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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3909 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 3909

 To amend title XVII of the Public Health Service Act to authorize the 
Secretary of Health and Human Services to make grants to establish and 
 develop telemedicine projects for rural areas, to establish a health 
         care data interchange system, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 24, 1994

 Mr. LaRocco introduced the following bill; which was referred jointly 
    to the Committees on Energy and Commerce, Ways and Means, Armed 
  Services, Veterans' Affairs, Post Office and Civil Service, Natural 
                   Resources, and Education and Labor

_______________________________________________________________________

                                 A BILL

 
 To amend title XVII of the Public Health Service Act to authorize the 
Secretary of Health and Human Services to make grants to establish and 
 develop telemedicine projects for rural areas, to establish a health 
         care data interchange system, and for other purposes.

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

      TITLE I--PROMOTION OF TELEMEDICINE PROJECTS FOR RURAL AREAS

SECTION 101. GRANTS TO RURAL HEALTH CARE PROVIDERS AND RURAL HEALTH 
              CARE NETWORKS TO ESTABLISH AND DEVELOP TELEMEDICINE 
              PROJECTS.

    Title XVII of the Public Health Service Act (42 U.S.C. 300u et 
seq.) is amended--
            (1) by striking the title heading and inserting the 
        following:

 ``TITLE XVII--HEALTH INFORMATION, HEALTH PROMOTION, AND PROMOTION OF 
                         TELEMEDICINE PROJECTS

        ``PART A--HEALTH INFORMATION AND HEALTH PROMOTION''; and

            (2) by adding at the end the following:

      ``PART B--PROMOTION OF TELEMEDICINE PROJECTS FOR RURAL AREAS

``SEC. 1711. PURPOSES.

    ``The purposes of this part are as follows:
            ``(1) To support the establishment and development of 
        telemedicine projects that use telecommunications technologies 
        and other technologies to increase the quality and 
        accessibility of health care in rural areas and to reduce the 
        costs of such care. Such technologies may include--
                    ``(A) testbed networks for linking health care 
                providers, medical schools, medical libraries, and 
                universities to enable health care providers and 
                researchers to share medical images and to develop 
                computer-based records;
                    ``(B) software and visualization technology for 
                visualizing the human anatomy and analyzing diagnostic 
                images and records;
                    ``(C) virtual reality technology for simulating 
                surgical and medical procedures;
                    ``(D) collaborative technology to allow 
                geographically remote health care providers to provide 
                real-time treatment to patients;
                    ``(E) interactive technologies to allow health care 
                providers to monitor, evaluate, and treat patients in 
                nonclinical settings;
                    ``(F) database technology to provide health care 
                providers with access to relevant medical information 
                and literature; and
                    ``(G) database technology for storing, accessing, 
                and transmitting patients' medical records while 
                protecting the accuracy and privacy of such records.
            ``(2) To encourage the use of the telecommunications 
        technologies and other technologies described in paragraph 
        (1)--
                    ``(A) to permit rural health care providers to 
                maintain contact with itinerant staff and remote 
                specialists;
                    ``(B) to permit patients in rural areas to receive 
                health care locally whenever possible;
                    ``(C) to reduce the costs of health care in rural 
                areas by reducing the costs of paperwork;
                    ``(D) to improve coordination and efficiency in the 
                provision of health care in rural areas; and
                    ``(E) to provide rural health care providers with 
                access to equipment, specialists, and continuing 
                education programs that may not be otherwise available 
                in rural areas.
            ``(3) To demonstrate the effectiveness of 
        telecommunications technologies and other technologies in 
        improving the quality and accessibility of health care in rural 
        areas and reducing the costs of such care.

``SEC. 1712. GRANTS FOR ESTABLISHMENT OF TELEMEDICINE PROJECTS.

    ``(a) In General.--The Secretary may make grants under this section 
to rural health care providers and rural health care networks for the 
establishment, and initial development and operation, of telemedicine 
projects that are consistent with the purposes of this part.
    ``(b) Applications.--
            ``(1) Submission.--To apply for a grant under this section 
        for any fiscal year, a rural health care provider or a rural 
        health care network shall submit an application to the 
        Secretary in accordance with the procedures established by the 
        Secretary. The Secretary shall establish a deadline for the 
        submission of applications under this paragraph for each fiscal 
        year.
            ``(2) Criteria for approval.--The Secretary may not approve 
        an application submitted under paragraph (1) unless the 
        application includes assurances satisfactory to the Secretary 
        that funds received under this section will be used for 1 or 
        more of the following purposes:
                    ``(A) To develop or acquire, through lease or 
                purchase, computer hardware, computer software, audio 
                equipment, video equipment, computer network equipment, 
                telecommunications transmission facilities, 
                telecommunications terminal equipment, interactive 
                video equipment, data terminal equipment, or other 
                facilities or equipment consistent with the purposes of 
                this part.
                    ``(B) To develop or acquire instructional 
                programming consistent with the purposes of this part.
                    ``(C) To receive technical assistance or 
                instruction with respect to the development or use of 
                such facilities, equipment, or instructional 
                programming.
                    ``(D) Such other purposes as may be approved by the 
                Secretary consistent with the purposes of this part.
            ``(3) Petitions for reconsideration and reapplications.--
                    ``(A) In general.--With respect to an application 
                submitted under paragraph (1) that is disapproved under 
                this subsection, the applicant may submit to the 
                Secretary--
                            ``(i) a petition for reconsideration of the 
                        application; and
                            ``(ii) an application that conforms to the 
                        requirements of this subsection.
                    ``(B) Deadlines.--The Secretary shall establish a 
                deadline for the submission of petitions for 
                reconsideration and reapplications under this paragraph 
                for each fiscal year. The Secretary shall approve or 
                disapprove each such petition and reapplication before 
                the termination of the 60-day period beginning on the 
                date of such submission.
    ``(c) Preferences in Awarding Grants.--
            ``(1) In general.--In awarding grants under this section, 
        the Secretary shall give preference to applicants that are not 
        using any of the telecommunications technologies or other 
        technologies described in section 1711(1) at the time the 
        applicant submits an application under subsection (b).
            ``(2) Preferences among networks.--Except as provided in 
        paragraph (4), in awarding grants under this section to rural 
        health care networks, the Secretary shall give preference to 
        networks that demonstrate, through the membership of the 
        network, broad geographic representation of rural areas in the 
        State or States in which the network intends to establish and 
        develop a project with funds received under this section.
    ``(d) Grants Reserved for Health Care Providers and Small Health 
Care Networks.--At least 40 percent of the grants made by the Secretary 
under this section shall be made to rural health care providers or 
rural health care networks with 10 or fewer members.

``SEC. 1713. GRANTS FOR DEVELOPMENT OF ADVANCED TELEMEDICINE PROJECTS.

    ``(a) In General.--The Secretary may make grants under this section 
to applicant groups consisting of 2 or more rural health care networks 
for the purposes of electronically linking existing telemedicine 
projects established by such networks and further developing such 
linked projects in a manner that is consistent with the purposes of 
this part.
    ``(b) Applications.--
            ``(1) Submission.--To apply for a grant under this section 
        for any fiscal year, a group consisting of 2 or more rural 
        health care networks shall submit an application to the 
        Secretary in accordance with the procedures established by the 
        Secretary. The Secretary shall establish a deadline for the 
        submission of applications under this paragraph for each fiscal 
        year.
            ``(2) Criteria for approval.--The Secretary may not approve 
        an application submitted by a group under paragraph (1) unless 
        the application includes assurances satisfactory to the 
        Secretary that--
                    ``(A) the group, through the membership of the 
                networks that are part of the group, broadly 
                geographically represents rural areas in the State or 
                States in which the group intends to link and develop 
                telemedicine projects with funds received under this 
                section; and
                    ``(B) funds received under this section will be 
                used for 1 or more of the following purposes:
                            ``(i) To develop or acquire, through lease 
                        or purchase, computer hardware, computer 
                        software, audio equipment, video equipment, 
                        computer network equipment, telecommunications 
                        transmission facilities, telecommunications 
                        terminal equipment, interactive video 
                        equipment, data terminal equipment, or other 
                        facilities or equipment consistent with the 
                        purposes of this part.
                            ``(ii) To develop or acquire instructional 
                        programming consistent with the purposes of 
                        this part.
                            ``(iii) To receive technical assistance or 
                        instruction with respect to the development or 
                        use of such facilities, equipment, or 
                        instructional programming.
                            ``(iv) Such other purposes as may be 
                        approved by the Secretary consistent with the 
                        purposes of this part.
            ``(3) Petitions for reconsideration and reapplications.--
                    ``(A) In general.--With respect to an application 
                submitted under paragraph (1) that is disapproved under 
                this subsection, the applicant may submit to the 
                Secretary--
                            ``(i) a petition for reconsideration of the 
                        application; and
                            ``(ii) an application that conforms to the 
                        requirements of this subsection.
                    ``(B) Deadlines.--The Secretary shall establish a 
                deadline for the submission of petitions for 
                reconsideration and reapplications under this paragraph 
                for each fiscal year. The Secretary shall approve or 
                disapprove each such petition and reapplication before 
                the termination of the 60-day period beginning on the 
                date of such submission.
    ``(c) Preference in Awarding Grants.--In awarding grants under this 
section, the Secretary shall give preference to groups that--
            ``(1) demonstrate that each of the rural health care 
        networks that is a part of the group was created more than 1 
        year before the date on which the application was submitted by 
        the group; and
            ``(2) provide assurances satisfactory to the Secretary that 
        the group will use funds received under this section to provide 
        a broad range of health care and educational services through 
        the telemedicine projects linked and developed using such 
        funds.

``SEC. 1714. REVIEW AND SANCTIONS.

    ``The Secretary shall review at least annually the compliance of a 
person receiving a grant under this part with the provisions of this 
part. The Secretary shall establish a procedure for determining whether 
such a person has failed to comply substantially within the provisions 
of this part and the sanctions to be imposed for any such 
noncompliance.

``SEC. 1715. ANNUAL REPORT.

    ``The Secretary shall include in the annual report under section 
1705 a description of the activities carried out under this part.

``SEC. 1716. REGULATIONS.

    ``The Secretary may issue any regulations necessary to carry out 
this part.

``SEC. 1717. DEFINITIONS.

    ``For purposes of this part:
            ``(1) Computer network equipment.--The term `computer 
        network equipment' means computer hardware and software, 
        terminals, signal conversion equipment including both 
        modulators and demodulators, or related devices, used to 
        communicate with other computers to process and exchange data 
        through a telecommunications network in which signals are 
        generated, modified, prepared for transmission, or received, 
        via telecommunications terminal equipment and 
        telecommunications transmission facilities.
            ``(2) Data terminal equipment.--The term `data terminal 
        equipment' means equipment that converts user information into 
        data signals for transmission, or reconverts the received data 
        signals into user information, and is normally found on the 
        terminal of a circuit and on the premises of the end user.
            ``(3) Fiber optic cable.--The term `fiber optic cable' 
        means a bundle of optical transmission elements or waveguides 
        usually consisting of fiber core and fiber cladding that can 
        guide a lightwave and that are incorporated into an assembly of 
        materials that provide tensile strength and external 
        protection.
            ``(4) Health care provider.--The term `health care 
        provider' means a person who is licensed, certified, 
        registered, or otherwise authorized by law to provide health 
        care in the ordinary course of business or practice of a 
        profession.
            ``(5) Interactive video equipment.--The term `interactive 
        video equipment' means equipment used to produce and prepare 
        for transmission audio and visual signals from at least 2 
        distant locations in order that individuals at such locations 
        can verbally and visually communicate with each other. Such 
        equipment includes monitors, other display devices, cameras or 
        other recording devices, audio pickup devices, and related 
        equipment.
            ``(6) Rural area.--The term `rural area' has the meaning 
        given such term in section 1866(d)(2)(D) of the Social Security 
        Act.
            ``(7) Rural health care network.--The term `rural health 
        care network' means a group of rural health care providers that 
        have entered into a formal relationship with each other or with 
        health care providers in an area that is not a rural area for 
        the purpose of improving the delivery of health care in a rural 
        area, or for the purpose of improving the access of their 
        patients to the services of a telemedicine project.
            ``(8) Rural health care provider.--The term `rural health 
        care provider' means a health care provider who provides health 
        care in a rural area.
            ``(9) Telecommunications terminal equipment.--The term 
        `telecommunications terminal equipment' means the assembly of 
        telecommunications equipment at the end of a circuit, normally 
        located on the premises of the end user, that interfaces with 
        telecommunications transmission facilities and that is used to 
        modify, convert, encode, or otherwise prepare signals to be 
        transmitted via such telecommunications equipment or that is 
        used to modify, reconvert, or carry signals received from such 
        facilities, the purpose of which is to accomplish the goal for 
        which the circuit was established.
            ``(10) Telecommunications transmission facilities.--The 
        term `telecommunications transmission facilities' means 
        facilities that transmit, receive, or carry data between 
        telecommunications terminal equipment at each end of a 
        telecommunications circuit or path. Such facilities include 
        microwave antennae, relay stations and towers, other 
        telecommunications antennae, fiber optic cables and repeaters, 
        coaxial cables, communication satellite ground station 
        complexes, copper cable electronic equipment associated with 
        telecommunications transmissions, and similar items as defined 
        by the Secretary.

``SEC. 1718. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
such sums as may be necessary for each of the fiscal years 1995 through 
1998.''.

             TITLE II--HEALTH CARE DATA INTERCHANGE SYSTEM

SEC. 201. ESTABLISHMENT OF HEALTH CARE DATA INTERCHANGE SYSTEM.

    (a) In General.--In accordance with the procedures provided in this 
title, there shall be established a health care data interchange system 
the purpose of which is to make health care data available on a uniform 
basis to all participants in the health care system.
    (b) General Requirements for System.--The system described in 
subsection (a) shall ensure--
            (1) the integration of all participants in the health care 
        system;
            (2) the use of uniform processes which will permit 
        participants in the health care system to communicate 
        electronically for the submission and receipt of health care 
        data;
            (3) the privacy of individuals who are patients receiving 
        health care services and the confidentiality of information in 
        the data interchange system;
            (4) that the data in the system is verifiable, timely, 
        accurate, reliable, useful, complete, relevant, time and date 
        stamped, and comparable; and
            (5) an overall reduction in the administrative burdens and 
        costs of the health care system, an overall increase in the 
        productivity, effectiveness, and efficiency of the system, and 
        an overall increase in the quality of care furnished by the 
        system.
    (c) General Implementation.--The system described in subsection (a) 
shall be implemented through--
            (1) the development of proposed regulations as provided 
        under section 202 by the Health Care Data Panel established 
        under section 213 (referred to in this title as the ``Panel''); 
        and
            (2) the development of final regulations through the Office 
        of Management and Budget (referred to in this title as ``OMB'') 
        as provided under section 203.

SEC. 202. DEVELOPMENT OF PROPOSED REGULATIONS BY PANEL.

    (a) In General.--The Panel shall, in consultation with the National 
Health Informatics Commission established under section 214, develop 
proposed regulations for the implementation and ongoing operation of an 
integrated electronic health care data interchange system that are 
based on the operating standards, conventions, requirements, and 
procedures for the system established, selected, or developed by the 
Panel under sections 204 through 210.
    (b) Requirements Relating to Proposed Regulations.--The proposed 
regulations developed under subsection (a) shall--
            (1) be submitted to OMB not later than 30 days after the 
        date on which the Panel is required to establish, select, or 
        develop any of such operating standards, conventions, 
        requirements, and procedures for the system; and
            (2) provide that the general requirements for the system 
        referred to in section 201(b) are met.
    (c) Modifications.--The Panel shall continuously monitor the 
implementation of the regulations promulgated by OMB under section 203 
and shall submit to OMB any proposed modifications to such regulations 
determined appropriate by the Panel. The requirements of section 203 
shall apply to any such proposed modifications in the same manner as 
such requirements apply to the proposed regulations initially submitted 
by the Panel.

SEC. 203. PROMULGATION AND IMPLEMENTATION OF PROPOSED REGULATIONS BY 
              OMB.

    (a) Promulgation of Regulations.--OMB shall promulgate regulations 
based on the proposed regulations submitted under section 202 within 90 
days after the date such proposed regulations are submitted.
    (b) Applicability.--
            (1) In general.--The regulations promulgated by OMB shall 
        apply to all participants in the health care system.
            (2) Special rule regarding the medicare program.--The 
        Secretary may incorporate the capabilities of the common 
        working file used in the medicare program under title XVIII of 
        the Social Security Act into a uniform working file system 
        developed and operated according to the regulations referred to 
        in subsection (a).
    (c) Compliance with Regulations.--
            (1) In general.--Not later than 1 year after the date on 
        which any regulations (other than the regulations described in 
        paragraph (2)) are promulgated by OMB, all participants in the 
        health care system shall be required to comply with such 
        regulations.
            (2) Comprehensive quality measurement data.--Not later than 
        2 years after the date on which any regulations relating to 
        standards, conventions, and requirements for comprehensive 
        quality measurement data (as described in subsection 204(e)(3)) 
        are promulgated by OMB, all participants in the health care 
        system shall be required to comply with such regulations.

SEC. 204. SELECTION AND ESTABLISHMENT OF DATA AND TRANSACTION 
              STANDARDS, CONVENTIONS, AND REQUIREMENTS FOR THE DATA 
              INTERCHANGE SYSTEM.

    (a) In General.--The Panel, in consultation with the American 
National Standards Institute (referred to in this title as ``ANSI''), 
shall select and establish data and transaction standards, conventions, 
and requirements that permit the electronic interchange of any health 
care data the Panel determines necessary for the efficient and 
effective administration of the health care system.
    (b) Minimum Requirements.--The data and transaction standards, 
conventions, and requirements selected and established by the Panel 
under this section shall, at a minimum--
            (1) ensure that the data interchange system shall have the 
        capability to comply with such standards, conventions, and 
        requirements; and
            (2) be based on any standards that are in use and generally 
        accepted on the date of the enactment of this title or that are 
        recommended by nationally recognized standard setting groups, 
        including ANSI, the National Uniform Billing Committee, the 
        Uniform Claim Form Task Force, the National Committee for 
        Prescription Drug Programs, and the Healthcare Informatics 
        Standards Planning Panel.
    (c) Applicability.--The proposed regulations developed by the Panel 
shall provide that--
            (1) any participant in the health care system who has the 
        capability to interchange data through a uniform working file 
        developed by the Panel under section 205 shall be required to 
        transmit and receive such data using the standards, 
        conventions, and requirements developed by the Panel under this 
        section; and
            (2) any participant in the health care system who does not 
        have such capability shall be required to transmit and receive 
        data through a health care information clearinghouse or a 
        health care value-added network that is certified under the 
        procedure established pursuant to section 211.
    (d) Additional Requirements.--
            (1) In general.--The proposed regulations developed by the 
        Panel shall provide that no participant in the health care 
        system shall be permitted to establish data requirements in 
        addition to such standards, conventions, and requirements 
        established by the Panel and included in regulations 
        promulgated by OMB--
                    (A) unless 2 or more participants voluntarily 
                establish such additional requirements and the 
                requirements meet all of the privacy and 
                confidentiality standards developed by the Panel under 
                this title and included in any regulations promulgated 
                by OMB; or
                    (B) unless a waiver is granted under paragraph (2) 
                to establish such additional requirements.
            (2) Conditions for waivers.--
                    (A) In general.--The proposed regulations developed 
                by the Panel shall provide that any participant in the 
                health care system may request a waiver to establish 
                additional data requirements.
                    (B) Consideration of waiver requests.--The proposed 
                regulations developed by the Panel shall provide that 
                no waiver shall be granted under this paragraph unless 
                the entity granting such waiver considers the value of 
                the additional data to be exchanged for research or 
                other purposes determined appropriate by the Panel, the 
                administrative cost of the additional data 
                requirements, the burden of the additional data 
                requirements, and the burden of the timing of the 
                imposition of the additional data requirements.
                    (C) Certain requests for waivers.--The proposed 
                regulations developed by the Panel shall provide that 
                if a participant in the health care system attempts to 
                impose additional data requirements on any other such 
                participant, the participant on which such requirements 
                are being imposed may contact the Secretary. The Panel 
                shall develop a procedure under which any participant 
                in the health care system contacting the Secretary 
                under the preceding sentence shall remain anonymous. 
                The Secretary shall notify the participant imposing the 
                additional data requirements that such requirements may 
                not be imposed on any other participant unless such 
                other participant voluntarily agrees to such 
                requirements or a waiver is obtained under this 
                paragraph.
    (e) Timetable for Standards, Conventions, and Requirements.--
            (1) Standards, conventions, and requirements relating to 
        financial and administrative transactions.--Not later than 9 
        months after the date of the enactment of this title, the Panel 
        shall develop data and transaction standards, conventions, and 
        requirements for the following items relating to the financing 
        and administration of health care:
                    (A) Enrollment.
                    (B) Eligibility.
                    (C) Payment and remittance advice.
                    (D) Claims.
                    (E) Claims status.
                    (F) Coordination of benefits.
                    (G) Crossover billing.
                    (H) First report of injury.
                    (I) Standardized claim attachments.
                    (J) Any other items relating to the financing and 
                administration of health care delivery.
            (2) Standards, conventions, and requirements relating to 
        initial quality measurement indicators.--Not later than 12 
        months after the date of the enactment of this title, the Panel 
        shall develop data and transaction standards, conventions, and 
        requirements for participants in the health care system to 
        transmit data derived from the financial and administrative 
        transactions data described in paragraph (1) on quality 
        measurement, utilization monitoring, risk assessment, patient 
        satisfaction, outcomes, and access.
            (3) Standards, conventions, and requirements relating to 
        comprehensive quality measurement data.--Not later than 24 
        months after the date of the enactment of this title, the Panel 
        shall develop standards, conventions, and requirements for 
        participants in the health care system to transmit 
        comprehensive data collected at the site of care on quality 
        measurement, utilization monitoring, risk assessment, patient 
        satisfaction, outcomes, and access.
            (4) Standards, conventions, and requirements relating to 
        data on patient care records.--Not later than 36 months after 
        the date of the enactment of this title, the Panel shall 
        develop standards, conventions, and requirements related to the 
        inclusion of data from patient care records into the health 
        care data interchange system, including standards, conventions, 
        and requirements on the identification of the origin of any 
        data from such records that is included in such system.
            (5) Standards, conventions, and requirements for the 
        centers for disease control and prevention.--Not later than 36 
        months after the date of the enactment of this title, the 
        Panel, in collaboration with the Centers for Disease Control 
        and Prevention (referred to in this title as the ``CDCP'') and 
        in consultation with State departments of health, shall develop 
        standards, conventions, and requirements for the electronic 
        interchange of data on vital health statistics collected by 
        CDCP or the States or any other such data as CDCP determines 
        appropriate.
    (f) Waivers of Compliance.--
            (1) Financial and administrative transactions.--The 
        proposed regulations developed by the Panel shall provide that 
        any of the data and transaction standards, conventions, and 
        requirements relating to financial and administrative 
        transactions developed by the Panel under subsection (e)(1) may 
        be waived until January 1, 1995, for a health care provider 
        that--
                    (A) does not have access to a health care 
                information clearinghouse or a health care value-added 
                network, is in the process of developing a system that 
                complies with such standards, conventions, and 
                requirements, and executes an agreement with the 
                appropriate regulatory entity that such provider will 
                meet such standards, conventions, and requirements by a 
                specified date (not later than January 1, 1995); or
                    (B) is a small rural hospital (as defined by the 
                Panel and included in regulations promulgated by OMB).
            (2) Comprehensive quality measurement data.--The proposed 
        regulations developed by the Panel shall provide that any of 
        the data and transaction standards, conventions, and 
        requirements relating to comprehensive quality measurement data 
        developed by the Panel under subsection (e)(3) may be waived 
        until January 1, 1998, for a health care provider that--
                    (A) does not have access to a health care 
                information clearinghouse or a health care value-added 
                network, is in the process of developing a system that 
                complies with such standards, conventions, and 
                requirements, and executes an agreement with the 
                appropriate regulatory entity that such provider will 
                meet such standards and requirements by a specified 
                date (not later than January 1, 1998); or
                    (B) agrees to obtain from such provider's records 
                the data elements that are needed to meet the standards 
                and requirements developed under subsection (e)(3) and 
                agrees to subject the provider's data transfer process 
                to a quality assurance program that is satisfactory to 
                the appropriate regulatory entity.

SEC. 205. STANDARDS FOR OPERATION OF A UNIFORM WORKING FILE.

    Not later than 24 months after the date of the enactment of this 
title the Panel shall establish standards for the development and 
operation of a uniform working file system that is national in scope. 
Such standards shall ensure--
            (1) that all participants in the health care system may be 
        linked electronically (directly or indirectly) to the uniform 
        working file system;
            (2) that any privacy and confidentiality standards 
        established by the Panel under section 208 are satisfied;
            (3) that the uniform working file system improves the 
        efficiency and effectiveness of the administration of the 
        health care system, including health care quality measurement;
            (4) the interoperability of the uniform working file system 
        by--
                    (A) supporting the data and transaction standards, 
                conventions, and requirements selected and established 
                by the Panel; and
                    (B) making use of such standards, conventions, and 
                requirements; and
            (5) the support of any other requirements selected or 
        established by the Panel.

SEC. 206. CODE SETS FOR SYSTEM.

    Not later than 9 months after the date of the enactment of this 
title, the Panel shall select and establish code sets that are 
maintained by private and public entities as the Panel's official code 
sets for use in a national uniform working file system. The proposed 
regulations developed by the Panel shall provide that any changes or 
updates to such code sets that are established or requested by the 
private or public entity which maintains the code set--
            (1) shall preserve the informational value of data retained 
        either within the uniform working file system or within the 
        information systems of parties making use of the data and 
        transactions standards, conventions, and requirements;
            (2) shall include instructions on how existing data 
        containing such codes is to be converted or translated so as to 
        preserve its value;
            (3) shall be incorporated into the official code set in 
        such a manner as to minimize the disruption to the national 
        uniform working file system and minimize the cost to all 
        entities within the system for reprogramming to accommodate 
        such changes or updates; and
            (4) shall be implemented--
                    (A) only after at least 90 days advance notice has 
                been provided to participants in the health care 
                system; and
                    (B) no more frequently than on an annual basis.

SEC. 207. ESTABLISHMENT OF UNIQUE IDENTIFIERS.

    (a) In General.--Not later than 9 months after the date of the 
enactment of this title, the Panel shall develop unique identifiers for 
each participant in the health care system.
    (b) Special Rules.--
            (1) Individuals.--Each individual shall have a unique 
        identifier developed by the Panel.
            (2) Health plans or providers.--In developing unique 
        identifiers for each health plan or provider, the Panel shall 
        take into account multiple uses for such identifiers and shall 
        consider multiple physical locations and specialty 
        classifications for providers. The unique identifiers for 
        health plans or providers may be based on the system used under 
        title XVIII of the Social Security Act on the date of the 
        enactment of this title.

SEC. 208. PRIVACY AND CONFIDENTIALITY STANDARDS.

    (a) In General.--Not later than 9 months after the date of the 
enactment of this title, the Panel, after taking into consideration the 
Insurance Information and Privacy Protection Model Act of the National 
Association of Insurance Commissioners, other model legislation, and 
international guidelines, shall develop requirements that protect the 
privacy of participants in the health care system and ensure the 
confidentiality of information in the data interchange system.
    (b) Principles Considered.--In developing the requirements referred 
to in subsection (a), the Panel shall take into consideration the 
following principles:
            (1) Information relating to an identifiable or identified 
        individual should be collected only to the extent necessary to 
        carry out the purpose for which the information is collected.
            (2) Information relating to an identifiable or identified 
        individual collected for a particular purpose should generally 
        not be used for another purpose without the individual's 
        informed consent unless the pooling of information renders an 
        individual's data unidentifiable.
            (3) Information relating to an identifiable or identified 
        individual should be disposed of when no longer necessary to 
        carry out the purpose for which it was collected, unless the 
        pooling of information renders an individual's data 
        unidentifiable.
            (4) Methods to ensure the verifiability, timeliness, 
        accuracy, reliability, utility, completeness, relevance, and 
        comparability of information relating to an identifiable or 
        identified individual should be instituted.
            (5) An individual should be notified in advance of the 
        collection of information relating to such individual with 
        regard to--
                    (A) whether the furnishing of information is 
                mandatory or voluntary;
                    (B) the recordkeeping practices with respect to any 
                information provided; and
                    (C) the uses to be made of any information 
                provided.
            (6) If informed consent is necessary for the intended 
        primary or secondary use of information relating to an 
        identifiable or identified individual, the individual should be 
        provided the opportunity to reject such uses at the time the 
        information is collected, except where such uses are necessary 
        to comply with law.
            (7) An individual should be permitted to inspect and 
        correct any information which concerns such individual and 
        should be able to obtain information on how such information is 
        being used.

SEC. 209. TRANSFER OF INFORMATION BETWEEN HEALTH PLANS.

    Not later than 9 months after the date of the enactment of this 
title, the Panel shall develop rules and procedures--
            (1) for determining the financial liability of health plans 
        when health care benefits are payable under two or more health 
        plans; and
            (2) concerning the transfer among health plans of 
        appropriate official data sets needed to carry out the 
        coordination of benefits, the sequential processing of claims, 
        and other health data as determined necessary by the Panel for 
        individuals who have more than 1 health plan, according to the 
        priorities established under the rules and procedures 
        established under paragraph (1).

SEC. 210. FINES AND PENALTIES FOR FAILURE TO COMPLY.

    (a) Development by the Panel.--
            (1) Compliance with standards for privacy and 
        confidentiality.--Not later than 9 months after the date of the 
        enactment of this title, the Panel shall develop civil fines 
        and penalties, as determined appropriate by the Panel, to 
        enforce any of the requirements developed by the Panel under 
        section 208 relating to privacy and confidentiality. The civil 
        fines and penalties developed by the Panel under this paragraph 
        shall not be less than $1,000 for each violation.
            (2) Compliance with other requirements.--
                    (A) In general.--Not later than 9 months after the 
                date of the enactment of this title, the Panel shall 
                develop civil fines and penalties, as determined 
                appropriate by the Panel, to enforce any of the 
                requirements developed by the Panel under this title 
                other than the requirements related to privacy and 
                confidentiality. The civil fines and penalties 
                developed by the Panel under this paragraph shall not 
                exceed $100 for each violation.
                    (B) Limitations.--
                            (i) Penalties not to apply where 
                        noncompliance not discovered exercising 
                        reasonable diligence.--No civil fine or penalty 
                        developed by the Panel under this paragraph 
                        shall be imposed if it is established that the 
                        person liable for the fine or penalty did not 
                        know, and by exercising reasonable diligence 
                        would not have known, that such person failed 
                        to comply with any of the requirements 
                        described in subparagraph (A).
                            (ii) Penalties not to apply to compliance 
                        failures corrected within 30 days.--No civil 
                        fine or penalty developed by the Panel under 
                        this paragraph shall be imposed if--
                                    (I) the failure to comply was due 
                                to reasonable cause and not to willful 
                                neglect, and
                                    (II) the failure to comply is 
                                corrected during the 30-day period 
                                beginning on the 1st date the person 
                                liable for the fine or penalty knew, or 
                                by exercising reasonable diligence 
                                would have known, that the failure to 
                                comply occurred.
                            (iii) Waiver.--In the case of a failure to 
                        comply which is due to reasonable cause and not 
                        to willful neglect, any civil fine or penalty 
                        developed by the Panel under this paragraph may 
                        be waived to the extent that the payment of 
                        such fine or penalty would be excessive 
                        relative to the compliance failure involved.
    (b) Legislative Proposal on Certain Criminal Fines and Penalties.--
Not later than 12 months after the date of the enactment of this title, 
the Panel shall submit to Congress a legislative proposal relating to 
any criminal fines and penalties determined appropriate by the Panel to 
enforce any of the requirements developed by the Panel under section 
208 relating to privacy and confidentiality.

SEC. 211. OVERSIGHT OF UNIFORM WORKING FILE, HEALTH CARE INFORMATION 
              CLEARINGHOUSES, AND VALUE-ADDED NETWORKS.

    (a) Periodic Reviews.--Not later than 9 months after the date of 
the enactment of this title, the Secretary shall establish a procedure 
for the periodic review of business practices, performance, and fees 
with respect to the uniform working file and each health care 
information clearinghouse and value-added network to ensure that such 
entities are not taking unfair advantage of participants in the health 
care system through the application of any regulations promulgated by 
OMB.
    (b) Certification Procedure.--Not later than 12 months after the 
date of the enactment of this title, the Panel shall establish a 
certification procedure for the uniform working file, health care 
information clearinghouses, and value-added networks. The requirements 
for certification shall include--
            (1) adherence to the data and transaction standards and 
        requirements and the privacy and confidentiality standards 
        included in any regulations promulgated by OMB;
            (2) making public standardized indicators of performance 
        such as accessibility, transaction responsiveness, 
        administrative efficiency, reliability, dependability, and any 
        other indicators determined appropriate by the Secretary; and
            (3) any other requirements determined appropriate by the 
        Secretary.

SEC. 212. ANNUAL REPORTS TO CONGRESS.

    (a) In General.--The Panel shall annually prepare and submit to 
Congress a report on--
            (1) the status of the data interchange system, including 
        the system's ability to provide data on cost, quality, and 
        patient satisfaction;
            (2) the savings and costs of implementing the data 
        interchange system; and
            (3) any legislative recommendations related to the data 
        interchange system.
    (b) Availability to the Public.--Any information in the report 
submitted to Congress under subsection (a) shall be made available to 
the public unless such information may not be disclosed by law.

SEC. 213. HEALTH CARE DATA PANEL.

    (a) Establishment.--There is established a panel to be known as the 
Health Care Data Panel.
    (b) Membership.--
            (1) In general.--The Panel shall be composed of the 
        following members:
                    (A) The Secretary.
                    (B) The Secretary of Defense.
                    (C) The Secretary of Veterans Affairs.
                    (D) A representative of the Agency for Health Care 
                Policy and Research.
                    (E) A representative of the National Institute of 
                Standards and Technology.
                    (F) A representative of the National 
                Telecommunication and Information Administration.
                    (G) 6 additional Federal officers determined 
                appropriate by the Secretary.
            (2) Chair.--The Secretary shall be the Chair of the Panel.
    (c) Meetings.--
            (1) In general.--Except as provided in paragraph (2), the 
        Panel shall meet at the call of the Chair.
            (2) Initial and subsequent meetings.--The Panel shall hold 
        a meeting not later than 30 days after the date of the 
        enactment of this section and at least annually thereafter.
            (3) Quorum.--A majority of the members of the Panel shall 
        constitute a quorum, but a lesser number of members may hold 
        hearings.
    (d) Powers of the Panel.--
            (1) Hearings.--The Panel may hold such hearings, sit and 
        act at such times and places, take such testimony, and receive 
        such evidence as the Panel considers advisable to carry out the 
        purposes of this section.
            (2) Information from federal agencies.--The Panel may 
        secure directly from any Federal department or agency such 
        information as the Panel considers necessary to carry out the 
        provisions of this section. Upon request of the Chair of the 
        Panel, the head of such department or agency shall furnish such 
        information to the Panel.
            (3) Postal services.--The Panel may use the United States 
        mails in the same manner and under the same conditions as other 
        departments and agencies of the Federal Government.
            (4) Gifts.--The Panel may accept, use, and dispose of gifts 
        or donations of services or property.
    (e) Panel Personnel Matters.--
            (1) Compensation of members.--Members of the Panel shall 
        serve without compensation in addition to that received for 
        their services as officers or employees of the Federal 
        Government.
            (2) Staff.--
                    (A) Detail of government employees.--Upon the 
                request of the Chair, any Federal Government employee 
                may be detailed to the Panel without reimbursement, and 
                such detail shall be without interruption or loss of 
                civil service status or privilege.
                    (B) Contracts.--The Chair may enter into contracts 
                or other arrangements that may be necessary for the 
                Panel to perform its duties.
                    (C) Internal organization.--The Chair may prescribe 
                such rules as the Chair determines necessary with 
                respect to the internal organization of the Panel.

SEC. 214. NATIONAL HEALTH INFORMATICS COMMISSION.

    (a) Appointment.--The Panel shall provide for appointment of a 
National Health Informatics Commission (referred to in this section as 
the ``Commission'') to advise the Panel on its activities.
    (b) Membership.--
            (1) In general.--The Commission shall consist of 15 
        members. The Panel shall designate 1 member of the Commission 
        as the Chair.
            (2) Expertise.--Members of the Commission shall be 
        individuals who--
                    (A) represent different professions and different 
                geographic areas, including urban and rural areas;
                    (B) represent Federal or State government health 
                programs;
                    (C) represent applicable standard-setting groups, 
                including the National Uniform Billing Committee, the 
                Uniform Claim Form Task Force, American National 
                Standards Institute, and the Healthcare Informatics 
                Standards Planning Panel;
                    (D) represent consumers of health care services; 
                and
                    (E) have expertise in--
                            (i) electronic data interchange of health 
                        care information and computerized information 
                        systems associated with the operation and 
                        administration of matters relating to health 
                        care;
                            (ii) the provision and financing of health 
                        care;
                            (iii) conducting and interpreting health 
                        economics research;
                            (iv) research and development of 
                        technological and scientific advances in health 
                        care;
                            (v) health care eligibility, enrollment, 
                        and claims administration;
                            (vi) health care financial management;
                            (vii) health care reimbursement; or
                            (viii) health care outcomes research.
            (3) Terms.--The Chair shall serve on the Commission at the 
        pleasure of the Panel. Each other member of the Commission 
        shall be appointed for a term of 5 years, except with respect 
        to the members first appointed--
                    (A) 3 members shall be appointed for a term of 1 
                year;
                    (B) 3 members shall be appointed for terms of 2 
                years;
                    (C) 3 members shall be appointed for terms of 3 
                years;
                    (D) 3 members shall be appointed for terms of 4 
                years; and
                    (E) 2 members shall be appointed for terms of 5 
                years.
            (4) Vacancies.--
                    (A) In general.--A vacancy on the Commission shall 
                be filled in the manner in which the original 
                appointment was made and shall be subject to any 
                conditions which applied with respect to the original 
                appointment.
                    (B) Filling unexpired term.--An individual chosen 
                to fill a vacancy shall be appointed for the unexpired 
                term of the member replaced.
                    (C) Expiration of terms.--The term of any member 
                shall not expire before the date on which the member's 
                successor takes office.
    (c) Meetings.--
            (1) In general.--Except as provided in paragraph (2), the 
        Commission shall meet at the call of the Chair.
            (2) Initial meeting.--No later than 30 days after the date 
        on which all members of the Commission have been appointed, the 
        Commission shall hold its first meeting.
            (3) Quorum.--A majority of the members of the Commission 
        shall constitute a quorum, but a lesser number of members may 
        hold hearings.
    (d) Duties.--
            (1) In general.--Not later than 60 days prior to any date 
        on which the Panel is required to select, establish, or develop 
        any requirements relating to the data interchange system, the 
        Commission shall make recommendations to the Panel with respect 
        to the issues relating to such requirements.
            (2) Additional studies and projects.--As directed by the 
        Panel, the Commission shall undertake such studies and projects 
        as the Panel may deem necessary.
    (e) Powers of the Commission.--
            (1) Hearings.--The Commission may hold such hearings, sit 
        and act at such times and places, take such testimony, and 
        receive such evidence as the Commission considers advisable to 
        carry out the purposes of this section.
            (2) Information from federal agencies.--The Commission may 
        secure directly from any Federal department or agency such 
        information as the Commission considers necessary to carry out 
        the provisions of this section. Upon request of the Chair, the 
        head of such department or agency shall furnish such 
        information to the Commission.
            (3) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
            (4) Gifts.--The Commission may accept, use, and dispose of 
        gifts or donations of services or property.
    (f) Commission Personnel Matters.--
            (1) Compensation of members.--Each member of the Commission 
        who is not an officer or employee of the Federal Government 
        shall be compensated at a rate equal to the daily equivalent of 
        the annual rate of basic pay prescribed for level IV of the 
        Executive Schedule under section 5315 of title 5, United States 
        Code, for each day (including travel time) during which such 
        member is engaged in the performance of the duties of the 
        Commission. All members of the Commission who are officers or 
        employees of the United States shall serve without compensation 
        in addition to that received for their services as officers or 
        employees of the United States.
            (2) Travel expenses.--The members of the Commission shall 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Commission.
            (3) Staff.--
                    (A) In general.--The Chair may, without regard to 
                civil service laws and regulations, appoint and 
                terminate such personnel as may be necessary to enable 
                the Commission to perform its duties.
                    (B) Compensation.--The Chair may fix the 
                compensation of personnel without regard to the 
                provisions of chapter 51 and subchapter III of chapter 
                53 of title 5, United States Code, relating to 
                classification of positions and General Schedule pay 
                rates, except that the rate of pay for the personnel 
                may not exceed the rate payable for level V of the 
                Executive Schedule under section 5316 of such title.
                    (C) Detail of government employees.--Any Federal 
                Government employee may be detailed to the Commission 
                without reimbursement, and such detail shall be without 
                interruption or loss of civil service status or 
                privilege.
                    (D) Procurement of temporary and intermittent 
                services.--The Chair may procure temporary and 
                intermittent services under section 3109(b) of title 5, 
                United States Code, at rates for individuals which do 
                not exceed the daily equivalent of the annual rate of 
                basic pay prescribed for level V of the Executive 
                Schedule under section 5316 of such title.
                    (E) Contracts.--The Chair may enter into contracts 
                or other arrangements that may be necessary for the 
                Commission to perform its duties.
                    (F) Internal organization.--The Chair may prescribe 
                such rules as the Chair determines necessary with 
                respect to the internal organization of the Commission. 
                The Commission shall create such committees (composed 
                of Commission members and others as appointed by the 
                Chair) as necessary to enable the Commission to meet 
                its responsibilities and functions.
    (g) Reports.--The Commission shall submit to the Panel such reports 
as may be requested by the Panel on each study or project conducted by 
the Commission. Such reports shall contain such information as 
requested by the Panel.
    (h) Termination of Commission.--The Commission shall terminate 20 
years after the date of the enactment of this title.
    (i) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated 
        such sums as may be necessary to carry out the purposes of this 
        section.
            (2) Availability.--Any sums appropriated under the 
        authorization contained in this subsection shall remain 
        available, without fiscal year limitation, until expended.

SEC. 215. DEFINITIONS.

    For purposes of this title:
            (1) Administrator.--The term ``administrator'' has the 
        meaning given that term in section 3(16)(A) of the Employee 
        Retirement Income Security Act of 1974.
            (2) Code sets.--The term ``code sets'' means any codes used 
        for supplying specific data in a uniform data set, including 
        tables of terms, medical diagnostic codes, medical procedure 
        codes, identification numbers, and any code sets of the 
        National Uniform Billing Committee, the Health Care Financing 
        Administration, or ANSI.
            (3) Employee welfare benefit plan.--The term ``employee 
        welfare benefit plan'' has the meaning given that term in 
        section 3(1) of the Employee Retirement Income Security Act of 
        1974.
            (4) Health care information clearinghouse.--The term 
        ``health care information clearinghouse'' means a public or 
        private entity that--
                    (A) processes data that cannot be sent directly due 
                to lack of proper formatting or editing; and
                    (B) facilitates the translation of data to the 
                standardized data set and code sets between persons who 
                normally would send or receive the transaction;
        but does not store information processed beyond the time 
        required to complete its task and communicate the information.
            (5) Health care value-added network.--The term ``health 
        care value-added network'' means any entity that provides 
        additional services beyond the transmission of data or value, 
        such as the storage of electronic data or value and the 
        transfer of such data or value between health care entities.
            (6) Health plan.--the term ``health plan'' means an insured 
        health plan and a self-insured health plan.
            (7) Insured health plan.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``insured health plan'' means any 
                hospital or medical service policy or certificate, 
                hospital or medical service plan contract, or health 
                maintenance organization group contract offered by an 
                insurer.
                    (B) Exception.--Such term does not include any of 
                the following--
                            (i) coverage only for accident, dental, 
                        vision, disability income, or long-term care 
                        insurance, or any combination thereof,
                            (ii) medicare supplemental health 
                        insurance,
                            (iii) coverage issued as a supplement to 
                        liability insurance,
                            (iv) worker's compensation or similar 
                        insurance,
                            (v) automobile medical-payment insurance,
                            (vi) coverage for a specified disease or 
                        illness, or
                            (vii) a hospital or fixed indemnity policy 
                        (unless the Secretary determines that such a 
                        policy provides sufficiently comprehensive 
                        coverage of a benefit so that it should be 
                        treated as an insured health plan),
                or any combination thereof.
            (8) Insurer.--The term ``insurer'' means any entity that 
        offers a health plan under which such entity is at risk for all 
        or part of the cost of benefits under the plan, and includes 
        any agent of such entity.
            (9) Participant in the health care system.--The term 
        ``participant in the health care system'' means any Federal 
        health care program, State, employee welfare benefit plan, 
        health plan, administrator, insurer, or provider.
            (10) Provider.--The term ``provider'' means a physician, 
        hospital, pharmacy, laboratory, or other person licensed or 
        otherwise authorized under applicable State laws to furnish 
        health care items or services.
            (11) Self-insured health plan.--The term ``self-insured 
        health plan''--
                    (A) means an employee welfare benefit plan or other 
                arrangement insofar as the plan or arrangement provides 
                health benefits and that is funded in a manner other 
                than through the purchase of 1 or more insured health 
                plans, but
                    (B) does not include any coverage or insurance 
                described in paragraph (7)(B).
            (12) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the United States Virgin Islands, Guam, American Samoa, 
        and the Commonwealth of the Northern Mariana Islands.

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