II 

108TH CONGRESS 

2D SESSION S. 2594 

To reduce health care disparities and improve health care quality, to improve 

the collection of racial, ethnic, primary language, and socio-economic 

determination data for use by healthcare researchers and policymakers, 

to provide performance incentives for high performing hospitals and 

community health centers, and to expand current Federal programs 

seeking to eliminate health disparities. 

IN THE SENATE OF THE UNITED STATES 

JUNE 24, 2004 

Mr. LIEBERMAN introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To reduce health care disparities and improve health care 

quality, to improve the collection of racial, ethnic, primary language, and socio-economic determination data 

for use by healthcare researchers and policymakers, to 

provide performance incentives for high performing hospitals and community health centers, and to expand current Federal programs seeking to eliminate health disparities. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

•S 2594 IS 

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Faircare Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

Sec. 3. Definitions. 

TITLE I—DEMOGRAPHIC DATA COLLECTION 

Sec. 101. Data on race, ethnicity, highest education level attained, and primary 

language. 

Sec. 102. Revision of HIPAA claims standards. 

TITLE II—IMPROVED COLLECTION OF QUALITY DATA 

Sec. 201. Authority of Agency for Healthcare Research and Quality. 

‘‘PART C—IMPROVED COLLECTION OF QUALITY DATA

‘‘Sec. 921. General authority of the Agency to determine measures. 

‘‘Sec. 922. Use of hospital-specific measures. 

‘‘Sec. 923. Outpatient-specific measures. 

‘‘Sec. 924. Ranking of measures. 

‘‘Sec. 925. Advisory Committee on Quality. 

‘‘Sec. 926. Updates of conditions. 

‘‘Sec. 927. Reporting of measures. 

‘‘Sec. 928. Voluntary submission of data. 

‘‘Sec. 929. Authorization of appropriations. 

Sec. 202. Office of national healthcare disparities and quality. 

TITLE III—FAIRCARE HOSPITAL PROGRAM 

Sec. 301. Faircare hospital program. 

Sec. 302. Technical assistance grants. 

TITLE IV—COMMUNITY HEALTH CENTERS. 

Sec. 401. Authority of Bureau of Primary Health Care to develop new reporting standards. 

Sec. 402. Faircare designation for health centers. 

Sec. 403. Grants for technical assistance. 

Sec. 404. Health disparity collaboratives. 

TITLE V—REACH 2010 

Sec. 501. Expansion of REACH 2010 

TITLE VI—MALPRACTICE INSURANCE RELIEF 

Sec. 601. Refundable tax credit for the cost of malpractice insurance for certain 

providers. 
3 

•S 2594 IS 

Sec. 602. Grants to non-profit hospitals. 

Sec. 603. Grants for research into quality of care and medical errors. 

Sec. 604. Authorization of appropriations. 

1 SEC. 2. FINDINGS. 

2 (a) EVIDENCE OF HEALTHCARE DISPARITIES.—With 

3 respect to evidence of healthcare disparities, Congress 

4 makes the following findings: 

5 (1) Healthcare disparities affect the lives, 

6 health, and livelihood of Americans, and increase the 

7 overall cost of health care in the United States. 

8 (2) Minority patients with chronic diseases have 

9 been found less likely to receive the necessary serv10 ices required to manage effectively these illnesses, 

11 such as routine blood pressure checks or eye exami12 nations, and are less likely to receive treatments to 

13 cure these conditions, such as heart surgeries or kid14 ney transplants. 

15 (3) Studies have shown that non-English speak16 ing patients report more satisfaction with health en17 counters and have better health outcomes after en18 counters with healthcare providers who speak their 

19 primary language. 

20 (4) The Institute of Medicine’s report ‘‘In the 

21 Nation’s Compelling Interest’’, concluded that racial 

22 and ethnic minority healthcare providers are signifi23 cantly more likely than their white peers to serve mi24 nority and medically underserved communities, 
4 

•S 2594 IS 

1 thereby helping to improve problems of limited mi2 nority access to care. 

3 (5) Data from the National Center for Health 

4 Statistics demonstrates that minorities are less likely 

5 to receive routine cancer screenings even when they 

6 do have health insurance and access to healthcare 

7 providers, and once diagnosed with cancer, elderly 

8 minority patients are also less likely to receive ap9 propriate treatment for pain associated with cancer. 

10 (b) EVIDENCE OF INCONSISTENCIES IN

11 HEALTHCARE QUALITY.—With respect to evidence of in12 consistencies in healthcare quality, Congress makes the 

13 following findings: 

14 (1) Inconsistent healthcare quality threatens 

15 the health of all Americans regardless of race, eth16 nicity, or socio-economic status. 

17 (2) Studies by the RAND Corporation have 

18 shown that all patients in the United States have 

19 only a 55 percent possibility of receiving clinically 

20 appropriate care in the healthcare setting, despite 

21 the fact that the United States spends twice as 

22 much as other industrialized countries on health 

23 care. 

24 (3) The control of hypertension is essential to 

25 reducing mortality from heart disease, stroke, and 
5 

•S 2594 IS 

1 diabetes complications, yet, only 23 percent of Amer2 icans with hypertension are adequately treated. 

3 (4) About 1 in 5 elderly Americans are pre4 scribed inappropriate medications. 

5 (5) Only 21 percent of Americans with diabetes 

6 get all recommended checkups. 

7 (6) One of the safest, simplest, and most cost8 effective ways to reduce cancer morbidity and mor9 tality is to increase screening rates for selected can10 cers including colorectal cancers, yet, less than half 

11 of men and women over the age of 50 report screen12 ing for colorectal cancers. 

(7) In the United States, over 1 13 ⁄4 of infants and 

14 toddlers of all races and ethnicities do not receive all 

15 recommended vaccines. 

16 (8) Breakthroughs in treatments have enabled 

17 more patients to survive and live better, yet too 

18 many of these treatments are not being administered 

19 to all those who can benefit from them. 

20 SEC. 3. DEFINITIONS. 

21 In this Act: 

22 (1) HEALTH DISPARITY POPULATIONS.—The 

23 term ‘‘health disparity populations’’ has the meaning 

24 given that term in section 485E(d) of the Public 

25 Health Service Act (42 U.S.C. 287c–31(d)). 
6 

•S 2594 IS 

1 (2) RACIAL AND ETHNIC MINORITY.—The term 

2 ‘‘racial and ethnic minority’’ has the meaning given 

3 the term ‘‘racial and ethnic minority group’’ in sec4 tion 1707(g)(1) of the Public Health Service Act (42 

5 U.S.C. 300u–6(g)(1)). 

6 TITLE I—DEMOGRAPHIC DATA 

7 COLLECTION 

8 SEC. 101. DATA ON RACE, ETHNICITY, HIGHEST EDUCATION 

9 LEVEL ATTAINED, AND PRIMARY LANGUAGE. 

10 (a) PURPOSE.—It is the purpose of this section to 

11 promote data collection and reporting by race, ethnicity, 

12 highest education level attained, and primary language 

13 among federally supported health programs. 

14 (b) AMENDMENT.—Part B of title II of the Public 

15 Health Service Act (42 U.S.C. 238 et seq.) is amended 

16 by adding at the end the following: 

17 ‘‘SEC. 249. DATA ON RACE, ETHNICITY, HIGHEST EDU18 CATION LEVEL ATTAINED, AND PRIMARY 

19 LANGUAGE. 

20 ‘‘(a) REQUIREMENTS.— 

21 ‘‘(1) IN GENERAL.—Each health-related pro22 gram operated by or that receives funding or reim23 bursement, in whole or in part, either directly or in24 directly from the Department of Health and Human 
7 

•S 2594 IS 

1 Services shall, in accordance with the schedule de2 scribed in subsection (e)— 

3 ‘‘(A) require the collection, by the agency 

4 or program involved, of data on the race, eth5 nicity, highest education level attained, and pri6 mary language of each applicant for and recipi7 ent of health-related assistance under such pro8 gram— 

9 ‘‘(i) using, at a minimum, the cat10 egories for race and ethnicity described in 

11 the 1997 Office of Management and Budg12 et Standards for Maintaining, Collecting, 

13 and Presenting Federal Data on Race and 

14 Ethnicity; 

15 ‘‘(ii) using the standards developed 

16 under subsection (d) for the collection of 

17 language data; 

18 ‘‘(iii) where practicable, collecting 

19 data for additional population groups if 

20 such groups can be aggregated into the 

21 minimum race and ethnicity categories as 

22 defined by the Office of Management and 

23 Budget; and 

24 ‘‘(iv) where practicable, through self25 reporting; 
8 

•S 2594 IS 

1 ‘‘(B) with respect to the collection of the 

2 data described in subparagraph (A) for appli3 cants and recipients who are minors or other4 wise legally incapacitated, require that— 

5 ‘‘(i) such data be collected from the 

6 parent or legal guardian of such an appli7 cant or recipient; and 

8 ‘‘(ii) the preferred language of the 

9 parent or legal guardian of such an appli10 cant or recipient be collected; and 

11 ‘‘(C) ensure that the provision of assist12 ance to an applicant or recipient of assistance 

13 is not denied or otherwise adversely affected be14 cause of the failure of the applicant or recipient 

15 to provide race, ethnicity, highest education 

16 level attained, and primary language data. 

17 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

18 this subsection shall be construed to permit the use 

19 of information collected under this subsection in a 

20 manner that would adversely affect any individual 

21 providing any such information. 

22 ‘‘(b) PROTECTION OF DATA.—The Secretary shall 

23 ensure (through the promulgation of regulations or other24 wise) that all data collected pursuant to subsection (a) is 

25 protected— 
9 

•S 2594 IS 

1 ‘‘(1) under the same privacy protections as the 

2 Secretary applies to other health data under the reg3 ulations promulgated under section 264(c) of the 

4 Health Insurance Portability and Accountability Act 

5 of 1996 (Public Law 104–191; 110 Stat. 2033) re6 lating to the privacy of individually identifiable 

7 health information and other protections; and 

8 ‘‘(2) from all inappropriate internal use by any 

9 entity that collects, stores, or receives the data, in10 cluding use of such data in determinations of eligi11 bility (or continued eligibility) in health plans, and 

12 from other inappropriate uses, as defined by the 

13 Secretary. 

14 ‘‘(c) COMPLIANCE WITH STANDARDS.—Data col15 lected under subsection (a) shall be obtained, maintained, 

16 and presented (including for reporting purposes) in ac17 cordance with, at a minimum, the 1997 Office of Manage18 ment and Budget Standards for Maintaining, Collecting, 

19 and Presenting Federal Data on Race and Ethnicity. 

20 ‘‘(d) LANGUAGE COLLECTION STANDARDS.—Not 

21 later than 1 year after the date of enactment of this sec22 tion, the Director of the Office of Minority Health, in con23 sultation with the Office for Civil Rights of the Depart24 ment of Health and Human Services, shall develop and 
10 

•S 2594 IS 

1 disseminate Standards for the Classification of Federal 

2 Data on Preferred Written and Spoken Language. 

3 ‘‘(e) SCHEDULE OF COMPLIANCE.—Data collection 

4 under subsection (a) shall be required within the following 

5 time periods: 

6 ‘‘(1) With respect to medicare-related data 

7 (under title XVIII of the Social Security Act), such 

8 data shall be collected not later than 2 years after 

9 the date of enactment of this section, including data 

10 related to— 

11 ‘‘(A) the Medicare Hospital Quality Initia12 tive; 

13 ‘‘(B) the Center for Medicare and Med14 icaid Services Abstraction or Reporting Tools 

15 (referred to in this section as ‘CART’); 

16 ‘‘(C) all CART equivalent private data17 bases used to submit data for the Medicare 

18 Hospital Quality Initiative or medicare billing 

19 (including data for both medicare and non20 medicare patients); and 

21 ‘‘(D) all medicare billing communications. 

22 ‘‘(2) With respect to data that is not currently 

23 mandated or collected and reported by the medicaid 

24 and State Children’s Health Insurance Program 

25 (under titles XIX and XXI of the Social Security 
11 

•S 2594 IS 

1 Act), such data shall be collected not later than 4 

2 years after the date of enactment of this section. 

3 ‘‘(3) With respect to data relating to biomedical 

4 and health services research that is described in sub5 section (a), such data shall be collected not later 

6 than 6 years after the date of enactment of this sec7 tion. 

8 ‘‘(4) With respect to data relating to all other 

9 programs described in subsection (a), such data 

10 shall be collected not later than 6 years after the 

11 date of enactment of this section. 

12 ‘‘(f) TECHNICAL ASSISTANCE FOR THE COLLECTION

13 AND REPORTING OF DATA.— 

14 ‘‘(1) IN GENERAL.—The Secretary may, either 

15 directly or through grant or contract, provide tech16 nical assistance to enable a healthcare program or 

17 an entity operating under such program to comply 

18 with the requirements of this section. 

19 ‘‘(2) TYPES OF ASSISTANCE.—Assistance pro20 vided under this subsection may include assistance 

21 to— 

22 ‘‘(A) enhance or upgrade information tech23 nology that will facilitate race, ethnicity, highest 

24 education level attained, and primary language 

25 data collection and analysis; 
12 

•S 2594 IS 

1 ‘‘(B) improve methods for health data col2 lection and analysis including additional popu3 lation groups beyond the Office of Management 

4 and Budget categories if such groups can be 

5 aggregated into the minimum race and ethnicity 

6 categories; 

7 ‘‘(C) develop mechanisms for submitting 

8 collected data subject to existing privacy and 

9 confidentiality regulations; and 

10 ‘‘(D) develop educational programs to in11 form health insurance issuers, health plans, 

12 health providers, health-related agencies, and 

13 the general public that data collection and re14 porting by race, ethnicity, and preferred lan15 guage are legal and essential for eliminating 

16 health and healthcare disparities. 

17 ‘‘(g) GRANTS FOR DATA COLLECTION BY COMMU18 NITY HEALTH CENTERS AND HOSPITALS.— 

19 ‘‘(1) IN GENERAL.—The Secretary, in consulta20 tion with the Administrator of the Centers for Medi21 care & Medicaid Services and the Administrator of 

22 the Health Resources and Services Administration, 

23 is authorized to award grants for the conduct of 100 

24 demonstration programs, 50 percent of which shall 

25 be conducted by community health centers and 50 
13 

•S 2594 IS 

1 percent of which shall be conducted by hospitals, to 

2 enhance the ability of such centers and hospitals to 

3 collect, analyze, and report the data required under 

4 subsection (a). 

5 ‘‘(2) ELIGIBILITY.—To be eligible to receive a 

6 grant under paragraph (1), a community health cen7 ter or hospital shall— 

8 ‘‘(A) prepare and submit to the Secretary 

9 an application at such time, in such manner, 

10 and containing such information as the Sec11 retary may require; and 

12 ‘‘(B) provide assurances that the commu13 nity health center or hospital will use, at a min14 imum, the racial and ethnic categories and the 

15 standards for collection described in the 1997 

16 Office of Management and Budget Standards 

17 for Maintaining, Collecting, and Presenting 

18 Federal Data on Race and Ethnicity and avail19 able standards for language. 

20 ‘‘(3) ACTIVITIES.—A grantee shall use amounts 

21 received under a grant under paragraph (1) to— 

22 ‘‘(A) collect, analyze, and report data by 

23 race, ethnicity, highest education level attained, 

24 and primary language for patients served by the 

25 hospital (including emergency room patients 
14 

•S 2594 IS 

1 and patients served on an outpatient basis) or 

2 community health center; 

3 ‘‘(B) enhance or upgrade computer tech4 nology that will facilitate racial, ethnic, highest 

5 education level attained, and primary language 

6 data collection and analysis; 

7 ‘‘(C) provide analyses of disparities in 

8 health and healthcare, including specific disease 

9 conditions, diagnostic and therapeutic proce10 dures, or outcomes; 

11 ‘‘(D) improve health data collection and 

12 analysis for additional population groups be13 yond the Office of Management and Budget 

14 categories if such groups can be aggregated into 

15 the minimum race and ethnicity categories; 

16 ‘‘(E) develop mechanisms for sharing col17 lected data subject to privacy and confiden18 tiality regulations; 

19 ‘‘(F) develop educational programs to in20 form health insurance issuers, health plans, 

21 health providers, health-related agencies, pa22 tients, enrollees, and the general public that 

23 data collection, analysis, and reporting by race, 

24 ethnicity, and preferred language are legal and 
15 

•S 2594 IS 

1 essential for eliminating disparities in health 

2 and healthcare; and 

3 ‘‘(G) develop quality assurance systems de4 signed to track disparities and quality improve5 ment systems designed to eliminate disparities. 

6 ‘‘(4) COMMUNITY HEALTH CENTER; HOS7 PITAL.—In this subsection: 

8 ‘‘(A) COMMUNITY HEALTH CENTER.—The 

9 term ‘community health center’ means a Feder10 ally qualified health center as defined in section 

11 1861(aa)(4) of the Social Security Act. 

12 ‘‘(B) HOSPITAL.—The term ‘hospital’ 

13 means a hospital participating in the prospec14 tive payment system under section 1886 of the 

15 Social Security Act and that is submitting qual16 ity indicators data in accordance with section 

17 1886(b)(3)(B)(vii)(II) of the Social Security 

18 Act. 

19 ‘‘(h) DEFINITION.—In this section, the term ‘health20 related program’ means a program— 

21 ‘‘(1) under the Social Security Act (42 U.S.C. 

22 301 et seq.) that pays for healthcare and services; 

23 and 

24 ‘‘(2) under this Act that provides Federal finan25 cial assistance for healthcare, biomedical research, 
16 

•S 2594 IS 

1 health services research, and other programs des2 ignated by the Secretary. 

3 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is 

4 authorized to be appropriated to carry out this section, 

5 $50,000,000 for fiscal year 2005, and such sums as may 

6 be necessary for each of fiscal years 2006 through 2015.’’. 

7 SEC. 102. REVISION OF HIPAA CLAIMS STANDARDS. 

8 (a) IN GENERAL.—Not later than 1 year after the 

9 date of enactment of this Act, the Secretary of Health and 

10 Human Services shall revise the regulations promulgated 

11 under part C of title XI of the Social Security Act (42 

12 U.S.C. 1320d et seq.), as added by the Health Insurance 

13 Portability and Accountability Act of 1996 (Public Law 

14 104–191), relating to the collection of data on race, eth15 nicity, highest education level attained, and primary lan16 guage in a health-related transaction to require— 

17 (1) the use, at a minimum, of the categories for 

18 race and ethnicity described in the 1997 Office of 

19 Management and Budget Standards for Maintain20 ing, Collecting, and Presenting Federal Data on 

21 Race and Ethnicity; 

22 (2) the establishment of new data code sets for 

23 highest education level attained and primary lan24 guage; and 
17 

•S 2594 IS 

1 (3) the designation of the racial, ethnic, highest 

2 education level attained, and primary language code 

3 sets as ‘‘required’’ for claims and enrollment data. 

4 (b) DISSEMINATION.—The Secretary of Health and 

5 Human Services shall disseminate the new standards de6 veloped under subsection (a) to all health entities that are 

7 subject to the regulations described in such subsection and 

8 provide technical assistance with respect to the collection 

9 of the data involved. 

10 (c) COMPLIANCE.—Not later than 1 year after the 

11 final promulgation of the regulations developed under sub12 section (a), the Secretary of Health and Human Services 

13 shall require that health entities comply with such stand14 ards. 

15 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

16 authorized to be appropriated to carry out this section, 

17 such sums as may be necessary for each of fiscal years 

18 2005 through 2015. 

19 TITLE II—IMPROVED 

20 COLLECTION OF QUALITY DATA 

21 SEC. 201. AUTHORITY OF AGENCY FOR HEALTHCARE RE22 SEARCH AND QUALITY. 

23 Title IX of the Public Health Service Act (42 U.S.C. 

24 299 et seq.) is amended— 

25 (1) by redesignating part C as part D; 
18 

•S 2594 IS 

1 (2) by redesignating sections 921 through 928, 

2 as sections 931 through 938, respectively; 

3 (3) in section 938(1) (as so redesignated), by 

4 striking ‘‘921’’ and inserting ‘‘931’’; and 

5 (4) by inserting after part B the following: 

6 ‘‘PART C—IMPROVED COLLECTION OF QUALITY 

7 DATA 

8 ‘‘SEC. 921. GENERAL AUTHORITY OF THE AGENCY TO DE9 TERMINE MEASURES. 

10 ‘‘(a) IN GENERAL.—The Agency, in consultation with 

11 the Centers for Medicare & Medicaid Services, the Health 

12 Resources and Services Administration, the Office for 

13 Civil Rights of the Department of Health and Human 

14 Services, and the Office of Minority Health, shall have the 

15 authority to develop a new set of quality measures for each 

16 of the most common treatment settings. Such settings 

17 shall include, but not be limited to, hospitals, outpatient 

18 facilities, community health centers, long term care facili19 ties, and other independent health care facilities. 

20 ‘‘(b) REQUIREMENTS.—The quality measures devel21 oped under subsection (a) shall— 

22 ‘‘(1) as closely as possible reflect the healthcare 

23 priority areas determined by the Institute of Medi24 cine, the National Quality Forum, the Quality Initia25 tive, and other healthcare quality and health care 
19 

•S 2594 IS 

1 disparity organizations as determined by the Sec2 retary; 

3 ‘‘(2) reflect the Institute of Medicine’s goal of 

4 inclusiveness, improvability, and impact, addressing 

5 pervasive health and healthcare problems that 

6 produce a high level of morbidity and mortality, that 

7 disproportionally affect health disparity populations, 

8 and that have the potential for improvement with 

9 the consistent application of proven medical inter10 ventions; and 

11 ‘‘(3) where practical, employ process measures 

12 of care. 

13 ‘‘SEC. 922. USE OF HOSPITAL-SPECIFIC MEASURES. 

14 ‘‘(a) DEVELOPMENT.— 

15 ‘‘(1) IN GENERAL.—The Agency, in conjunction 

16 with the Centers for Medicare & Medicaid Services, 

17 shall develop a set of hospital quality measures. 

18 ‘‘(2) USE.—The Secretary shall ensure that the 

19 Hospital Quality Initiative and the Robust Project 

20 Measures of the Centers for Medicare & Medicaid 

21 Services, and other Centers for Medicare & Medicaid 

22 Services directed quality initiatives use the hospital 

23 quality measures developed under paragraph (1). 

24 ‘‘(b) SUBMISSION.—The information required under 

25 the measures developed under subsection (a) shall be sub-
20 

•S 2594 IS 

1 mitted in accordance with section 1886(b)(3)(B)(vii) ex2 cept that any reference to ‘2007’ shall be deemed to be 

3 a reference to ‘2015’. 

4 ‘‘SEC. 923. OUTPATIENT-SPECIFIC MEASURES. 

5 ‘‘(a) IN GENERAL.—The Agency, in conjunction with 

6 the Bureau of Primary Health Care within the Health Re7 sources and Services Administration, shall develop a set 

8 of outpatient quality measures. Such measures may be 

9 used as a supplement to existing demographic or quality 

10 reporting instruments or other quality reporting instru11 ments utilized by the Health Resources and Services Ad12 ministration. 

13 ‘‘(b) VOLUNTARY SUBMISSION.—Submission of the 

14 supplementary information required under the measures 

15 developed under subsection (a) shall be voluntary. 

16 ‘‘(c) DISCRETIONARY USE.—The measures developed 

17 under subsection (a) may be used as appropriate by the 

18 Hospital Quality Initiative and the Robust Project Meas19 ures and other Centers for Medicare & Medicaid Services20 directed quality initiatives. 

21 ‘‘SEC. 924. RANKING OF MEASURES. 

22 ‘‘The Agency shall— 

23 ‘‘(1) determine which of the quality measures 

24 developed under this part have the greatest potential 

25 to remedy healthcare disparities; 
21 

•S 2594 IS 

1 ‘‘(2) rank such quality measures according to 

2 such potential; and 

3 ‘‘(3) rank such quality measures separately as 

4 applicable to hospitals and outpatients. 

5 ‘‘SEC. 925. ADVISORY COMMITTEE ON QUALITY. 

6 ‘‘(a) IN GENERAL.—The Agency shall establish an 

7 Advisory Committee on Quality (referred to in this section 

8 as the ‘Advisory Committee’) to recommend quality indica9 tors for all quality data sets developed under this section. 

10 The Agency may designate a governmental or nongovern11 mental committee existing on the date of enactment of this 

12 part to serve as the Advisory Committee so long as the 

13 membership requirements of subsection (b) are complied 

14 with. 

15 ‘‘(b) MEMBERSHIP.—The Advisory Committee shall 

16 be composed of not less than 10 members, including— 

17 ‘‘(1) the Director; 

18 ‘‘(2) the Administrator of the Centers for Medi19 care & Medicaid Services; 

20 ‘‘(3) the Director of the Centers for Disease 

21 Control and Prevention; 

22 ‘‘(4) the Administrator of the Health Resources 

23 and Services Administration; 
22 

•S 2594 IS 

1 ‘‘(5) the Director of the Office of Minority 

2 Health of the Department of Health and Human 

3 Services; 

4 ‘‘(6) the Director of the Office for Civil Rights 

5 of the Department of Health and Human Services; 

6 ‘‘(7) the Director of the Indian Health Service; 

7 ‘‘(8) the chairperson of the Institute of Medi8 cine National Roundtable on Healthcare Quality or 

9 other representatives of the Institute of Medicine; 

10 ‘‘(9) the chairperson of the National Quality 

11 Forum; 

12 ‘‘(10) the Director of the Joint Commission on 

13 Accreditation of Healthcare Organizations; 

14 ‘‘(11) a representative of the Quality Initiative; 

15 and 

16 ‘‘(12) other members to be appointed by the 

17 Secretary to represent other private, public, and 

18 non-profit stakeholders from medicine, healthcare, 

19 patient groups, and academia, who shall serve for a 

20 term of 3 years, and shall include a mix of different 

21 professions and broad geographic and culturally di22 verse representation. 

23 ‘‘(c) DUTIES.—The Advisory Committee shall— 

24 ‘‘(1) for each 3 year period beginning with fis25 cal year 2005, report to the Agency recommenda-
23 

•S 2594 IS 

1 tions of quality indicators for all quality data sets 

2 described in this part; 

3 ‘‘(2) in making the recommendations described 

4 in paragraph (1), focus on how best to integrate the 

5 findings of the Institute of Medicine, the National 

6 Quality Forum, the Quality Initiative, and other 

7 healthcare quality and healthcare disparity organiza8 tions as determined by the Secretary into quality 

9 measures that can be used in carrying out sections 

10 922 and 923; and 

11 ‘‘(3) address issues of continuity of care be12 tween ambulatory care and inpatient settings to the 

13 maximum extent practicable. 

14 ‘‘SEC. 926. UPDATES OF CONDITIONS. 

15 ‘‘(a) IN GENERAL.—At least once during every 3-year 

16 period beginning in fiscal year 2006, the Secretary shall 

17 direct the Agency to update the list of measures as de18 scribed in sections 922 and 923. Such updates shall be 

19 based on recommendations of the Advisory Committee es20 tablished under section 925 and determined in consulta21 tion with the Centers for Medicare & Medicaid Services 

22 and the Health Resources and Services Administration. 

23 ‘‘(b) REQUIREMENT.—For each period in which an 

24 update is undertaken under subsection (a), the Agency 

25 shall ensure that the recommendations referred to such 
24 

•S 2594 IS 

1 subsection include measures for at least 4 additional con2 ditions identified by the Institute of Medicine National 

3 Roundtable on Healthcare Quality, or measures developed 

4 by other healthcare disparity or healthcare quality organi5 zations as determined by the Secretary, and not addressed 

6 by the quality reporting initiatives administered by the 

7 Secretary on the date of enactment of this part. The re8 quirement of this section shall apply until there are meas9 ures for all Institute of Medicine priority areas. 

10 ‘‘SEC. 927. REPORTING OF MEASURES. 

11 ‘‘(a) IN GENERAL.—Not later than 5 years after the 

12 date of enactment of the Faircare Act, the Secretary shall 

13 enter into a contract with the Institute of Medicine to 

14 produce a report on the effectiveness of the quality meas15 ures developed by the Agency under this part in accurately 

16 assessing the quality of healthcare and healthcare dispari17 ties present in hospitals, community health centers, and 

18 other appropriate health care settings. Such report shall 

19 evaluate the progress made in improving the quality and 

20 consistency of healthcare and reducing healthcare dispari21 ties. 

22 ‘‘(b) MANNER OF REPORTING.—All data reported 

23 under the Faircare Act (including data reported under 

24 this part) shall, to the maximum extent practicable, be re-
25 

•S 2594 IS 

1 ported by race, ethnicity, primary language, and highest 

2 educational level attained in accordance with section 249. 

3 ‘‘SEC. 928. EFFECTIVENESS RESEARCH GRANTS. 

4 ‘‘The Office of Minority Health shall have the author5 ity to award grants to study the effectiveness of all meas6 ures and programs established under this part. The Office 

7 shall recommend ways to improve such measure and pro8 grams and to implement the findings of the study con9 ducted under section 927. 

10 ‘‘SEC. 929. PROTECTION OF DATA. 

11 ‘‘(a) RULE OF CONSTRUCTION.—Nothing in this part 

12 shall be construed to permit the use of information col13 lected under this part in a manner that would adversely 

14 affect any individual providing any such information. 

15 ‘‘(b) PROTECTION OF DATA.—The Secretary shall 

16 ensure (through the promulgation of regulations or other17 wise) that all data collected pursuant to this part is pro18 tected— 

19 ‘‘(1) under the same privacy protections as the 

20 Secretary applies to other health data under the reg21 ulations promulgated under section 264(c) of the 

22 Health Insurance Portability and Accountability Act 

23 of 1996 (Public Law 104–191; 110 Stat. 2033) re24 lating to the privacy of individually identifiable 

25 health information and other protections; and 
26 

•S 2594 IS 

1 ‘‘(2) from all inappropriate internal use by any 

2 entity that collects, stores, or receives the data, in3 cluding use of such data in determinations of eligi4 bility (or continued eligibility) in health plans, and 

5 from other inappropriate uses, as defined by the 

6 Secretary. 

7 ‘‘SEC. 929A. AUTHORIZATION OF APPROPRIATIONS. 

8 ‘‘There is authorized to be appropriated to carry out 

9 this section, $5,000,000 for each of fiscal years 2005 

10 through 2007, and such sums as may be necessary for 

11 each of fiscal years 2008 through 2015.’’. 

12 SEC. 202. OFFICE OF NATIONAL HEALTHCARE DISPARITIES 

13 AND QUALITY. 

14 Part A of title IX of the Public Health Service Act 

15 (42 U.S.C. 299 et seq.) is amended by adding at the end 

16 the following: 

17 ‘‘SEC. 904. OFFICE OF NATIONAL HEALTHCARE DISPARI18 TIES AND QUALITY. 

19 ‘‘(a) IN GENERAL.—There is established within the 

20 Agency an Office of National Healthcare Disparities and 

21 Quality (referred to in this section as the ‘Office’). Such 

22 Office shall administer the development and submission of 

23 the annual National Healthcare Disparities Report (under 

24 section 903(a)(6)) and the National Healthcare Quality 
27 

•S 2594 IS 

1 Report (under section 913(b)(2)) and carry out any other 

2 activities determined appropriate by the Secretary. 

3 ‘‘(b) NATIONAL HEALTHCARE DISPARITIES AND

4 QUALITY REPORTS.— 

5 ‘‘(1) REPORTING REQUIREMENTS.—Not later 

6 than 1 year after the date of enactment of this sec7 tion, and annually thereafter, the Office, in consulta8 tion with the Advisory Committee under section 925, 

9 the Office of Minority Health, and the Office for 

10 Civil Rights of the Department of Health and 

11 Human Services, shall submit to the Secretary, the 

12 appropriate committees of Congress, and the pub13 lic— 

14 ‘‘(A) a report on the disparities in 

15 healthcare which shall include data using the 

16 quality measures developed by the Agency 

17 under part C; and 

18 ‘‘(B) a report on general healthcare qual19 ity. 

20 ‘‘(2) LIMITATIONS.—The reports under para21 graph (1) shall not identify individual hospitals or 

22 healthcare providers but shall include regional and 

23 State level data. To the maximum extent practicable, 

24 such reports shall— 
28 

•S 2594 IS 

1 ‘‘(A) indicate variations in healthcare qual2 ity between States and regions; and 

3 ‘‘(B) to the maximum extent practicable, 

4 include data reported by race, ethnicity, pri5 mary language, and highest educational level 

6 attained in accordance with section 249. 

7 ‘‘(3) AVAILABILITY.—The Office shall make 

8 such reports available to States, tribal organizations, 

9 and territorial governments upon request. 

10 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

11 There is authorized to be appropriated to carry out 

12 this subsection, $10,000,000 for each of fiscal years 

13 2005 through 2007, and such sums as may be nec14 essary for each of fiscal years 2008 through 2015. 

15 ‘‘(c) ACTIVITIES RELATING TO BEST PRACTICES.— 

16 ‘‘(1) REPORT.—The Office of National 

17 Healthcare Disparities and Quality shall annually 

18 publish a report that describes the specific activities 

19 undertaken by Faircare Level I institutions, as des20 ignated under section 330P of this Act or section 

21 1898(b) of the Social Security Act, that have re22 sulted in a decrease in healthcare disparities or im23 proved quality. Such reports shall include rec24 ommendations for carrying out such activities at 

25 other healthcare institutions. 
29 

•S 2594 IS 

1 ‘‘(2) CONFERENCE.—In conjunction with the 

2 publication of each report under paragraph (1), Of3 fice of National Healthcare Disparities and Quality 

4 shall hold an annual conference at which personnel 

5 from the Faircare institutions described in para6 graph (1) can interact, advise, and consult with 

7 other healthcare institutions. 

8 ‘‘(3) TECHNICAL ASSISTANCE.—The Office of 

9 National Healthcare Disparities and Quality shall 

10 offer technical assistance to healthcare institutions 

11 in reducing healthcare disparities, including through 

12 the dissemination of information through the Office 

13 Internet website, the development of an electronic 

14 mail list of best practices, the maintenance of a 

15 database and clearinghouse of best practices, and 

16 through other activities determined appropriate by 

17 the Office. 

18 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

19 There is authorized to be appropriated to carry out 

20 this subsection, $5,000,000 for each of fiscal years 

21 2005 to 2007, and such sums as may be necessary 

22 for each of fiscal years 2008 through 2015.’’. 
30 

•S 2594 IS 

1 TITLE III—FAIRCARE HOSPITAL 

2 PROGRAM 

3 SEC. 301. FAIRCARE HOSPITAL PROGRAM. 

4 (a) PURPOSES.—The purposes of this section are 

5 to— 

6 (1) require the Administrator of the Center for 

7 Medicare & Medicaid Services to— 

8 (A) determine which hospitals have suc9 cessfully reduced healthcare disparities between 

10 health disparity populations and other patients 

11 and improved healthcare quality based on the 

12 Hospital Quality Initiative measures established 

13 by the Agency for Healthcare Research and 

14 Quality under part C of title IX of the Public 

15 Health Service Act, as added by title II; 

16 (B) verify the accuracy of the data sub17 mitted by such hospitals for purposes of being 

18 designated as a Faircare Hospital; and 

19 (C) designate such hospitals as Faircare 

20 hospitals; and 

21 (2) provide such hospitals with increased pay22 ments under the medicare program. 

23 (b) PROGRAM.—Title XVIII of the Social Security 

24 Act, as amended by section 1016 of the Medicare Prescrip25 tion Drug, Improvement, and Modernization Act of 2003 
31 

•S 2594 IS 

1 (Public Law 108–173; 117 Stat. 2447), is amended by 

2 adding at the end the following new section: 

3 ‘‘PERFORMANCE INCENTIVE PAYMENT PROGRAM

4 ‘‘SEC. 1898. (a) ESTABLISHMENT.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall estab6 lish a program under which financial incentive pay7 ments are made in accordance with subsection (c) to 

8 subsection (d) hospitals (as defined in paragraph 

9 (2)) that have been designated under subsection (b). 

10 ‘‘(2) SUBSECTION (d) HOSPITAL.—In this sec11 tion, the term ‘subsection (d) hospital’ has the 

12 meaning given that term in section 1886(d)(1)(B). 

13 ‘‘(b) DESIGNATION OF FAIRCARE HOSPITALS.— 

14 ‘‘(1) IN GENERAL.—For each of fiscal years 

15 2006 through 2014, the Secretary shall designate 

16 subsection (d) hospitals as follows: 

17 ‘‘(A) LEVEL III FAIRCARE HOSPITAL.—The 

18 Secretary shall designate a subsection (d) hos19 pital as a Level III Faircare hospital if the fol20 lowing requirements are met: 

21 ‘‘(i) The subsection (d) hospital sub22 mitted data described in section 249 of the 

23 Public Health Service Act and part C of 

24 title IX of such Act to the Secretary in 

25 such form and manner and at such time 

26 specified by the Secretary under such sec-
32 

•S 2594 IS 

1 tion and part and all such data submitted 

2 relating to patient quality includes data on 

3 the race, ethnicity, highest education level 

4 attained, and primary language of such pa5 tients. 

6 ‘‘(ii) The Secretary determines that 

7 the subsection (d) hospital has improved 

8 the rate of delivery of high quality care 

9 during the 24-month period preceding such 

10 determination. A hospital shall be deter11 mined to meet the requirement in the pre12 ceding sentence if the Secretary determines 

13 that the hospital has increased the fre14 quency of appropriate care for the majority 

15 of the applicable measures during such 24- 

16 month period by at least 5 percentage 

17 points within each such measure. 

18 ‘‘(B) LEVEL II FAIRCARE HOSPITAL.—The 

19 Secretary shall designate a subsection (d) hos20 pital as a Level II Faircare hospital if the fol21 lowing requirements are met: 

22 ‘‘(i) The requirements described in 

23 clauses (i) and (ii) of subparagraph (A) 

24 are met. 
33 

•S 2594 IS 

1 ‘‘(ii) The Secretary determines that 

2 the subsection (d) hospital, during the 24- 

3 month period preceding such determina4 tion, has made a significant reduction in 

5 the disparities in the treatment of health 

6 disparity populations relative to other pa7 tients for— 

8 ‘‘(I) the majority of the applica9 ble measures; or 

10 ‘‘(II) all of the 25 percent high11 est ranked applicable measures, as 

12 ranked for their importance for 

13 healthcare equity by the Agency for 

14 Healthcare Research and Quality 

15 under section 925 of the Public 

16 Health Service Act. 

17 ‘‘(C) LEVEL I FAIRCARE HOSPITAL.—The 

18 Secretary shall designate a subsection (d) hos19 pital as a Level I Faircare hospital if the fol20 lowing requirements are met: 

21 ‘‘(i) The requirement described sub22 paragraph (A)(i) is met. 

23 ‘‘(ii) Either— 

24 ‘‘(I) the requirement described in 

25 subparagraph (A)(ii) is met; or 
34 

•S 2594 IS 

1 ‘‘(II) the Secretary determines 

2 that the frequency of appropriate care 

3 provided by the subsection (d) hos4 pital for each applicable measure is at 

5 least 10 percentage points greater 

6 than the national average for the fre7 quency of appropriate care for each 

8 applicable measure. 

9 ‘‘(iii) The Secretary determines that 

10 the subsection (d) hospital, during the 24- 

11 month period preceding such determina12 tion, has had no significant disparity in the 

13 treatment of health disparity populations 

14 relative to other patients for all of the 75 

15 percent highest ranked applicable meas16 ures, as ranked for their importance for 

17 healthcare equity by the Agency for 

18 Healthcare Research and Quality under 

19 section 925 of the Public Health Service 

20 Act. 

21 ‘‘(2) APPLICABLE MEASURES DEFINED.—For 

22 purposes of this subsection, the term ‘applicable 

23 measures’ means the Hospital Quality Initiative 

24 measures established by the Agency for Healthcare 
35 

•S 2594 IS 

1 Research and Quality under part C of title IX of the 

2 Public Health Service Act. 

3 ‘‘(3) HEALTH DISPARITY POPULATION DE4 FINED.—For purposes of this subsection, the term 

5 ‘health disparity population’ has the meaning given 

6 that term in section 485E(d) of the Public Health 

7 Service Act. 

8 ‘‘(b) FINANCIAL INCENTIVE PAYMENTS.— 

9 ‘‘(1) IN GENERAL.—Subject to paragraph (2) 

10 and subsection (d), for purposes of subclauses (XIX) 

11 and (XX) of section 1886(b)(3)(B)(i) for each of fis12 cal years 2007 through 2015, in the case of a sub13 section (d) hospital that has been designated under 

14 subsection (b) for a fiscal year, the Secretary shall 

15 increase the applicable percentage increase for the 

16 subsequent fiscal year for such hospital— 

17 ‘‘(A) in the case of a Level I Faircare hos18 pital, by 4 percentage points (or 8 percentage 

19 points in the case of such a hospital who is also 

20 described in subparagraph (B) of section 

21 1923(b)(1)(B)); 

22 ‘‘(B) in the case of a Level II Faircare 

23 hospital, by 2 percentage points (or 4 percent24 age points in the case of such a hospital who 
36 

•S 2594 IS 

1 is also described in subparagraph (B) of section 

2 1923(b)(1)(B)); and 

3 ‘‘(C) in the case of a Level III Faircare 

4 hospital, by 1 percentage point (or 2 percentage 

5 points in the case of such a hospital who is also 

6 described in subparagraph (B) of section 

7 1923(b)(1)(B)). 

8 ‘‘(2) REDUCTION IN FINANCIAL INCENTIVE

9 PAYMENTS IF INSUFFICIENT FUNDING AVAIL10 ABLE.—If the Secretary estimates that the total 

11 amount of increased payments under paragraph (1) 

12 for a fiscal year will exceed the funding available 

13 under subsection (d) for such increased payments 

14 for the fiscal year, the Secretary shall proportion15 ately reduce the percentage points described in sub16 paragraphs (A), (B), and (C) of paragraph (1) in 

17 order to eliminate such excess. 

18 ‘‘(3) INCREASED PAYMENT NOT BUILT INTO

19 THE BASE.—Any increased payment under para20 graph (1) shall only apply to the fiscal year involved 

21 and the Secretary shall not take into account any 

22 such increased payment in computing the applicable 

23 percentage increase under clause (i)(XIX) for a sub24 sequent fiscal year. 
37 

•S 2594 IS 

1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated for making payments 

3 under subsection (b) such sums as may be necessary for 

4 each of fiscal years 2007 through 2015.’’. 

5 SEC. 302. TECHNICAL ASSISTANCE GRANTS. 

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

7 Human Services shall provide technical assistance to eligi8 ble entities for the conduct of demonstration projects to 

9 improve the quality of healthcare and to reduce healthcare 

10 disparities. 

11 (b) ELIGIBILITY.—To be eligible to receive technical 

12 assistance under subsection (a), an entity shall— 

13 (1) be a hospital— 

14 (A) that, by legal mandate or explicitly 

15 adopted mission, provides patients with access 

16 to services regardless of their ability to pay; 

17 (B) that provides care or treatment for a 

18 substantial number of patients who are unin19 sured, are receiving assistance under a State 

20 program under title XIX of the Social Security 

21 Act, or are members of health disparity popu22 lations, as determined by the Secretary; and 

23 (C)(i) with respect to which, not less than 

24 50 percent of the entity’s patient population is 

25 made up of racial and ethnic minorities; or 
38 

•S 2594 IS 

1 (ii) that serves a disproportionate percent2 age of local, minority racial and ethnic patients, 

3 or that has a patient population, at least 50 

4 percent of which is limited English proficient; 

5 and 

6 (2) prepare and submit to the Secretary an ap7 plication at such time, in such manner, and con8 taining such information as the Secretary may re9 quire. 

10 (c) TYPES OF ASSISTANCE.—The type of technical 

11 assistance that may be provided under this section shall 

12 be determined by the Centers for Medicare & Medicaid 

13 Services. Such assistance may include competitively 

14 awarded grants and other forms of assistance. 

15 (d) USE OF ASSISTANCE.—Assistance provided under 

16 this section shall be used to improve healthcare quality 

17 or to reduce healthcare disparities. 

18 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to carry out this section, 

20 such sums as may be necessary for each of fiscal years 

21 2005 through 2015. 
39 

•S 2594 IS 

1 TITLE IV—COMMUNITY HEALTH 

2 CENTERS. 

3 SEC. 401. AUTHORITY OF BUREAU OF PRIMARY HEALTH 

4 CARE TO DEVELOP NEW REPORTING STAND5 ARDS. 

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

7 Human Services, acting through the Bureau of Primary 

8 Health Care within the Health Resources and Services Ad9 ministration, shall have the authority to— 

10 (1) incorporate the outpatient measures of the 

11 Agency for Healthcare Research and Quality as de12 veloped under part C of title IX of the Public Health 

13 Service Act (as added by title II) into a supplement 

14 to existing demographic or quality reporting instru15 ments or other quality reporting instruments utilized 

16 by the Health Resources and Services Administra17 tion; 

18 (2) verify the submission of data under this 

19 title (and the amendments made by this title); and 

20 (3) award Faircare designations in accordance 

21 with section 339P of the Public Health Service Act 

22 (as added by section 402). 

23 (b) DISTRIBUTION.—Not later than 1 year after the 

24 date of enactment of this Act, the standards described in 

25 subsection (a) shall be designed and distributed to health 
40 

•S 2594 IS 

1 centers under section 339P of the Public Health Service 

2 Act (as added by section 402). 

3 SEC. 402. FAIRCARE DESIGNATION FOR HEALTH CENTERS. 

4 Part P of title III of the Public Health Service Act 

5 (42 U.S.C. 280g et seq.) is amended by adding at the end 

6 the following: 

7 ‘‘SEC. 399P. FAIRCARE DESIGNATION FOR HEALTH CEN8 TERS. 

9 ‘‘(a) DESIGNATION OF FAIRCARE HEALTH CEN10 TERS.— 

11 ‘‘(1) IN GENERAL.—For each of fiscal years 

12 2006 through 2014, the Secretary shall designate 

13 health centers that receive Federal assistance as fol14 lows: 

15 ‘‘(A) LEVEL III FAIRCARE HEALTH CEN16 TER.—The Secretary shall designate a health 

17 center as a Level III Faircare health center if 

18 the following requirements are met: 

19 ‘‘(i) The health center submitted data 

20 described in section 249 and part C of title 

21 IX to the Secretary in such form and man22 ner and at such time specified by the Sec23 retary under such section and part and all 

24 such data submitted relating to patient 

25 quality includes data on the race, ethnicity, 
41 

•S 2594 IS 

1 highest education level attained, and pri2 mary language of such patients. 

3 ‘‘(ii) The Secretary determines that 

4 the health center has improved the rate of 

5 delivery of high quality care during the 24- 

6 month period preceding such determina7 tion. A health center shall be determined 

8 to meet the requirement in the preceding 

9 sentence if the Secretary determines that 

10 the health center has increased the fre11 quency of appropriate care for the majority 

12 of the applicable measures during such 24- 

13 month period by at least 5 percentage 

14 points within each such measure. 

15 ‘‘(B) LEVEL II FAIRCARE HEALTH CEN16 TER.—The Secretary shall designate a health 

17 center as a Level II Faircare health center if 

18 the following requirements are met: 

19 ‘‘(i) The requirements described in 

20 clauses (i) and (ii) of subparagraph (A) 

21 are met. 

22 ‘‘(ii) The Secretary determines that 

23 the health center, during the 24-month pe24 riod preceding such determination, has 

25 made a significant reduction in the dispari-
42 

•S 2594 IS 

1 ties in the treatment of health disparity 

2 populations relative to other patients for— 

3 ‘‘(I) the majority of the applica4 ble measures; or 

5 ‘‘(II) all of the 25 percent high6 est ranked applicable measures, as 

7 ranked for their importance for 

8 healthcare equity by the Agency for 

9 Healthcare Research and Quality 

10 under section 925. 

11 ‘‘(C) LEVEL I FAIRCARE HEALTH CEN12 TER.—The Secretary shall designate a health 

13 center as a Level I Faircare health center if the 

14 following requirements are met: 

15 ‘‘(i) The requirement described sub16 paragraph (A)(i) is met. 

17 ‘‘(ii) Either— 

18 ‘‘(I) the requirement described in 

19 subparagraph (A)(ii) is met; or 

20 ‘‘(II) the Secretary determines 

21 that the frequency of appropriate care 

22 provided by the health center for each 

23 applicable measure is at least 10 per24 centage points greater than the na25 tional average for the frequency of ap-
43 

•S 2594 IS 

1 propriate care for each applicable 

2 measure. 

3 ‘‘(iii) The Secretary determines that 

4 the health center, during the 24-month pe5 riod preceding such determination, has had 

6 no significant disparity in the treatment of 

7 health disparity populations relative to 

8 other patients for all of the 75 percent 

9 highest ranked applicable measures, as 

10 ranked for their importance for healthcare 

11 equity by the Agency for Healthcare Re12 search and Quality under section 925. 

13 ‘‘(2) APPLICABLE MEASURES DEFINED.—For 

14 purposes of this subsection, the term ‘applicable 

15 measures’ means the measures determined applica16 ble under section 401(a) of the Faircare Act. 

17 ‘‘(3) HEALTH DISPARITY POPULATION DE18 FINED.—For purposes of this subsection, the term 

19 ‘health disparity population’ has the meaning given 

20 that term in section 485E(d). 

21 ‘‘(b) ELIGIBILITY FOR BONUSES.—A health center 

22 that is designated as a Faircare health center under sub23 section (a) shall be eligible for the following annual bo24 nuses in the fiscal year following the year in which the 

25 health center is designated as a Faircare health center 
44 

•S 2594 IS 

1 under this section, with respect to assistance received 

2 under Federal health care programs: 

3 ‘‘(1) With respect to a health center that is des4 ignated as a Level III Faircare health center, the 

5 Secretary shall determine the amount of such bonus 

6 which shall not be less than $200,000. 

7 ‘‘(2) With respect to a health center that is des8 ignated as a Level II Faircare health center, the 

9 Secretary shall determine the amount of such bonus 

10 which shall not be less than $300,000. 

11 ‘‘(3) With respect to a health center that is des12 ignated as a Level I Faircare health center, the Sec13 retary shall determine the amount of such bonus 

14 which shall not be less than $500,000. 

15 ‘‘(c) REDUCTION IN FINANCIAL INCENTIVE PAY16 MENTS IF INSUFFICIENT FUNDING AVAILABLE.—If the 

17 Secretary estimates that the total amount of bonuses 

18 under subsection (b) for a fiscal year will exceed the fund19 ing available under subsection (e) for such bonuses for the 

20 fiscal year, the Secretary shall proportionately reduce the 

21 amount of the bonus payments described in paragraphs 

22 (1), (2), and (3) of subsection (b) in order to eliminate 

23 such excess. 

24 ‘‘(d) DEFINITION.—For purposes of this section, the 

25 term ‘health center’ means a Federally qualified health 
45 

•S 2594 IS 

1 center as defined in section 1861(aa)(4) of the Social Se2 curity Act. 

3 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

4 is authorized to be appropriated to carry out this section, 

5 such sums as may be necessary for each of fiscal years 

6 2007 through 2015.’’. 

7 SEC. 403. GRANTS FOR TECHNICAL ASSISTANCE. 

8 Part P of title III of the Public Health Service Act 

9 (42 U.S.C. 280g et seq.), as amended by section 402, is 

10 further amended by adding at the end the following: 

11 ‘‘SEC. 399Q. GRANTS FOR TECHNICAL ASSISTANCE IN IM12 PROVING QUALITY. 

13 ‘‘(a) IN GENERAL.—If a health center reporting data 

14 described in section 399P(a)(1)(A) for 3 or more years 

15 has demonstrated no improvement or a decrease in 

16 healthcare quality on at least 30 percent of all quality 

17 measures as designated under section 401(a) of the 

18 Faircare Act, such health center shall be given priority 

19 to receive technical assistance from the Bureau of Primary 

20 Health Care within the Health Resources and Services Ad21 ministration. 

22 ‘‘(b) TYPE OF ASSISTANCE.—The type of technical 

23 assistance that may be provided under subsection (a) shall 

24 be determined by the Bureau of Primary Health Care and 
46 

•S 2594 IS 

1 may include competitively awarded grants and other forms 

2 of assistance. 

3 ‘‘(c) USE OF ASSISTANCE.—Assistance provided 

4 under this section shall be used by the health center to 

5 improve healthcare quality or reduce healthcare dispari6 ties. 

7 ‘‘(d) DEFINITION.—For purposes of this section, the 

8 term ‘health center’ means a Federally qualified health 

9 center as defined in section 1861(aa)(4) of the Social Se10 curity Act. 

11 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

12 is authorized to be appropriated to carry out this sub13 section, such sums as may be necessary for each of fiscal 

14 years 2007 through 2015.’’. 

15 SEC. 404. HEALTH DISPARITY COLLABORATIVES. 

16 (a) IN GENERAL.—The Bureau of Primary Health 

17 Care within the Health Resources and Services Adminis18 tration shall— 

19 (1) provide technical assistance and funding to 

20 the Health Disparity Collaboratives; and 

21 (2) expand the provision of technical assistance 

22 and funding, at the discretion of the Bureau, to pri23 ority areas designated by the Agency for Healthcare 

24 Research and Quality in consultation with the Advi-
47 

•S 2594 IS 

1 sory Committee established under section 925 of the 

2 Public Health Service Act. 

3 (b) FUNDING.—The Bureau of Primary Health Care 

4 within the Health Resources and Services Administration 

5 shall continue to fund collaboratives with a goal of adding 

6 at least 50 new health centers each year. 

7 (c) DEFINITION.—For purposes of this section, the 

8 term ‘health center’ means a Federally qualified health 

9 center as defined in section 1861(aa)(4) of the Social Se10 curity Act. 

11 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

12 authorized to be appropriated to carry out this section, 

13 such sums as may be necessary for each of fiscal years 

14 2005 through 2015. 

15 TITLE V—REACH 2010 

16 SEC. 501. EXPANSION OF REACH 2010. 

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

18 Human Services, acting through the Director of the Cen19 ters for Disease Control and Prevention, shall award 

20 grants and carry out other activities to expand the Racial 

21 and Ethnic Approaches to Community Health Program 

22 (REACH 2010) program to support coalitions in all 50 

23 States and territories. 

24 (b) ELIGIBILITY.—To be eligible to receive a grant 

25 under this section an entity shall— 
48 

•S 2594 IS 

1 (1) be a coalition that is comprised of, at a 

2 minimum, a community-based organization and at 

3 least 3 other organizations, one of which is either a 

4 State or local health department or a university or 

5 research organization; and 

6 (2) prepare and submit to the Secretary of 

7 Health and Human Services an application at such 

8 time, in such manner, and containing such informa9 tion as the Secretary may require. 

10 (c) USE OF GRANTS.—Amounts provided under a 

11 grant under this section shall be used to support commu12 nity coalitions in designing, implementing, and evaluating 

13 community-driven strategies to eliminate health dispari14 ties, with an emphasis on African Americans, American 

15 Indians, Alaska Natives, Asian Americans, Hispanic 

16 Americans, and Pacific Islanders. 

17 (d) PRIORITY AREAS.—In carrying out the Racial 

18 and Ethnic Approaches to Community Health Program 

19 (REACH 2010) program, the Director of the Centers for 

20 Disease Control and Prevention shall include the following 

21 priority areas: 

22 (1) Cardiovascular disease. 

23 (2) Immunizations. 

24 (3) Breast and cervical cancer screening and 

25 management. 
49 

•S 2594 IS 

1 (4) Diabetes. 

2 (5) HIV/AIDS. 

3 (6) Infant mortality. 

4 (7) Asthma. 

5 (8) Obesity. 

6 (8) At the discretion of the Director of the Cen7 ters for Disease Control and Prevention, any addi8 tional priority areas determined appropriate by the 

9 Agency for Healthcare Research and Quality in con10 sultation with the Advisory Committee established 

11 under section 925 of the Public Health Service Act. 

12 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

13 authorized to be appropriated to carry out this section and 

14 the Racial and Ethnic Approaches to Community Health 

15 Program (REACH 2010) program, $200,000,000 for each 

16 of fiscal years 2005 to 2007, and such sums as may be 

17 necessary for each of fiscal years 2008 through 2015. 

18 TITLE VI—MALPRACTICE 

19 INSURANCE RELIEF 

20 SEC. 601. REFUNDABLE TAX CREDIT FOR THE COST OF 

21 MALPRACTICE INSURANCE FOR CERTAIN 

22 PROVIDERS. 

23 (a) IN GENERAL.—Subpart C of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 

25 1986 (relating to refundable credits) is amended by redes-
50 

•S 2594 IS 

1 ignating section 36 as section 37 and by inserting after 

2 section 35 the following new section: 

3 ‘‘SEC. 36. CERTAIN MALPRACTICE INSURANCE COSTS. 

4 ‘‘(a) IN GENERAL.—In the case of an eligible health 

5 care provider, there shall be allowed as a credit against 

6 the tax imposed by this subtitle for the taxable year an 

7 amount equal to the applicable percentage of qualified 

8 malpractice insurance expenditures paid or incurred dur9 ing the taxable year. 

10 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

11 this section— 

12 ‘‘(1) IN GENERAL.—The applicable percentage 

13 shall be— 

14 ‘‘(A) 10 percent for any taxable year for 

15 which the person claiming the credit is an eligi16 ble health care provider, plus 

17 ‘‘(B) 5 percent for each consecutive prior 

18 taxable year ending after the date of enactment 

19 of this section for which such person was an eli20 gible health care provider. 

21 ‘‘(2) LIMITATION.—The applicable percentage 

22 shall not exceed 25 percent. 

23 ‘‘(c) ELIGIBLE HEALTH CARE PROVIDER.—For pur24 poses of this section, the term ‘eligible health care pro25 vider’ means— 
51 

•S 2594 IS 

1 ‘‘(1) a public or private nonprofit hospital 

2 which is— 

3 ‘‘(A) located in a medically underserved 

4 area (as defined in section 1302(7) of the Pub5 lic Health Service Act) or in a health profes6 sional shortage area (as designated under sec7 tion 332 of the Public Health Service Act), and 

8 ‘‘(B) designated as a Level I Faircare Hos9 pital under section 339P of the Public Health 

10 Service Act or section 1898 of the Social Secu11 rity Act for the year in which such hospital’s 

12 taxable year ends, and 

13 ‘‘(2) a physician for whom not less than 66 per14 cent of the practice for the taxable year is at a facil15 ity described in paragraph (1). 

16 ‘‘(d) QUALIFIED MEDICAL MALPRACTICE INSUR17 ANCE EXPENDITURE.—The term ‘qualified medical mal18 practice insurance expenditure’ means so much of any pro19 fessional insurance premium, surcharge, payment or other 

20 cost or expense required as a condition of State licensure 

21 which is incurred by an eligible health care provider in 

22 a taxable year for the sole purpose of providing or fur23 nishing general medical malpractice liability insurance for 

24 such eligible health care provider.’’. 
52 

•S 2594 IS 

1 (b) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

2 the Internal Revenue Code of 1986 (relating to certain 

3 expenses for which credits are allowable) is amended by 

4 adding at the end the following new subsection: 

5 ‘‘(d) CREDIT FOR MEDICAL MALPRACTICE LIABILITY

6 INSURANCE PREMIUMS.— 

7 ‘‘(1) IN GENERAL.—No deduction shall be al8 lowed for that portion of the qualified medical mal9 practice insurance expenditures otherwise allowable 

10 as a deduction for the taxable year which is equal 

11 to the amount of the credit allowable for the taxable 

12 year under section 36. 

13 ‘‘(2) CONTROLLED GROUPS.—In the case of a 

14 corporation which is a member of a controlled group 

15 of corporations (within the meaning of section 

16 41(f)(5)) or a trade or business which is treated as 

17 being under common control with other trades or 

18 business (within the meaning of section 

19 41(f)(1)(B)), this subsection shall be applied under 

20 rules prescribed by the Secretary similar to the rules 

21 applicable under subparagraphs (A) and (B) of sec22 tion 41(f)(1).’’. 

23 (c) CONFORMING AMENDMENT.—Paragraph (2) of 

24 section 1324(b) of title 31, United States Code, is amend-
53 

•S 2594 IS 

1 ed by inserting before the period ‘‘or from section 36 of 

2 such Code’’. 

3 (d) CLERICAL AMENDMENT.—The table of sections 

4 for subpart C of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 is amended by strik6 ing the item related to section 36 and inserting the fol7 lowing new items: 

‘‘Sec. 36. Certain malpractice insurance costs. 

‘‘Sec. 37. Overpayments of tax.’’. 

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to expenditures incurred after De10 cember 31, 2005. 

11 (f) AVAILABILITY OF CREDIT FOR TAX EXEMPT OR12 GANIZATIONS.—The Secretary of the Treasury shall ad13 minister the credit allowable under section 36 of the Inter14 nal Revenue Code of 1986 (as added by this section) in 

15 such a manner so as to minimize to the largest extent pos16 sible the administrative burden on tax exempt organiza17 tions claiming the credit. 

18 SEC. 602. GRANTS TO NON-PROFIT HOSPITALS. 

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

20 Human Services, acting through the Administrator of the 

21 Health Resources and Services Administration, shall 

22 award grants to eligible entities to assist such entities in 

23 defraying qualified medical malpractice insurance expendi24 tures. 
54 

•S 2594 IS 

1 (b) ELIGIBILITY.—To be eligible to receive a grant 

2 under subsection (a), an entity shall— 

3 (1) be a Faircare Level I non-profit hospital (as 

4 determined under section 1898(b) of the Social Se5 curity Act) in the preceding fiscal year; 

6 (2) not be eligible to claim the tax credit under 

7 section 36 of the Internal Revenue Code of 1986; 

8 (3) prepare and submit to the Secretary of 

9 Health and Human Services an application at such 

10 time, in such manner, and containing such informa11 tion as the Secretary may require. 

12 (c) AMOUNT OF GRANT.—The amount of a grant 

13 awarded to an eligible entity under this section shall be— 

14 (1) with respect to the first year of the grant, 

15 an amount equal to 10 percent of the qualified med16 ical malpractice insurance expenditures of the entity 

17 for the year; 

18 (2) with respect to the second year of the grant, 

19 an amount equal to 15 percent of the qualified med20 ical malpractice insurance expenditures of the entity 

21 for the year; 

22 (3) with respect to the third year of the grant, 

23 an amount equal to 20 percent of the qualified med24 ical malpractice insurance expenditures of the entity 

25 for the year; and 
55 

•S 2594 IS 

1 (4) with respect to the fourth and subsequent 

2 years of the grant, an amount equal to 25 percent 

3 of the qualified medical malpractice insurance ex4 penditures of the entity for the year. 

5 (d) DEFINITION.—In this section, the term ‘‘qualified 

6 medical malpractice insurance expenditure’’ has the mean7 ing given such term in section 36(d) of the Internal Rev8 enue Code of 1986. 

9 SEC. 603. GRANTS FOR RESEARCH INTO QUALITY OF CARE 

10 AND MEDICAL ERRORS. 

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

12 Human Services shall award grants to eligible entities to 

13 study the relationship between institutions that are des14 ignated as Faircare hospitals under section 1898(b) of the 

15 Social Security Act and medical errors or the rate of 

16 claims of malpractice. 

17 (b) ELIGIBILITY.—To be eligible to receive a grant 

18 under subsection (a), an entity shall prepare and submit 

19 to the Secretary of Health and Human Services an appli20 cation at such time, in such manner, and containing such 

21 information as the Secretary may require. 
56 

•S 2594 IS 

1 SEC. 604. AUTHORIZATION OF APPROPRIATIONS. 

2 There is authorized to be appropriated to carry out 

3 this title, such sums as may be necessary for each of fiscal 

4 years 2005 through 2015. 

Æ