I

103D CONGRESS

1ST SESSION H. R. 2261

To contain the rate of growth in health care costs and enhance the quality

of health care by improving and making more efficient the provision

of medical and health insurance information, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 25, 1993

Mr. THOMAS of California (for himself, Mrs. JOHNSON of Connecticut, Mr.

GRANDY, and Mr. MCCRERY) introduced the following bill; which was referred jointly to the Committees on Energy and Commerce, Ways and

Means, Education and Labor, and Veterans’ Affairs

A BILL

To contain the rate of growth in health care costs and

enhance the quality of health care by improving and

making more efficient the provision of medical and health

insurance information, 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. TABLE OF CONTENTS.

4 The table of contents of this Act is as follows:

Sec. 1. Table of contents.

Sec. 2. Definitions.

TITLE I—STANDARDIZATION OF CLAIMS PROCESSING

Sec. 101. Adoption of data elements, uniform claims, and uniform electronic

transmission standards.

Sec. 102. Application of standards.
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Sec. 103. Periodic review and revision of standards.

TITLE II—ELECTRONIC MEDICAL DATA STANDARDS

Sec. 201. Medical data standards for hospitals and other providers.

Sec. 202. Application of electronic data standards to certain hospitals.

Sec. 203. Electronic transmission to Federal agencies.

Sec. 204. Limitation on data requirements where standards in effect.

Sec. 205. Advisory commission.

TITLE III—DEVELOPMENT AND DISTRIBUTION OF COMPARATIVE

VALUE INFORMATION

Sec. 301. State comparative value information programs for health care purchasing.

Sec. 302. Federal implementation.

Sec. 303. Comparative value information concerning Federal programs.

Sec. 304. Development of model systems.

TITLE IV—ADDITIONAL STANDARDS AND REQUIREMENTS;

RESEARCH AND DEMONSTRATIONS

Sec. 401. Standards relating to use of medicare and medicaid magnetized

health benefit cards; secondary payor data bank.

Sec. 402. Preemption of State quill pen laws.

Sec. 403. Use of standard identification numbers.

Sec. 404. Coordination of benefit standards.

Sec. 405. Research and demonstrations.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act:

3 (1) HEALTH BENEFIT PLAN.—The term

4 ‘‘health benefit plan’’ means any hospital or medical

5 expense incurred policy or certificate, hospital or

6 medical service plan contract, or health maintenance

7 subscriber contract, or a multiple employer welfare

8 arrangement or employee benefit plan (as defined

9 under the Employee Retirement Income Security Act

10 of 1974) which provides benefits with respect to

11 health care services. The term includes the medicare

12 program (under title XVIII of the Social Security

13 Act), medicare supplemental health insurance, and a
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1 State medicaid plan (approved under title XIX of

2 such Act). The term does not include—

3 (A) coverage only for accident, dental, vi4 sion, disability income, or long-term care insur5 ance, or any combination thereof,

6 (B) coverage issued as a supplement to li7 ability insurance,

8 (C) worker’s compensation or similar in9 surance, or

10 (D) automobile medical-payment insur11 ance,

12 or any combination thereof.

13 (2) SECRETARY.—The term ‘‘Secretary’’ means

14 the Secretary of Health and Human Services.

15 (3) STATE.—The term ‘‘State’’ means any of

16 the several States, the District of Columbia, the

17 Commonwealth of Puerto Rico, the Virgin Islands,

18 Guam, and American Samoa.
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1 TITLE I—STANDARDIZATION OF

2 CLAIMS PROCESSING

3 SEC. 101. ADOPTION OF DATA ELEMENTS, UNIFORM

4 CLAIMS, AND UNIFORM ELECTRONIC TRANS5 MISSION STANDARDS.

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

7 Human Services shall adopt standards relating to each of

8 the following:

9 (1) Data elements for use in paper and elec10 tronic claims processing under health benefit plans,

11 as well as for use in utilization review and manage12 ment of care (including data fields, formats, and

13 medical nomenclature, and including plan benefit

14 and insurance information).

15 (2) Uniform claims forms (including uniform

16 procedure and billing codes for uses with such forms

17 and including information on other health benefit

18 plans that may be liable for benefits).

19 (3) Uniform electronic transmission of the data

20 elements (for purposes of billing and utilization

21 review).

22 Standards under paragraph (3) relating to electronic

23 transmission of data elements for claims for services shall

24 supersede (to the extent specified in such standards) the

25 standards adopted under paragraph (2) relating to the
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1 submission of paper claims for such services. Standards

2 under paragraph (3) shall include protections to assure

3 the confidentiality of patient-specific information and to

4 protect against the unauthorized use and disclosure of

5 information.

6 (b) USE OF TASK FORCES.—In adopting standards

7 under this section—

8 (1) the Secretary shall take into account the

9 recommendations of current task forces, including at

10 least the Workgroup on Electronic Data Inter11 change, National Uniform Billing Committee, the

12 Uniform Claim Task Force, and the Computer-based

13 Patient Record Institute;

14 (2) the Secretary shall consult with the Na15 tional Association of Insurance Commissioners (and,

16 with respect to standards under subsection (a)(3),

17 the American National Standards Institute); and

18 (3) the Secretary shall, to the maximum extent

19 practicable, seek to make the standards consistent

20 with any uniform clinical data sets which have been

21 adopted and are widely recognized.

22 (c) DEADLINES FOR PROMULGATION.—The Sec23 retary shall promulgate the standards under—
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1 (1) subsection (a)(1) relating to claims process2 ing data, by not later than 12 months after the date

3 of the enactment of this Act;

4 (2) subsection (a)(2) (relating to uniform

5 claims forms) by not later than 12 months after the

6 date of the enactment of this Act; and

7 (3)(A) subsection (a)(3) relating to trans8 mission of information concerning hospital and phy9 sicians services, by not later than 24 months after

10 the date of the enactment of this Act, and

11 (B) subsection (a)(3) relating to transmission

12 of information on other services, by such later date

13 as the Secretary may determine it to be feasible.

14 (d) REPORT TO CONGRESS.—Not later than 3 years

15 after the date of the enactment of this Act, the Secretary

16 shall report to Congress recommendations regarding re17 structuring the medicare peer review quality assurance

18 program given the availability of hospital data in elec19 tronic form.

20 SEC. 102. APPLICATION OF STANDARDS.

21 (a) IN GENERAL.—If the Secretary determines, at

22 the end of the 2-year period beginning on the date that

23 standards are adopted under section 101 with respect to

24 classes of services, that a significant number of claims for

25 benefits for such services under health benefit plans are
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1 not being submitted in accordance with such standards,

2 the Secretary may require, after notice in the Federal

3 Register of not less than 6 months, that all providers of

4 such services must submit claims to health benefit plans

5 in accordance with such standards. The Secretary may

6 waive the application of such a requirement in such cases

7 as the Secretary finds that the imposition of the require8 ment would not be economically practicable.

9 (b) SIGNIFICANT NUMBER.—The Secretary shall

10 make an affirmative determination described in subsection

11 (a) for a class of services only if the Secretary finds that

12 there would be a significant, measurable additional gain

13 in efficiencies in the health care system that would be ob14 tained by imposing the requirement described in such

15 paragraph with respect to such services.

16 (c) APPLICATION OF REQUIREMENT.—

17 (1) IN GENERAL.—If the Secretary imposes the

18 requirement under subsection (a)—

19 (A) in the case of a requirement that im20 poses the standards relating to electronic trans21 mission of claims for a class of services, each

22 health care provider that furnishes such services

23 for which benefits are payable under a health

24 benefit plan shall transmit electronically and di25 rectly to the plan on behalf of the beneficiary
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1 involved a claim for such services in accordance

2 with such standards;

3 (B) any health benefit plan may reject any

4 claim subject to the standards adopted under

5 section 101 but which is not submitted in ac6 cordance with such standards;

7 (C) it is unlawful for a health benefit plan

8 (i) to reject any such claim on the basis of the

9 form in which it is submitted if it is submitted

10 in accordance with such standards or (ii) to re11 quire, for the purpose of utilization review or as

12 a condition of providing benefits under the plan,

13 a provider to transmit medical data elements

14 that are inconsistent with the standards estab15 lished under section 101(a)(1); and

16 (D) the Secretary may impose a civil

17 money penalty on any provider that knowingly

18 and repeatedly submits claims in violation of

19 such standards or on any health benefit plan

20 (other than a health benefit plan described in

21 paragraph (2)) that knowingly and repeatedly

22 rejects claims in violation of subparagraph (B),

23 in an amount not to exceed $100 for each such

24 claim.
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1 The provisions of section 1128A of the Social Secu2 rity Act (other than the first sentence of subsection

3 (a) and other than subsection (b)) shall apply to a

4 civil money penalty under subparagraph (D) in the

5 same manner as such provisions apply to a penalty

6 or proceeding under section 1128A(a) of such Act.

7 (2) PLANS SUBJECT TO EFFECTIVE STATE REG8 ULATION.—A plan described in this paragraph is a

9 health benefit plan—

10 (A) that is subject to regulation by a

11 State, and

12 (B) with respect to which the Secretary

13 finds that—

14 (i) the State provides for application

15 of the standards established under section

16 101, and

17 (ii) the State regulatory program pro18 vides for the appropriate and effective en19 forcement of such standards.

20 (d) TREATMENT OF REJECTIONS.—If a plan rejects

21 a claim pursuant to subsection (c)(1), the plan shall per22 mit the person submitting the claim a reasonable oppor23 tunity to resubmit the claim on a form or in an electronic

24 manner that meets the requirements for acceptance of the

25 claim under such subsection.
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1 SEC. 103. PERIODIC REVIEW AND REVISION OF STAND2 ARDS.

3 (a) IN GENERAL.—The Secretary shall—

4 (1) provide for the ongoing receipt and review

5 of comments and suggestions for changes in the

6 standards adopted and promulgated under section

7 101;

8 (2) establish a schedule for the periodic review

9 of such standards; and

10 (3) based upon such comments, suggestions,

11 and review, revise such standards and promulgate

12 such revisions.

13 (b) APPLICATION OF REVISED STANDARDS.—If the

14 Secretary under subsection (a) revises the standards de15 scribed in 101, then, in the case of any claim for benefits

16 submitted under a health benefit plan more than the mini17 mum period (of not less than 6 months specified by the

18 Secretary) after the date the revision is promulgated

19 under subsection (a)(3), such standards shall apply under

20 section 102 instead of the standards previously promul21 gated.
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1 TITLE II—ELECTRONIC MEDICAL

2 DATA STANDARDS

3 SEC. 201. MEDICAL DATA STANDARDS FOR HOSPITALS AND

4 OTHER PROVIDERS.

5 (a) PROMULGATION OF HOSPITAL DATA STAND6 ARDS.—

7 (1) IN GENERAL.—Between July 1, 1994, and

8 January 1, 1995, the Secretary shall promulgate

9 standards described in subsection (b) for hospitals

10 concerning electronic medical data.

11 (2) REVISION.—The Secretary may from time

12 to time revise the standards promulgated under this

13 subsection.

14 (b) CONTENTS OF DATA STANDARDS.—The stand15 ards promulgated under subsection (a) shall include at

16 least the following:

17 (1) A definition of a standard set of data ele18 ments for use by utilization and quality control peer

19 review organizations.

20 (2) A definition of the set of comprehensive

21 data elements, which set shall include for hospitals

22 the standard set of data elements defined under

23 paragraph (1).

24 (3) Standards for an electronic patient care in25 formation system with data obtained at the point of
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1 care, including standards to protect against the un2 authorized use and disclosure of information.

3 (4) A specification of, and manner of presen4 tation of, the individual data elements of the sets

5 and system under this subsection.

6 (5) Standards concerning the transmission of

7 electronic medical data.

8 (6) Standards relating to confidentiality of

9 patient-specific information.

10 The standards under this section shall be consistent with

11 standards for data elements established under section 101.

12 (c) OPTIONAL DATA STANDARDS FOR OTHER PRO13 VIDERS.—

14 (1) IN GENERAL.—The Secretary may promul15 gate standards described in paragraph (2) concern16 ing electronic medical data for providers that are not

17 hospitals. The Secretary may from time to time re18 vise the standards promulgated under this sub19 section.

20 (2) CONTENTS OF DATA STANDARDS.—The

21 standards promulgated under paragraph (1) for non22 hospital providers may include standards comparable

23 to the standards described in paragraphs (2), (4),

24 and (5) of subsection (b) for hospitals.
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1 (d) CONSULTATION.—In promulgating and revising

2 standards under this section, the Secretary shall—

3 (1) consult with the American National Stand4 ards Institute, hospitals, with the advisory commis5 sion established under section 205, and with other

6 affected providers, health benefit plans, and other

7 interested parties, and

8 (2) take into consideration, in developing stand9 ards under subsection (b)(1), the data set used by

10 the utilization and quality control peer review pro11 gram under part B of title XI of the Social Security

12 Act.

13 SEC. 202. APPLICATION OF ELECTRONIC DATA STANDARDS

14 TO CERTAIN HOSPITALS.

15 (a) MEDICARE REQUIREMENT FOR SHARING OF

16 HOSPITAL INFORMATION.—As of January 1, 1996, sub17 ject to paragraph (2), each hospital, as a requirement of

18 each participation agreement under section 1866 of the

19 Social Security Act, shall—

20 (1) maintain clinical data included in the set of

21 comprehensive data elements under section

22 201(b)(2) in electronic form on all inpatients,

23 (2) upon request of the Secretary or of a utili24 zation and quality control peer review organization

25 (with which the Secretary has entered into a con-
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1 tract under part B of title XI of such Act), transmit

2 electronically the data set, and

3 (3) upon request of the Secretary, or of a fiscal

4 intermediary or carrier, transmit electronically any

5 data (with respect to a claim) from such data set,

6 in accordance with the standards promulgated under sec7 tion 201(a).

8 (b) WAIVER AUTHORITY.—Until January 1, 2000:

9 (1) The Secretary may waive the application of

10 the requirements of subsection (a) for a hospital

11 that is a small rural hospital, for such period as the

12 hospital demonstrates compliance with such require13 ments would constitute an undue financial hardship.

14 (2) The Secretary may waive the application of

15 the requirements of subsection (a) for a hospital

16 that is in the process of developing a system to pro17 vide the required data set and executes agreements

18 with its fiscal intermediary and its utilization and

19 quality control peer review organization that the hos20 pital will meet the requirements of subsection (a) by

21 a specified date (not later than January 1, 2000).

22 (3) The Secretary may waive the application of

23 the requirement of subsection (a)(1) for a hospital

24 that agrees to obtain from its records the data ele25 ments that are needed to meet the requirements of
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1 paragraphs (2) and (3) of subsection (a) and agrees

2 to subject its data transfer process to a quality as3 surance program specified by the Secretary.

4 (c) APPLICATION TO HOSPITALS OF THE DEPART5 MENT OF VETERANS AFFAIRS.—

6 (1) IN GENERAL.—The Secretary of Veterans

7 Affairs shall provide that each hospital of the De8 partment of Veterans Affairs shall comply with the

9 requirements of subsection (a) in the same manner

10 as such requirements would apply to the hospital if

11 it were participating in the Medicare program.

12 (2) WAIVER.—Such Secretary may waive the

13 application of such requirements to a hospital in the

14 same manner as the Secretary of Health and

15 Human Services may waive under subsection (b) the

16 application of the requirements of subsection (a).

17 SEC. 203. ELECTRONIC TRANSMISSION TO FEDERAL AGEN18 CIES.

19 (a) IN GENERAL.—Effective January 1, 2000, if a

20 provider is required under a Federal program to transmit

21 a data element that is subject to a presentation or trans22 mission standard (as defined in subsection (b)), the head

23 of the Federal agency responsible for such program (if not

24 otherwise authorized) is authorized to require the provider
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1 to present and transmit the data element electronically in

2 accordance with such a standard.

3 (b) PRESENTATION OR TRANSMISSION STANDARD

4 DEFINED.—In subsection (a), the term ‘‘presentation or

5 transmission standard’’ means a standard, promulgated

6 under subsection (b) or (c) of section 201, described in

7 paragraph (4) or (5) of section 201(b).

8 SEC. 204. LIMITATION ON DATA REQUIREMENTS WHERE

9 STANDARDS IN EFFECT.

10 (a) IN GENERAL.—If standards with respect to data

11 elements are promulgated under section 201 with respect

12 to a class of provider, a health benefit plan may not re13 quire, for the purpose of utilization review or as a condi14 tion of providing benefits under the plan, that a provider

15 in the class—

16 (1) provide any data element not in the set of

17 comprehensive data elements specified under such

18 standards, or

19 (2) transmit or present any such data element

20 in a manner inconsistent with the applicable stand21 ards for such transmission or presentation.

22 (b) COMPLIANCE.—

23 (1) IN GENERAL.—The Secretary may impose a

24 civil money penalty on any health benefit plan (other

25 than a health benefit plan described in paragraph
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1 (2)) that fails to comply with subsection (a) in an

2 amount not to exceed $100 for each such failure.

3 The provisions of section 1128A of the Social Secu4 rity Act (other than the first sentence of subsection

5 (a) and other than subsection (b)) shall apply to a

6 civil money penalty under this paragraph in the

7 same manner as such provisions apply to a penalty

8 or proceeding under section 1128A(a) of such Act.

9 (2) PLANS SUBJECT TO EFFECTIVE STATE REG10 ULATION.—A plan described in this paragraph is a

11 health benefit plan that is subject to regulation by

12 a State, if the Secretary finds that—

13 (A) the State provides for application of

14 the requirement of subsection (a), and

15 (B) the State regulatory program provides

16 for the appropriate and effective enforcement of

17 such requirement with respect to such plans.

18 SEC. 205. ADVISORY COMMISSION.

19 (a) IN GENERAL.—The Secretary shall establish an

20 advisory commission including hospital executives, hospital

21 data base managers, physicians, health services research22 ers, and technical experts in collection and use of data

23 and operation of data systems. Such commission shall in24 clude, as ex officio members, a representative of the Direc25 tor of the National Institutes of Health, the Administrator
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1 for Health Care Policy and Research, the Secretary of

2 Veterans Affairs, and the Director of the Centers for Dis3 ease Control.

4 (b) FUNCTIONS.—The advisory commission shall

5 monitor and advise the Secretary concerning—

6 (1) the standards established under this title,

7 and

8 (2) operational concerns about the implementa9 tion of such standards under this part.

10 (c) STAFF.—From the amounts appropriated under

11 subsection (d), the Secretary shall provide sufficient staff

12 to assist the advisory commission in its activities under

13 this section.

14 (d) AUTHORIZATION OF APPROPRIATIONS.—There

15 are authorized to be appropriated $2,000,000 for each of

16 fiscal years 1994 through 1999 to carry out this section.

17 TITLE III—DEVELOPMENT AND

18 DISTRIBUTION OF COMPARA19 TIVE VALUE INFORMATION

20 SEC. 301. STATE COMPARATIVE VALUE INFORMATION PRO21 GRAMS FOR HEALTH CARE PURCHASING.

22 (a) PURPOSE.—In order to assure the availability of

23 comparative value information to purchasers of health

24 care in each State, the Secretary shall determine whether

25 each State is developing and implementing a health care
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1 value information program that meets the criteria and

2 schedule set forth in subsection (b).

3 (b) CRITERIA AND SCHEDULE FOR STATE PRO4 GRAMS.—The criteria and schedule for a State health care

5 value information program in this subsection shall be

6 specified by the Secretary as follows:

7 (1) The State begins promptly after enactment

8 of this Act to develop (directly or through contrac9 tual or other arrangements with one or more States,

10 coalitions of health insurance purchasers, other enti11 ties, or any combination of such arrangements)

12 information systems regarding comparative health

13 values.

14 (2) The information contained in such systems

15 covers at least the average prices of common health

16 care services (as defined in subsection (d)) and

17 health insurance plans, and, where available, meas18 ures of the variability of these prices within a State

19 or other market areas.

20 (3) The information described in paragraph (2)

21 is made available within the State beginning not

22 later than 1 year after the date of the enactment of

23 this Act, and is revised as frequently as reasonably

24 necessary, but at intervals of no greater than 1 year.
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1 (4) Not later than 6 years after the date of the

2 enactment of this Act the State has developed infor3 mation systems that provide comparative costs, qual4 ity, and outcomes data with respect to health insur5 ance plans and hospitals and made the information

6 broadly available within the relevant market areas.

7 Nothing in this section shall preclude a State from provid8 ing additional information, such as information on prices

9 and benefits of different health benefit plans, available.

10 (c) GRANTS TO STATES FOR THE DEVELOPMENT OF

11 STATE PROGRAMS.—

12 (1) GRANT AUTHORITY.—The Secretary may

13 make grants to each State to enable such State to

14 plan the development of its health care value infor15 mation program and, if necessary, to initiate the im16 plementation of such program. Each State seeking

17 such a grant shall submit an application therefore,

18 containing such information as the Secretary finds

19 necessary to assure that the State is likely to de20 velop and implement a program in accordance with

21 the criteria and schedule in subsection (b).

22 (2) OFFSET AUTHORITY.—If, at any time with23 in the 3-year period following the receipt by a State

24 of a grant under this subsection, the Secretary is re25 quired by section 302 to implement a health care in-
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1 formation program in the State, the Secretary may

2 recover the amount of the grant under this sub3 section by offset against any other amount payable

4 to the State under the Social Security Act. The

5 amount of the offset shall be made available (from

6 the appropriation account with respect to which the

7 offset was taken) to the Secretary to carry out such

8 section.

9 (3) AUTHORIZATION OF APPROPRIATIONS.—

10 There are authorized to be appropriated such sums

11 as are necessary to make grants under this sub12 section, to remain available until expended.

13 (d) COMMON HEALTH CARE SERVICES DEFINED.—

14 In this section, the term ‘‘common health care services’’

15 includes such procedures as the Secretary may specify and

16 any additional health care services which a State may wish

17 to include in its comparative value information program.

18 SEC. 302. FEDERAL IMPLEMENTATION.

19 (a) IN GENERAL.—If the Secretary finds, at any

20 time, that a State has failed to develop or to continue to

21 implement a health care value information program in ac22 cordance with the criteria and schedule in section 301(b),

23 the Secretary shall take the actions necessary, directly or

24 through grants or contract, to implement a comparable

25 program in the State.
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1 (b) FEES.—Fees may be charged by the Secretary

2 for the information materials provided pursuant to a pro3 gram under this section. Any amounts so collected shall

4 be deposited in the appropriation account from which the

5 Secretary’s costs of providing such materials were met,

6 and shall remain available for such purposes until

7 expended.

8 SEC. 303. COMPARATIVE VALUE INFORMATION CONCERN9 ING FEDERAL PROGRAMS.

10 (a) DEVELOPMENT.—The head of each Federal agen11 cy with responsibility for the provision of health insurance

12 or of health care services to individuals shall promptly de13 velop health care value information relating to each pro14 gram that such head administers and covering the same

15 types of data that a State program meeting the criteria

16 of section 301(b) would provide.

17 (b) DISSEMINATION OF INFORMATION.—Such infor18 mation shall be made generally available to States and to

19 providers and consumers of health care services.

20 SEC. 304. DEVELOPMENT OF MODEL SYSTEMS.

21 (a) IN GENERAL.—The Secretary shall, directly or

22 through grant or contract, develop model systems to facili23 tate—
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1 (1) the gathering of data on health care cost,

2 quality, and outcome described in section 301(b)(4),

3 and

4 (2) analyzing such data in a manner that will

5 permit the valid comparison of such data among

6 providers and among health plans.

7 (b) EXPERIMENTATION.—The Secretary shall sup8 port experimentation with different approaches to achieve

9 the objectives of subsection (a) in the most cost effective

10 manner (relative to the accuracy and timeliness of the

11 data secured) and shall evaluate the various methods to

12 determine their relative success.

13 (c) STANDARDS.—When the Secretary considers it

14 appropriate, the Secretary may establish standards for the

15 collection and reporting of data on health care cost, qual16 ity and outcomes in order to facilitate analysis and com17 parisons among States and nationally.

18 (e) REPORT.—By not later than 3 years after the

19 date of the enactment of this Act, the Secretary shall re20 port to the Congress and the States on the models devel21 oped, and experiments conducted, under this section.

22 (e) AUTHORIZATION OF APPROPRIATIONS.—There

23 are authorized to be appropriated such sums as are nec24 essary for each fiscal year beginning with fiscal year 1993

25 to enable the Secretary to carry out this section, including
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1 evaluation of the different approaches tested under sub2 section (b) and their relative cost effectiveness.

3 TITLE IV—ADDITIONAL STAND4 ARDS AND REQUIREMENTS;

5 RESEARCH AND DEMONSTRA6 TIONS

7 SEC. 401. STANDARDS RELATING TO USE OF MEDICARE

8 AND MEDICAID MAGNETIZED HEALTH BENE9 FIT CARDS; SECONDARY PAYOR DATA BANK.

10 (a) MAGNETIZED IDENTIFICATION CARDS UNDER

11 MEDICARE PROGRAM.—The Secretary shall adopt stand12 ards relating to the design and use of magnetized medi13 care identification cards in order to assist health care pro14 viders providing medicare covered services to individuals—

15 (1) in determining whether individuals are eligi16 ble for benefits under the medicare program, and

17 (2) in billing the medicare program for such

18 services provided to eligible individuals.

19 Such cards shall be designed to be compatible with ma20 chines currently employed to transmit information on

21 credit cards. Such cards also shall be designed to be able

22 to be used with respect to the provision of benefits under

23 medicare supplemental policies.

24 (b) ADOPTION UNDER MEDICAID PLANS.—
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1 (1) IN GENERAL.—The Secretary shall take

2 such steps as may be necessary to encourage and as3 sist States to design and use magnetized medicaid

4 identification cards that meet such standards, for

5 use under their medicaid plans.

6 (2) LIMITATION ON MMIS FUNDS.—In applying

7 section 1903(a)(3) of the Social Security Act, the

8 Secretary may determine that Federal financial par9 ticipation is not available under that section to a

10 State which has provided for a magnetized card sys11 tem that is inconsistent with the standards adopted

12 under subsection (a).

13 (c) MEDICARE AND MEDICAID SECONDARY PAYOR

14 DATA BANK.—The Secretary shall establish a medicare

15 and medicaid information system which is designed to pro16 vide information on those group health plans and other

17 health benefit plans that are primary payors to the medi18 care program and medicaid program under section

19 1862(b) or section 1905(a)(25) of the Social Security Act.

20 (d) AUTHORIZATION OF APPROPRIATIONS.—There

21 are authorized to be appropriated, in equal proportions

22 from the Federal Hospital Insurance Trust Fund and

23 from the Federal Supplementary Medical Insurance Trust

24 Fund, a total of $25,000,000 to carry out subsections (a)
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1 and (c), including the issuance of magnetized cards to

2 medicare beneficiaries.

3 SEC. 402. PREEMPTION OF STATE QUILL PEN LAWS.

4 (a) IN GENERAL.—Effective January 1, 1994, no ef5 fect shall be given to any provision of State law that re6 quires medical or health insurance records (including bill7 ing information) to be maintained in written, rather than

8 electronic form.

9 (b) SECRETARIAL AUTHORITY.—The Secretary of

10 Health and Human Services may issue regulations to

11 carry out subsection (a). Such regulations may provide for

12 such exceptions to subsection (a) as the Secretary deter13 mines to be necessary to prevent fraud and abuse, with

14 respect to controlled substances, and in such other cases

15 as the Secretary deems appropriate.

16 SEC. 403. USE OF STANDARD IDENTIFICATION NUMBERS.

17 (a) IN GENERAL.—Effective January 1, 1994, each

18 health benefit plan shall—

19 (1) for each of its beneficiaries that has a social

20 security account number, use that number as the

21 personal identifier for claims processing and related

22 purposes, and

23 (2) for each provider that has a unique identi24 fier for purposes of title XVIII of the Social Security

25 Act and that furnishes health care items or services
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1 to a beneficiary under the plan, use that identifier

2 as the identifier of that provider for claims process3 ing and related purposes.

4 (b) COMPLIANCE.—

5 (1) IN GENERAL.—The Secretary may impose a

6 civil money penalty on any health benefit plan (other

7 than a health benefit plan described in paragraph

8 (2)) that fails to comply with standards established

9 under subsection (a) in an amount not to exceed

10 $100 for each such failure. The provisions of section

11 1128A of the Social Security Act (other than the

12 first sentence of subsection (a) and other than sub13 section (b)) shall apply to a civil money penalty

14 under this paragraph in the same manner as such

15 provisions apply to a penalty or proceeding under

16 section 1128A(a) of such Act.

17 (2) PLANS SUBJECT TO EFFECTIVE STATE REG18 ULATION.—A plan described in this paragraph is a

19 health benefit plan that is subject to regulation by

20 a State, if the Secretary finds that—

21 (A) the State provides for application of

22 the requirement of subsection (a), and

23 (B) the State regulatory program provides

24 for the appropriate and effective enforcement of

25 such requirement with respect to such plans.
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1 SEC. 404. COORDINATION OF BENEFIT STANDARDS.

2 (a) REVIEW OF COORDINATION OF BENEFIT PROB3 LEMS.—Between July 1, 1994, and January 1, 1995, the

4 Secretary shall determine whether problems relating to—

5 (1) the rules for determining the liability of

6 health benefit plans when benefits are payable under

7 2 or more such plans, or

8 (2) the availability of information among such

9 health benefit plans when benefits are so payable,

10 cause significant administrative costs.

11 (b) CONTINGENT PROMULGATION OF STANDARDS.—

12 (1) IN GENERAL.—If the Secretary determines

13 that such problems do cause significant administra14 tive costs that could be significantly reduced through

15 the implementation of standards, the Secretary shall

16 promulgate standards concerning—

17 (A) the liability of health benefit plans

18 when benefits are payable under 2 or more such

19 plans, and

20 (B) the transfer among health benefit

21 plans of appropriate information (which may in22 clude standards for the use of unique identifi23 ers, and for the listing of all individuals covered

24 under a health benefit plan) in determining li25 ability in cases when benefits are payable under

26 2 or more such plans.
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1 (2) EFFECTIVE DATE.—The standards promul2 gated under paragraph (1) shall become effective on

3 a date specified by the Secretary, which date shall

4 be not earlier than 1 year after the date of promul5 gation of the standards.

6 (c) COMPLIANCE.—

7 (1) IN GENERAL.—The Secretary may impose a

8 civil money penalty on any health benefit plan (other

9 than a health benefit plan described in paragraph

10 (2)) that fails to comply with standards promulgated

11 under subsection (b) in an amount not to exceed

12 $100 for each such failure. The provisions of section

13 1128A of the Social Security Act (other than the

14 first sentence of subsection (a) and other than sub15 section (b)) shall apply to a civil money penalty

16 under this paragraph in the same manner as such

17 provisions apply to a penalty or proceeding under

18 section 1128A(a) of such Act.

19 (2) PLANS SUBJECT TO EFFECTIVE STATE REG20 ULATION.—A plan described in this paragraph is a

21 health benefit plan that is subject to regulation by

22 a State, if the Secretary finds that—

23 (A) the State provides for application of

24 the standards established under subsection (b),

25 and
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1 (B) the State regulatory program provides

2 for the appropriate and effective enforcement of

3 such standards with respect to such plans.

4 (d) REVISION OF STANDARDS.—If the Secretary es5 tablishes standards under subsection (b), the Secretary

6 may revise such standards from time to time and such

7 revised standards shall be applied under subsection (c) on

8 or after such date (not earlier than 6 months after the

9 date the revision is promulgated) as the Secretary shall

10 specify.

11 SEC. 405. RESEARCH AND DEMONSTRATIONS.

12 (a) DEMONSTRATIONS AND RESEARCH ON MONITOR13 ING AND IMPROVING PATIENT CARE.—

14 (1) The Secretary shall provide grants to quali15 fied entities to demonstrate (and conduct research

16 concerning) the application of comprehensive infor17 mation systems—

18 (A) in continuously monitoring patient

19 care, and

20 (B) in improving patient care.

21 (2) To make grants under this subsection, there

22 are authorized to be appropriated from the Federal

23 Hospital Insurance Trust Fund $10,000,000 for

24 each fiscal year (beginning with fiscal year 1994 and

25 ending with fiscal year 1998).
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1 (b) COMMUNICATION LINKS.—

2 (1) The Secretary may make grants to at least

3 2, but not more than 5, community organizations, or

4 coalitions of health care providers, health benefit

5 plans, and purchasers, to establish and document

6 the efficacy of communication links between the in7 formation systems of health benefit plans and of

8 health care providers.

9 (2) To make grants under this subsection, there

10 are authorized to be appropriated such sums as may

11 be necessary for fiscal year 1994, to remain avail12 able until expended.

13 (c) REGIONAL OR COMMUNITY BASED CLINICAL IN14 FORMATION SYSTEMS.—

15 (1) The Secretary may make grants to at least

16 2, but not more than 5, public or private non-profit

17 entities for the development of regional or commu18 nity-based clinical information systems.

19 (2) To make grants under this subsection, there

20 are authorized to be appropriated such sums as may

21 be necessary for fiscal year 1994, to remain avail22 able until expended.

23 (d) AMBULATORY CARE DATA SETS.—

24 (1) The Secretary may make grants to public or

25 private non-profit entities to develop and test, for
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1 electronic medical data generated by physicians and

2 other entities (other than hospitals) that provide

3 health care services—

4 (A) the definition of a comprehensive set of

5 data elements, and

6 (B) the specification of, and manner of

7 presentation of, the individual data elements of

8 the set under subparagraph (A).

9 (2) To make grants under this subsection, there

10 are authorized to be appropriated such sums as may

11 be necessary for fiscal year 1994, to remain avail12 able until expended.

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