IB 

Union Calendar No. 19

108TH CONGRESS 

1ST SESSION H. R. 663

[Report No. 108–28] 

To amend title IX of the Public Health Service Act to provide for the 

improvement of patient safety and to reduce the incidence of events 

that adversely affect patient safety, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 11, 2003

Mr. BILIRAKIS (for himself, Mr. BROWN of Ohio, Mr. TAUZIN, Mr. DINGELL, 

Mr. BARTON of Texas, Mr. WAXMAN, Mr. UPTON, Mr. MARKEY, Mr. 

GREENWOOD, Mr. TOWNS, Mr. BURR, Mr. PALLONE, Mr. WHITFIELD, 

Mr. GORDON, Mr. NORWOOD, Mr. DEUTSCH, Mr. TERRY, Mr. RUSH, Mr. 

ROGERS of Michigan, Mr. ENGEL, Mr. WYNN, Ms. MCCARTHY of Missouri, Mr. STRICKLAND, Mrs. CAPPS, Mr. JOHN, and Ms. HARMAN) introduced the following bill; which was referred to the Committee on Energy and Commerce 

MARCH 6, 2003

Additional sponsors: Mr. ISSA, Ms. ESHOO, Mr. GREEN of Texas, and Mr. 

STUPAK

MARCH 6, 2003

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 11, 2003] 

A BILL

To amend title IX of the Public Health Service Act to 
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provide for the improvement of patient safety and to 

reduce the incidence of events that adversely affect patient safety, and for other purposes.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Patient Safety and 

5 Quality Improvement Act’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—The Congress finds as follows: 

8 (1) In 1999, the Institute of Medicine released a 

9 report entitled ‘‘To Err Is Human’’ that described 

10 medical errors as the 8th leading cause of death in the 

11 United States, with as many as 98,000 people dying 

12 as a result of medical errors each year. 

13 (2) To address these deaths and injuries due to 

14 medical errors, the health care system must identify 

15 and learn from such errors so that systems of care can 

16 be improved. 

17 (3) Myriad public and private patient safety 

18 initiatives have begun. The Quality Interagency Co19 ordination Task Force has recommended steps to im20 prove patient safety that may be taken by each Fed21 eral agency involved in health care and activities re22 lating to these steps are ongoing. 
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1 (4) The Department of Health and Human Serv2 ices has initiated several patient safety projects. The 

3 Joint Commission on Accreditation of Healthcare Or4 ganizations issued a patient safety standard that 

5 went into effect on July 1, 2001, and the peer review 

6 organizations are conducting ongoing studies of clin7 ical performance measurement of care delivered to 

8 beneficiaries under the medicare program under title 

9 XVIII of the Social Security Act. 

10 (5) Several steps can be taken now to improve 

11 patient safety. For example, according to the Centers 

12 for Disease Control and Prevention, hand washing is 

13 the single most important means of preventing the 

14 spread of infection. Repeated studies indicate that 

15 lack of or improper hand washing still contributes 

16 significantly to disease transmission in health care 

17 settings. Working with experts from the private sector, 

18 the Centers for Disease Control and Prevention has 

19 drafted ‘‘Guidelines for Hand Hygiene in Healthcare 

20 Settings’’ setting forth recommendations to promote 

21 improved hand hygiene practices and reduce trans22 mission of pathogenic microorganisms to patients and 

23 personnel in health care settings. 

24 (6) According to the Centers for Disease Control 

25 and Prevention, nosocomial infections affect approxi-
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1 mately 2 million patients annually in acute care fa2 cilities in the United States at an estimated direct 

3 patient care cost of approximately $3.5 billion each 

4 year. 

5 (7) The Congress encourages the continuation 

6 and acceleration of private sector efforts to take im7 mediate steps to improve patient safety and recog8 nizes the need for action in the public sector to com9 plement these efforts. 

10 (8) The research on patient safety unequivocally 

11 calls for a learning environment, where providers will 

12 feel safe to report health care errors, in order to im13 prove patient safety. 

14 (9) Voluntary data gathering systems are more 

15 supportive than mandatory systems in creating the 

16 learning environment referred to in paragraph (8) as 

17 stated in the Institute of Medicine’s report. 

18 (10) Promising patient safety reporting systems 

19 have been established throughout the United States, 

20 and the best ways to structure and use these systems 

21 are currently being determined, largely through 

22 projects funded by the Agency for Healthcare Research 

23 and Quality. 

24 (11) Many organizations currently collecting pa25 tient safety information have expressed a need for 
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1 protections that will allow them to review protected 

2 information so that they may collaborate in the devel3 opment and implementation of patient safety im4 provement strategies. Currently, the State peer review 

5 protections provide inadequate conditions to allow the 

6 sharing of information to promote patient safety. 

7 (12) In 2001, the Institute of Medicine released 

8 a report entitled ‘‘Crossing the Quality Chasm’’ that 

9 found that the United States health care system does 

10 not consistently deliver high-quality care to patients. 

11 (b) PURPOSES.—The purposes of this Act are—

12 (1) to encourage a culture of safety and quality 

13 in the United States health care system by providing 

14 for a health care errors reporting system that both 

15 protects information and improves patient safety and 

16 quality of health care; and 

17 (2) to ensure accountability by raising standards 

18 and expectations for continuous quality improvements 

19 in patient safety through the actions of the Secretary 

20 of Health and Human Services. 

21 SEC. 3. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT. 

22 (a) IN GENERAL.—Title IX of the Public Health Serv23 ice Act (42 U.S.C. 299 et seq.) is amended—

24 (1) in section 912(c), by inserting ‘‘, in accord25 ance with part C,’’ after ‘‘The Director shall’’; 
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1 (2) by redesignating part C as part D;

2 (3) by redesignating sections 921 through 928, as 

3 sections 931 through 938, respectively; 

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

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

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

7 ‘‘PART C—PATIENT SAFETY IMPROVEMENT 

8 ‘‘SEC. 921. DEFINITIONS. 

9 ‘‘In this part: 

10 ‘‘(1) IDENTIFIABLE INFORMATION.—The term 

11 ‘identifiable information’ means information that is 

12 presented in a form and manner that allows the iden13 tification of any provider, patient, or reporter of pa14 tient safety work product. With respect to patients, 

15 such information includes any individually identifi16 able health information as that term is defined in the 

17 regulations promulgated pursuant to section 264(c) of 

18 the Health Insurance Portability and Accountability 

19 Act of 1996 (Public Law 104–191; 110 Stat. 2033). 

20 ‘‘(2) NONIDENTIFIABLE INFORMATION.—The 

21 term ‘nonidentifiable information’ means information 

22 that is presented in a form and manner that prevents 

23 the identification of any provider, patient, or reporter 

24 of patient safety work product. With respect to pa25 tients, such information must be de-identified con-
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1 sistent with the regulations promulgated pursuant to 

2 section 264(c) of the Health Insurance Portability 

3 and Accountability Act of 1996 (Public Law 104–191; 

4 110 Stat. 2033). 

5 ‘‘(3) PATIENT SAFETY EVALUATION SYSTEM.—

6 The term ‘patient safety evaluation system’ means a 

7 process that involves the collection, management, or 

8 analysis of information for submission to or by a pa9 tient safety organization. 

10 ‘‘(4) PATIENT SAFETY ORGANIZATION.—The term 

11 ‘patient safety organization’ means a private or pub12 lic organization or component thereof that is certified, 

13 through a process to be determined by the Secretary 

14 under section 925, to perform each of the following ac15 tivities: 

16 ‘‘(A) The conduct, as the organization or 

17 component’s primary activity, of efforts to im18 prove patient safety and the quality of health 

19 care delivery. 

20 ‘‘(B) The collection and analysis of patient 

21 safety work product that is submitted by pro22 viders. 

23 ‘‘(C) The development and dissemination of 

24 evidence-based information to providers with re25 spect to improving patient safety, such as rec-
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1 ommendations, protocols, or information regard2 ing best practices. 

3 ‘‘(D) The utilization of patient safety work 

4 product to carry out activities limited to those 

5 described under this paragraph and for the pur6 poses of encouraging a culture of safety and of 

7 providing direct feedback and assistance to pro8 viders to effectively minimize patient risk. 

9 ‘‘(E) The maintenance of confidentiality 

10 with respect to identifiable information. 

11 ‘‘(F) The provision of appropriate security 

12 measures with respect to patient safety work 

13 product. 

14 ‘‘(G) The submission of nonidentifiable in15 formation to the Agency consistent with stand16 ards established by the Secretary under section 

17 923(b) for any National Patient Safety Data18 base. 

19 ‘‘(5) PATIENT SAFETY WORK PRODUCT.—

20 ‘‘(A) The term ‘patient safety work product’ 

21 means any document or communication (includ22 ing any information, report, record, memo23 randum, analysis, deliberative work, statement, 

24 or root cause analysis) that—
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1 ‘‘(i) except as provided in subpara2 graph (B), is developed by a provider for 

3 the purpose of reporting to a patient safety 

4 organization, and is reported to a patient 

5 safety organization; 

6 ‘‘(ii) is created by a patient safety or7 ganization; or 

8 ‘‘(iii) would reveal the deliberations or 

9 analytic process of a patient safety evalua10 tion system (as defined in paragraph (3)). 

11 ‘‘(B)(i) Patient safety work product de12 scribed in subparagraph (A)(i)—

13 ‘‘(I) does not include any separate in14 formation described in clause (ii); and 

15 ‘‘(II) shall not be construed to include 

16 such separate information merely by reason 

17 of inclusion of a copy of the document or 

18 communication involved in a submission to, 

19 or the fact of submission of such a copy to, 

20 a patient safety organization. 

21 ‘‘(ii) Separate information described in this 

22 clause is a document or communication (includ23 ing a patient’s medical record or any other pa24 tient or hospital record) that is developed or
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1 maintained, or exists, separately from any pa2 tient safety evaluation system. 

3 ‘‘(C) Information available from sources 

4 other than a patient safety work product under 

5 this section may be discovered or admitted in a 

6 civil or administrative proceeding, if discover7 able or admissible under applicable law. 

8 ‘‘(6) PROVIDER.—The term ‘provider’ means—

9 ‘‘(A) an individual or entity licensed or 

10 otherwise authorized under State law to provide 

11 health care services, including—

12 ‘‘(i) a hospital, nursing facility, com13 prehensive outpatient rehabilitation facility, 

14 home health agency, and hospice program; 

15 ‘‘(ii) a physician, physician assistant, 

16 nurse practitioner, clinical nurse specialist, 

17 certified nurse midwife, psychologist, cer18 tified social worker, registered dietitian or 

19 nutrition professional, physical or occupa20 tional therapist, or other individual health 

21 care practitioner; 

22 ‘‘(iii) a pharmacist; and 

23 ‘‘(iv) a renal dialysis facility, ambula24 tory surgical center, pharmacy, physician 

25 or health care practitioner’s office, long-
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1 term care facility, behavioral health residen2 tial treatment facility, clinical laboratory, 

3 or community health center; or 

4 ‘‘(B) any other person or entity specified in 

5 regulations by the Secretary after public notice 

6 and comment. 

7 ‘‘SEC. 922. PRIVILEGE FOR PATIENT SAFETY WORK PROD8 UCT. 

9 ‘‘(a) PRIVILEGE.—Notwithstanding any other provi10 sion of law and subject to subsection (c), patient safety work 

11 product shall not be—

12 ‘‘(1) subject to a civil or administrative sub13 poena or order; 

14 ‘‘(2) subject to discovery in connection with a 

15 civil or administrative proceeding; 

16 ‘‘(3) subject to disclosure pursuant to section 552 

17 of title 5, United States Code (commonly known as 

18 the Freedom of Information Act), or any other simi19 lar Federal or State law; 

20 ‘‘(4) required to be admitted as evidence or other21 wise disclosed in any State or Federal civil or admin22 istrative proceeding; or 

23 ‘‘(5) if the patient safety work product is identi24 fiable information and is received by a national ac-
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1 creditation organization in its capacity as a patient 

2 safety organization—

3 ‘‘(A) used by a national accreditation orga4 nization in an accreditation action against the 

5 provider that reported the information; 

6 ‘‘(B) shared by such organization with its 

7 survey team; or 

8 ‘‘(C) required as a condition of accredita9 tion by a national accreditation association. 

10 ‘‘(b) REPORTER PROTECTION.—

11 ‘‘(1) IN GENERAL.—A provider may not use 

12 against an individual in an adverse employment ac13 tion described in paragraph (2) the fact that the indi14 vidual in good faith reported information—

15 ‘‘(A) to the provider with the intention of 

16 having the information reported to a patient 

17 safety organization; or 

18 ‘‘(B) directly to a patient safety organiza19 tion. 

20 ‘‘(2) ADVERSE EMPLOYMENT ACTION.—For pur21 poses of this subsection, an ‘adverse employment ac22 tion’ includes—

23 ‘‘(A) the failure to promote an individual or 

24 provide any other employment-related benefit for 

25 which the individual would otherwise be eligible; 
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1 ‘‘(B) an adverse evaluation or decision 

2 made in relation to accreditation, certification, 

3 credentialing, or licensing of the individual; and 

4 ‘‘(C) a personnel action that is adverse to 

5 the individual concerned. 

6 ‘‘(3) REMEDIES.—Any provider that violates this 

7 subsection shall be subject to a civil monetary penalty 

8 of not more than $20,000 for each such violation in9 volved. Such penalty shall be imposed and collected in 

10 the same manner as civil money penalties under sub11 section (a) of section 1128A of the Social Security Act 

12 are imposed and collected. 

13 ‘‘(c) DISCLOSURES.—Nothing in this section prohibits 

14 any of the following disclosures: 

15 ‘‘(1) Voluntary disclosure of nonidentifiable in16 formation. 

17 ‘‘(2) Voluntary disclosure of identifiable infor18 mation by a provider or patient safety organization, 

19 if such disclosure—

20 ‘‘(A) is authorized by the provider for the 

21 purposes of improving quality and safety; 

22 ‘‘(B) is to an entity or person subject to the 

23 requirements of section 264(c) of the Health In24 surance Portability and Accountability Act of 

25 1996 (Public Law 104–191; 110 Stat. 2033), or 
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1 any regulation promulgated under such section; 

2 and 

3 ‘‘(C) is not in conflict with such section or 

4 any regulation promulgated under such section. 

5 ‘‘(3) Disclosure as required by law by a provider 

6 to the Food and Drug Administration, or on a vol7 untary basis by a provider to a federally established 

8 patient safety program, with respect to an Adminis9 tration-regulated product or activity for which that 

10 entity has responsibility, for the purposes of activities 

11 related to the quality, safety, or effectiveness of such 

12 Administration-regulated product or activity. 

13 ‘‘(4) Disclosures of patient safety work product 

14 in accordance with this part by a provider to a pa15 tient safety organization. 

16 ‘‘(d) EFFECT OF TRANSFER, DISCLOSURE.—The fol17 lowing shall not be treated as a waiver of any privilege 

18 or protection established under this part: 

19 ‘‘(1) The transfer of any patient safety work 

20 product between a provider and a patient safety orga21 nization. 

22 ‘‘(2) Disclosure of patient safety work product as 

23 described in subsection (c). 

24 ‘‘(3) The unauthorized disclosure of patient safe25 ty work product.
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1 ‘‘(e) PENALTY.—

2 ‘‘(1) PROHIBITION.—Except as provided in this 

3 part, and subject to paragraphs (2) and (4), it shall 

4 be unlawful for any person to disclose patient safety 

5 work product in violation of this section, if such dis6 closure constitutes a negligent or knowing breach of 

7 confidentiality. 

8 ‘‘(2) RELATION TO HIPAA.—The penalty under 

9 paragraph (3) for a disclosure in violation of para10 graph (1) does not apply if the person would be sub11 ject to a penalty under section 264(c) of the Health 

12 Insurance Portability and Accountability Act of 1996 

13 (Public Law 104–191; 110 Stat. 2033), or any regu14 lation promulgated under such section, for the same 

15 disclosure. 

16 ‘‘(3) AMOUNT.—Any person who violates para17 graph (1) shall be subject to a civil monetary penalty 

18 of not more than $10,000 for each such violation in19 volved. Such penalty shall be imposed and collected in 

20 the same manner as civil money penalties under sub21 section (a) of section 1128A of the Social Security Act 

22 are imposed and collected. 

23 ‘‘(4) SUBSEQUENT DISCLOSURE.—Paragraph (1) 

24 applies only to the first person that breaches confiden-
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1 tiality with respect to particular patient safety work 

2 product. 

3 ‘‘(f) RELATION TO HIPAA.—

4 ‘‘(1) IN GENERAL.—For purposes of applying the 

5 regulations promulgated pursuant to section 264(c) of 

6 the Health Insurance Portability and Accountability 

7 Act of 1996 (Public Law 104–191; 110 Stat. 2033)—

8 ‘‘(A) patient safety organizations shall be 

9 treated as business associates; and 

10 ‘‘(B) activities of such organizations de11 scribed in section 921(4) in relation to a pro12 vider are deemed to be health care operations (as 

13 defined in such regulations) of the provider. 

14 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in this 

15 section shall be construed to alter or affect the imple16 mentation of such regulations or such section 264(c). 

17 ‘‘(g) NO LIMITATION OF OTHER PRIVILEGES.—Noth18 ing in this section shall be construed to affect privileges, 

19 including peer review and confidentiality protections, that 

20 are otherwise available under Federal or State laws. 

21 ‘‘(h) NO LIMITATION ON CONTRACTS.—Nothing in this 

22 section shall be construed to limit the power of a provider 

23 and a patient safety organization, or a patient safety orga24 nization and the Agency or any National Patient Safety 

25 Database, consistent with the provisions of this Act and 
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1 other applicable law, to enter into a contract requiring 

2 greater confidentiality or delegating authority to make an 

3 authorized disclosure. 

4 ‘‘(i) RELATION TO STATE REPORTING REQUIRE5 MENTS.—Nothing in this part shall be construed as pre6 empting or otherwise affecting any State law requiring a 

7 provider to report information, including information de8 scribed in section 921(5)(B), that is not patient safety work 

9 product. 

10 ‘‘(j) CONTINUATION OF PRIVILEGE.—Patient safety 

11 work product of an organization that is certified as a pa12 tient safety organization shall continue to be privileged and 

13 confidential, in accordance with this section, if the organi14 zation’s certification is terminated or revoked or if the orga15 nization otherwise ceases to qualify as a patient safety orga16 nization. 

17 ‘‘(k) REPORTS ON STRATEGIES TO IMPROVE PATIENT

18 SAFETY.—

19 ‘‘(1) DRAFT REPORT.—Not later than the date 

20 that is 18 months after any National Patient Safety 

21 Database is operational, the Secretary, in consulta22 tion with the Director, shall prepare a draft report on 

23 effective strategies for reducing medical errors and in24 creasing patient safety. The draft report shall include 

25 any measure determined appropriate by the Secretary 
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1 to encourage the appropriate use of such strategies, 

2 including use in any federally funded programs. The 

3 Secretary shall make the draft report available for 

4 public comment and submit the draft report to the In5 stitute of Medicine for review. 

6 ‘‘(2) FINAL REPORT.—Not later than 1 year 

7 after the date described in paragraph (1), the Sec8 retary shall submit a final report to the Congress that 

9 includes, in an appendix, any findings by the Insti10 tute of Medicine concerning research on the strategies 

11 discussed in the draft report and any modifications 

12 made by the Secretary based on such findings. 

13 ‘‘SEC. 923. NATIONAL DATABASE. 

14 ‘‘(a) AUTHORITY.—

15 ‘‘(1) IN GENERAL.—In conducting activities 

16 under this part, the Secretary shall provide for the es17 tablishment and maintenance of a database to receive 

18 relevant nonidentifiable patient safety work product, 

19 and may designate entities to collect relevant non20 identifiable patient safety work product that is volun21 tarily reported by patient safety organizations upon 

22 the request of the Secretary. Any database established 

23 or designated under this paragraph may be referred 

24 to as a ‘National Patient Safety Database’. 
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1 ‘‘(2) USE OF INFORMATION.—Information re2 ported to any National Patient Safety Database shall 

3 be used to analyze national and regional statistics, 

4 including trends and patterns of health care errors. 

5 The information resulting from such analyses may be 

6 included in the annual quality reports prepared 

7 under section 913(b)(2). 

8 ‘‘(3) ADVISORY ROLE.—The Secretary shall pro9 vide scientific support to patient safety organizations, 

10 including the dissemination of methodologies and evi11 dence-based information related to root causes and 

12 quality improvement. 

13 ‘‘(b) STANDARDS.—In establishing or designating a 

14 database under subsection (a)(1), the Secretary shall, in 

15 consultation with representatives of patient safety organiza16 tions, the provider community, and the health information 

17 technology industry, determine common formats for the vol18 untary reporting of nonidentifiable patient safety work 

19 product, including necessary elements, common and con20 sistent definitions, and a standardized computer interface 

21 for the processing of the work product. To the extent prac22 ticable, such standards shall be consistent with the adminis23 trative simplification provisions of part C of title XI of the 

24 Social Security Act.
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1 ‘‘(c) CERTAIN METHODOLOGIES FOR COLLECTION.—

2 The Secretary shall ensure that the methodologies for the 

3 collection of nonidentifiable patient safety work product for 

4 any National Patient Safety Database include the meth5 odologies developed or recommended by the Patient Safety 

6 Task Force of the Department of Health and Human Serv7 ices. 

8 ‘‘(d) FACILITATION OF INFORMATION EXCHANGE.—To 

9 the extent practicable, the Secretary may facilitate the di10 rect link of information between providers and patient safe11 ty organizations and between patient safety organizations 

12 and any National Patient Safety Database. 

13 ‘‘(e) RESTRICTION ON TRANSFER.—Only nonidentifi14 able information may be transferred to any National Pa15 tient Safety Database. 

16 ‘‘SEC. 924. TECHNICAL ASSISTANCE. 

17 ‘‘(a) IN GENERAL.—The Secretary, acting through the 

18 Director, may—

19 ‘‘(1) provide technical assistance to patient safe20 ty organizations, and to States with reporting sys21 tems for health care errors; and 

22 ‘‘(2) provide guidance on the type of data to be 

23 voluntarily submitted to any National Patient Safety 

24 Database. 
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1 ‘‘(b) ANNUAL MEETINGS.—Assistance provided under 

2 subsection (a) may include annual meetings for patient 

3 safety organizations to discuss methodology, communica4 tion, information collection, or privacy concerns. 

5 ‘‘SEC. 925. CERTIFICATION OF PATIENT SAFETY ORGANIZA6 TIONS. 

7 ‘‘(a) IN GENERAL.—Not later than 6 months after the 

8 date of enactment of the Patient Safety and Quality Im9 provement Act, the Secretary shall establish a process for 

10 certifying patient safety organizations. 

11 ‘‘(b) PROCESS.—The process established under sub12 section (a) shall include the following: 

13 ‘‘(1) Certification of patient safety organizations 

14 by the Secretary or by such other national or State 

15 governmental organizations as the Secretary deter16 mines appropriate. 

17 ‘‘(2) If the Secretary allows other governmental 

18 organizations to certify patient safety organizations 

19 under paragraph (1), the Secretary shall establish a 

20 process for approving such organizations. Any such 

21 approved organization shall conduct certifications 

22 and reviews in accordance with this section. 

23 ‘‘(3) A review of each certification under para24 graph (1) (including a review of compliance with 

25 each criterion in this section and any related imple-
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1 menting standards as determined by the Secretary 

2 through rulemaking) not less often than every 3 years, 

3 as determined by the Secretary. 

4 ‘‘(4) Revocation of any such certification by the 

5 Secretary or other such governmental organization 

6 that issued the certification, upon a showing of cause. 

7 ‘‘(c) CRITERIA.—A patient safety organization must 

8 meet the following criteria as conditions of certification: 

9 ‘‘(1) The mission of the patient safety organiza10 tion is to conduct activities that are to improve pa11 tient safety and the quality of health care delivery 

12 and is not in conflict of interest with the providers 

13 that contract with the patient safety organization. 

14 ‘‘(2) The patient safety organization has appro15 priately qualified staff, including licensed or certified 

16 medical professionals. 

17 ‘‘(3) The patient safety organization, within any 

18 2 year period, contracts with more than 1 provider 

19 for the purpose of receiving and reviewing patient 

20 safety work product. 

21 ‘‘(4) The patient safety organization is not a 

22 component of a health insurer or other entity that of23 fers a group health plan or health insurance coverage. 

24 ‘‘(5) The patient safety organization is managed, 

25 controlled, and operated independently from any pro-
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1 vider that contracts with the patient safety organiza2 tion for reporting patient safety work product. 

3 ‘‘(6) To the extent practical and appropriate, the 

4 patient safety organization collects patient safety 

5 work product from providers in a standardized man6 ner that permits valid comparisons of similar cases 

7 among similar providers. 

8 ‘‘(d) ADDITIONAL CRITERIA FOR COMPONENT ORGANI9 ZATIONS.—If a patient safety organization is a component 

10 of another organization, the patient safety organization 

11 must, in addition to meeting the criteria described in sub12 section (c), meet the following criteria as conditions of cer13 tification: 

14 ‘‘(1) The patient safety organization maintains 

15 patient safety work product separately from the rest 

16 of the organization, and establishes appropriate secu17 rity measures to maintain the confidentiality of the 

18 patient safety work product. 

19 ‘‘(2) The patient safety organization does not 

20 make an unauthorized disclosure under this Act of 

21 patient safety work product to the rest of the organi22 zation in breach of confidentiality. 

23 ‘‘(3) The mission of the patient safety organiza24 tion does not create a conflict of interest with the rest 

25 of the organization.’’. 
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

2 937 of the Public Health Service Act (as redesignated by 

3 subsection (a)) is amended by adding at the end the fol4 lowing: 

5 ‘‘(e) PATIENT SAFETY AND QUALITY IMPROVEMENT.—

6 For the purpose of carrying out part C, there are authorized 

7 to be appropriated such sums as may be necessary for each 

8 of the fiscal years 2004 through 2008.’’. 

9 SEC. 4. PROMOTING THE DIFFUSION AND INTEROPER10 ABILITY OF INFORMATION TECHNOLOGY SYS11 TEMS INVOLVED WITH HEALTH CARE DELIV12 ERY. 

13 (a) VOLUNTARY STANDARDS.—

14 (1) IN GENERAL.—Not later than 18 months 

15 after the date of the enactment of this Act, the Sec16 retary of Health and Human Services (in this section 

17 referred to as the ‘‘Secretary’’) shall—

18 (A) develop or adopt voluntary national 

19 standards that promote the interoperability of 

20 information technology systems involved with 

21 health care delivery, including but not limited to 

22 computerized physician order entry; 

23 (B) in developing or adopting such stand24 ards, take into account—
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1 (i) the ability of such systems to cap2 ture and aggregate clinically specific data 

3 to enable evidence-based medicine and other 

4 applications that promote the electronic ex5 change of patient medical record informa6 tion; and 

7 (ii) the cost that meeting such stand8 ards would have on providing health care in 

9 the United States and the increased effi10 ciencies in providing such care achieved 

11 under the standards; 

12 (C) in developing or adopting such stand13 ards and to the extent practicable, test the effi14 cacy, usability, and scalability of proposed inter15 operability standards within a variety of clinical 

16 settings, including an urban academic medical 

17 center, a rural hospital, a community health cen18 ter, and a community hospital; and 

19 (D) submit a report to the Congress con20 taining recommendations on such standards. 

21 (2) CONSULTATION.—In developing or adopting 

22 standards under paragraph (1)(A), the Secretary 

23 shall consider the recommendations of the National 

24 Committee on Vital Health Statistics for the stand25 ardization of message formatting, coding, and vocabu-
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1 lary for interoperability of information technology 

2 systems involved with health care delivery. The Sec3 retary shall consult with representatives of the health 

4 information technology industry and the provider 

5 community who are involved with the development of 

6 interoperability standards. 

7 (b) UPDATES.—The Secretary shall provide for the on8 going review and periodic updating of the standards devel9 oped under subsection (a). 

10 SEC. 5. REQUIRED USE OF PRODUCT IDENTIFICATION 

11 TECHNOLOGY. 

12 The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

13 301 et seq.) is amended—

14 (1) in section 502, by adding at the end the fol15 lowing: 

16 ‘‘(w) If it is a drug or biological product, unless it 

17 includes a unique product identifier for the drug or biologi18 cal product as required by regulations under section 

19 510(q).’’; and 

20 (2) in section 510, by adding at the end the fol21 lowing: 

22 ‘‘(q)(1) The Secretary shall issue, and may periodi23 cally revise, regulations requiring the manufacturer of any 

24 drug or biological product that is subject to regulation by 

25 the Food and Drug Administration, or the packager or la-
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1 beler of a drug or biological product that is subject to regu2 lation by the Food and Drug Administration, to include 

3 a unique product identifier on the packaging of the drug 

4 or biological product. 

5 ‘‘(2) For purposes of this subsection, the term ‘unique 

6 product identifier’ means an identification that—

7 ‘‘(A) is affixed by the manufacturer, labeler, or 

8 packager to each drug or biological product described 

9 in paragraph (1) at each packaging level; 

10 ‘‘(B) uniquely identifies the item and meets the 

11 standards required by this section; and 

12 ‘‘(C) can be read by a scanning device or other 

13 technology acceptable to the Secretary. 

14 ‘‘(3) A unique product identifier required by regula15 tions issued or revised under paragraph (1) shall be based 

16 on—

17 ‘‘(A) the National Drug Code maintained by the 

18 Food and Drug Administration; 

19 ‘‘(B) commercially accepted standards estab20 lished by organizations that are accredited by the 

21 American National Standards Institute, such as the 

22 Health Industry Business Communication Council or 

23 the Uniform Code Council; or 

24 ‘‘(C) other identification formats that the Sec25 retary deems appropriate. 
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1 ‘‘(4) The Secretary may, at the Secretary’s discretion, 

2 waive the requirements of this section, or add additional 

3 provisions that are necessary to safeguard the public 

4 health.’’. 

5 SEC. 6. GRANTS FOR ELECTRONIC PRESCRIPTION PRO6 GRAMS. 

7 (a) GRANTS.—

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

9 Human Services (in this section referred to as the 

10 ‘‘Secretary’’) may make grants to qualified practi11 tioners for the purpose of establishing electronic pre12 scription programs. 

13 (2) MATCHING FUNDS.—

14 (A) IN GENERAL.—With respect to the costs 

15 of establishing an electronic prescription pro16 gram, a condition for the receipt of a grant 

17 under paragraph (1) is that the qualified practi18 tioner involved agree to make available (directly 

19 or through donations from public or private enti20 ties) non-Federal contributions toward such costs 

21 in an amount that is not less than 50 percent 

22 of such costs. 

23 (B) DETERMINATION OF AMOUNT CONTRIB24 UTED.—Non-Federal contributions required in 

25 subparagraph (A) may be in cash or in kind, 
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1 fairly evaluated, including equipment or services. 

2 Amounts provided by the Federal Government, 

3 or services assisted or subsidized to any signifi4 cant extent by the Federal Government, may not 

5 be included in determining the amount of such 

6 non-Federal contributions. 

7 (b) STUDY.—

8 (1) IN GENERAL.—The Secretary, acting through 

9 the Director of the Agency for Healthcare Research 

10 and Quality, shall support a study to assess existing 

11 scientific evidence regarding the effectiveness and cost12 effectiveness of the use of electronic prescription pro13 grams intended to improve the efficiency of prescrip14 tion ordering and the safe and effective use of pre15 scription drugs. The study shall address the following: 

16 (A) The ability of such programs to reduce 

17 medical errors and improve the quality and safe18 ty of patient care. 

19 (B) The impact of the use of such programs 

20 on physicians, pharmacists, and patients, in21 cluding such factors as direct and indirect costs, 

22 changes in productivity, and satisfaction. 

23 (C) The effectiveness of strategies for over24 coming barriers to the use of electronic prescrip25 tion programs.
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1 (2) REPORT.—The Secretary shall ensure that, 

2 not later than 18 months after the date of the enact3 ment of this Act, a report containing the findings of 

4 the study under paragraph (1) is submitted to the ap5 propriate committees of the Congress. 

6 (3) DISSEMINATION OF FINDINGS.—The Sec7 retary shall disseminate the findings of the study 

8 under paragraph (1) to appropriate public and pri9 vate entities. 

10 (c) DEVELOPMENT OF MODEL.—The Secretary, acting 

11 through the Director of the Agency for Healthcare Research 

12 and Quality, may develop an Internet-based mathematical 

13 model that simulates the cost and effectiveness of electronic 

14 prescription programs for qualified practitioners. The 

15 model may be designed to allow qualified practitioners to 

16 estimate, through an interactive interface, the impact of 

17 electronic prescribing on their practices, including the re18 duction in drug-related health care errors. 

19 (d) DEFINITIONS.—For purposes of this section: 

20 (1) The term ‘‘electronic prescription pro21 gram’’—

22 (A) means a program for the electronic sub23 mission and processing of prescriptions; and 

24 (B) includes the hardware (including com25 puters and other electronic devices) and software 
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1 programs for the electronic submission of pre2 scriptions to pharmacies, the processing of such 

3 submissions by pharmacies, and decision-support 

4 programs. 

5 (2) The term ‘‘qualified practitioner’’ means a 

6 practitioner licensed by law to administer or dispense 

7 prescription drugs. 

8 SEC. 7. GRANTS TO HOSPITALS AND OTHER HEALTH CARE 

9 PROVIDERS FOR INFORMATION TECH10 NOLOGIES. 

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

12 Human Services (in this section referred to as the ‘‘Sec13 retary’’) shall make grants to hospitals and other health 

14 care providers (but not more than 1 grant to any 1 hospital 

15 or provider) to pay the costs of acquiring or implementing 

16 information technologies whose purposes are—

17 (1) to improve quality of care and patient safety; 

18 and 

19 (2) to reduce adverse events and health care com20 plications resulting from medication errors. 

21 (b) SPECIAL CONSIDERATION.—In making grants 

22 under subsection (a), the Secretary shall give special consid23 eration to applicants who seek to promote the following: 
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1 (1) Interoperability across hospital services or 

2 departments using standards developed or adopted by 

3 the Secretary under section 4. 

4 (2) Electronic communication of patient data 

5 across the spectrum of health care delivery. 

6 (3) Computerized physician order entry or bar 

7 coding applications. 

8 (4) Electronic communication of patient data in 

9 hospitals that provide services to underserved or low10 income populations. 

11 (5) Improved clinical decisionmaking through 

12 acquisition and implementation of decision-support 

13 technologies. 

14 (c) CERTAIN GRANT CONDITIONS.—A condition for the 

15 receipt of a grant under subsection (a) is that the applicant 

16 involved meet the following requirements: 

17 (1) The applicant agrees to carry out a program 

18 to measure, analyze, and report patient safety and 

19 medical errors at the hospital or other health care 

20 provider involved, to submit to the Secretary a de21 scription of the methodology that will be used, and to 

22 have such program in effect as soon as practicable 

23 after the application for the grant is approved, with24 out regard to whether information technologies under 

25 the grant have been implemented. 
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1 (2) The applicant has arranged for an evalua2 tion that addresses the effectiveness and cost-effective3 ness of the information technology for which the grant 

4 is provided and its impact on the quality and safety 

5 of patient care, submitted the evaluation plan to the 

6 Secretary, and received approval from the Secretary 

7 of the applicant’s methodology. 

8 (3) The applicant has or is developing a patient 

9 safety evaluation system (as that term is defined in 

10 section 921 of the Public Health Service Act (as 

11 amended by section 3)) for reporting health care er12 rors to a patient safety organization. 

13 (4) The applicant agrees to provide the Secretary 

14 with such information as the Secretary may require 

15 regarding the use of funds under this program or its 

16 impact. 

17 (5) The applicant provides assurances satisfac18 tory to the Secretary that any information technology 

19 planned, acquired, or implemented with grant funds 

20 under this section will be part of an information pro21 gram that—

22 (A) carries out the purposes described in 

23 subsection (a); and 
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1 (B) is comprehensive or will be expanded to 

2 become comprehensive, regardless of whether Fed3 eral assistance is available for such expansion. 

4 (d) TECHNICAL ASSISTANCE TO GRANTEES.—The Sec5 retary, acting through the Director of the Agency for 

6 Healthcare Research and Quality, shall provide technical 

7 assistance to applicants and grantees to ensure the appro8 priate evaluation of the information technologies for which 

9 grants are awarded under this section, such as—

10 (1) reviewing and providing technical assistance 

11 on the applicant’s proposed evaluation; 

12 (2) developing mechanisms to ensure ongoing 

13 communications between grantees and evaluators to 

14 facilitate the identification and resolution of problems 

15 as they arise, ensure mutual learning, and promote 

16 the rapid dissemination of information; 

17 (3) reviewing the interim and final reports re18 quired under subsection (e); and 

19 (4) disseminating evidence-based information in 

20 interim and final reports to patient safety organiza21 tions, as appropriate. 

22 (e) EVALUATION REPORTS BY GRANTEE.—A condition 

23 for the receipt of a grant under subsection (a) is that the 

24 applicant agree to submit an interim and a final report 

25 to the Secretary in accordance with this subsection.
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1 (1) INTERIM REPORT.—Not later than 1 year 

2 after the implementation of information technologies 

3 under the grant is completed, the applicant will sub4 mit an interim report to the Secretary describing the 

5 initial effectiveness of such technologies in carrying 

6 out the purposes described in subsection (a). 

7 (2) FINAL REPORT.—Not later than 3 years after 

8 the implementation of information technologies under 

9 the grant is completed, the applicant will submit a 

10 final report to the Secretary describing the effective11 ness and cost-effectiveness of such technologies and ad12 dressing other issues determined to be important in 

13 carrying out the purposes described in subsection (a). 

14 (3) RELATION TO DISBURSEMENT OF GRANT.—

15 In disbursing a grant under subsection (a), the Secretary shall withhold 1 16 ⁄3 of the grant until the grantee 

17 submits to the Secretary the report required in para18 graph (1). 

19 (f) REPORTS BY SECRETARY.—

20 (1) INTERIM REPORTS.—

21 (A) IN GENERAL.—Through the fiscal year 

22 preceding the fiscal year in which the final re23 port under paragraph (2) is prepared, the Sec24 retary shall submit to the Committee on Energy 

25 and Commerce of the House of Representatives 
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1 and the Committee on Health, Education, Labor, 

2 and Pensions of the Senate periodic reports on 

3 the grant program under subsection (a). Such re4 ports shall be submitted not less frequently than 

5 once each fiscal year, beginning with fiscal year 

6 2004. 

7 (B) CONTENTS.—A report under subpara8 graph (A) shall include information on—

9 (i) the number of grants made; 

10 (ii) the nature of the projects for which 

11 funding is provided under the grant pro12 gram; 

13 (iii) the geographic distribution of 

14 grant recipients; and 

15 (iv) such other matters as the Sec16 retary determines appropriate. 

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

18 after the date on which the last of the reports is due 

19 under subsection (e)(2), the Secretary shall submit a 

20 final report to the committees referred to in para21 graph (1)(A) on the grant program under subsection 

22 (a), together with such recommendations for legisla23 tion and administrative action as the Secretary deter24 mines appropriate. 

25 (g) DEFINITIONS.—For purposes of this section: 
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1 (1) The term ‘‘costs’’, with respect to information 

2 technologies referred to in subsection (a), includes 

3 total expenditures incurred for—

4 (A) purchasing, leasing, and installing com5 puter software and hardware, including hand6 held computer technologies; 

7 (B) making improvements to existing com8 puter software and hardware; and 

9 (C) purchasing or leasing communications 

10 capabilities necessary for clinical data access, 

11 storage, and exchange. 

12 (2) The term ‘‘health care provider’’ has the same 

13 meaning given to the term ‘‘provider’’ in section 921 

14 of the Public Health Services Act (as amended by this 

15 Act). 

16 (h) TERMINATION OF GRANT AUTHORITIES.—The au17 thority of the Secretary to make grants under subsection 

18 (a) terminates upon the expiration of fiscal year 2011. 

19 (i) MATCHING FUNDS.—

20 (1) IN GENERAL.—With respect to the costs of a 

21 grant to be carried out under this section, such grant 

22 may be made only if the applicant agrees to make 

23 available (directly or through donations from public 

24 or private entities) non-Federal contributions toward 

25 such costs in an amount that is not less than 50 per-
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1 cent of such costs ($1 for each $1 of Federal funds 

2 provided in the grant). 

3 (2) DETERMINATION OF AMOUNTS CONTRIB4 UTED.—Amounts provided by the Federal Govern5 ment, or services assisted or subsidized to any signifi6 cant extent by the Federal Government, may not be 

7 included in determining the amount of such non-Fed8 eral contributions. 

9 SEC. 8. AUTHORIZATION OF APPROPRIATIONS FOR GRANTS 

10 UNDER SECTIONS 6 AND 7. 

11 For the purpose of carrying out sections 6 and 7, there 

12 are authorized to be appropriated $25,000,000 for each of 

13 fiscal years 2004 and 2005.

Union Calendar No. 19

108TH CONGRESS 

1ST SESSION H. R. 663

[Report No. 108–28] 

A BILL

To amend title IX of the Public Health Service Act 

to provide for the improvement of patient safety and to reduce the incidence of events that adversely affect patient safety, and for other purposes. 

MARCH 6, 2003

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed