PROD1PC60 with HEARING
74 

6To Err is Human. IOM (2000) National Academy Press. 

7 Congressional Budget Office, Budget Options Health Care, Volume I, Option 46 (Dec. 2008). 

8 Congressional Budget Office, Evidence on the Cost and Benefits of Health Information Technology (May 2008). 9 Catherine M. DesRoches, Dr.P.H., Eric G. Campbell, Ph.D., Sowmya R. Rao, Ph.D., Karen 

Donelan, Sc.D., Timothy G. Ferris, M.D., M.P.H., Ashish Jha, M.D., M.P.H., Rainu Kaushal, 

M.D., M.P.H., Douglas E. Levy, Ph.D., Sara Rosenbaum, J.D., Alexandra E. Shields, Ph.D., and 

David Blumenthal, M.D., M.P.P, ‘‘Electronic Health Records in Ambulatory Care—A National 

Survey of Physicians’’ The New England Journal of Medicine, Published at www.nejm.org (June 

18, 2008) (10.1056/NEJMsa0802005). 10 Id. 11 Id. 

year due to preventable medical errors.6 According to the Agency 

for Healthcare Research and Quality (AHRQ), an average of 17 

years is required for findings from randomized clinical trials to be 

implemented into clinical practice. These documented shortcomings 

in our quality of care contribute to higher health care costs and 

place patients at risk. 

Nationwide adoption of health information technology (HIT), that 

supports the electronic exchange of health information, has the potential to ameliorate many of the quality and efficiency problems 

endemic to our health care system. HIT would allow for the centralization of patient information, enhanced, real-time communication between providers to improve the coordination of care, improved patient access to medical records, and access to a variety of 

quality enhancing programs and tools. 

According to the Congressional Budget Office, only 5% of physicians have and use a comprehensive electronic health record, those 

that provide decision support capability, physician order entry and 

more.7 Similarly, only 11% of hospitals have adopted such systems.8 A commonly cited impediment to the adoption of HIT is cost. 

A study published in the New England Journal of Medicine showed 

that a large majority of physicians using electronic health records 

are satisfied and report that those systems have positive effects on 

the quality of patient care.9 The study, which surveyed 2,607 physicians, showed that physicians without HIT systems were concerned 

about financial barriers.10 Evidence from this study and others 

strongly indicate that health care providers need guidance and financial support if HIT is to be widely adopted in the United 

States.11

In addition to costs, concerns about the security and privacy of 

health information have also been regarded as an obstacle to the 

adoption of HIT. As the electronic transmission of health information between various independent entities is encouraged, the privacy and security of that health information becomes a much greater concern. The Health Insurance Portability and Accountability 

Act of 1996 (HIPAA; P.L. 104–191) resulted in the Secretary of 

HHS developing privacy and security standards giving patients the 

right of access to their medical information and placing restrictions 

on the use and disclosure of that information without the patient’s 

consent. The HIPAA ‘‘Privacy Rule’’ and ‘‘Security Rule’’ currently 

provide the federal standard for the protection of individually identifiable health information. 

There are, however, clear gaps in the current privacy and security structure established under HIPAA that have become apparent 

over time. For example, there are no requirements that a person 

be notified if their information is accessed by an unauthorized 

party. In addition, between April 2003 and March 2007, HHS docuVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00074 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
75 

12Stevens, Gina Marie, ‘‘Enforcement of the HIPAA Privacy Rule,’’ CRS Report RL33989 (Apr. 

30, 2007). 13 Id. 14 Holahan and Garrett, op. cit., Table 2. 15 Id. at 8. 

mented 26,408 complaints of Privacy Rule violations.12 Despite the 

relatively large number of complaints, no civil penalties were levied 

during that period and only one civil fine has been levied since 

then.13 The bill would address these barriers to adoption and take 

steps to provide for greater privacy and security of health information and stronger enforcement of violations of federal law. 

3. Medicaid provisions 

The rise in unemployment during a recession also has severe impact on state Medicaid programs. Caseloads rise as workers lose 

their incomes. If, as projected, the unemployment rate rises to 9%, 

the number of children enrolled in Medicaid or the Children’s 

Health Insurance Program (CHIP) will increase by 2.8 million, 

while the number of non-elderly adults in Medicaid will rise by 1.6 

million.14

At the same time, the revenues that states need to pay for their 

Medicaid programs fall as income tax, sales tax, property tax, and 

corporate tax receipts decline. A 1 percentage point increase in the 

unemployment rate causes state general fund revenue to drop by 

3% to 4% below the level of revenues expected. A 9 percent unemployment rate would reduce state revenues by an estimated $26 

billion.15

Because the states, on average, pay 43% of Medicaid program 

costs, states would have to reduce their Medicaid spending by over 

$60 billion in order to reduce their state-only spending by $26 billion. Withdrawing $60 billion in aggregate demand from the health 

care sector of the economy is likely to prolong the recession. 

The bill contains provisions to assist states in maintaining their 

Medicaid programs in the face of caseload increases and revenue 

shortfalls. The bill provides a temporary increase in the federal 

Medicaid matching rate (FMAP) targeted in part at states with 

high unemployment. The bill also extends a moratorium on regulations that would substantially reduce federal Medicaid matching 

payments to states. 

CBO estimates that these provisions will increase federal Medicaid spending by $89.5 billion over the next five years. Of this 

amount, about $80 billion, or nearly 90%, will be spent during 2009 

and 2010, providing immediate fiscal relief to state Medicaid programs while the recession is underway. 

LEGISLATIVE HISTORY

H.R. 629, the Energy and Commerce Recovery and Investment 

Act, was introduced by Rep. Henry A. Waxman on January 22, 

2009, and referred to the Committee on Energy and Commerce. 

On January 22, 2009, the Committee met in open markup session to consider five Committee prints that correspond to the five 

titles of H.R. 629. The Committee by unanimous consent substituted the text of these five prints, as amended during the markup session, for the text of H.R. 629 as introduced, and approved 

H.R. 629, amended, by a voice vote. 


dwashington3 on PROD1PC60 with HEARING
76 

SECTION-BY-SECTION

Title I—Broadband Communications 

Section 1001: Inventory of broadband service capability and availability 

Subsection (a) directs the National Telecommunications and Information Administration (‘‘NTIA’’) to develop and maintain a 

broadband inventory map of the United States that identifies and 

depicts broadband service availability and capability. Subsection (b) 

directs the NTIA to make the map accessible online no later than 

2 years after the date of enactment of this Act. 

Section 1002: Wireless and broadband deployment grant programs 

Subsection (a) authorizes the creation of grant programs for wireless and wireline broadband infrastructure to be administered by 

the NTIA. 

Subsection (b) authorizes a state to submit a priority report to 

NTIA that identifies the geographic areas within that state that 

have greatest need for new or additional telecommunications infrastructure. A state may not identify areas encompassing more than 

20% of that state’s population. 

Subsection (c) authorizes the NTIA to award Wireless Broadband 

Grants. The NTIA shall seek to distribute grants, to the extent possible, so that 25% of the available funds to ‘‘unserved areas’’ for 

basic voice services and 75% to ‘‘underserved areas’’ for advanced 

broadband services. 

Subsection (d) authorizes the NTIA to award Broadband Deployment Grants. The NTIA shall seek to distribute grants, to the extent possible, so that 25% of the available funds go to ‘‘unserved 

areas’’ for basic broadband services and 75% to ‘‘underserved areas’’ 

for advanced broadband services. 

Subsection (e) directs the NTIA to establish certain grant requirements, including that grant recipients are not unjustly enriched by the program, that grant recipients adhere to the FCC’s 

August 5, 2005, broadband Internet policy statement, which grant 

recipients operate networks on an open access basis, and that grant 

recipients adhere to a build out schedule. 

Subsection (f) sets for the requirements of the grant application 

and grant selection criteria. The NTIA is required to consider certain public policy goals (e.g., public safety benefits and enhancement in computer ownership or literacy) before awarding grants. 

Subsection (g) requires the NTIA to coordinate with the FCC and 

to consult with other agencies as necessary to implement this Section. 

Subsection (h) requires NTIA to submit an annual report to Congress assessing the impact o the grants on the policy objectives and 

criteria contained in this Section. 

Subsection (i) grants the NTIA authority to prescribe rules as 

necessary to implement this Section. 

Subsection (j) contains definitions of terms used in this Section, 

and directs the FCC to develop definitions for certain terms. 


dwashington3 on PROD1PC60 with HEARING
77 

Section 1003: National Broadband Plan 

Subsection (a) requires the FCC to, not later than one year after 

the date of enactment of this section, develop and submit to Congress a report containing a national broadband plan. 

Subsection (b) sets forth the contents of the plan. 

Title II—Energy 

Section 2001: Technical corrections to the Energy Independence and 

Security Act of 2007 

This section provides technical corrections to the Energy Independence and Security Act of 2007 (EISA) to eliminate confusion in 

grant fund allocations. 

Section 2002: Amendments to Title XIII of the Energy Independence 

And Security Act of 2007 

Presented in Appropriations Committee bill as ‘‘Technical Corrections’’ to EISA, this section in fact comprises substantive changes 

to that title and has therefore been retitled ‘‘Amendments to Title 

XIII’’ of EISA by the Committee. The language of subsection (1)(A) 

has been clarified to avoid concern that demonstration projects 

would be limited to those in rural areas when the intent is to have 

them in a variety of geographic settings. An additional paragraph 

(F) was added requiring grantees for EISA section 1304 Demonstration Projects to ‘‘utilize open Internet-based protocols and 

standards if available.’’ The same conditioning language is also applied to Smart Grid grantees under section 1306 of EISA as an addition to the procedural changes in subsection (8)(e)(2). 

Section 2003: Renewable energy and electric power transmission 

loan guarantee programs 

This provision creates a new section of Title XVII of the Energy 

Policy Act of 2005 (EPAct) to provide temporary loan guarantee authority for certain commercially ready renewable energy technologies. The bill modifies the categories of eligible recipients to 

clarify that ‘‘renewable energy systems’’ would be those ‘‘including 

incremental hydropower, that generate electricity,’’ and that ‘‘electric power transmission systems’’ would include ‘‘upgrading and 

reconductoring projects.’’ The bill adds a third category of eligible 

users, ‘‘leading edge biofuel projects,’’ judged by the Secretary of 

Energy as likely to become commercial, and limited to using $500 

million of the total authority provided. These projects are required 

to ‘‘substantially reduce life cycle greenhouse gas emissions’’ and it 

is expected that the Secretary will use a procedure and methodology consistent for calculating emissions that is consistent with 

those being developed by the U.S. Environmental Protection Agency. The bill also includes factors to be considered by the Secretary 

in reviewing transmission projects for federal support. 

Section 2004: Weatherization program amendments 

This section contains language allowing the Secretary of Energy 

to encourage states to move forward with attic insulation and other 

low-cost high-efficiency techniques in weatherization program actions for qualifying homes rather than weatherizing single homes 


dwashington3 on PROD1PC60 with HEARING
78 

at once with all techniques, if the Secretary judged that such action 

would increase the effectiveness of the program. 

Section 2005: Renewable electricity transmission study 

This section provides for additional elements to the triennial 

DOE study of transmission congestion, required under Section 1221 

of the Energy Policy Act of 2005. It requires the analysis of renewable transmission constraints and legal actions as 8 obstacles to 

new renewable transmission, and requiring that assumptions and 

projections involved in the study be explained. 

Section 2006: Additional state energy grants 

This section adds conditions that would apply to acceptance by 

a state of incremental State Energy Program grant funding beyond 

base amounts. The funds would be conditioned on governors of 

states notifying the Secretary of Energy that they would seek, 

within the limits of their authority, to ensure that three conditions 

were met. 

First, the governor would seek to promote policies to ensure that 

recovery of a utility’s fixed costs of service are independent of retail 

sales, that a utility could recover costs for energy efficiency and 

that an earnings opportunity existed for energy efficiency. This provision is designed to nudge a state toward adopting policies that 

would remove disincentives that utilities have to invest in energy 

efficiency and promote new incentives to encourage energy efficiency. Experience in states that have adopted these policies show 

that consumer rates may fluctuate only minimally while delivering 

substantial benefits and reducing the need for additional power 

plant construction. 

Care was taken to ensure that governors were not encouraged to 

advocate that variable charges be shifted to fixed charges. In this 

way, consumers can continue to save money through their own conservation efforts and rate structures that are not advantageous to 

consumers are not encouraged. Moreover, the Committee understands the limited effect of this condition. Public utility commissions are generally independent of a governor’s office and a governor’s notification under this section will not legally require a public utility commission to adopt any specific regulatory policy. In 

fact, nothing in this section preempts state laws or in anyway limits the authority of a state to protect its consumers. This provision 

is intended to aid consumers by ensuring that the most cost-effective energy solutions are sought. The Committee expects that public utility commissions will maintain their practice of ensuring that 

only prudent investments are recovered and that consumers are 

protected. 

Second, the governor would seek to promote the adoption of updated energy efficient building codes adopted by leading code-setting organizations or their equivalent. 

Finally, the governor would seek, to the extent practicable, to 

prioritize the use of such funds in the expansion of existing energy 

efficiency programs or renewable energy programs. A separate provision of the section eliminates the 20% state match required under 

current law for receipt of Economic Recovery Act revenues. Another 

provision removes any limits in current law as to percentages of 


dwashington3 on PROD1PC60 with HEARING
79 

funding that can be used for purchase and installation of equipment and materials for energy efficiency measures. 

Section 2007: Inapplicability of limitation 

This provision temporarily lifts current statutory limitations and 

conditions on grant and loan funding pursuant to Section 471 of 

EISA, Sustainability and Energy Efficiency Loans and Grants for 

Institutions, to accord with the ‘‘American Recovery and Reinvestment Act of 2009’’ appropriation timing and amounts. It provides 

that not more than 80% of the funding for any project can be provided in the form of grant funding. 

Title III—Health Insurance Assistance for the Unemployed 

Section 3001: Short title and table of contents 

Sets forth the short title and table of contents. 

Section 3002: Premium assistance for cobra benefits and Extension 

of Cobra Benefits for older or long-term employees 

Section 3002 establishes a temporary premium assistance program for COBRA benefits and extends COBRA benefits for older or 

long-term employees. 

To be eligible for COBRA under current law, a worker must have 

worked for an employer with 20 or more employees, have been enrolled in the employer’s health plan, and have lost his/her health 

coverage due to termination of employment for reasons other than 

gross misconduct. Workers must pay 100% of the premium plus 2% 

in administrative costs. In addition, some states offer similar 

health care continuation coverage for those employers with less 

than 20 employees. 

The bill provides a 65% subsidy for COBRA continuation premiums for up to 12 months for workers who have been involuntarily terminated (and their families) and are otherwise eligible for 

federal or state COBRA continuation coverage. To qualify for this 

COBRA premium assistance, a worker must be involuntarily terminated between 

September 1, 2008, and December 31, 2009, and not have an income of over 1 million dollars. The subsidy would terminate upon 

offer of any new employer-sponsored coverage. 

The bill also provides that those COBRA-eligible workers who 

are 55 and older, or who have worked for an employer for 10 or 

more years, would be able to retain COBRA coverage, at their own 

expense, until they become Medicare eligible at age 65. 

Section 3003: Temporary optional medicaid coverage for the unemployed 

This section provides temporary optional Medicaid coverage for 

the unemployed without health insurance coverage. State Medicaid 

programs will have the option of covering one or more of the following groups of unemployed individuals without health insurance 

(and their uninsured spouses and dependents): 

(1) individuals who are receiving unemployment benefits and individuals who were receiving but have exhausted unemployment 

benefits on or after July 1, 2008; 


dwashington3 on PROD1PC60 with HEARING
80 

(2) individuals who are involuntarily unemployed and were involuntarily separated from employment on or after September 1, 2008, 

and before January 1, 2009, with a gross family income below 

200% of the poverty level ($44,100 per year for a family of four in 

2009) and are not otherwise eligible for Medicaid; 

(3) individuals who are involuntarily unemployed and were involuntarily separated from employment on or after September 1, 2008, 

and before January 1, 2009, are member of households participating in the food stamps program, and are not otherwise eligible 

for Medicaid. 

The federal government will assume 100% of the costs of benefits 

and administration for individuals enrolled under this option 

through December 31, 2010. The costs of administration include 

the cost of outreach and modification and operation of eligibility information systems. 

Individuals eligible for coverage as of December 31, 2010, will 

continue to be entitled to coverage until their next regularly-scheduled eligibility redetermination date. During this post-December 

31, 2010, coverage period, the federal government will share in the 

cost of covered items and services for such individuals at the state’s 

regular matching rate. 

Title IV—Health Information Technology 

Sec. 4001: Short title, table of contents of title 

Provides that the title of the section is the Health Information 

Technology for Economic and Clinical Health Act or the HITECH 

Act. 

Subtitle A—Promotion of Health Information Technology 

Part I—Improving Health Care Quality, Safety and Efficiency 

Sec. 4101: ONCHIT; standards development and adoption 

This section makes a number of amendments to the Public 

Health Service Act (PHSA): 

Sec. 3000—Definitions. These provisions define key terms related 

to the promotion of health information technologies. 

Sec. 3001—Office of the National Coordinator for Health Information Technology. The Office of the National Coordinator of 

Health Information Technology (ONCHIT), which was originally 

created by Executive Order 13335, is codified into statute within 

the U.S. Department of Health and Human Services (HHS). The 

head of ONCHIT (the National Coordinator) will lead the efforts for 

the development of policies and recognition of standards to allow 

for the secure electronic exchange of health information that leads 

to improvements in the quality of clinical care. 

The National Coordinator is charged with the following duties: 

• Update and maintain strategic plan on how to achieve widespread adoption and use of interoperable, secure, and clinically useful electronic health records. The plan shall include measurable 

goals and the National Coordinator is required to regularly evaluate and publicly report on progress toward achieving these goals. 

• Provide guidance to and act as a liaison between the HIT Policy and HIT Policy Committees. 


dwashington3 on PROD1PC60 with HEARING
81 

• Review and recommend standards and guidance to the Secretary to ensure interoperability, security/privacy, and clinical utility of electronic health information. Such recommendations will be 

developed with input from the HIT Standards Committee. • Develop a program for the voluntary testing and certification 

of products as meeting the standards adopted by the Secretary for 

the secure electronic exchange of health information. • Coordinate efforts throughout the federal government to promote and utilize electronic health information technology. • Appoint a Chief Privacy Officer who shall assist the National 

Coordinator with initiatives to promote privacy, security, and data 

stewardship of electronic health information. • Regularly report on progress on efforts to achieve the goals 

outlined in the strategic plan, as well as the impact of health information technology in communities with health disparities and 

medically underserved areas. 

Sec. 3002—HIT Policy Committee. Establishes a federal advisory 

committee of public and private stakeholders to provide input and 

assistance to the National Coordinator. The HIT Policy Committee 

will serve as a forum for input and expertise in the area of health 

information technology. The HIT Policy Committee will provide policy advice and make recommendations to the National Coordinator 

on how best to achieve the goals outlined in the strategic plan, including how to achieve the goal of ensuring that every person in 

the nation has a secure electronic health record by 2014. 

Sec. 3003—HIT Standards Committee. Establishes a federal advisory committee of public and private stakeholders to provide 

input and assistance to the National Coordinator. The HIT Standards Committee will recommend standards, implementation specifications, and certification criteria for the secure electronic exchange and use of health information technology consistent with 

the strategic plan and policy recommendations from the HIT Policy 

Committee. 

Sec. 3004—Process for adoption of endorsed recommendations; 

adoption of initials set of standards, implementation of specifications, and certification criteria. Directs the Secretary, in consultation with other relevant agencies, to review standards recommended by the National Coordinator and, where appropriate, 

provide for adoption by the government through a rulemaking process. Requires that the Secretary adopt an initial set of standards, 

which may be based on standards already developed by the National Coordinator, no later than December 31, 2009. 

Sec. 3005—Application and use of adopted standards and implementation specifications by federal agencies. Requires that federal 

agencies implementing or using electronic health information do so 

in a way that is consistent with Section 4111. 

Sec. 3006—Voluntary application and use of adopted standards 

and implementation specifications by private entities. Except as 

provided for under Section 4112, states that standards developed 

under this Act shall not be binding on private entities, but may be 

voluntarily adopted. 

Sec. 3007—Federal health information technology. Directs the 

Secretary to support the development of, and make available, a 

low-cost electronic health record that is certified as meeting the 

adopted standards, unless the Secretary finds that provider deVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00081 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
82 

mand for such systems is being met through the marketplace. 

States that no public or private entity will be required to adopt or 

use the system developed under this Section. 

Sec. 3008—Transitions. Provides for transitions to allow for the 

development and harmonization of standards currently taking 

place to continue to occur as ONCHIT is codified and the functions 

of the American Health Information Community Successor, Inc. 

flow appropriately to the HIT Policy and Standards Committees. 

Sec. 3009—Relation to HIPPA privacy and security law. Specifies 

that this title may not be construed as having any effect on the authorities granted to the Secretary under the HIPAA privacy and security law. 

Sec. 3010—Authorization for appropriations. Authorizes an appropriation of $250 million to ONCHIT for 2009 to implement this 

title. 

Sec. 4102: Technical amendment 

Amends the HIPAA definition of health plan to include Medicare 

Part D. 

Sec. 4103: American technology required 

Requires all funds made available pursuant to this Act for the 

purchase of health information technology only purchase technology that is manufactured, engineered, programmed in the 

United States and made substantially from articles, materials, supplies, mined, produced or manufactured in the United States. 

Part II—Application and Use of Adopted Health Information 

Technology Standards; Reports 

Sec. 4111: Coordination of Federal activities with adopted standards and implementation specifications 

Codifies a 2006 executive order to require federal agencies implementing, acquiring, or upgrading HIT systems for the electronic exchange of identifiable health information use HIT products meeting 

standards adopted by the Secretary of HHS in accordance with this 

bill. It also requires that the President ensure that federal activities involving the collection and submission of health information 

be consistent with standards established under this bill for the 

electronic exchange of health information. 

Sec. 4112: Application to private entities 

Requires that private entities contracting with the federal government to carry out health activities adopt the standards established under this bill for the electronic exchange of health information. 

Sec. 4113: Study and reports 

Requires the Secretary to submit an annual report to Congress 

on the efforts toward, and barriers to, facilitating the electronic exchange of health information nationwide. It also requires the Secretary to study methods to create efficient reimbursement incentives for improving healthcare quality in federally-qualified health 

centers, rural health clinics, and free clinics. 


dwashington3 on PROD1PC60 with HEARING
83 

Subtitle B—Testing of Health Information Technology 

Sec. 4201: National Institute for Standards and Technology Testing 

Requires that the National Institute for Standards and Technology (NIST) work in coordination with the Office of the National 

Coordinator to test standards. These are standards being developed 

or recognized for the electronic exchange of health information by 

the Office of National Coordinator. It additionally requires the director of NIST in coordination with the Office of the National Coordinator to support the establishment of accredited testing laboratories for the voluntary testing of products for certification by the 

National Coordinator that they meet standards for the electronic 

exchange of information. 

Sec. 4202: Research and development programs 

Requires that the Director of NIST, in consultation with the Director of the National Science Foundation and other appropriate 

federal agencies, award competitive grants to institutes of higher 

education to research innovative approaches for the use of HIT in 

the delivery of health care. Additionally, it directs the National 

High-Performance Computing Program, created by the High Performance Computing Act of 1991, to coordinate federal research 

and programs related to the development and deployment of HIT. 

Subtitle C—Incentives for the Use of Health Information 

Technology 

Part I—Grants and Loans Funding 

Sec. 4301: Grant, Loan and Demonstration Programs 

This section makes a number of amendments to the Public 

Health Service Act (PHSA): 

Sec. 3011—Immediate funding to strengthen the health information technology infrastructure, Authorizes the Secretary to make 

immediate investments in the infrastructure necessary to facilitate 

the electronic exchange and use of health information for each individual in the United States consistent with the goals and strategies 

outlined in the strategic plan developed by the Office of the National Coordinator, including assistance to providers not eligible for 

assistance under Medicare or Medicaid. 

Sec. 3012—Health information technology implementation assistance. Establishes several programs to help providers adopt and use 

health information technology. These programs will serve as a 

forum for exchanging knowledge and experience, disseminate lessons learned and best practices, and provide technical assistance to 

providers and health information networks about how to implement health IT. The program will prioritize direct assistance first 

to non-for profit hospitals, federally qualified health care centers, 

providers in medically underserved areas, and individual or small 

group practices focused on primary care. 

Sec. 3013—State grants to promote health information technology. Authorizes the Secretary to award states, or qualified statedesignated entities, grants to implement and expand the electronic 

exchange of health information. 


dwashington3 on PROD1PC60 with HEARING
84 

Sec. 3014—Competitive grants to States and Indian Tribes for 

the development of loan programs to facilitate the widespread 

adoption of certified EHR technology. Authorizes the National Coordinator to award states and Indian Tribes grants for the purpose 

of establishing health IT loan programs. Such loans could only be 

used to assist with the purchase of health information technology 

that facilitates the electronic exchange of health information and 

improves the quality of care. 

Sec. 3015—Demonstration program to integrate information 

technology into clinical education. Establishes a demonstration program for awarding grants to medical, dental, nursing schools, and 

other graduate health education programs to integrate health IT 

into the clinical education of health care professionals. 

Sec. 3016—Information technology professionals on health care. 

Directs the Secretary, in consultation with the National Science 

Foundation, to provide financial assistance to educational institutions to support training in medical health informatics. 

Sec. 3017—General grant and loan provisions. Permits the Secretary to require that grantees report on the effectiveness of activities funded through the grant, and requires the National Coordinator to annually evaluate the effectiveness of grants in improving 

the quality and efficiency of health care. 

Sec. 3018—Authorization for appropriations. Authorizes appropriations of such sums as are necessary to carry out this subtitle 

from 2009 through 2013. 

PART II—MEDICARE PROGRAM

Sec. 4311: Incentives for eligible professionals 

Provides for incentive payments to Section 1861(r) physicians 

and providers who adopt and utilize EHR technology that is certified as meeting appropriate standards for interoperability, security and clinical functionality. In order to receive the incentives, 

providers must demonstrate that they are engaging in meaningful 

use of the EHR technology, including electronically exchanging 

clinical information with other providers and reporting on clinical 

quality measures. In selecting the quality measures the Secretary 

is instructed to seek to select measures that are consistent with 

those already in use under other quality reporting programs under 

Title XVIII, such as the Physician Quality Reporting Initiative 

(PQRI) program. 

Beginning in fiscal year 2011, professionals that demonstrate 

they have adopted and are utilizing a certified EHR system are eligible to receive incentive payments through the Medicare program. 

Professionals who demonstrate they are meaningful EHR users 

starting in 2011, 2012, or 2013 will receive incentive payments that 

are phased out over a five-year period. Eligible professionals who 

use a certified EHR may receive up to $41,000 over five years, 

which may be made in annual lump-sum payments or a series of 

smaller payments. Professionals that become meaningful EHR 

users in 2014 and 2015 will receive a reduced series of payments 

over a 4 and 3 year period, respectively. No incentive payments are 

available for professionals who begin meaningful use of EHR technology after 2015. The Secretary is instructed to coordinate payments for professionals who participate in more than one practice 


dwashington3 on PROD1PC60 with HEARING
85 

to ensure proper application of payment incentives and limits. The 

Secretary is also given authority to adjust measures of meaningful 

use for professionals in group practice as appropriate. 

Starting in 2016, Medicare payments are reduced by a percentage of allowed charges for any eligible professional who does not 

demonstrate they are meaningfully using a certified EHR system. 

Allowed charges are reduced by 1% in 2016 and by an additional 

percentage point each year until payments are reduced by 3% for 

non-users. If less than 75% of eligible professionals are not demonstrating meaningful use of a certified EHR system, the reduction 

in payments will increase by 1% a year for a maximum reduction 

of 5%. The Secretary may provide a time-limited exemption from 

the payment reductions to professionals who demonstrate a significant hardship in meeting the meaningful use criteria. 

Similar payment incentives and reductions will apply to professionals who are affiliated with certain staff or group model Medicare Advantage (MA) plans. Furthermore, MA benchmark payments are not affected by incentive payments or penalties that 

apply to professionals in fee-for-service Medicare for the use of 

EHRs. 

Sec. 4312: Incentives for hospitals 

Provides incentive payments to Section 1886(d) hospitals that 

adopt and utilize EHR technology that is certified as meeting appropriate standards for interoperability, security and clinical 

functionality. In order to receive the incentives, hospitals must 

demonstrate that they are engaging in meaningful use of EHR 

technology, including electronically exchanging clinical information 

with other providers and reporting on clinical quality measures. In 

selecting clinical quality measures the Secretary is instructed to 

seek to avoid redundant or duplicative reporting with reporting required under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Program under 1886(b)(3)(B)(viii) of the 

Social Security Act. 

Beginning in fiscal year 2011, hospitals that demonstrate they 

have adopted and are utilizing an approved EHR system are eligible to receive incentive payments through Part A of the Medicare 

program. Hospitals that demonstrate they are meaningful EHR 

users by either fiscal 2011, 2012, or 2013 receive incentive payments that are phased out over a four-year period. Hospitals that 

become meaningful EHR users in 2014 and 2015 receive 3 and 2 

years of incentive payments respectively. No incentive payments 

are available for hospitals that begin adoption and meaningful use 

of EHR technology after 2015. 

All hospitals that meet the standards for meaningful EHR use 

receive a base payment based on their Medicare share of business. 

Hospitals receive additional payments based on total discharges, at 

a declining rate per discharge, up to a maximum number of discharges. All payments are adjusted by Medicare share, taking into 

account the level of charity care provided by the hospital. 

The market basket update is reduced for any eligible hospital 

that has not adopted a certified system by 2016. The Secretary may 

provide a time-limited exemption from the payment reduction to 

professionals who demonstrate a significant hardship in meeting 

the meaningful use criteria. 


dwashington3 on PROD1PC60 with HEARING
86 

Similar payment incentives and reductions will apply to hospitals 

which are affiliated with certain staff or group model Medicare Advantage (MA) plans and have less than one-third of their total discharges covered under Medicare fee-for-service. MA benchmark 

payments are not affected by incentive payments and penalties to 

1886(d) hospitals for the development of EHRs. 

Sec. 4313: Treatment of payments and savings; implementation 

funding 

This section excludes all payment incentives made by this Act 

from Medicare beneficiary premiums. All funds currently held in 

the Medicare Improvement Fund are designated to be expended in 

fiscal year 2014, and any savings resulting from payment reductions for failing to use certified EHRs is deposited into the Fund 

starting in 2020. Provides funding to the Centers for Medicare and 

Medicaid Service to implement the incentive programs described in 

this part of the Act. 

Sec. 4314: Study on application of EHR payment incentives for providers not receiving other incentive payments 

Instructs the Secretary to conduct a study to determine the extent to which and manner in which incentives and other funding 

for adoption and use of qualified EHR technology should be made 

available to health care providers who are receiving minimal or no 

payments under this Act, titles XVIII, or XIX of the Social Security 

Act, or otherwise. The study is due to Congress by June 30, 2010. 

Part III—Medicaid Funding 

Sec. 4321: Medicaid provider HIT adoption and operation payments; implementation funding 

Provides incentives to encourage the adoption and use of an electronic health record that is certified as meeting appropriate standards for interoperability, security, and clinical functionality among 

providers participating in the Medicaid program under title XIX of 

the Social Security Act. Incentives are administered by state Medicaid programs according to statute and under regulatory supervision of the Secretary of Health and Human Services. There is no 

payment reduction associated with incentive payments under this 

section. 

Eligible practitioners include physicians as defined in Sections 

1861(r)(1) and 1861(r)(2) of the Social Security Act, nurse practitioners, and certified nurse midwives with at least 30% of patient 

volume attributable to patients receiving assistance under title 

XIX. Such practitioners would be eligible to receive 85% of the 

costs of implementing and operating health information technology 

up to $75,000 over a period of six years, or $63,750 in federal 

spending. Up to $25,000 of this funding would be for the initial 

adoption of an electronic health record with the rest being for operation and maintenance costs spread over the succeeding five years. 

Practitioners receiving such assistance would be required to demonstrate meaningful use of certified electronic health records in a 

manner specified by the State and satisfactory to the Secretary. In 

order to avoid duplicative reporting requirements such demonstraVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00086 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
87 

tion may be based on the rules developed for the Medicare program. 

Other eligible providers include children’s hospitals, acute care 

hospitals with at least 10 percent of their patient volume attributable to patients receiving assistance under title XIX, and federally qualified health centers (FQHCs) and rural health clinics 

(RHCs) with at least 30% of their patient volume attributable to 

such individuals. Payments to hospitals are calculated in a similar 

fashion as under Section 4312 of this Act. Hospitals demonstrating 

meaningful use of certified electronic health records (under standards administered by the states and acceptable to the Secretary) 

may receive a base payment based on their Medicaid share, with 

additional amounts for additional discharges. All payments are adjusted by the percentage of discharges made for individuals receiving assistance under title XIX (the Medicaid share, including individuals enrolled in managed care plans) and the amount of charity 

care being provided by the hospital. Payments to FQHCs and 

RHCs are made according to a formula to be developed by the Secretary. 

State spending for payments to providers for adoption and operation of certified electronic health records will be entirely paid for 

by the federal government; 90% of state costs in administering the 

program will be reimbursed by the federal government. Funding is 

provided to the Centers for Medicare & Medicaid Services to administer this section. 

Subtitle D—Privacy 

Sec. 4400: Definitions 

These provisions define key terms related to the privacy and security provisions of this bill. 

Part I—Improved Privacy Provisions and Security Provisions 

Sec. 4401: Application of security provisions and penalties to business associates of covered entities; annual guidance on security 

provisions 

Requires that security safeguards promulgated pursuant to 

Health Insurance Portability and Accountability Act of 1996 

(HIPAA) and this bill, and the penalties for violation of those safeguards apply to business associates under HIPAA (see note below) 

in the same manner as applied to covered entities. This provision 

also requires that the Secretary, in consultation with stakeholders, 

annually issue guidance on the most appropriate security safeguard technologies for protecting information. 

Sec. 4401: Notification in the case of breach 

Requires that, in the case of a breach of unsecured Protected 

Health Information (PHI), a covered entity must notify each individual whose information has been, or is reasonably believed to 

have been, breached. In the case of a breach of unsecured PHI that 

is under the control of a business associate, that business associate 

is required to notify the covered entity. All breach notifications 

must be made without unreasonable delay and no later than 60 

calendar days after discovery. The provision provides instruction 


dwashington3 on PROD1PC60 with HEARING
88 

for the required methods by which an individual must be notified 

and the content of the notification. However, this notification may 

be delayed if it could impede a criminal investigation or damage 

national security. 

The Secretary is also required to issue guidance within 60 days, 

and annually thereafter, as to the technologies or methodologies 

that meet the standard of making information secure (i.e. unusable, unreadable, or indecipherable). If the Secretary fails to issue 

guidance within 60 days, PHI will be considered secure if it is protected by technology standards developed or endorsed by a standards developing organization that is accredited by the American 

National Standards Institute (ANSI). 

Finally, the Secretary is required each year to compile and analyze the number and nature of breaches reported to the Secretary 

and issue a report to Congress concerning the scope of the problem 

and steps that have or will be taken to address it at a federal level 

and through guidance on best practices for covered entities and 

business associates. 

Sec. 4403: Education on health information technology privacy 

Requires that the Secretary designate an individual in each regional HHS office to offer education and guidance on privacy requirements regarding PHI. 

Sec. 4404: Application of privacy provisions and penalties to business associates of covered entities 

Requires that privacy provisions promulgated pursuant to Health 

Insurance Portability and Accountability Act of 1996 (HIPAA) and 

this bill, and the penalties for violation of those privacy provisions 

apply to business associates under HIPAA in the same manner as 

applied to covered entities. 

Sec. 4405: Restrictions on certain disclosures and sales of health information; accounting of certain protected health information 

disclosures; access to certain information in electronic format 

Permits a patient to request that their PHI regarding a specific 

healthcare item or service not be disclosed by a covered entity to 

a health plan for purposes of payment or healthcare operations, unless otherwise required by law, if that patient has paid in full outof-pocket for that item or service. In such a circumstance, the covered entity is required to honor the patient’s request. 

Also requires covered entities to make reasonable effort to restrict the use, disclosure, request of PHI to a ‘‘limited data set’’ of 

information as defined in the HIPAA rules until such time that the 

Secretary issues guidance on what constitutes the ‘‘minimum necessary’’ for use or disclosure of such data. 

The provision also gives an individual the right to request an accounting of disclosures of PHI from an entity or business associate 

to another party for treatment, payment, and health care operations in the three years prior to the request if that entity is utilizing an electronic health record and the disclosure was made from 

the electronic health record. Covered entities would not be required 

to make an accounting for uses of PHI or oral disclosures of such 

information. 


dwashington3 on PROD1PC60 with HEARING
89 

The provision additionally requires the Secretary to review the 

definition of health care operations to determine those activities 

that can reasonably and efficiently be conducted through the use 

of information that is de-identified. Health care operations are activities for which providers and insurers can share a patient’s protected health information without their authorization. 

Additionally, this provision clarifies that certain uses and disclosures of PHI are not permitted without a valid authorization, such 

as the sale of PHI (with some exceptions) and the unauthorized reidentification of de-identified data or the limited data set. 

This provision also gives individuals the right to receive electronic copies of their PHI used or maintained by a covered entity 

in electronic format if the entity uses an electronic medical record 

or electronic health record. The provider would be able to charge 

a reasonable cost based fee for doing so. 

Sec. 4406: Conditions on certain contracts as part of health care operations 

Clarifies the definition of marketing under HIPAA and precludes 

direct or indirect payment to covered entities for the use of PHI to 

make certain communications without valid patient authorization. 

Removes fundraising from the HIPAA definition of health care operations. 

Sec. 4407: Temporary breach notification requirement for vendors of 

personal health records and other non-HIPPA covered entities 

In the case that an individual’s personal health record (PHR) unsecured identifiable health information is breached, requires that 

PHR vendors notify that individual along with the Federal Trade 

Commission (FTC). The provision requires that the notification requirements applicable to covered entities under section 4402 of this 

bill be applied to notifications required under this section and that 

FTC notify HHS of breach notices received by FTC. The provision 

gives the FTC enforcement authority regarding breaches of health 

information maintained by PHR vendors. The provision sunsets 

when either HHS or FTC adopt privacy and security standards specific to PHRs and other non-HIPAA covered entities. 

Sec. 4408: Business associate contracts required for certain entities 

Requires organizations such as Health Information Exchanges, 

Regional Health Information Organizations, E-prescribing Gateways, and vendors of PHRs who have entered into contracts with 

covered entities to have business associate agreement as defined 

under HIPAA. 

Sec. 4409: Clarification of application of wrongful disclosures criminal penalties 

Clarifies that criminal penalties for violations of HIPAA can be 

applied directly to individuals, whether they are employees of covered entities or have no relationship to covered entities. 

Sec. 4410: Improved enforcement 

Improves enforcement of the federal health privacy law by the 

Office of Civil Rights (OCR) at HHS by requiring a formal investigation of complaints and the imposition of civil monetary penVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00089 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
90 

alties for violations that rise to the level of willful neglect or other 

violations that are not corrected. The provision also increases the 

amount of civil monetary penalties and authorizes a percentage of 

the penalty to accrue to the individual(s) harmed and the OCR, 

through the application of a methodology to be developed by the 

GAO and adopted by the Secretary. 

Preserves OCR’s current tools for informal resolution, technical 

assistance, and correction without the imposition of a penalty in 

situations where the violation was due to a reasonable cause. Currently, all complaints and violations can be handled informally and 

without the imposition of civil monetary penalties. 

In addition, this provision permits OCR to pursue an investigation and the imposition of civil monetary penalties against any individual for an alleged criminal violation of the federal health privacy law if the Department of Justice has not prosecuted the individual. 

Finally, this provision authorizes state attorneys general to enforce federal privacy and security laws. 

Sec. 4411: Audits 

Directs the Secretary to perform periodic audits to oversee compliance with the privacy and security provisions. 

Sec. 4412: Securing individually identifiable health information 

Requires covered entities and business associates to use technology to make all data transmitted in the nationwide health information network or transported outside a covered entities or business associate’s physical perimeter unusable, unreadable, or indecipherable to unauthorized individuals. 

Sec. 4413: Special rule for information to reduce medication errors 

and improve patient safety 

Clarifies that nothing in the privacy subtitle of the Act shall prevent a pharmacist from collecting and sharing information with a 

patient in order to reduce medication errors and improve patient 

safety so long as any remuneration received for making such communication is reasonable and cost based. 

Part II—Relationship to other laws; regulatory references; effective 

date; reports 

Sec. 4421: Relationship to other laws 

Applies the preemption in Section 1178 of the Social Security Act 

to the provisions of title IV of this bill and preserves the HIPAA 

and the regulations promulgated pursuant to that Act to the extent 

that they are consistent with Title IV of this bill. 

Sec. 4422: Regulatory references 

States that each reference in this subtitle to a federal regulation 

refers to the most recent version of the regulation. 

Sec. 4423: Effective date 

With the exception of certain specified provisions, this bill shall 

become effective 12 months after the date of enactment of this Act. 


dwashington3 on PROD1PC60 with HEARING
91 

Sec. 4424: Studies, reports, guidance 

This provision requires that the Secretary annually report to 

Congress on the number and nature of complaints of alleged violations and how they were resolved, including the imposition and 

amount of civil money penalties; the number of audits performed, 

and more. 

In addition, this section requires study on the application of privacy and security requirements to vendors of personal health 

records. The provision requires the Secretary, in consultation with 

the Federal Trade Commission (FTC) to submit recommendations 

to Congress regarding: (1) the requirements relating to security, 

privacy, and notification in the case of a breach of protected health 

information, including the applicability of an exemption to notification in the case of PHI that has been rendered indecipherable 

through the use of encryption or alternative technologies, with respect to personal health record vendors; and (2) the federal agency 

best equipped to enforce those requirements. 

Finally, this section requires that the GAO study and report on 

the disclosures of protected health information made for treatment 

purposes and best practices used by entities and states for such 

disclosures. 

Title V—Medicaid Provisions 

Section 5000: Table of contents of title 

Sets forth the table of contents. 

Section 5001: Temporary increase of Medicaid FMAP 

Provides for a temporary increase in the federal medical assistance percentage (FMAP) to assist states in meeting the costs of increasing Medicaid caseloads at a time when their revenues are falling due to rising unemployment. Three types of temporary assistance will apply to the costs of Medicaid items and services during 

the period October 1, 2008, through December 31, 2010: 

(1) States that would otherwise experience a drop in their federal 

matching rate under the regular FMAP formula during FY 2009 or 

FY 2010 or the first quarter of FY 2011 will be held harmless 

against any decline. 

(2) Every state will receive an increase in its FMAP by 4.9 percentage points for the entire nine quarter period. 

(3) States experiencing an increase in their unemployment rate 

will receive an additional percentage point increase in their FMAP 

as follows. Each state’s average monthly unemployment rate for 

the most recent previous three-consecutive-month period for which 

data are available is compared to the state’s lowest average monthly unemployment rate for any three-consecutive-month period beginning on or after January 1, 2006. If the most recent rate exceeds 

the lowest rate by not less than 1.5 percentage points but less than 

2.5 percentage points, the additional percentage point increase in 

FMAP is the product of 6 percent and the state’s regular state 

matching rate. If the most recent rate exceeds the lowest rate by 

not less than 2.5 percentage points but less than 3.5 percentage 

points, the additional percentage point increase in FMAP is the 

product of 12 percent and the state’s regular state matching rate. 

If the most recent rate exceeds the lowest rate by not less than 3.5 


dwashington3 on PROD1PC60 with HEARING
92 

percentage points, the additional percentage point increase in 

FMAP is the product of 14 percent and the state’s regular state 

matching rate. 

For purposes of this calculation, the state’s regular state matching rate is determined after applying the hold harmless but before 

applying the 4.9 percentage point increase. 

This high unemployment percentage point adjustment will automatically adjust upward, per the formula described above, to reflect 

increases in a state’s unemployment rates until the quarter ending 

June 30, 2010. Until that time, the percentage point adjustment 

can only remain unchanged or go up; it cannot go down. For the 

last two quarters in calendar year 2010, the adjustment will be determined based on the state’s average monthly unemployment rate 

for December 2009, January 2010, and February 2010. 

Puerto Rico, the Virgin Islands, Guam, the Northern Marianna 

Islands, and American Samoa will have the option of a 20% increase in their medical assistance cap amount or a 4.9 percentage 

point increase in their FMAP plus a 10% increase in their cap. 

The temporary increase in FMAP resulting from the hold harmless provision and the 4.9 percentage point increase will apply to 

payments under Title IV-E (relating to foster care and adoption assistance). None of the three temporary FMAP increases described 

above will apply to Medicaid payments to disproportionate share 

(DSH) hospital or to payments under the State Children’s Health 

Insurance Program (SCHIP). 

In order to receive the temporary FMAP increase, a state must 

have in place eligibility standards, methodologies, and procedures 

(such as the length of a redetermination period) that are no more 

restrictive than those in effect on July 1, 2008. The bill provides 

special rules for states that implemented more restrictive eligibility 

standards, methodologies, or procedures after July 1, 2008, but before enactment. 

A state is not eligible for the 4.9 percentage point adjustment or 

any high unemployment adjustment if any amounts attributable 

(directly or indirectly) to such an increase are deposited or credited 

into any reserve or rainy day fund. 

In the case of a state that requires a county or other locality to 

contribute toward the state share of Medicaid costs, the state is not 

eligible for any increase in its FMAP if it requires the county or 

other locality to pay a larger percentage of the state share than the 

county or other locality was required to contribute as of September 

30, 2008. 

Section 5002: Moratoria on certain medicaid regulations 

Extends from March 31, 2009, through June 30, 2009, the current law moratoria on implementation of Medicaid regulations relating to cost limits on public providers, graduate medical education (GME) payments, provider taxes, rehabilitative services, targeted case management services, and school administration and 

transportation services. In addition, the bill imposes a moratorium 

through June 30, 2009, on implementation of a final regulation 

published on November 7, 2008, relating to Medicaid outpatient 

hospital services. 


dwashington3 on PROD1PC60 with HEARING
93 

Section 5003: Transitional medical assistance 

Extends and simplifies transitional medical assistance (TMA), 

under which individuals who leave welfare to go to work receive up 

to one year of Medicaid coverage so long as they continue working. 

The bill extends the current TMA provision, which expires on June 

30, 2009, through December 31, 2010. In addition, the bill gives 

states the option of simplifying TMA eligibility determinations to 

reduce administrative burden and turnover. 

Section 5004: State eligibility option for family planning services 

This section gives states the option of providing Medicaid coverage for family planning services and supplies to individuals who 

are not pregnant and whose income does not exceed the highest income eligibility level for pregnant women established under the 

state’s Medicaid or State Children’s Health Insurance programs. 

The allowable coverage includes medical diagnosis and treatment 

services provided pursuant to a family planning service in a family 

planning setting. In addition, states will have the option of providing this coverage to such individuals during a presumptive eligibility period. 

In its Budget Options for Health Care (December 2009), CBO 

presents an option that would require state Medicaid programs to 

cover family planning services and supplies for low-income women 

who are not pregnant. The bill allows each state to make its own 

decision as to whether to provide such coverage. CBO estimates 

that the option provided by the Committee bill will save the federal 

government $700 million in Medicaid outlays over the next ten 

years. 

The arguments cited by CBO in support of its budget option 

apply with equal force to this section of the bill: ‘‘The main argument for this option is that it would reduce the number of unplanned pregnancies while resulting in savings to the states and 

the federal government. A number of benefits are associated with 

lowering the rate of unplanned pregnancies. Women with unplanned pregnancies are less likely to recognize early signs of pregnancy and thus delay the use of prenatal services until later in 

their pregnancies, possibly increasing the risk of birth complications. In addition, motherhood among young women tends to result 

in lower educational attainment and higher reliance on public assistance. Finally, reducing unplanned pregnancies could reduce the 

adverse health consequences of closely spaced births.’’ 

Section 5005: Protections for Indians under Medicaid and CHIP 

This section establishes protections for American Indians and 

Alaska Natives under Medicaid and the State Children’s Health Insurance Program (SCHIP). The bill prohibits state Medicaid programs from imposing cost-sharing requirements on Medicaid-eligible American Indians or Alaska Natives when the beneficiary is receiving an item or service directly from an Indian health care provider or through referral from a Contract Health Services (CHS) 

provider. The bill requires that states disregard certain property in 

determining the Medicaid or SCHIP eligibility of American Indians 

or Alaska Natives. Finally, the bill requires that the procedures 

used by state Medicaid programs for estate recovery exempt certain 


dwashington3 on PROD1PC60 with HEARING
94 

income, resources, and property described in manual instructions 

in effect on April 1, 2003. 

Section 5006: Consultation on Medicaid and CHIP 

This section requires state Medicaid and SCHIP programs to 

seek advice on a regular, ongoing basis from Indian Health Programs and Urban Indian Organizations on all matters likely to 

have a direct effect on such Programs and Organizations, including 

plan amendments, waiver request, and proposals for demonstration 

projects. 

Section 5007: Temporary increase in DSH allotments during recession 

Provides a temporary increase in state allotments for payments 

to Medicaid disproportionate share (DSH) hospitals. The bill increases the DSH allotment for each state for FY 2009 by 2.5% 

above the allotment the state would otherwise receive. Each state’s 

DSH allotment for FY 2010 will be 102.5% of its DSH allotment 

for FY 2009, as increased by the bill. For FY 2011 and each fiscal 

year thereafter, each state’s DSH allotment will be determined as 

under current law without regard to the temporary increases for 

FY 2009 and FY 2010. 

EXPLANATION OF AMENDMENTS

During the January 22, 2009, Committee business meeting, the 

Committee considered five separate Committee prints on the following subjects: (1) broadband; (2) energy; (3) health insurance for 

the unemployed; (4) health information technology; and (5) Medicaid. The text of these prints was comprised of provisions of the 

legislation proposed by the House Appropriations Committee 

known as the ‘‘American Recovery and Reinvestment Act’’ that 

fund communications, energy, and health-related programs created 

by and within the jurisdiction of the Committee on Energy and 

Commerce. 

At the conclusion of consideration of these prints, the Committee 

by unanimous consent agreed to replace the text of H.R. 629 as introduced with the text of the five Committee prints as amended 

during the Committee business meeting. This section will therefore 

describe amendments to the five Committee prints. 

BROADBAND

Chairman Waxman offered an Amendment in the Nature of a 

Substitute (‘‘ANS’’) that incorporated several technical changes. 

The ANS changed the funding language of ‘‘from money appropriated’’ to ‘‘from amounts authorized.’’ It added a requirement that 

the NTIA coordinate with the FCC while consulting with other federal agencies. To provide enhanced oversight, the ANS added a requirement that NTIA submit an annual report to Congress for five 

years assessing the impact of the grants funded under this program and whether the grants are meeting the objectives and criteria described. It also gave the NTIA the explicit authority to prescribe rules as necessary to carry out the purposes of the section. 

The ANS modified the definition of eligible entities to make it clear 

that satellite providers, tower companies, and ‘‘backhaul compaVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00094 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
95 

nies’’ (companies that provide facilities critical for connecting 

broadband and wireless networks) are all potentially eligible for 

the funds. Finally the ANS dropped the requirement that applicants provide an ‘‘engineering plan.’’ The amendment was adopted 

by voice vote. 

Rep. Stupak offered an amendment that requires the FCC to revise its definitions of ‘‘unserved’’ and ‘‘underserved’’ based on data 

used by the NTIA to develop and maintain its new national 

broadband map no later than three months after the map becomes 

available. This allows the FCC to utilize the best available data for 

the purpose of defining the terms. The Stupak amendment was accepted by voice vote. 

Rep. Stupak offered a second amendment that would add to the 

list of public policy goals to be considered by the NTIA in making 

the grants whether a grant application will significantly improve 

interoperable broadband communications used by public safety. 

The term ‘‘interoperable broadband communications systems’’ is defined as communications systems which enable public safety agencies to share information using voice or data signals via advanced 

wireless broadband services. Equipment used would include hardware, software, middleware, or network-based IP solutions. The 

amendment was accepted by voice vote. 

Rep. Rush offered an amendment that would add to the list of 

public policy goals to be considered by the NTIA in making the 

grants whether the applicant is a ‘‘socially and economically disadvantaged small business concern’’ as defined under the Small 

Business Act. The amendment was accepted by voice vote. 

Rep. Markey offered an amendment to direct the FCC to submit 

a National Broadband Plan to the Energy and Commerce Committee within one year after enactment. The amendment was accepted by voice vote. 

Rep. Walden offered an amendment to delete the prohibition on 

a state from identifying more than 20% of the geographic area of 

that state as an area worthy of grant funds. The Walden amendment was adopted by voice vote. 

Rep. Blunt offered an amendment that would have prioritized 

grant applications for unserved areas over underserved areas based 

on the number of existing service providers. The amendment was 

defeated on a 23-to-33 vote. 

Rep. Buyer offered an amendment to require the FCC to revise 

the definitions of ‘‘unserved’’ and ‘‘underserved.’’ It would require 

the FCC to also review the percentage distribution currently allocated to unserved and underserved areas. The amendment was defeated on a 21-to-33 vote. 

Ranking Member Barton offered an amendment to disqualify applicants that have received or are scheduled to receive Universal 

Service Fund under its high-cost program or from the Rural Utilities Service within 12 months of the date of its application for the 

grant programs. The amendment was defeated on a voice vote. 

ENERGY

An amendment in the nature of a substitute offered by Mr. Waxman was adopted by a voice vote. The Chairman’s amendment in 

the nature of a substitute included the following changes: 


dwashington3 on PROD1PC60 with HEARING
96 

• Adding a condition to smart-grid grants for demonstration 

projects and qualifying smart-grid investments that requires grantees to utilize open internet-based protocols and standards, if available. 

• Allowing the Weatherization Assistance Program to proceed 

separately if cost-effective on separate elements of weatherizing eligible homes, such as attic insulation. 

• Elaboration of the categories of eligible recipients of loan guarantees to limit awardees to renewable energy systems that generate electricity and that favor electric power transmission system 

projects, including upgrading and reconductoring, that require such 

guarantees to be viable and that serve reliability and environmental objectives. 

• Elaboration of what became Section 2005 of H.R. 629, to assure that assumptions and projections made in the study will be 

fully explained. 

An amendment offered by Mr. Upton was adopted by a voice 

vote. This amendment required the Secretary of Energy to analyze 

the extent to which legal challenges are delaying construction of 

transmission lines necessary to access renewable energy. 

An amendment offered by Mr. Upton was defeated by a recorded 

vote, 21–33. This amendment would have expanded the category of 

eligible projects for loan guarantees to include zero-emission technologies. 

An amendment offered by Ms. Baldwin was adopted by a voice 

vote. This amendment allowed leading edge biofuels to be eligible 

for loan guarantees. 

An amendment offered by Mr. Shadegg was adopted by a voice 

vote. This amendment clarified that incremental hydropower 

projects were eligible for loan guarantees. 

An amendment offered by Mr. Inslee was adopted by a voice 

vote. This amendment ensured that prior to receiving funds for 

state energy programs; governors would notify the Secretary of Energy that to the extent practicable they would seek to prioritize 

funding for existing energy efficiency and renewable energy programs. 

An amendment offered by Mr. Barton was defeated by a recorded 

vote, 20–33. This amendment sought to eliminate the requirement 

that governors notify the Secretary of Energy that they would seek 

to modify utility policies in favor of allowing utilities to promote energy efficiency. 

An amendment offered by Mr. Shimkus was defeated on a recorded vote, 19–34. This amendment would have made forestry 

projects and other carbon sequestration projects eligible for loan 

guarantees. 

An amendment offered by Mr. Stearns was defeated by a division 

vote, 15–29. This amendment would have eliminated the requirement that governors notify the Secretary of Energy that they would 

seek to update their state building energy codes. 

An amendment offered by Mr. Walden was ruled non germane. 

This amendment would have amended the Clean Air Act. 

An amendment offered by Mr. Gingrey was withdrawn. This 

amendment would have amended a governmentwide contracting 

standard. 


dwashington3 on PROD1PC60 with HEARING
97 

An amendment offered by Mr. Terry was ruled non germane. 

This amendment would have amended the Federal Power Act to 

create a new program for the promotion of transmission lines. 

HEALTH INSURANCE FOR THE UNEMPLOYED

An amendment in the nature of a substitute offered by Mr. Waxman was agreed to as amended by a voice vote. This amendment 

made a minor change in the Medicaid assistance provided for those 

affected by the economic downturn. It consolidated two Medicaid 

eligibility categories—individuals who are receiving unemployment 

benefits, and individuals who have exhausted those benefits—into 

one optional category. It also made conforming technical changes. 

An amendment offered by Mr. Barton was not agreed to by a 

vote of 14 to 30. This amendment would have required individuals 

seeking temporary assistance for COBRA coverage to meet an income test of $100,000 and an asset test of $1,000,000 to qualify for 

the COBRA coverage option. 

An amendment offered by Mr. Stearns was agreed to by voice vote. This amendment imposed an income limit of $1,000,000 on individuals seeking temporary assistance under the COBRA coverage 

option. 

An amendment offered by Mr. Rogers was not agreed to by voice 

vote. The amendment would have required states that provide coverage through Medicaid to those affected by the economic downturn 

to offer premium assistance through a voucher to purchase coverage in the individual market as part of that option. 

An amendment offered by Mr. Deal was not agreed to by a vote 

of 13 to 27. This amendment would have imposed a limit of 

$1,000,000 for those seeking temporary assistance under the Medicaid coverage option. 

HEALTH INFORMATION TECHNOLOGY

An amendment in the nature of a substitute offered by Rep. 

Waxman made certain technical corrections to title IV of the Committee print relating to health information technology, including a 

clarification that Medicare measures of clinical quality should be 

selected in parallel fashion for hospitals and eligible professionals. 

The amendment was further amended to clarify that certain grant 

activities would be directed towards expanding the use of health information technology. The amendment was adopted, amended, by 

a voice vote. 

An amendment offered by Rep. Whitfield would have modified 

Medicare’s sustainable growth rate formula for updating the Medicare physician fee schedule to require an annual increase in fees 

equal to the Medicare Economic Index. The amendment was defeated by a recorded vote of 15–31. 

An amendment offered by Rep. Burgess would have modified 

Medicare’s sustainable growth rate formula for updating the Medicare physician fee schedule. The amendment was defeated by a recorded vote of 15–34. 

An amendment offered by Rep. Gingrey would have set the update for 2010 to Medicare’s physician fee schedule to 0 percent. The 

amendment was defeated by a division vote of 13–27. 

An amendment offered by Rep. Barton would have created an exception to self-referral prohibitions in the case of a physician ownVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00097 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
98 

ing an interest in a whole hospital. The amendment was defeated 

by a division vote of 10–30. 

An amendment offered by Rep. Rogers would have prohibited enforcement of federal privacy and security laws by state attorneys 

general. The amendment was defeated by a recorded vote of 15–32. 

An amendment offered by Rep. Blunt provided that nothing in 

the privacy subtitle of the HITECH Act shall prevent a pharmacist 

from collecting and sharing information with a patient in order to 

improve patient safety. The amendment was withdrawn without 

prejudice. 

An amendment offered by Rep. Rogers would allow providers and 

health plans to market to individuals using their personal health 

information so long as any remuneration was disclosed and there 

was notice of a toll-free number patients could call to opt out of the 

communications. The amendment was withdrawn without prejudice. 

An amendment offered by Rep. Markey would require individually identifiable health information be secured by technology to 

render it unusable, unreadable, or indecipherable. The amendment 

was adopted by unanimous consent. 

An amendment offered by Rep. Murphy of Pennsylvania required 

all funds made available pursuant to the HITECH Act for health 

information technology only purchase technology that is manufactured, engineered, programmed in the United States and made 

substantially from articles, materials, or supplies mined, produced, 

or manufactured in the United States. The amendment was adopted by a voice vote. 

An amendment offered by Rep. Christensen required that one of 

the purposes of the Office of the National Coordinator for Health 

Information Technology and Health Information Technology Policy 

Committee be to reduce health disparities through the use of 

health information technology. The amendment was adopted by a 

voice vote. 

An amendment offered by Rep. Burgess would permit the donation of health information technology from one provider to another 

by rolling back anti-fraud protections that currently exist under 

Medicare. The amendment was defeated by a recorded vote of 16– 

32. 

An amendment offered by Rep. Rogers would require covered entities to only account for disclosures made for health care operations. The underlying bill requires covered entities to account for 

disclosures made for treatment, payment and health care operations. The amendment was defeated by a voice vote. 

An amendment offered by Rep. Burgess would have prohibited 

incentives payments to eligible professionals for the use of certified 

electronic health records in Medicare until the sustainable growth 

rate formula relating to the physician fee schedule remains is repealed. The amendment was defeated by a voice vote. 

An amendment offered by Rep. Gingrey would have accelerated 

the depreciation of health IT expenses for tax purposes. The 

amendment was ruled non-germane and withdrawn. 

An amendment offered by Mr. Gingrey would accelerate the date 

in which Medicare incentive payments are made for physicians to 

acquire and use health information technology and delayed the 


dwashington3 on PROD1PC60 with HEARING
99 

date in which penalties were applied to physician payments for 

noncompliance. The amendment was defeated by voice vote. 

An amendment offered by Mr. Burgess would have accelerated 

the date in which Medicare incentive payments are made for physicians to acquire and use health information technology to June 

2009. The amendment was defeated by a voice vote. 

An amendment offered by Rep. Blunt clarifies that nothing in the 

privacy subtitle of the HITECH Act shall prevent a pharmacist 

from collecting and sharing information with a patient in order to 

reduce medication errors and improve patient safety so long as any 

remuneration received for making such communication is reasonable and cost based. The amendment was adopted by unanimous 

consent. 

MEDICAID

An amendment in the nature of a substitute offered by Mr. Waxman was agreed to by voice vote. This amendment contained a 

minor change to the text of the Committee print. It added a section 

that would temporarily raise the Medicaid DSH allotments for all 

States in Fiscal Years 2009 and 2010 by 2.5 percent each year. 

An amendment offered by Mr. Buyer was withdrawn. This 

amendment would have imposed stricter requirements on state 

Medicaid programs relating to formularies and prior authorization 

for single source drugs within six protected classes. 

An amendment offered by Mr. Pitts was not agreed to by a recorded vote of 14 to 29. This amendment would have required any 

entity determining a minor presumptively eligible for family planning services provide parental notification before providing any 

services. 

An amendment offered by Mr. Deal was not agreed to by a recorded vote of 11 to 32. This amendment would have required 

states under title XIX to require providers to report prices charged 

to self-paying (non-Medicaid) patients to the state to report to the 

Secretary of Health and Human Services. The Secretary would 

then publish these prices on a publicly available website. 

An amendment offered by Mr. Deal was not agreed to by a recorded vote of 11 to 32. This amendment would have required 

states, as a condition of receiving enhanced federal assistance 

under title XIX beginning with FY 2010, to pay pharmacies a minimum of $9 per prescription dispensed under XIX. 

An amendment offered by Mr. Shadegg was not agreed to by a 

division vote of 9 to 26. This amendment would have mandated 

that a state offer a premium assistance program under title XIX to 

allow individuals to use Medicaid funding to purchase health coverage in the individual market or employer coverage as a condition 

of receiving enhanced federal assistance under section 5001. 

An amendment offered by Mr. Rush was withdrawn. This 

amendment would have expanded the number of entities that receive federally mandated 340B prices. 

An amendment offered by Mr. Stupak was withdrawn. This 

amendment would have required that managed care organizations 

providing outpatient prescription drugs to individuals under title 

XIX receive the same rebate from drug manufacturers as the state 

receives for such covered drugs, without meeting the same statuVerDate Nov 24 2008 08:58 Jan 27, 2009 Jkt 079006 PO 00000 Frm 00099 Fmt 6659 Sfmt 6602 E:\HR\OC\HR007P1.XXX HR007P1

dwashington3 on PROD1PC60 with HEARING
100 

tory protections relating to formularies and prior authorization as 

the state must follow. 

An amendment offered by Mr. Deal was not agreed to by a recorded vote of 11 to 31. This amendment would have prevented 

states from receiving certain enhanced federal assistance if the 

state provided coverage to legal immigrants, such as legal immigrant pregnant women and children. 

COMMITTEE CONSIDERATION

On Thursday, January 22, 2009, the Committee met in open session and ordered H.R. 629 to be favorably reported to the House 

by a voice vote. 

ROLL CALL VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Waxman to order H.R. 629 favorably reported to the House, 

amended, by a voice vote. The following is the recorded votes taken 

during Committee consideration, including the names of those 

Members voting for and against: 


dwashington3 on PROD1PC60 with HEARING
101 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 316 here HR7P1.001
102 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 317 here HR7P1.002
103 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 318 here HR7P1.003
104 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 319 here HR7P1.004
105 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 320 here HR7P1.005
106 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 321 here HR7P1.006
107 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 322 here HR7P1.007
108 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 323 here HR7P1.008
109 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 324 here HR7P1.009
110 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 325 here HR7P1.010
111 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 326 here HR7P1.011
112 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 327 here HR7P1.012
113 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 328 here HR7P1.013
114 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 329 here HR7P1.014
115 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 330 here HR7P1.015
116 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 331 here HR7P1.016
117 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 332 here HR7P1.017
118 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 333 here HR7P1.018
119 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 334 here HR7P1.019
120 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 335 here HR7P1.020
121 


dwashington3 on PROD1PC60 with HEARINGInsert graphic folio 336 here HR7P1.021
122 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of P.L. 104–1 requires a description of the application of this bill to the legislative branch where the bill relates 

to terms and conditions of employment or access to public services 

and accommodations. H.R. 629 is a generally applicable measure 

that does not have provisions that uniquely apply to the legislative 

branch. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goals and 

objectives are reflected in the descriptive portions of this report. 

CONSTITUTIONAL AUTHORITY STATEMENT

Under clause 3(d)(1) of rule XIII of the Rules of the House of 

Representatives, the Committee must include a statement citing 

the specific powers granted to Congress to enact the law proposed 

by H.R. 629. Article I, Section 8, Clause 18 of the Constitution of 

the United States grants the Congress the power to enact this law. 

FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., Section 5(b). 

UNFUNDED MANDATES STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement on whether the 

provisions of the report include unfunded mandates. The Congressional Budget Office is conducting the analysis of this matter as 

part of its review of H.R. 1, which incorporates provisions of H.R. 

629. 

EARMARK IDENTIFICATION

H.R. 629 does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), 

or 9(f) of rule XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 629. 

However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its report 


dwashington3 on PROD1PC60 with HEARING
123 

a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act. CBO is conducting a cost estimate of 

H.R. 1, which incorporates provisions of H.R. 629. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 1974, 

Congressional Budget Office is conducting a cost estimate of H.R. 

1, which incorporates provisions of H.R. 629. 


dwashington3 on PROD1PC60 with HEARING
(124) 

MINORITY VIEWS

[TITLE I] BROADBAND

This title throws nearly $3 billion into the air and hopes the 

right people catch it when it falls out of the sky more like manna 

from heaven than money taken away from working families. If the 

point of this exercise was to meet the President’s call for bipartisan 

ideas that stimulate broadband deployment and the economy, we 

do not believe that the inclusion of controversial provisions on open 

access, minimum speeds, and build-out requirements meets such 

goals. These provisions are not bipartisan, and they harm rather 

than advance the stated goal. ‘‘Open access’’ is not even defined in 

the legislation. The speed requirements are unrealistic at best, and 

at worst they are neither competitively nor technologically neutral. 

Possibly worst of all, these conditions combine to discourage companies from participating in the stimulus plan. 

This title has its priorities upside down. Why else would it send 

75 percent of the grants to ‘‘underserved areas’’ and give totally 

‘‘unserved areas’’ the leftovers. Most people know what some service is, and what no service is, and they know the difference. This 

bill either doesn’t know the difference, or gets it exactly backwards. 

In fact, the fair case can be made that all the money should go to 

unserved areas. Those are the places that need the most help, since 

there is apparently no market-based business case to deploy there 

yet. At least in underserved areas, a market appears to be developing. Moreover, sending money to underserved areas simply subsidizes one set of providers as they compete against others. Government’s role is not to put fingers on the scale. The Majority rejected 

an amendment offered by Mr. Blunt that would have addressed 

this disparity on a party line vote. 

Lastly, this title cedes far too much discretion over a $3 billion 

program to unelected officials at the Federal Communications Commission (FCC). Not only does the public not know who they are, 

Congress doesn’t know who they are. At the moment, only three of 

the five seats on the Commission are filled, and two of the sitting 

members must leave if they are not renominated and reconfirmed 

in short order. Yet the bill leaves it to the FCC to define what 

‘‘unserved’ and ‘‘underserved’’ areas are. It is irresponsible for Congress to allocate $3 billion in this fashion. 

Elsewhere in the stimulus package Congress is apparently considering allocating $650 million to pay for the disaster that delaying the digital television transition will cause. Delaying the transition is not necessary, and will cause more harm than good by confusing consumers and jeopardizing spectrum earmarked for public 

safety and wireless broadband services. It will also cost government and industry millions of more dollars to change five years 

worth of previous planning. Ensuring that the DTV transition goes 


dwashington3 on PROD1PC60 with HEARING
125 

forward on February 17, 2009, is perhaps the nation’s quickest, 

most realistic chance of creating a broadband stimulus and creating jobs. To top it off, legislation delaying the DTV transition has 

not even passed, so we may be allocating $650 million with nothing 

to spend it on. 

[TITLE II] ENERGY PROVISIONS

The most egregious provision in the energy title is one that attempts to promulgate a policy to preserve utility profits at the expense of energy-saving consumers. In order for a state to receive 

energy efficiency grants, a governor would have to notify the Secretary of Energy that his state is trying to institute a system in 

which utilities’ fixed costs are covered by consumers, independent 

of energy usage. Under this concept, consumers who follow our persistent advice to consume less energy will see their bills either stay 

the same or actually rise. Families who buy appliances rated high 

for energy stinginess will be punished for their good intentions and 

expensive investments. We believe that consumers should be rewarded when they save energy, not penalized so that electric utility 

companies can be supported in the luxe style to which they have 

become accustomed. Mr. Barton proposed an amendment to remedy 

this injustice; it was rejected on a party-line vote by the Majority. 

The energy title fails to address important sources of energy that 

are essential to stimulating our economy. This title—which authorizes $22.1 billion in spending for renewable energy, transmission 

projects, and increased energy efficiency—completely neglects almost 70 percent of our country’s electricity supply. Mr. Upton proposed an amendment designed to stimulate zero-emissions energy 

which did not pass. Mr. Shimkus’s amendment to add carbon capture and sequestration for coal-fired generation to the list of energy 

project categories to the proposed temporary program for rapid deployment of energy projects also was rejected. Republican Members’ 

position is that a true stimulus should stimulate all American energy, a suggestion that the Majority rebuffed as too wide-ranging 

for the narrow focus of the $22.1 billion in stimulus dollars. The 

Majority totally failed to address energy from America’s most abundant source—coal—and its cleanest—nuclear. The Majority’s energy mark-up resulted in a package that overstimulates a small 

area of our economy and neglects the energy sources that provide 

the most jobs right now, that ensure energy security, and that will 

provide clean energy for years to come. 

Smart-grid technology is extremely promising. It holds the possibility of increasing efficiency throughout the electricity system and 

giving consumers more control over their own electricity use. However, language was added in Chairman Waxman’s substitute which 

would limit the grants only to recipients using open internet-based 

protocols and standards, when available. This language, if passed, 

would result in Congress picking technology winners and losers, 

without any hearings or discussions. Smart-grid technology is still 

developing, and there is more than one standard being tested. Forget about paper versus plastic or VHS versus Betamax—the ramifications of determining the industry standards and protocols for 

deployment of smart grid technology are monumental in comparison. Given the importance of this issue, the one thing that is clear 


dwashington3 on PROD1PC60 with HEARING
126 

is that smart-grid standards and protocols should be carefully considered and not added as a last-minute afterthought to the Chairman’s substitute with absolutely no discussion or consideration. 

The Majority is equally misguided in their position that stimulating the economy should involve micro-managing state and local 

building codes. The majority proposes $8.4 billion in energy efficiency grants and loans. Rather than funding states and localities 

to enforce the currently existing energy efficiency codes, the Majority insists on micro-managing states and localities by mandating 

adoption of the most recently published version of the International 

Energy Conservation Code or its equivalent for residential buildings, and the ANSI/ASHRAE/IESNA Standard 90.1–2007 or equivalent for commercial buildings. Mr. Stearns proposed an amendment that would provide grant funding to empower states and localities to enforce the codes that they have chosen in the best interests of their states. The choices for cost-effective energy efficiency 

technology should be determined by those closest to the building 

site, not a wide-sweeping federal code. Nevertheless, the Majority 

insists that states should be forced to conform to a model code to 

receive the grants. 

The mark-up highlighted the need for changes to the Energy 

Independence and Security Act of 2007 (‘‘EISA’’), as evidenced by 

the rejection of all Minority-offered amendments, including: Mr. 

Walden’s amendment to correct the definition of renewable biomass 

so advanced biofuels derived from woody material gathered from 

federal lands and other private lands can be counted towards the 

renewable fuels standard; Mr. Gingrey’s proposed amendment to 

strike Section 526 of EISA, which restricts procurement and acquisition of alternative fuels; and Mr. Shadegg’s proposed amendment 

to remove the Davis-Bacon provisions from Section 545 of EISA. 

While the Majority members agreed with the need for an all-encompassing revision to EISA, they stopped short of actually supporting any of the Minority amendments to make improvements to 

EISA. We hope the Majority lives up to its commitments to revisit 

EISA and look forward to working with them, when that time 

comes. 

[TITLE III] HEALTH INSURANCE FOR THE UNEMPLOYED

This title permanently extends COBRA coverage to any person 

55 or older who loses their job or to any person that has worked 

for a company for at least 10 years. This will lead to greater cost 

for the employers that currently provide health care coverage to 

their employees and a reduction in employer sponsored health care. 

In addition to the change in length to COBRA eligibility, this 

title establishes a new government subsidy of 65 percent of COBRA 

premium costs for the first 12 months of coverage. Unfortunately, 

the bill lacks the thoughtful approach of legislation that results 

from regular order. The new program for COBRA subsidies does 

not contain an income test or an asset test. In tough economic 

times it is unconscionable that we would ask the average American 

to have their tax dollars transferred to the wealthiest in this country. An amendment was rejected that would have capped eligibility 

for the government subsidy at $100,000 in annual income and a 

total of $1 million in assets on a party line vote. 


dwashington3 on PROD1PC60 with HEARING
127 

We are pleased that the Majority accepted an amendment that would have capped eligibility for the new government subsidy at $1 

million in annual income. We believe this level is still too high, but 

as previously mentioned, efforts to impose a lower income threshold 

were rejected. 

The legislation expands the Medicaid program to new groups of 

individuals. The ‘‘temporary’’ Medicaid option is funded 100 percent 

by the Federal Government and has no regard to a person’s income 

or asset levels. An amendment to limit the program to individuals 

with incomes below $1 million in the previous year was rejected. 

Medicaid has historically been administered by the states and 

funded jointly by the states and the Federal Government. Although 

there are significant reports of persistent fraud and abuse in the 

Medicaid program, as reiterated in a recently released study by the 

Government Accountability Office (GAO), states had the incentive 

to protect their investments in the program, and they succeeded in 

getting more money with less reform. The new Medicaid expansion 

would provide 100 percent of the financing for the program not just 

for medical services but also for administrative costs. This is a dangerous precedent that will undermine the already unsustainable 

Medicaid program. Unless there is significant state investment in 

the program, there will be little or no incentive for the state to govern the program efficiently and ensure that federal taxpayer dollars are being spent responsibly. 

An amendment also was rejected that would have provided a premium subsidy for individuals in the new Medicaid expansion so 

they could enroll in a health plan of their choice. Individuals in 

Medicaid should have the same options to receive better heath care 

as those receiving the new COBRA subsidy. The Committee has repeatedly heard of instances where Medicaid fails patients. Many 

doctors will not participate in the program. Patients must linger on 

waiting lists or drive miles to find a doctor who takes Medicaid patients. 

[TITLE IV] HEALTH INFORMATION TECHNOLOGY

We support the adoption of health information technology and 

believe its increased adoption will lead to reduced medical errors 

and improved patient outcomes. However rushed adoption of noninteroperable health information technology could actually impede 

its deployment. 

Although the legislation purports to be an economic stimulus 

package, the bonus payments for using electronic health records do 

not go out until 2011 with penalties for not using electronic health 

records going into effect in 2016. How these are supposed to stimulate a cure for the present recession is a medical mystery. Given 

that payment incentives are not distributed until 2011, the legislation should have been considered through regular order to ensure 

that health information technology is disseminated efficiently and 

effectively. 

[TITLE V] MEDICAID PROVISIONS

In what may be considered a fitting coincidence, on the same day 

that legislation designed to increase the federal share of the costs 

of the Medicaid program by $98.5 billion over the next two years 


dwashington3 on PROD1PC60 with HEARING
128 

was favorably reported by the Energy and Commerce Committee, 

the Government Accountability Office released a report stating that 

the Medicaid program remained on GAO’s list of ‘‘high-risk’’ programs because of ‘‘growing concerns about the quality of fiscal oversight, which is necessary to prevent inappropriate program spending.’’ Unfortunately, GAO’s concern about the future stability of the 

Medicaid program is directly contrasted by the provisions in Title 

V of the American Recovery and Reinvestment Act of 2009 which, 

other than expanding taxpayer coverage of family planning items 

and services, only serves to temporarily prop up an unsustainable, 

broken program. 

When Senator Mark Warner (D–VA) was the governor of Virginia and the chairman of the National Governors Association, he 

correctly stated that the unsustainable growth of Medicaid spending has every state and the Federal Government ‘‘on the road to 

a meltdown.’’ His solution was to update the severely outdated 

rules and regulations and allow state governments the flexibility to 

run their programs with increased levels of innovation, efficiency, 

and accountability. The Republican Members of the Committee on 

Energy and Commerce believe that Senator Warner was correct in 

both his assessment of the problem facing Medicaid as well as its 

solution. In contrast, the proposed solution put forward by the Majority ignores the impending meltdown of the Medicaid system and 

places a finger in the leaking dam with a proposal to temporarily 

shift more of the costs of the Medicaid program onto the federal 

government in exchange for a commitment from the states that 

they will not reduce their eligibility criteria below where they were 

on July 1, 2008. While, states retain the flexibility to cut payment 

rates to the rapidly decreasing number of health care providers 

that still participate in the Medicaid program and the flexibility to 

reduce the number of items and services that are covered in Medicaid, states accepting any of the temporarily increased reimbursement rates are prohibited from reforming their eligibility criteria, 

unless—of course—a state would like to expand its eligibility. 

Proponents of this legislation like to claim that it is necessary because states cannot afford the expenses of their current Medicaid 

programs. However, simply dumping more federal dollars into an 

unsustainable status quo is not the answer. State officials must be 

held accountable for the performance of their programs, and states 

that continue to administer their programs in the same inefficient 

manner that created the current crisis should not be rewarded with 

additional federal funds. 

The Republicans on the Energy and Commerce Committee are 

deeply concerned that this legislation will create a very troubling 

situation on January 1, 2011, when the temporary increases in reimbursement expire. Under the legislation reported out of the Committee, states will be prevented from making certain necessary reforms to their programs and will have additional federal dollars 

with which to expand their Medicaid enrollment to new populations. As a result, short-sighted state officials may take the bait 

5 and expand their Medicaid program while blissfully ignoring the 

fact that the billions of dollars worth of increased reimbursement 

rates will come to an abrupt halt on December 31, 2010. Clearly, 

if a state cannot afford its Medicaid program today, it is reasonable 


dwashington3 on PROD1PC60 with HEARING
129 

to assume that this same state will not be able to afford an even 

larger, more expensive Medicaid program on January 1, 2011. This 

is why the Republican approach of reforming the Medicaid program 

and demanding accountability from state officials is the better approach for the American taxpayers, health care providers, and the 

current and future generations of Medicaid beneficiaries. 

The Minority was disappointed that an amendment offered by 

Dr. Gingrey requiring all states to verify the identity of all applicants for Medicaid coverage was defeated by the Majority. Given 

the tens of billions of dollars of state and federal Medicaid funds 

that are lost each year to criminally fraudulent claims and fraudulently enrolled beneficiaries, this amendment would have been an 

important provision to enable states to continue their current Medicaid program without making cuts to benefits or eligibility. 

JOE BARTON. 

STEVE BUYER. 

JOE PITTS. 

GREG WALDEN. 

MIKE ROGERS. 

MICHAEL BURGESS. 

PHIL GINGREY. 

NATHAN DEAL. 

ROY BLUNT. 

GEORGE RADANOVICH. 

MARY BONO MACK. 

LEE TERRY. 

JOHN SULLIVAN. 

MARSHA BLACKBURN. 

STEVE SCALISE. 


dwashington3 on PROD1PC60 with HEARING
(130) 

DISSENTING VIEWS

In addition to the Minority Views expressed by Ranking Member 

Barton and our Republican colleagues on the Committee, we have 

some additional concerns that this legislation fails to address. Several Republican Members offered amendments to ensure Medicare 

beneficiaries continue to have access to their doctors and that new 

Medicare beneficiaries would be able to find a doctor that would accept Medicare. Unfortunately, these amendments were all rejected 

on a party-line vote by the Majority. 

Over the last several years, the Sustainable Growth Rate (SGR), 

the formula that controls Medicare physician payment, has forecast 

deep cuts to Medicare Part B reimbursement. This has created a 

high-degree of instability for doctors and threatens the viability of 

their practices. Including a permanent fix to Medicare physician 

payment rates would have a profound impact on stimulating the 

health care sector of the U.S. economy, which constitutes 16.2% of 

GDP, and ensuring vulnerable seniors have access to their doctors. 

PHIL GINGREY. 

MICHAEL BURGESS. 

Æ 


dwashington3 on PROD1PC60 with HEARING