II 

116TH CONGRESS 

1ST SESSION S. 1260 

To amend the Public Health Service Act to provide for grants to enable 

States to carry out activities to reduce administrative costs and burdens 

in health care. 

IN THE SENATE OF THE UNITED STATES 

MAY 1, 2019 

Ms. SMITH (for herself and Mr. CASSIDY) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

A BILL 

To amend the Public Health Service Act to provide for 

grants to enable States to carry out activities to reduce 

administrative costs and burdens in health care. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Reducing Administra5 tive Costs and Burdens in Health Care Act of 2019’’. 


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1 SEC. 2. REDUCING ADMINISTRATIVE COSTS AND BURDENS 

2 IN HEALTH CARE. 

3 Title II of the Public Health Service Act (42 U.S.C. 

4 202 et seq.) is amended by adding at the end the fol5 lowing: 

6 ‘‘PART E—REDUCING ADMINISTRATIVE COSTS 

7 AND BURDENS IN HEALTH CARE 

8 ‘‘SEC. 281. ELIMINATING UNNECESSARY ADMINISTRATIVE 

9 BURDENS AND COSTS. 

10 ‘‘(a) REDUCING ADMINISTRATIVE BURDENS AND

11 COSTS.—The Secretary, in consultation with providers of 

12 health services, health care suppliers of services, health 

13 care payers, health professional societies, health vendors 

14 and developers, health care standard development organi15 zations and operating rule entities, health care quality or16 ganizations, health care accreditation organizations, public 

17 health entities, States, patients, and other appropriate en18 tities, shall, in accordance with subsection (b)— 

19 ‘‘(1) establish a goal of reducing unnecessary 

20 costs and administrative burdens across the health 

21 care system, including the Medicare program under 

22 title XVIII of the Social Security Act, the Medicaid 

23 program under title XIX of such Act, and the pri24 vate health insurance market, by at least half over 

25 a period of 10 years from the date of enactment of 

26 this section; 


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1 ‘‘(2) develop strategies and benchmarks for 

2 meeting the goal established under paragraph (1); 

3 ‘‘(3) develop recommendations for meeting the 

4 goal established under paragraph (1); and 

5 ‘‘(4) take action to reduce unnecessary costs 

6 and administrative burdens based on recommenda7 tions identified in this subsection. 

8 ‘‘(b) STRATEGIES, RECOMMENDATIONS, AND AC9 TIONS.— 

10 ‘‘(1) IN GENERAL.—To achieve the goal estab11 lished under subsection (a)(1), the Secretary, in con12 sultation with the entities described in such sub13 section, shall not later than 1 year after the date of 

14 enactment of this section, develop strategies and rec15 ommendations and take actions to meet such goal in 

16 accordance with this subsection. No strategies, rec17 ommendation, or action shall undermine the quality 

18 of patient care or patient health outcomes. 

19 ‘‘(2) STRATEGIES.—The strategies developed 

20 under paragraph (1) shall address unnecessary costs 

21 and administrative burdens. Such strategies shall in22 clude broad public comment and shall prioritize— 

23 ‘‘(A) recommendations identified as a re24 sult of efforts undertaken to implement section 

25 3001; 


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1 ‘‘(B) recommendations and best practices 

2 identified as a result of efforts undertaken 

3 under this part; 

4 ‘‘(C) a review of regulations, rules, and re5 quirements of the Department of Health and 

6 Human Services that could be modified or 

7 eliminated to reduce unnecessary costs and ad8 ministrative burden imposed on patients, pro9 viders, payers, and other stakeholders across 

10 the health care system; and 

11 ‘‘(D) feedback from stakeholders in rural 

12 or frontier areas on how to reduce unnecessary 

13 costs and administrative burdens on the health 

14 care system in those areas. 

15 ‘‘(3) RECOMMENDATIONS.—The recommenda16 tions developed under paragraph (1) shall include— 

17 ‘‘(A) actions that improve the standardiza18 tion and automation of administrative trans19 actions; 

20 ‘‘(B) actions that integrate clinical and ad21 ministrative functions; 

22 ‘‘(C) actions that improve patient care and 

23 reduce unnecessary costs and administrative 

24 burdens borne by patients, their families, and 

25 other caretakers; 


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1 ‘‘(D) actions that advance the development 

2 and adoption of open application programming 

3 interfaces and other emerging technologies to 

4 increase transparency and interoperability, em5 power patients, and facilitate better integration 

6 of clinical and administrative functions; 

7 ‘‘(E) actions to be taken by the Secretary 

8 and actions that need to be taken by other enti9 ties; and 

10 ‘‘(F) other areas, as the Secretary deter11 mines appropriate, to reduce unnecessary costs 

12 and administrative burdens required of health 

13 care providers. 

14 ‘‘(4) CONSISTENCY.—Any improvements in 

15 electronic processes proposed by the Secretary under 

16 this section should leverage existing information 

17 technology definitions under Federal Law. Specifi18 cally, any electronic processes should not be con19 strued to include a facsimile, a proprietary payer 

20 portal that does not meet standards specified by the 

21 Secretary, or an electronic form image. 

22 ‘‘(5) ACTIONS.—The Secretary shall take action 

23 to achieve the goal established under subsection 

24 (a)(1), and, not later than 1 year after the date of 

25 enactment of this section, and biennially thereafter, 


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1 submit to Congress and make publically available, a 

2 report describing the actions taken by the Secretary 

3 pursuant to goals, strategies, and recommendations 

4 described in this subsection. 

5 ‘‘(6) FACA.—The Federal Advisory Committee 

6 Act (5 U.S.C. App.) shall not apply to the develop7 ment of the goal, strategies, recommendations, or 

8 actions described in this section. 

9 ‘‘(7) RULE OF CONSTRUCTION.—Nothing in 

10 this subsection shall be construed to authorize, or be 

11 used by, the Federal Government to inhibit or other12 wise restrain efforts made to reduce waste, fraud, 

13 and abuse across the health care system. 

14 ‘‘SEC. 282. GRANTS TO STATES TO DEVELOP AND IMPLE15 MENT RECOMMENDATIONS TO ACCELERATE 

16 STATE INNOVATION TO REDUCE HEALTH 

17 CARE ADMINISTRATIVE COSTS. 

18 ‘‘(a) GRANTS.— 

19 ‘‘(1) IN GENERAL.—Not later than 6 months 

20 after the date of enactment of this section, the Sec21 retary shall award grants to at least 15 States, and 

22 one coordinating entity designated as provided for 

23 under subsection (e), to enable such States to estab24 lish and administer private-public multi-stakeholder 

25 commissions for the purpose of reducing health care 


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1 administrative costs and burden within and across 

2 States. Not less than 3 of such grants shall be 

3 awarded to States that are primarily rural, frontier, 

4 or a combination thereof, in nature. 

5 ‘‘(2) ENTITIES.—For purposes of this section, 

6 the term ‘State’ means a State, a State designated 

7 entity, or a multi-State collaborative (as defined by 

8 the Secretary). 

9 ‘‘(3) PRIORITY.—In awarding grants under this 

10 section, the Secretary shall give priority to applica11 tions submitted by States that propose to carry out 

12 a pilot program or support the adoption of electronic 

13 health care transactions and operating rules. 

14 ‘‘(b) APPLICATION.— 

15 ‘‘(1) IN GENERAL.—To be eligible to receive a 

16 grant under subsection (a) a State shall submit to 

17 the Secretary an application in such a manner and 

18 containing such information as the Secretary may 

19 reasonably require, including the information de20 scribed in paragraph (2). 

21 ‘‘(2) REQUIRED INFORMATION.—In addition to 

22 any additional information required by the Secretary 

23 under this subsection, an application shall include a 

24 description of— 


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1 ‘‘(A) the size and composition of the com2 mission to be established under the grant, in3 cluding the stakeholders represented and the 

4 degree to which the commission reflects impor5 tant geographic and population characteristics 

6 of the State; 

7 ‘‘(B) the relationship of the commission to 

8 the State official responsible for coordinating 

9 and implementing the recommendations result10 ing from the commission, and the role and re11 sponsibilities of the State with respect to the 

12 commission, including any participation, review, 

13 oversight, implementation or other related func14 tions; 

15 ‘‘(C) the history and experience of the 

16 State in addressing health care administrative 

17 costs, and any experience similar to the purpose 

18 of the commission to improve health care ad19 ministrative processes and the exchange of 

20 health care administrative data; 

21 ‘‘(D) the resources and expertise that will 

22 be made available to the commission by com23 mission members or other possible sources, and 

24 how Federal funds will be used to leverage and 

25 complement these resources; 


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1 ‘‘(E) the governance structure and proce2 dures that the commission will follow to make, 

3 implement, and pilot recommendations; 

4 ‘‘(F) the proposed objectives relating to the 

5 simplification of administrative transactions 

6 and operating rules, increased standardization, 

7 and the efficiency and effectiveness of the 

8 transmission of health information; 

9 ‘‘(G) potential cost savings and other im10 provements in meeting the objectives described 

11 in subparagraph (F); and 

12 ‘‘(H) the method or methods by which the 

13 recommendations described in subsection (c) 

14 will be reviewed, tested, adopted, implemented, 

15 and updated as needed. 

16 ‘‘(c) MULTI-STAKEHOLDER COMMISSION.— 

17 ‘‘(1) IN GENERAL.—Not later than 90 days 

18 after the date on which a grant is awarded to a 

19 State under this section, the State official described 

20 in subsection (b)(2)(B), the State insurance commis21 sioner, or other appropriate State official shall con22 vene a multi-stakeholder commission, in accordance 

23 with this subsection. 

24 ‘‘(2) MEMBERSHIP.—The commission convened 

25 under paragraph (1) shall include representatives 


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1 from health plans, health care providers, health ven2 dors, relevant State agencies, health care standard 

3 development organizations, and operating rule enti4 ties, relevant professional and trade associations, pa5 tients, and other entities determined appropriate by 

6 the State. 

7 ‘‘(3) RECOMMENDATIONS.—Not later than one 

8 year after the date on which a grant is awarded to 

9 a State under this section, the commission shall 

10 make recommendations and plans, consistent with 

11 the application submitted by the State under sub12 section (b), and intended to meet the objectives de13 fined in the application. Such recommendations shall 

14 comply with, and build upon, all relevant Federal re15 quirements and regulations, and may include— 

16 ‘‘(A) common, uniform specifications, best 

17 practices, and conventions, for the efficient, ef18 fective exchange of administrative transactions 

19 adopted pursuant to the Health Insurance Port20 ability and Accountability Act of 1996 (Public 

21 Law 104–191); 

22 ‘‘(B) the development of streamlined busi23 ness processes for the exchange and use of 

24 health care administrative data; and 


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1 ‘‘(C) specifications, incentives, require2 ments, tools, mechanisms, and resources to im3 prove— 

4 ‘‘(i) the access, exchange, and use of 

5 health care administrative information 

6 through electronic means; 

7 ‘‘(ii) the implementation of utilization 

8 management protocols; and 

9 ‘‘(iii) compliance with Federal and 

10 State laws. 

11 ‘‘(d) USE OF FUNDS FOR IMPLEMENTATION.—A 

12 State may use amounts received under a grant under this 

13 section for one or more of the following: 

14 ‘‘(1) The development, implementation, and 

15 best use of shared data infrastructure that supports 

16 the electronic transmission of administrative data. 

17 ‘‘(2) The development and provision of training 

18 and educational materials, forums, and activities as 

19 well as technical assistance to effectively implement, 

20 use, and benefit from electronic health care trans21 actions and operating rules. 

22 ‘‘(3) To accelerate the early adoption and im23 plementation of administrative transactions and op24 erating rules designated by the Secretary and that 

25 have been adopted pursuant to the Health Insurance 


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1 Portability and Accountability Act of 1996 (Public 

2 Law 104–191), including transactions and operating 

3 rules described in section 1173(a)(2) of the Social 

4 Security Act. 

5 ‘‘(4) To accelerate the early adoption and im6 plementation of additional or updated administrative 

7 transactions, operating rules, and related data ex8 change standards that are being considered for 

9 adoption under the Health Insurance Portability and 

10 Accountability Act of 1996 or are adopted pursuant 

11 to such Act, or as designated by the Secretary, in12 cluding the electronic claim attachment. 

13 ‘‘(5) To conduct pilot projects to test ap14 proaches to implement and use the electronic health 

15 care transactions and operating rules in practice 

16 under a variety of different settings. With respect to 

17 the electronic attachment transaction, priority shall 

18 be given to pilot projects that test and evaluate 

19 methods and mechanisms to most effectively incor20 porate patient health data from electronic health 

21 records and other electronic sources with the elec22 tronic attachment transaction. 

23 ‘‘(6) To assess barriers to the adoption, imple24 mentation, and effective use of electronic health care 

25 transactions and operating rules, as well as to exVerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260

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1 plore, identify, and plan options, approaches, and re2 sources to address barriers and make improvements. 

3 ‘‘(7) The facilitation of public and private ini4 tiatives to reduce administrative costs and accelerate 

5 the adoption, implementation, and effective use of 

6 electronic health care transactions and operating 

7 rules for State programs. 

8 ‘‘(8) Developing, testing, implementing, and as9 sessing additional data exchange specifications, oper10 ating rules, incentives, requirements, tools, mecha11 nisms, and resources to accelerate the adoption and 

12 effective use of the transactions and operating rules. 

13 ‘‘(9) Ongoing needs assessments and planning 

14 related to the development and implementation of 

15 administrative simplification initiatives. 

16 ‘‘(e) COORDINATING ENTITY.— 

17 ‘‘(1) FUNCTIONS.—Not later than 6 months 

18 after the date of enactment of this section, the Sec19 retary shall designate a coordinating entity under 

20 this subsection for the purpose of— 

21 ‘‘(A) providing technical assistance to 

22 States relating to the simplification of adminis23 trative transactions and operating rules, in24 creased standardization, and the efficiency and 


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1 effectiveness of the transmission of health care 

2 information; 

3 ‘‘(B) evaluating pilot projects and other ef4 forts conducted under this section for impact 

5 and best practices to inform broader national 

6 use; 

7 ‘‘(C) using consistent evaluation meth8 odologies to compare return on investment 

9 across efforts conducted under this section; 

10 ‘‘(D) compiling, synthesizing, dissemi11 nating, and adopting lessons learned to promote 

12 the adoption of electronic health care trans13 actions and operating rules across the health 

14 care system; and 

15 ‘‘(E) making recommendations to the Sec16 retary and the National Committee on Vital 

17 and Health Statistics regarding the national 

18 adoption of efforts conducted under this sec19 tion. 

20 ‘‘(2) ELIGIBILITY.—The entity designated 

21 under paragraph (1) shall be a qualified nonprofit 

22 entity that— 

23 ‘‘(A) focuses its mission on administrative 

24 simplification; 


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1 ‘‘(B) has demonstrated experience using a 

2 multi-stakeholder and consensus-based process 

3 for the development of common, uniform speci4 fications, operating rules, best practices, and 

5 conventions, for the efficient, effective exchange 

6 of administrative transactions that includes rep7 resentation by or participation from health 

8 plans, health care providers, vendors, States, 

9 relevant Federal agencies, and other health care 

10 standard development organizations; 

11 ‘‘(C) has demonstrated experience pro12 viding technical assistance to health plans, 

13 health care providers, vendors, and States relat14 ing to the simplification of administrative trans15 actions and operating rules, increased standard16 ization, and the efficiency and effectiveness of 

17 the transmission of health care information; 

18 ‘‘(D) has demonstrated experience evalu19 ating and measuring the adoption and return 

20 on investment of administrative transactions 

21 and operating rules; 

22 ‘‘(E) has demonstrated experience gath23 ering, synthesizing, and adopting common, uni24 form specifications, operating rules, best prac25 tices, and conventions for national use based on 


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1 lessons learned to promote the adoption of elec2 tronic health care transactions and operating 

3 rules across the health care system; 

4 ‘‘(F) has a public set of guiding principles 

5 that ensure processes are open and transparent, 

6 and supports nondiscrimination and conflict of 

7 interest policies that demonstrate a commit8 ment to open, fair, and nondiscriminatory prac9 tices; 

10 ‘‘(G) builds on the transaction standards 

11 issued under Health Insurance Portability and 

12 Accountability Act of 1996; and 

13 ‘‘(H) allows for public review and updates 

14 of common, uniform specifications, operating 

15 rules, best practices, and conventions to support 

16 administrative simplification. 

17 ‘‘(f) PERIOD AND AMOUNT.—A grant awarded to a 

18 State under this section shall be for a period of 5 years 

19 and shall not exceed $50,000,000 for such 5-year period. 

20 A grant awarded to the coordinating entity designated by 

21 the Secretary under subsection (e) shall be for a period 

22 of 5 years and shall not exceed $15,000,000 for such 5- 

23 year period. 

24 ‘‘(g) REPORTS.— 


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1 ‘‘(1) STATES.—Not later than 1 year after re2 ceiving a grant under this section, and biennially 

3 thereafter, a State shall submit to the Secretary a 

4 report on the outcomes experienced by the State 

5 under the grant. 

6 ‘‘(2) COORDINATING ENTITY.—Not later than 1 

7 year after receiving a grant under this section, and 

8 at least biennially thereafter, the coordinating entity 

9 shall submit to the Secretary and the National Com10 mittee on Vital and Health Statistics a report of 

11 evaluations conducted under the grant under this 

12 section and recommendations regarding the national 

13 adoption of efforts conducted under this section. 

14 ‘‘(3) SECRETARY.—Not later than 6 months 

15 after the date on which the States and coordinating 

16 entity submit the report required under paragraphs 

17 (1) and (2), the Secretary, in consultation with Na18 tional Committee on Vital and Health Statistics, 

19 shall submit to the Committee on Health, Edu20 cation, Labor, and Pensions of the Senate and the 

21 Committee on Energy and Commerce of the House 

22 of Representatives, a report on the outcomes 

23 achieved under the grants under this section. 

24 ‘‘(4) GAO.—Not later than 6 months after the 

25 date on which the Secretary submits the final report 


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1 under paragraph (3), the Comptroller General of the 

2 United States shall conduct a study, and submit to 

3 the Committee on Health, Education, Labor, and 

4 Pensions of the Senate and the Committee on En5 ergy and Commerce of the House of Representa6 tives, a report on the outcomes of the activities car7 ried out under this section which shall contain a list 

8 of best practices and recommendations to States 

9 concerning administrative simplification. 

10 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

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

12 $250,000,000 for the 5-fiscal-year period beginning with 

13 fiscal year 2020.’’. 

Æ 


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