II 

108TH CONGRESS 

1ST SESSION S. 1729

To establish an informatics grant program for hospitals and skilled nursing 

facilities in order to encourage health care providers to make major 

information technology advances. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 14, 2003

Mr. GRAHAM of Florida (for himself and Ms. SNOWE) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL

To establish an informatics grant program for hospitals and 

skilled nursing facilities in order to encourage health 

care providers to make major information technology advances.

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 ‘‘Medication Errors Re5 duction Act of 2003’’. 
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1 SEC. 2. INFORMATICS SYSTEMS GRANT PROGRAM FOR 

2 HOSPITALS AND SKILLED NURSING FACILI3 TIES. 

4 (a) GRANTS.—

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

6 Human Services (in this section referred to as the 

7 ‘‘Secretary’’) shall establish a program to make 

8 grants to eligible entities that have submitted appli9 cations in accordance with subsection (b) for the 

10 purpose of assisting such entities in offsetting the 

11 costs related to purchasing, leasing, developing, and 

12 implementing standardized clinical health care 

13 informatics systems designed to improve patient 

14 safety and reduce adverse events and health care 

15 complications resulting from medication errors. 

16 (2) DURATION.—The authority of the Secretary 

17 to make grants under this section shall terminate on 

18 September 30, 2013. 

19 (3) COSTS DEFINED.—For purposes of this sec20 tion, the term ‘‘costs’’ shall include total expendi21 tures incurred for—

22 (A) purchasing, leasing, and installing 

23 computer software and hardware, including 

24 handheld computer technologies; 

25 (B) making improvements to existing com26 puter software and hardware; 
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1 (C) purchasing or leasing communications 

2 capabilities necessary for clinical data access, 

3 storage, and exchange; and 

4 (D) providing education and training to el5 igible entity staff on computer patient safety in6 formation systems. 

7 (4) ELIGIBLE ENTITY DEFINED.—For purposes 

8 of this section, the term ‘‘eligible entity’’ means the 

9 following entities: 

10 (A) HOSPITAL.—A hospital (as defined in 

11 section 1861(e) of the Social Security Act (42 

12 U.S.C. 1395x(e))). 

13 (B) SKILLED NURSING FACILITY.—A 

14 skilled nursing facility (as defined in section 

15 1819(a) of such Act (42 U.S.C. 1395i–3(e))). 

16 (b) APPLICATION.—An eligible entity seeking a grant 

17 under this section shall submit an application to the Sec18 retary at such time, in such form and manner, and con19 taining such information as the Secretary specifies. 

20 (c) SPECIAL CONSIDERATIONS AND RURAL HOS21 PITAL RESERVE.—

22 (1) SPECIAL CONSIDERATION FOR ELIGIBLE

23 ENTITIES THAT SERVE A LARGE NUMBER OF MEDI24 CARE, MEDICAID, AND SCHIP ELIGIBLE INDIVID25 UALS.—In awarding grants under this section, the 
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1 Secretary shall give special consideration to eligible 

2 entities in which individuals that are eligible for ben3 efits under the medicare program under title XVIII 

4 of the Social Security Act, the medicaid program 

5 under title XIX of such Act, or under the State chil6 dren’s health insurance program under title XXI of 

7 such Act make up a high percentage of the total pa8 tient population of the entity. 

9 (2) RESERVE 20 PERCENT OF GRANT FUNDS

10 FOR RURAL HOSPITALS.—

11 (A) IN GENERAL.—Subject to subpara12 graph (C), the Secretary shall ensure that at 

13 least 20 percent of the funds available for mak14 ing grants under this section are used for mak15 ing grants to eligible entities that are rural hos16 pitals. 

17 (B) RURAL HOSPITAL DEFINED.—For pur18 poses of subparagraph (A), the term ‘‘rural hos19 pital’’ means a hospital that—

20 (i) is located in a rural area (as such 

21 term is defined for purposes of section 

22 1886(d) of the Social Security Act (42 

23 U.S.C. 1395ww(d))); 
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1 (ii) is located in an area designated by 

2 any law or regulation of the State as a 

3 rural area; or 

4 (iii) is designated by the State as a 

5 rural hospital. 

6 (C) AVAILABILITY OF RESERVE FUNDS IF

7 LIMITED NUMBER OF RURAL HOSPITALS APPLY

8 FOR GRANTS.—If the Secretary estimates that 

9 the amount of funds reserved under subpara10 graph (A) for hospitals described in such sub11 paragraph exceeds the maximum amount of 

12 funds permitted for such hospitals under sub13 section (d), the Secretary may reduce the 

14 amount reserved for such hospitals by an 

15 amount equal to such excess and use such 

16 funds for awarding grants to other eligible enti17 ties. 

18 (d) LIMITATION ON AMOUNT OF GRANT.—

19 (1) IN GENERAL.—A grant awarded under this 

20 section may not exceed the lesser of—

21 (A) an amount equal to the applicable per22 centage of the costs incurred by the eligible en23 tity for the project for which the entity is seek24 ing funding under this section; or 

25 (B) in the case of a grant made to a—
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1 (i) hospital, $750,000; or 

2 (ii) skilled nursing facility, $200,000. 

3 (2) APPLICABLE PERCENTAGE.—For purposes 

4 of paragraph (1)(A), the term ‘‘applicable percent5 age’’ means, with respect to an eligible entity, the 

6 percentage of total net revenues for such period as 

7 determined appropriate by the Secretary for the en8 tity that consists of net revenues from the medicare 

9 and medicaid programs or the State children’s 

10 health insurance program under titles XVIII, XIX, 

11 and XXI of the Social Security Act. 

12 (e) ELIGIBLE ENTITY REQUIRED TO FURNISH SEC13 RETARY WITH INFORMATION.—An eligible entity receiv14 ing a grant under this section shall furnish the Secretary 

15 with such information as the Secretary may require to—

16 (1) evaluate the project for which the grant is 

17 made; and

18 (2) ensure that funding provided under the 

19 grant is expended for the purposes for which it is 

20 made. 

21 (f) REPORTS.—

22 (1) INTERIM REPORTS.—

23 (A) IN GENERAL.—The Secretary shall 

24 submit, at least annually, a report to the Com25 mittee on Ways and Means of the House of 
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1 Representatives and the Committee on Finance 

2 of the Senate on the grant program established 

3 under this section. 

4 (B) CONTENTS.—A report submitted pur5 suant to subparagraph (A) shall include infor6 mation on—

7 (i) the number of grants made; 

8 (ii) the nature of the projects for 

9 which funding is provided under the grant 

10 program; 

11 (iii) the geographic distribution of 

12 grant recipients; and 

13 (iv) such other matters as the Sec14 retary determines appropriate. 

15 (2) FINAL REPORT.—Not later than 180 days 

16 after the completion of all of the projects for which 

17 a grant is made under this section, the Secretary 

18 shall submit a final report to the committees re19 ferred to in paragraph (1)(A) on the grant program 

20 established under this section, together with such 

21 recommendations for legislation and administrative 

22 action as the Secretary determines appropriate. 

23 (g) AUTHORIZATION OF APPROPRIATIONS.—

24 (1) AUTHORIZATION.—
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1 (A) HOSPITALS.—There are authorized to 

2 be appropriated from the Federal Hospital In3 surance Trust Fund under section 1817 of the 

4 Social Security Act (42 U.S.C. 1395i) 

5 $93,000,000, for each of the fiscal years 2004 

6 through 2013, for the purpose of making grants 

7 under this section to eligible entities that are 

8 hospitals. 

9 (B) SKILLED NURSING FACILITIES.—

10 There are authorized to be appropriated from 

11 the Federal Hospital Insurance Trust Fund 

12 under section 1817 of the Social Security Act 

13 (42 U.S.C. 1395i) $4,500,000, for each of the 

14 fiscal years 2004 through 2013, for the purpose 

15 of making grants under this section to eligible 

16 entities that are skilled nursing facilities. 

17 (2) AVAILABILITY.—Any amounts appropriated 

18 pursuant to the authority contained in subparagraph 

19 (A) or (B) of paragraph (1) shall remain available, 

20 without fiscal year limitation, through September 

21 30, 2013.

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