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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2766 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2766

To amend part D of title XVIII of the Social Security Act to authorize 
   the Secretary of Health and Human Services to negotiate for lower 
  prices for medicare prescription drugs and to eliminate the gap in 
  coverage of medicare prescription drug benefits, to reduce medical 
errors and increase the use of medical technology, to increase services 
in primary and preventive care by nonphysician providers, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2004

  Mr. Specter introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend part D of title XVIII of the Social Security Act to authorize 
   the Secretary of Health and Human Services to negotiate for lower 
  prices for medicare prescription drugs and to eliminate the gap in 
  coverage of medicare prescription drug benefits, to reduce medical 
errors and increase the use of medical technology, to increase services 
in primary and preventive care by nonphysician providers, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prescription Drug and Health 
Improvement Act of 2004''.

     TITLE I--IMPROVEMENTS UNDER MEDICARE PRESCRIPTION DRUG PROGRAM

SEC. 101. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    (a) In General.--Section 1860D-11 of the Social Security Act (42 
U.S.C. 1395w-111) is amended by striking subsection (i) (relating to 
noninterference) and by inserting the following:
    ``(i) Authority To Negotiate Prices With Manufacturers.--In order 
to ensure that beneficiaries enrolled under prescription drug plans and 
MA-PD plans pay the lowest possible price, the Secretary shall have 
authority similar to that of other Federal entities that purchase 
prescription drugs in bulk to negotiate contracts with manufacturers of 
covered part D drugs, consistent with the requirements and in 
furtherance of the goals of providing quality care and containing costs 
under this part.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 101 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2066).
    (c) HHS Reports Comparing Negotiated Prescription Drug Prices and 
Retail Prescription Drug Prices.--Beginning in 2006, the Secretary of 
Health and Human Services shall regularly, but in no case less often 
than quarterly, submit to Congress a report that compares the prices 
for covered part D drugs (as defined in section 1860D-2(e) of the 
Social Security Act (42 U.S.C. 1395w-102(e)) negotiated by the 
Secretary pursuant to section 1860D-11(i) of such Act (42 U.S.C. 1395w-
111(i)), as amended by subsection (a), with the average price a retail 
pharmacy would charge an individual who does not have health insurance 
coverage for purchasing the same strength, quantity, and dosage form of 
such covered part D drug.

SEC. 102. ELIMINATION OF GAP IN COVERAGE OF MEDICARE PRESCRIPTION DRUG 
              BENEFITS.

    (a) In General.--Section 1860D-2(b) of the Social Security Act (42 
U.S.C. 1395w-102(b)) is amended by striking paragraph (3) and inserting 
the following:
            ``(3) Repealed.''.
    (b) Conforming Amendments.--
            (1) Section 1860D-2 of the Social Security Act (42 U.S.C. 
        1395w-102) is amended--
                    (A) in subsection (a)(2)(A)(i)(I), by striking ``, 
                or an increase in the initial coverage limit with 
                respect to covered part D drugs'';
                    (B) in subsection (b)(2)(A), by striking ``and up 
                to the initial coverage limit under paragraph (3)'';
                    (C) in subsection (b)(4)(C)(i)--
                            (i) by striking the comma after ``paragraph 
                        (1)'' and inserting ``and''; and
                            (ii) by striking ``, and for amounts for 
                        which benefits are not provided because of the 
                        application of the initial coverage limit 
                        described in paragraph (3)'';
                    (D) in subsection (c)(1), by striking subparagraph 
                (C); and
                    (E) in subsection (d)(1)(A), by striking ``or an 
                initial coverage limit (described in subsection 
                (b)(3))''.
            (2) Section 1860D-4(a)(4)(B) of the Social Security Act (42 
        U.S.C. 1395w-104(a)(4)(B)) is amended to read as follows:
                    ``(B) when prescription drug benefits are provided 
                under this part, a notice of the benefits in relation 
                to the annual out-of-pocket threshold for the current 
                year.''.
            (3)(A) Section 1860D-14(a) of the Social Security Act (42 
        U.S.C. 1395w-114(a)) is amended--
                    (i) in paragraph (1), by striking subparagraph (C) 
                and redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively;
                    (ii) in paragraph (2), by striking subparagraph (C) 
                and redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively; and
                    (iii) in paragraph (4)(A) in the matter preceding 
                clause (i), by striking ``paragraph (1)(D)(ii)'' and 
                inserting ``paragraph (1)(C)(ii)''.
            (B) Section 1860D-14(c)(1) of the Social Security Act (42 
        U.S.C. 1395w-114(c)(1)) is amended in the second sentence by 
        striking ``subsections (a)(1)(D) and (a)(2)(E)'' and inserting 
        ``subsections (a)(1)(C) and (a)(2)(D)''.
            (C) Section 1860D-15(e)(1)(B) of the Social Security Act 
        (42 U.S.C. 1395w-115(e)(1)(B)) is amended by striking 
        ``paragraphs (1)(D) and (2)(E)'' and inserting ``paragraphs 
        (1)(C) and (2)(D)''.
            (4)(A) Section 1860D-41(a)(6) of the Social Security Act 
        (42 U.S.C. 1395w-151(a)(6)) is amended by striking paragraph 
        (6) and redesignating paragraphs (7) through (18) as paragraphs 
        (6) through (17), respectively.
            (B) Section 1860D-1(a)(1)(A) of the Social Security Act (42 
        U.S.C. 1395w-101(a)(1)(A)) is amended by striking ``1860D-
        41(a)(14)'' and inserting ``1860D-41(a)(13)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 101 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2066).

  TITLE II--REDUCING MEDICAL ERRORS AND INCREASING THE USE OF MEDICAL 
                               TECHNOLOGY

SEC. 201. MEDICAL ERRORS REDUCTION.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.) 
is amended--
            (1) by redesignating part C as part D;
            (2) by redesignating sections 921 through 928, as sections 
        931 through 938, respectively;
            (3) in section 938(1) (as so redesignated), by striking 
        ``921'' and inserting ``931''; and
            (4) by inserting after part B the following:

                ``PART C--REDUCING ERRORS IN HEALTH CARE

``SEC. 921. DEFINITIONS.

    ``In this part:
            ``(1) Adverse event.--The term `adverse event' means an 
        injury resulting from medical management rather than the 
        underlying condition of the patient.
            ``(2) Error.--The term `error' means the failure of a 
        planned action to be completed as intended or the use of a 
        wrong plan to achieve the desired outcome.
            ``(3) Health care provider.--The term `health care 
        provider' means an individual or entity that provides medical 
        services and is a participant in a demonstration program under 
        this part.
            ``(4) Health care-related error.--The term `health care-
        related error' means a preventable adverse event related to a 
        health care intervention or a failure to intervene 
        appropriately.
            ``(5) Medication-related error.--The term `medication-
        related error' means a preventable adverse event related to the 
        administration of a medication.
            ``(6) Safety.--The term `safety' with respect to an 
        individual means that such individual has a right to be free 
        from preventable serious injury.
            ``(7) Sentinel event.--The term `sentinel event' means an 
        unexpected occurrence involving an individual that results in 
        death or serious physical injury that is unrelated to the 
        natural course of the individual's illness or underlying 
        condition.

``SEC. 922. ESTABLISHMENT OF STATE-BASED MEDICAL ERROR REPORTING 
              SYSTEMS.

    ``(a) In General.--The Secretary shall make grants available to 
States to enable such States to establish reporting systems designed to 
reduce medical errors and improve health care quality.
    ``(b) Requirement.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (a), the State involved shall provide assurances to 
        the Secretary that amounts received under the grant will be 
        used to establish and implement a medical error reporting 
        system using guidelines (including guidelines relating to the 
        confidentiality of the reporting system) developed by the 
        Agency for Healthcare Research and Quality with input from 
        interested, non-governmental parties including patient, 
        consumer and health care provider groups.
            ``(2) Guidelines.--Not later than 90 days after the date of 
        enactment of this part, the Agency for Healthcare Research and 
        Quality shall develop and publish the guidelines described in 
        paragraph (1).
    ``(c) Data.--
            ``(1) Availability.--A State that receives a grant under 
        subsection (a) shall make the data provided to the medical 
        error reporting system involved available only to the Agency 
        for Healthcare Research and Quality and may not otherwise 
        disclose such information.
            ``(2) Confidentiality.--Nothing in this part shall be 
        construed to supersede any State law that is inconsistent with 
        this part.
    ``(d) Application.--To be eligible for a grant under this section, 
a State shall prepare and submit to the Secretary an application at 
such time, in such manner and containing, such information as the 
Secretary shall require.

``SEC. 923. DEMONSTRATION PROJECTS TO REDUCE MEDICAL ERRORS, IMPROVE 
              PATIENT SAFETY, AND EVALUATE REPORTING.

    ``(a) Establishment.--The Secretary, acting through the Director of 
the Agency for Healthcare Research and Quality and in conjunction with 
the Administrator of the Health Care Financing Administration, may 
establish a program under which funding will be provided for not less 
than 15 demonstration projects, to be competitively awarded, in health 
care facilities and organizations in geographically diverse locations, 
including rural and urban areas (as determined by the Secretary), to 
determine the causes of medical errors and to--
            ``(1) use technology, staff training, and other methods to 
        reduce such errors;
            ``(2) develop replicable models that minimize the frequency 
        and severity of medical errors;
            ``(3) develop mechanisms that encourage reporting, prompt 
        review, and corrective action with respect to medical errors; 
        and
            ``(4) develop methods to minimize any additional paperwork 
        burden on health care professionals.
    ``(b) Activities.--
            ``(1) In general.--A health care provider participating in 
        a demonstration project under subsection (a) shall--
                    ``(A) utilize all available and appropriate 
                technologies to reduce the probability of future 
                medical errors; and
                    ``(B) carry out other activities consistent with 
                subsection (a).
            ``(2) Reporting to patients.--In carrying out this section, 
        the Secretary shall ensure that--
                    ``(A) 5 of the demonstration projects permit the 
                voluntary reporting by participating health care 
                providers of any adverse events, sentinel events, 
                health care-related errors, or medication-related 
                errors to the Secretary;
                    ``(B) 5 of the demonstration projects require 
                participating health care providers to report any 
                adverse events, sentinel events, health care-related 
                errors, or medication-related errors to the Secretary; 
                and
                    ``(C) 5 of the demonstration projects require 
                participating health care providers to report any 
                adverse events, sentinel events, health care-related 
                errors, or medication-related errors to the Secretary 
and to the patient involved and a family member or guardian of the 
patient.
            ``(3) Confidentiality.--
                    ``(A) In general.--The Secretary and the 
                participating grantee organization shall ensure that 
                information reported under this section remains 
                confidential.
                    ``(B) Use.--The Secretary may use the information 
                reported under this section only for the purpose of 
                evaluating the ability to reduce errors in the delivery 
                of care. Such information shall not be used for 
                enforcement purposes.
                    ``(C) Disclosure.--The Secretary may not disclose 
                the information reported under this section.
                    ``(D) Nonadmissibility.--Information reported under 
                this section shall be privileged, confidential, shall 
                not be admissible as evidence or discoverable in any 
                civil or criminal action or proceeding or subject to 
                disclosure, and shall not be subject to the Freedom of 
                Information Act (5 U.S.C. App). This paragraph shall 
                apply to all information maintained by the reporting 
                entity and the entities who receive such reports.
    ``(c) Use of Technologies.--The Secretary shall encourage, as part 
of the demonstration projects conducted under subsection (a), the use 
of appropriate technologies to reduce medical errors, such as hand-held 
electronic prescription pads, training simulators for medical 
education, and bar-coding of prescription drugs and patient bracelets.
    ``(d) Database.--The Secretary shall provide for the establishment 
and operation of a national database of medical errors to be used as 
provided for by the Secretary. The information provided to the 
Secretary under subsection (b)(2) shall be contained in the database.
    ``(e) Evaluation.--The Secretary shall evaluate the progress of 
each demonstration project established under this section in reducing 
the incidence of medical errors and submit the results of such 
evaluations as part of the reports under section 926(b).
    ``(f) Reporting.--Prior to October 1, of the third fiscal year for 
which funds are made available under this section, the Secretary shall 
prepare and submit to the appropriate committees of Congress an interim 
report concerning the results of such demonstration projects.

``SEC. 924. PATIENT SAFETY IMPROVEMENT.

    ``(a) In General.--The Secretary shall provide information to 
educate patients and family members about their role in reducing 
medical errors. Such information shall be provided to all individuals 
who participate in Federally-funded health care programs.
    ``(b) Development of Programs.--The Secretary shall develop 
programs that encourage patients to take a more active role in their 
medical treatment, including encouraging patients to provide 
information to health care providers concerning pre-existing conditions 
and medications.

``SEC. 925. PRIVATE, NONPROFIT EFFORTS TO REDUCE MEDICAL ERRORS.

    ``(a) In General.--The Secretary shall make grants to health 
professional associations and other organizations to provide training 
in ways to reduce medical errors, including curriculum development, 
technology training, and continuing medical education.
    ``(b) Application.--To be eligible for a grant under this section, 
an entity shall prepare and submit to the Secretary an application at 
such time, in such manner and containing, such information as the 
Secretary shall require.

``SEC. 926. REPORT TO CONGRESS.

    ``(a) Initial Report.--Not later than 180 days after the date of 
enactment of this part, the Secretary shall prepare and submit to the 
appropriate committees of Congress a report concerning the costs 
associated with implementing a program that identifies factors that 
contribute to errors and which includes upgrading the health care 
computer systems and other technologies in the United States in order 
to reduce medical errors, including computerizing hospital systems for 
the coordination of prescription drugs and handling of laboratory 
specimens, and contains recommendations on ways in which to reduce 
those factors.
    ``(b) Other Reports.--Not later than 180 days after the completion 
of all demonstration projects under section 923, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
concerning--
            ``(1) how successful each demonstration project was in 
        reducing medical errors;
            ``(2) the data submitted by States under section 922(c);
            ``(3) the best methods for reducing medical errors;
            ``(4) the costs associated with applying such best methods 
        on a nationwide basis; and
            ``(5) the manner in which other Federal agencies can share 
        information on best practices in order to reduce medical errors 
        in all Federal health care programs.

``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated such sums as may be 
necessary to carry out this part.''.

SEC. 202. ENHANCING INVESTMENT IN COST-EFFECTIVE METHODS OF HEALTH 
              CARE.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to trust fund code) is amended by adding at the 
end the following:

``SEC. 9511. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES RESEARCH.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Trust Fund for 
Medical Treatment Outcomes Research' (referred to in this section as 
the `Trust Fund'), consisting of such amounts as may be appropriated or 
credited to the Trust Fund as provided in this section or section 
9602(b).
    ``(b) Transfers to Trust Fund.--There is hereby appropriated to the 
Trust Fund an amount equivalent to the taxes received in the Treasury 
under section 4491 (relating to tax on health insurance policies).
    ``(c) Distribution of Amounts in Trust Fund.--On an annual basis 
and without further appropriation the Secretary shall distribute the 
amounts in the Trust Fund to the Secretary of Health and Human Services 
for use by the Agency for Healthcare Research and Quality. Such amounts 
shall be available to pay for research activities related to medical 
treatment outcomes and shall be in addition to any other amounts 
appropriated for such purposes.''.
    (b) Conforming Amendment.--The table of sections for subchapter A 
of chapter 98 of such Code is amended by adding at the end the 
following:

                              ``Sec. 9511. Trust Fund for Medical 
                                        Treatment Outcomes Research.''.

SEC. 203. INCREASING THE USE OF MEDICAL TECHNOLOGY

    The Secretary of Health and Human Services shall--
            (1) provide grants and contracts to enhance the development 
        of information technology standards by the private sector;
            (2) carry out activities to examine how the use of 
        information technology can be encouraged; and
            (3) coordinate information technology-related activities 
        taken by the Federal Government and ensure that such activities 
        will further national health information and infrastructure.

            TITLE III--PRIMARY AND PREVENTIVE CARE PROVIDERS

SEC. 301. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN ASSISTANTS, 
              NURSE PRACTITIONERS, AND CLINICAL NURSE SPECIALISTS.

    (a) Fee Schedule Amount.--Section 1833(a)(1)(O) of the Social 
Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by striking ``85 
percent'' and inserting ``90 percent'' each place it appears.
    (b) Technical Amendment.--Section 1833(a)(1)(O) of the Social 
Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by striking 
``clinic'' and inserting ``clinical''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on and after January 1, 2005.

SEC. 302. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN PROVIDERS UNDER 
              THE MEDICAID PROGRAM.

    (a) In General.--Section 1905(a) of the Social Security Act (42 
U.S.C. 1396d(a)) is amended--
            (1) in paragraph (26), by striking ``and'' at the end;
            (2) by redesignating paragraph (27) as paragraph (28); and
            (3) by inserting after paragraph (26) the following:
            ``(27) services furnished by a physician assistant, nurse 
        practitioner, clinical nurse specialist (as defined in section 
        1861(aa)(5)), or certified registered nurse anesthetist (as 
        defined in section 1861(bb)(2)); and''.
    (b) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by inserting 
``and (27)'' after ``(24)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to medical assistance furnished under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.) beginning with the first fiscal 
year quarter that begins after the date of enactment of this Act.

SEC. 303. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 
293j et seq.) is amended by adding at the end the following:

``SEC. 749. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

    ``(a) Establishment.--The Secretary shall establish a program to 
award grants to eligible schools of medicine or osteopathic medicine to 
enable such schools to provide medical students for tutorial programs 
or as participants in clinics designed to interest high school or 
college students in careers in general medical practice.
    ``(b) Application.--To be eligible to receive a grant under this 
section, a school of medicine or osteopathic medicine shall prepare and 
submit to the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may require, including 
assurances that the school will use amounts received under the grant in 
accordance with subsection (c).
    ``(c) Use of Funds.--
            ``(1) In general.--Amounts received under a grant awarded 
        under this section shall be used to--
                    ``(A) fund programs under which students of the 
                grantee are provided as tutors for high school and 
                college students in the areas of mathematics, science, 
                health promotion and prevention, first aid, nutrition 
                and prenatal care;
                    ``(B) fund programs under which students of the 
                grantee are provided as participants in clinics and 
seminars in the areas described in paragraph (1); and
                    ``(C) conduct summer institutes for high school and 
                college students to promote careers in medicine.
            ``(2) Design of programs.--The programs, institutes, and 
        other activities conducted by grantees under paragraph (1) 
        shall be designed to--
                    ``(A) give medical students desiring to practice 
                general medicine access to the local community;
                    ``(B) provide information to high school and 
                college students concerning medical school and the 
                general practice of medicine; and
                    ``(C) promote careers in general medicine.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $5,000,000 for fiscal year 
2005, and such sums as may be necessary for fiscal year 2006.''.

SEC. 304. GENERAL MEDICAL PRACTICE GRANTS.

    Part C of title VII of the Public Health Service Act, as amended by 
section 303, is amended by adding at the end the following:

``SEC. 749A. GENERAL MEDICAL PRACTICE GRANTS.

    ``(a) Establishment.--The Secretary shall establish a program to 
award grants to eligible public or private nonprofit schools of 
medicine or osteopathic medicine, hospitals, residency programs in 
family medicine or pediatrics, or to a consortium of such entities, to 
enable such entities to develop effective strategies for recruiting 
medical students interested in the practice of general medicine and 
placing such students into general practice positions upon graduation.
    ``(b) Application.--To be eligible to receive a grant under this 
section, an entity of the type described in subsection (a) shall 
prepare and submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require, including assurances that the entity will use amounts received 
under the grant in accordance with subsection (c).
    ``(c) Use of Funds.--Amounts received under a grant awarded under 
this section shall be used to fund programs under which effective 
strategies are developed and implemented for recruiting medical 
students interested in the practice of general medicine and placing 
such students into general practice positions upon graduation.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $25,000,000 for each of the 
fiscal years 2005 through 2007, and such sums as may be necessary for 
fiscal years thereafter.''.
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