I 

109TH CONGRESS 

1ST SESSION H. R. 2234 

To authorize the Secretary of Health and Human Services to make health 

information technology grants, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 10, 2005 

Mr. MURPHY (for himself and Mr. KENNEDY of Rhode Island) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To authorize the Secretary of Health and Human Services 

to make health information technology grants, and for 

other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘21st Century Health 

5 Information Act of 2005’’. 

6 SEC. 2. FINDINGS; PURPOSE. 

7 (a) FINDINGS.— 
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1 (1) According to the Institute for Safe Medica2 tion Practices, pharmacists make over 150 million 

3 calls to physicians for clarification of illegible pre4 scriptions each year and electronic prescribing can 

5 reduce follow-up calls between pharmacists and doc6 tors by over 50 percent. 

7 (2) A study by the Journal of the American 

8 Medical Association found that laboratory and radi9 ology results, letters, and medical histories were 

10 missing during 13.6 percent of 1,614 patient visits. 

11 In 44 percent of these cases, doctors felt that the 

12 missing information had the potential to adversely 

13 affect a patient’s well-being. 

14 (3) A study by the Rand Corporation found 

15 that patients only receive recommended care about 

16 55 percent of the time. 

17 (4) A study of emerging infectious diseases 

18 finds that preventable health care acquired infec19 tions cost $4.5 billion per year and contributed to 

20 more than 88,000 deaths — one death every 6 min21 utes. 

22 (5) The Centers for Disease Control and Pre23 vention reports that United States patients are pre24 scribed improper medications in about 1 out of every 

25 12 physician visits. An estimated 16.7 million physi-
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1 cian visits for the elderly result in prescription er2 rors per year. 

3 (6) A March 2001 Institute of Medicine (IOM) 

4 study called ‘‘Crossing the Quality Chasm: A New 

5 Health System for the 21st Century’’ concludes that 

6 in order to improve quality, the Nation must have a 

7 national commitment to building an information in8 frastructure to support health care delivery, con9 sumer health, quality measurement and improve10 ment, public accountability, clinical and health serv11 ices research, and clinical education. 

12 (7) An October 2003 Government Account13 ability Office report found that the benefits of an 

14 electronic health care information system included 

15 improved quality of care, reduced costs associated 

16 with medication errors, more accurate and complete 

17 medical documentation, more accurate capture of 

18 codes and charges, and improved communication 

19 among providers enabling them to respond more 

20 quickly to patients’ needs. 

21 (8) In January 2004, the President stated that 

22 ‘‘by computerizing health records, we can avoid dan23 gerous medical mistakes, reduce costs, and improve 

24 care’’ and outlined a plan to ensure that most Amer-
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1 icans have electronic health records within the next 

2 10 years. 

3 (b) PURPOSE.—The Secretary of Health and Human 

4 Services shall implement this Act for the purpose of devel5 oping interoperable regional health information networks 

6 and promoting the adoption of health information tech7 nology products. 

8 SEC. 3. HEALTH INFORMATION TECHNOLOGY GRANTS. 

9 (a) GRANT AUTHORIZATION.— 

10 (1) IN GENERAL.—The Secretary may make 

11 not more than 20 grants to regional health informa12 tion organizations to enable each grantee to develop 

13 and implement over a 3-year period a regional 

14 health information technology plan that provides 

15 for— 

16 (A) a health information network that will 

17 serve a geographic area that— 

18 (i) is located in 1 or more States; and 

19 (ii) does not include any area to be 

20 served by the health information network 

21 of any other grantee under this section; 

22 (B) a plan to finance acquisition and im23 plementation of technology by health care pro24 viders as needed to allow participation by the 

25 providers in the network; and 
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1 (C) a plan to use the network to improve 

2 patient safety, quality, and efficiency within the 

3 health care system. 

4 (2) USE OF FUNDS.—The Secretary may not 

5 make a grant to a regional health information orga6 nization under this section unless the organization 

7 agrees to use the grant— 

8 (A) to develop and implement a regional 

9 health information technology plan described in 

10 paragraph (3) for submission to the Secretary 

11 under paragraph (4); and 

12 (B) to begin implementation of the plan 

13 not later than the beginning of the second year 

14 of the grant. 

15 (3) REGIONAL HEALTH INFORMATION TECH16 NOLOGY PLAN.— 

17 (A) IN GENERAL.—A regional health infor18 mation technology plan shall provide for— 

19 (i) the establishment and implementa20 tion in a specified geographic area of a re21 gional health information network that— 

22 (I) allows the seamless, secure, 

23 electronic sharing of health informa24 tion among health care providers, 
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1 health plans, and other authorized 

2 users; 

3 (II) provides consumers with se4 cure, electronic access to their own 

5 health information; 

6 (III) meets data standards for 

7 interoperability adopted by the Sec8 retary, including any standards pro9 viding for interoperability among re10 gional health information networks; 

11 (IV) provides for interoperability 

12 with any health information tech13 nology product certified by the certifi14 cation entity described in section 4(a); 

15 (V) meets the privacy require16 ments of subsection (b); 

17 (VI) gives patients the option of 

18 allowing only designated health care 

19 providers to access their individually 

20 identifiable information concerning di21 agnosis and treatment of sexually 

22 transmitted diseases, addiction, and 

23 mental illnesses; 
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1 (VII) provides such public health 

2 reporting capability as the Secretary 

3 requires; 

4 (VIII) allows for such reporting 

5 of, and access to, health information 

6 for purposes of research (other than 

7 individually identifiable patient health 

8 information) as the Secretary re9 quires; and 

10 (IX) allows for the reporting of 

11 provider-specific health information 

12 (other than individually identifiable 

13 patient health information) required 

14 for the calculation of any voluntary 

15 consensus standard endorsed by the 

16 National Quality Forum; 

17 (ii) the financing and technical assist18 ance required to allow health care pro19 viders, especially small physician groups, to 

20 acquire and implement electronic medical 

21 records or other technology necessary to 

22 participate in the regional health informa23 tion network; and 

24 (iii) agreements among health care 

25 stakeholders regarding data reporting, re-
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1 imbursement practices, or other mecha2 nisms to use the regional health informa3 tion network to improve patient safety, 

4 quality, and efficiency within the health 

5 care system. 

6 (B) CONTENTS.—A regional health infor7 mation technology plan shall— 

8 (i) be developed with the participation 

9 and widespread support of all health care 

10 stakeholders of the geographic area to be 

11 served by the grantee’s health information 

12 network, including but not limited to hos13 pitals, practicing physicians (including 

14 those from small physician groups), nurs15 ing facilities and skilled nursing facilities, 

16 other health care providers, health plans, 

17 employers, and patient groups; 

18 (ii) describe the governance structure 

19 of the health information network; 

20 (iii) describe the technologies and sys21 tems, including interoperability data stand22 ards, that will be used to establish a health 

23 information network consistent with para24 graph (A)(i); 
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1 (iv) explain what information will be 

2 able to be accessed, transferred, or ex3 changed through the health information 

4 network and what capabilities the network 

5 will have to include other types of informa6 tion in the future; 

7 (v) describe plans to ensure network 

8 reliability, expected frequency of network 

9 interruptions, and backup procedures in 

10 the event of network interruptions; 

11 (vi) describe sources of initial financ12 ing for the development of the health infor13 mation network and a financing model for 

14 long-term sustainability of the network; 

15 (vii) describe sources of financing the 

16 acquisition, implementation, and mainte17 nance of technology necessary to allow 

18 health care providers, especially small phy19 sician groups, to participate in the health 

20 information network; 

21 (viii) describe how the health informa22 tion network will be used to improve health 

23 care quality and the health outcomes of pa24 tients; 
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1 (ix) establish how administrative and 

2 clinical savings resulting from widespread 

3 use of the new health information network 

4 will be accounted for and allocated; 

5 (x) explain how the regional health in6 formation organization involved will ensure 

7 widespread participation by health care 

8 providers (especially small physician 

9 groups) in the grantee’s health information 

10 network and what support and assistance 

11 will be available to physicians seeking to 

12 integrate health information technologies 

13 into their practices; 

14 (xi) describe how patients and care15 givers who are not health care providers 

16 will be able to access and utilize the health 

17 information network; 

18 (xii) explain how the grantee’s health 

19 information network will protect patient 

20 privacy and maintain security; and 

21 (xiii) explain how the grantee will en22 sure the participation of health care pro23 viders serving minority communities, in24 cluding communities in which English is 

25 not the primary language spoken. 
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1 (4) APPROVAL OF PLAN.— 

2 (A) SUBMISSION BY GRANTEES.—Not later 

3 than the end of the first year for which a re4 gional health information organization receives 

5 a grant under this subsection, the organization 

6 shall submit its regional health information 

7 technology plan to the Secretary. 

8 (B) SUBMISSION BY OTHER ORGANIZA9 TIONS.—A regional health information organi10 zation that has not received a grant under this 

11 subsection may, at its discretion, submit a re12 gional health information technology plan to the 

13 Secretary. 

14 (C) APPROVAL.—The Secretary shall ap15 prove or disapprove each regional health infor16 mation technology plan submitted to the Sec17 retary under this paragraph based on whether 

18 the plan complies with the requirements of this 

19 subsection. 

20 (D) EFFECT OF FAILURE TO APPROVE.— 

21 The Secretary may not make any payment 

22 under this subsection to a regional health infor23 mation organization for the second or third 

24 year for which the organization receives a grant 

25 unless the Secretary has approved the organiza-
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1 tion’s regional health information technology 

2 plan. 

3 (E) GEOGRAPHIC EXCLUSIVITY.—The Sec4 retary may not approve a regional health infor5 mation technology plan under this paragraph if 

6 the plan applies to a geographic area for which 

7 the Secretary has already approved a regional 

8 health information technology plan under this 

9 paragraph, irrespective of whether the approved 

10 regional health information technology plan was 

11 submitted by a grantee under subparagraph (A) 

12 or by an organization under subparagraph (B). 

13 (5) SELECTION.—In selecting grant recipients 

14 under this section, the Secretary shall take into ac15 count— 

16 (A) existing technological and organiza17 tional infrastructure upon which the health in18 formation network can build; 

19 (B) the extent of stakeholder participation; 

20 (C) health care provider participation com21 mitments; 

22 (D) capacity to measure quality and effi23 ciency improvements; 

24 (E) replicability; 
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1 (F) the extent of the opportunity for a 

2 plan to improve health care quality and the 

3 health outcomes of patients in the region to be 

4 served; 

5 (G) the extent to which an applicant in6 tends to develop a regional health information 

7 technology plan that covers a complete medical 

8 market area (as defined by the Secretary); 

9 (H) the extent to which an applicant’s pro10 posed network will allow the exchange of ma11 chine-computable data among providers; 

12 (I) geographical diversity of grantees; and 

13 (J) such other factors as the Secretary 

14 considers relevant. 

15 (b) PRIVACY PROTECTIONS.— 

16 (1) IN GENERAL.—Any health information net17 work funded in whole or in part under this section 

18 shall— 

19 (A) comply with the privacy protections of 

20 regulations promulgated pursuant to section 

21 264(c) of the Health Insurance Portability and 

22 Accountability Act of 1996 (Public Law 104– 

23 191; 110 Stat. 2033); and 
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1 (B) allow patients to exclude their health 

2 information from the health information net3 work. 

4 (2) UNAUTHORIZED DISCLOSURE.—In the event 

5 of the unauthorized access to or disclosure of indi6 vidually identifiable patient health information by or 

7 through a health information network funded in 

8 whole or in part under this section, the operator of 

9 such network shall— 

10 (A) report the conditions of such unauthor11 ized access or disclosure to the Secretary in 

12 such manner as the Secretary requires; and 

13 (B) provide notice to any individuals whose 

14 patient health information may have been com15 promised in violation of this subsection as a re16 sult of such unauthorized access or disclosure. 

17 (c) APPLICATION.—To seek a grant under this sec18 tion, an applicant shall submit an application to the Sec19 retary in such form, in such manner, and containing such 

20 information and assurances as the Secretary may require. 

21 (d) TECHNICAL ASSISTANCE.— 

22 (1) IN GENERAL.—The Secretary shall provide 

23 to regional health information organizations such 

24 technical assistance as the Secretary deems appro25 priate to carry out this section, including assistance 
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1 relating to questions of governance, financing, and 

2 technological approaches to the creation of health in3 formation networks. 

4 (2) NATIONAL TECHNICAL ASSISTANCE CEN5 TER.— 

6 (A) ESTABLISHMENT.—The Director of 

7 the Agency for Healthcare Research and Qual8 ity shall by contract or grant establish and 

9 maintain a national technical assistance center 

10 to provide assistance to physicians described in 

11 subparagraph (B) to facilitate successful adop12 tion of health information technologies and par13 ticipation in the development and implementa14 tion of regional health information technology 

15 plans by such physicians. 

16 (B) PHYSICIANS.—The national technical 

17 assistance center shall provide assistance to 

18 physicians in geographical areas served by a 

19 health information network that has been ac20 credited or provisionally accredited under sub21 section (e). 

22 (C) PRIORITY.—In providing assistance to 

23 physicians under this paragraph, the national 

24 technical assistance centers shall— 
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1 (i) give priority to physicians in small 

2 physician groups; and 

3 (ii) as resources allow, provide assist4 ance to physicians in larger groups. 

5 (D) REQUIREMENTS.—Technical assist6 ance provided under this paragraph shall, at a 

7 minimum, include the following: 

8 (i) A clearinghouse of best practices, 

9 guidelines, and implementation strategies 

10 directed at the small medical practices that 

11 plan to adopt electronic medical records, 

12 electronic prescribing, and other health in13 formation technologies. 

14 (ii) A change management tool kit to 

15 enable physicians and their office staffs to 

16 successfully prepare practice workflows for 

17 adoption of electronic medical records and 

18 electronic prescribing, to receive guidance 

19 in the selection of vendors of health infor20 mation technology products and services 

21 that are appropriate within the context of 

22 the individual practice and the community 

23 setting, to implement health information 

24 technology solutions and manage the 

25 project at the practice level, and to address 
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1 the ongoing need for upgrades, mainte2 nance, and security of office-based health 

3 information technologies. 

4 (iii) The capability to provide con5 sultations and advice to small medical 

6 practices to facilitate adoption of health in7 formation technologies. 

8 (e) ACCREDITATION.— 

9 (1) IN GENERAL.—Not later than the date that 

10 is 1 year after the date of the enactment of this Act, 

11 the Secretary shall establish a program of accred12 iting health information networks that are in compli13 ance with the requirements of subparagraph (A) of 

14 subsection (a)(3), subsection (b), and any other re15 quirements of the national health information infra16 structure as established by the Secretary. 

17 (2) PROVISIONAL ACCREDITATION.—The pro18 gram under this subsection shall include a process 

19 for provisional accreditation of networks that are in 

20 the process of being implemented. Approval of a re21 gional health information technology plan by the 

22 Secretary under subsection (a)(4) is deemed to con23 stitute initial provisional accreditation of the health 

24 information network described in the plan. 
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1 (f) PROHIBITION.—No funds under this section may 

2 be used for the establishment of a national database of 

3 individually identifiable patient health information. 

4 (g) REPORT BY GAO.—Not later than 4 years after 

5 the date of the enactment of this Act, the Comptroller 

6 General of the United States shall submit a report to the 

7 Congress on the progress of the regional health informa8 tion organizations in realizing the purposes of this Act, 

9 with particular attention to the following: 

10 (1) The capacity to exchange health informa11 tion between and among regional health information 

12 networks. 

13 (2) Rates of health information technology 

14 usage and provider participation in regional health 

15 information networks. 

16 (3) The security and privacy of regional health 

17 information networks. 

18 (4) The differing approaches of regional health 

19 information organizations to implementing the pur20 poses of this Act and common characteristics of suc21 cessful efforts. 

22 (5) The impact of health information networks 

23 on health care quality, health outcomes of patients, 

24 and health care costs. 

25 (h) AUTHORIZATION OF APPROPRIATIONS.— 
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1 (1) IN GENERAL.—To carry out the provisions 

2 of this section other than subsection (d)(2), there 

3 are authorized to be appropriated for grants under 

4 subsection (a), $50,000,000 for fiscal year 2006 and 

5 such sums as may be necessary for each of fiscal 

6 years 2007, 2008, 2009, and 2010. 

7 (2) TECHNICAL ASSISTANCE.— 

8 (A) IN GENERAL.—Of the amount appro9 priated to carry out this section for a fiscal 

10 year, not more than than 10 percent of such 

11 amount or $5,000,000, whichever is lesser, may 

12 be used to provide technical assistance under 

13 subsection (d)(1). 

14 (B) NATIONAL TECHNICAL ASSISTANCE

15 CENTER.—To carry out subsection (d)(2), there 

16 is authorized to be appropriated $2,500,000 for 

17 each of fiscal years 2006 through 2010. 

18 SEC. 4. INTEROPERABILITY. 

19 (a) PURCHASE OF HEALTH INFORMATION TECH20 NOLOGY PRODUCTS.— 

21 (1) REQUIREMENT.—No Federal funds may be 

22 made available to any entity under this Act for the 

23 purchase of a health information technology product, 

24 unless— 
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1 (A) for any period during which there is a 

2 certification entity described in paragraph (2)— 

3 (i) the product is certified by the enti4 ty; or 

5 (ii) if a certification process has not 

6 yet been developed for the product by the 

7 entity, the Federal department or agency 

8 involved has determined that the product 

9 incorporates, to the extent feasible, appro10 priate interoperability data standards and 

11 compliance criteria adopted by the entity 

12 for another product; and 

13 (B) for any period for which the Secretary 

14 (or the Secretary’s designee) adopts applicable 

15 standards and criteria under paragraph (4), the 

16 product complies with such standards and cri17 teria. 

18 (2) CERTIFICATION ENTITY.—The certification 

19 entity described in this paragraph is— 

20 (A) for any period during which the Cer21 tification Commission for Healthcare Informa22 tion Technology is accredited by the American 

23 National Standards Institute or approved by 

24 the Secretary under paragraph (3), the Certifi-
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1 cation Commission for Healthcare Information 

2 Technology; and 

3 (B) for any other period, the private enti4 ty, if any, designated by the Secretary under 

5 paragraph (4)(A)(ii) or, as applicable, para6 graph (4)(B). 

7 (3) APPROVAL OF COMMISSION BY SEC8 RETARY.—For any period during which the Certifi9 cation Commission for Healthcare Information Tech10 nology is not accredited by the American National 

11 Standards Institute, the Secretary of Health and 

12 Human Services— 

13 (A) shall examine biannually the Commis14 sion’s certification processes; 

15 (B) shall approve the Commission for pur16 poses of this subsection if the Secretary deter17 mines that— 

18 (i) the Commission’s certification 

19 processes— 

20 (I) are open to input from all af21 fected parties, including providers, pa22 tients, vendors, and regional health 

23 information organizations; 

24 (II) reflect the prevailing opinion 

25 among the affected parties; and 
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1 (III) promote quality, safety, and 

2 efficiency in health care; and 

3 (ii) the Commission’s governance pro4 cedures ensure effective representation of 

5 and accountability to affected stakeholder 

6 groups and transparent decision-making 

7 processes; 

8 (C) shall disapprove the Commission for 

9 purposes of this subsection if the Secretary de10 termines that the Commission’s certification 

11 processes or governance procedures do not sat12 isfy clause (i) or (ii), respectively, of subpara13 graph (B); and 

14 (D) if the Secretary disapproves the Com15 mission under this paragraph, shall provide spe16 cific recommendations to the Commission on 

17 changes that may be implemented by the Com18 mission in order to obtain approval under this 

19 paragraph. 

20 (4) INTEROPERABILITY STANDARDS; ALTER21 NATIVE CERTIFICATION ENTITY.— 

22 (A) IN GENERAL.—For any period during 

23 which the Certification Commission for 

24 Healthcare Information Technology is not ac25 credited by the American National Standards 
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1 Institute and the Secretary disapproves such 

2 Commission under paragraph (3)(C), the Sec3 retary— 

4 (i) shall adopt interoperability stand5 ards and compliance criteria for health in6 formation technology products, including 

7 electronic medical records; or 

8 (ii) shall designate a private entity 

9 with certification and governance processes 

10 in accordance with paragraph (3)(B) to 

11 adopt such standards and criteria and to 

12 certify such products. 

13 (B) NINE-MONTH DEADLINE.—If the Cer14 tification Commission for Healthcare Informa15 tion Technology is accredited by the American 

16 National Standards Institute or approved by 

17 the Secretary under paragraph (3)(B) but fails 

18 to adopt interoperability standards and compli19 ance criteria for electronic medical records by 

20 the date that is 9 months after the date of the 

21 enactment of this Act, the Secretary may adopt 

22 such standards and criteria, or designate a pri23 vate entity with certification and governance 

24 processes in accordance with paragraph (3)(B) 
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1 to adopt such standards and criteria and to cer2 tify such products. 

3 (C) CONSULTATION.—In adopting stand4 ards and criteria under subparagraph (A)(i) or 

5 (B), the Secretary shall take into consideration 

6 the recommendations (if any) of the National 

7 Committee on Vital and Health Statistics. In 

8 making such recommendations, the National 

9 Committee on Vital and Health Statistics shall 

10 consult with all affected parties, including 

11 health care providers, patients, vendors, health 

12 plans, and regional health information organiza13 tions. 

14 (5) EFFECT OF FAILURE TO SEEK ACCREDITA15 TION BY ANSI.—In determining whether to approve 

16 the Certification Commission for Healthcare Infor17 mation Technology under paragraph (3)(B), the Sec18 retary shall not give any negative weight to a deci19 sion by the Commission to forgo seeking accredita20 tion by the American National Standards Institute. 

21 (b) TECHNICAL STANDARDS AND COMPLIANCE CRI22 TERIA.—The Secretary shall adopt such technical stand23 ards and compliance criteria for the organization and con24 tent of health information networks under section 3 as the 

25 Secretary deems appropriate to ensure that health infor-
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1 mation data can be exchanged among such networks and 

2 between health information networks and Federal agen3 cies. The Secretary may delegate the authority to adopt 

4 such standards and criteria to a private entity, if— 

5 (1) the entity is accredited by the American 

6 National Standards Institute; or 

7 (2) the Secretary biannually certifies that the 

8 entity’s processes for adoption of standards and— 

9 (A) compliance criteria— 

10 (i) are open to input for all affected 

11 parties, including health care providers, 

12 patients, vendors, and health plans re13 gional health information organizations; 

14 (ii) reflect the prevailing opinion 

15 among the affected parties; and 

16 (iii) promote quality, safety, and effi17 ciency in health care; 

18 (B) governance procedures ensure effective 

19 representation of and accountability to affected 

20 stakeholder groups and transparent decision21 making processes. 

22 SEC. 5. LOANS. 

23 (a) IN GENERAL.—The Secretary may make loans to 

24 any regional health information organization with a health 

25 information network that is accredited or provisionally ac-
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1 credited under section 3(e) to finance investments in net2 work infrastructure and technology acquisition, training, 

3 and workflow engineering for physicians. 

4 (b) TERMS AND CONDITIONS.—Each loan under this 

5 section shall be subject to such terms and conditions as 

6 the Secretary deems appropriate, except that— 

7 (1) the repayment period of each such loan may 

8 not exceed 10 years; 

9 (2) no funds from the loan may be used to ac10 quire a health information technology product for 

11 which the Certification Commission for Healthcare 

12 Information Technology has established a certifi13 cation process unless such health information tech14 nology product has been so certified; 

15 (3) any technology investments paid for in 

16 whole or in part with funds from the loan must com17 ply with the privacy requirements of section 3(b); 

18 and 

19 (4) the Secretary shall require the regional 

20 health information organization involved to provide 

21 to the Secretary an annual accounting of loan funds. 
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1 SEC. 6. SAFE HARBOR FOR EQUIPMENT AND SERVICES 

2 PROVIDED FOR THE DEVELOPMENT OR IM3 PLEMENTATION OF A HEALTH INFORMATION 

4 NETWORK. 

5 (a) IN GENERAL.—Paragraph (3) of section 

6 1128B(b) of the Social Security Act (42 U.S.C. 1320a– 

7 7b(b)) is amended— 

8 (1) by striking the period at the end of the first 

9 subparagraph (H) and inserting a semicolon; 

10 (2) by redesignating the second subparagraph 

11 (H) as subparagraph (I); 

12 (3) by striking the period at the end of sub13 paragraph (I) (as so redesignated) and inserting ‘‘; 

14 and’’; and 

15 (4) by adding at the end the following: 

16 ‘‘(J) the provision of any equipment or 

17 services that are appropriate for the develop18 ment or implementation of a regional health in19 formation technology plan approved by the Sec20 retary under section 3 of the 21st Century 

21 Health Information Act of 2005, including the 

22 provision of hardware, software, and services 

23 necessary to participate in a health information 

24 network so long as— 

25 ‘‘(i) any patient data and information 

26 that is accessible to recipients of such 
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1 equipment and services is also accessible to 

2 other appropriate persons or entities 

3 through a regional health information net4 work accredited or provisionally accredited 

5 under section 3(e) of the 21st Century 

6 Health Information Act of 2005; 

7 ‘‘(ii) any such equipment or services 

8 provided are capable of and intended to be 

9 used to access, transfer, and exchange pa10 tient data and information with other par11 ticipants in a regional health information 

12 network accredited or provisionally accred13 ited under section 3(e) of the 21st Century 

14 Health Information Act of 2005; and 

15 ‘‘(iii) any such equipment or services 

16 are not provided in a manner that takes 

17 into account the volume or value of refer18 rals or other business generated between 

19 the parties.’’. 

20 (b) ADDITIONAL SAFE HARBOR.—(1) Subject to 

21 paragraph (2), the Secretary shall consider the establish22 ment of a safe harbor under subsection (a) of section 

23 1128C of the Social Security Act (42 U.S.C. 1320a–7c) 

24 to permit the provision of equipment or services intended 

25 to permit the exchange of health care information to im-
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1 prove health care quality, reduce medical errors, reduce 

2 health care costs, or improve the coordination of health 

3 care services. 

4 (2) Insofar as the Secretary develops a safe harbor 

5 under paragraph (1)l 

6 (A) such safe harbor may only apply to geo7 graphic areas that are not covered by a regional 

8 health information network accredited by the Sec9 retary under section 3(e) of the 21st Century Health 

10 Information Act of 2005; 

11 (B) any equipment or services provided pursu12 ant to the safe harbor are not provided in a manner 

13 that takes into account the volume or value of refer14 rals or other business generated between the parties 

15 involved; and 

16 (C) any such equipment or services shall comply 

17 with data standards for interoperability adopted by 

18 the certification entity described in section 4 of the 

19 21st Century Health Information Act of 2005. 

20 SEC. 7. EXCEPTION TO MEDICARE LIMITATIONS ON PHYSI21 CIAN SELF-REFERRAL. 

22 (a) IN GENERAL.—Section 1877(e) of the Social Se23 curity Act (42 U.S.C. 1395nn(e)) is amended by adding 

24 at the end the following new paragraph: 
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1 ‘‘(9) DEVELOPMENT OR IMPLEMENTATION OF A

2 HEALTH INFORMATION NETWORK.—The provision of 

3 any equipment or services that are appropriate for 

4 the development or implementation of a regional 

5 health information technology plan approved by the 

6 Secretary under section 3 of the 21st Century 

7 Health Information Act of 2005, including the provi8 sion of hardware, software, and services necessary to 

9 participate in a health information network so long 

10 as— 

11 ‘‘(A) any patient data and information 

12 that is accessible to recipients of such equip13 ment and services is also accessible to other ap14 propriate persons or entities through a regional 

15 health information network accredited or provi16 sionally accredited under section 3(e) of the 

17 21st Century Health Information Act of 2005; 

18 ‘‘(B) any such equipment or services pro19 vided are capable of and intended to be used to 

20 access, transfer, and exchange patient data and 

21 information with other participants in a re22 gional health information network accredited or 

23 provisionally accredited under section 3(e) of 

24 the 21st Century Health Information Act of 

25 2005; and 
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1 ‘‘(C) any such equipment or services are 

2 not provided in a manner that takes into ac3 count the volume or value of referrals or other 

4 business generated between the parties.’’. 

5 (b) ADVISORY OPINION.—(1) Subject to paragraph 

6 (2), the Secretary shall consider the issuance of an advi7 sory opinion under subsection (g)(6) of section 1877 of 

8 the Social Security Act (42 U.S.C. 1395nn) to permit the 

9 provision of equipment or services intended to permit the 

10 exchange of health care information to improve health care 

11 quality, reduce medical errors, reduce health care costs, 

12 or improve the coordination of health care services. 

13 (2) Insofar as the Secretary develops an advisory 

14 opinion under paragraph (1)l 

15 (A) such advisory opinion may only apply to ge16 ographic areas that are not covered by a regional 

17 health information network accredited by the Sec18 retary under section 3(e) of the 21st Century Health 

19 Information Act of 2005; 

20 (B) any equipment or services provided pursu21 ant to the advisory opinion are not provided in a 

22 manner that takes into account the volume or value 

23 of referrals or other business generated between the 

24 parties involved; and 
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1 (C) any such equipment or services shall comply 

2 with data standards for interoperability adopted by 

3 the certification entity described in section 4 of the 

4 21st Century Health Information Act of 2005. 

5 SEC. 8. ADJUSTMENTS TO MEDICARE PAYMENTS TO PRO6 VIDERS OF SERVICE AND SUPPLIERS PAR7 TICIPATING IN HEALTH INFORMATION NET8 WORKS. 

9 (a) IN GENERAL.—The Secretary shall establish a 

10 methodology for making adjustments in payment amounts 

11 under title XVIII of the Social Security Act (42 U.S.C. 

12 1395 et seq.) made to providers of services and suppliers 

13 who furnish items or services for which payment is made 

14 under that title who— 

15 (1) participate in a health information network 

16 accredited or provisionally accredited by the Sec17 retary under section 3(e); and 

18 (2) in the course of furnishing items and serv19 ices for which payment may be made under such 

20 title, use health information technology with patient21 specific applications that the Secretary determines 

22 improve the quality and accuracy of clinical decision23 making (such as electronic medical records, elec24 tronic prescribing, and computerized physician order 

25 entry with clinical decision-support capabilities) . 
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1 (b) ESTABLISHMENT AND MODIFICATION OF

2 CODES.—The methodology under subsection (a) shall— 

3 (1) include the establishment of new codes, 

4 modification of existing codes, and adjustment of 

5 evaluation and management modifiers to such codes 

6 that take into account the costs of acquiring, using, 

7 and maintaining health information technology with 

8 patient-specific applications; and 

9 (2) take into account estimated aggregate an10 nual savings in overall payments under such title 

11 XVIII attributable to the use of health information 

12 technology with patient-specific applications. 

13 (c) DURATION.—The Secretary may reduce or elimi14 nate adjustments established made to subsection (a) as 

15 payment methodologies under title XVIII of the Social Se16 curity Act are adjusted to reflect provider quality and effi17 ciency. 

18 (d) RULE OF CONSTRUCTION.—In making national 

19 coverage determinations under section 1862(a) of the So20 cial Security Act (42 U.S.C. 1395y(a)) with respect to 

21 maintaining health information technology with patient22 specific applications, in determining whether the health in23 formation technology is reasonable and necessary for the 

24 diagnosis or treatment of illness or injury or to improve 

25 the functioning of a malformed body member, the Sec-
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1 retary shall consider whether the health information tech2 nology improves clinical outcomes or cost-effectiveness of 

3 treatment. 

4 (e) DEFINITIONS.—In this section: 

5 (1) PROVIDER OF SERVICES.—The term ‘‘pro6 vider of services’’ has the meaning given such term 

7 under section 1861(u) of the Social Security Act (42 

8 U.S.C. 1395x(u)). 

9 (2) SUPPLIER.—The term ‘‘supplier’’ has the 

10 meaning given such term under section 1861(d) of 

11 such Act (42 U.S.C. 1395x(d)). 

12 SEC. 9. MEDICAID PAYMENTS FOR INFORMATION INFRA13 STRUCTURE FOR HEALTH INFORMATION 

14 NETWORK AND INFORMATION TECHNOLOGY. 

15 In the case of a State that provides funding under 

16 a State plan under title XIX of the Social Security Act 

17 (42 U.S.C. 1396 et seq.) for the development and imple18 mentation of a regional health information technology plan 

19 approved by the Secretary under section 3, the Secretary 

20 shall make matching payments to States under section 

21 1903(a) of such Act (42 U.S.C. 1396b(a)) for such fund22 ing— 

23 (1) to the extent such funding supports develop24 ment of the health information network and is rea25 sonably related to the Medicaid population’s share of 
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1 the applicable region’s patient population or to Med2 icaid’s share of the applicable region’s health care 

3 costs; or 

4 (2) to the extent such funding directly or indi5 rectly assists community health centers or other 

6 Medicaid providers acquire and implement tech7 nology in order to participate in the network. 

8 SEC. 10. DEFINITIONS. 

9 In this Act: 

10 (1) The term ‘‘community health center’’ means 

11 a health center eligible for assistance under section 

12 330 of the Public Health Service Act (42 U.S.C. 

13 254b). 

14 (2) The term ‘‘health care provider’’ means an 

15 entity involved in consultation, prevention, diagnosis, 

16 and treatment, including but not limited to a physi17 cian group, physician in individual practice, psychol18 ogist or other mental health clinician licensed by the 

19 State, hospital, community health center, community 

20 mental health center, nursing facility, skilled nursing 

21 facility, laboratory, imaging center, or pharmacy. 

22 (3) The term ‘‘health information network’’ 

23 means a health information network described in 

24 section 3(a)(3)(A)(i). 
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1 (4) The term ‘‘health information technology’’ 

2 means products, devices, or systems that allow for 

3 the electronic collection, storage, exchange, or man4 agement of patient information. 

5 (5) The term ‘‘health plans’’ means a group 

6 health plan or a health insurance issuer that is of7 fering health insurance coverage. 

8 (6) The terms ‘‘health insurance coverage’’ and 

9 ‘‘health insurance issuer’’ have the meanings given 

10 such terms under paragraphs (1) and (2), respec11 tively, of section 733(b) of the Employee Retirement 

12 Income Security Act of 1974 (29 U.S.C. 1191b(b)). 

13 (7) The term ‘‘group health plan’’ has the 

14 meaning given that term in section 733(a)(1) of the 

15 Employee Retirement Income Security Act of 1974 

16 (29 U.S.C. 1191b(a)(1)). 

17 (8) The term ‘‘physician’’ has the meaning 

18 given to that term in section 1861(r) of the Social 

19 Security Act (42 U.S.C. 1395x(r)). 

20 (9) The term ‘‘regional health information orga21 nization’’ means an organization or consortium of 

22 organizations that— 

23 (A) facilitates the drafting and implemen24 tation of a regional health information network 
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1 plan for a given geographic area in 1 or more 

2 States; 

3 (B) includes representatives of health plans 

4 and other third party payers, government 

5 health care programs, employers, physicians, 

6 hospitals, other health care providers, and 

7 health care consumers; and 

8 (C) may include representatives of orga9 nized labor. 

10 (10) The term ‘‘small physician group’’ means 

11 a physician practice group of 10 or fewer physicians. 

12 (11) The term ‘‘State’’ includes the 50 States 

13 and the District of Columbia. 

Æ