ommendations described in subsection 
(a)(2)(B), and if the Secretary modifies a 
current Federal security and confiden-
tiality standard, the modified standard 
shall supersede (and the Secretary shall 
limit the permissibility of) any State se-
curity and confidentiality law that re-
lates to (but is different from) such stand-
ard. 
(2) 
CONDITIONS.—The 
conditions 
under this paragraph are the following: 
(A) 
NEED
FOR
GREATER
COM-
MONALITY.—The Secretary determines 
under subsection (a)(2)(A) that there 
is a need for greater commonality in 
the requirements of State security 
and confidentiality laws and current 
Federal security and confidentiality 
standards 
to 
better 
protect 
or 
strengthen the security and confiden-
tiality of health information in the 
timely exchange of health informa-
tion among States, the Federal gov-
ernment, and public and private enti-
ties. 
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(B) CONGRESSIONAL
FAILURE
TO 
ACT.—The Congress fails to enact, 
within 18 months after the date of re-
ceipt of the report under subsection 
(a)(2), legislation that specifically re-
sponds to the recommendations de-
scribed in subsection (a)(2)(B). Such 
legislation may include any action de-
scribed in paragraph (1) (relating to 
modifying Federal security and con-
fidentiality standards). 
(3) TREATMENT OF CURRENT LAWS AND 
STANDARDS.— 
(A) CONTINUATION OF CURRENT FED-
ERAL STANDARDS AND STATE LAWS PER-
MITTED.—Nothing in this subsection 
shall be construed as preventing the 
Secretary from continuing to apply 
the current Federal security and con-
fidentiality standards and from per-
mitting the continuance of State secu-
rity and confidentiality laws if such 
standards are not modified. 
(B) NO PREEMPTION OF STATE LAW 
UNLESS RULE ADOPTED.—A State secu-
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rity and confidentiality law shall not 
be preempted under paragraph (1), 
except to the extent the Secretary 
limits the application of such law 
under 
such 
paragraph. 
The 
Sec-
retary’s exercise of such authority 
supercedes the provisions of section 
1178(a) of the Social Security Act (42 
U.S.C. 
1320d–7(a)) 
and 
section 
264(c)(2) of the Health Insurance 
Portability and Accountability Act of 
1996 (42 U.S.C. 1320d–2 note). 
(c) DEFINITIONS.—For purposes of this sec-
tion: 
(1) CURRENT
FEDERAL
SECURITY
AND 
CONFIDENTIALITY
STANDARDS.—The 
term 
‘‘current Federal security and confiden-
tiality standards’’ means the Federal pri-
vacy standards established pursuant to 
section 264(c) of the Health Insurance 
Portability and Accountability Act of 
1996 (42 U.S.C. 1320d–2 note) and security 
standards 
established 
under 
section 
1173(d) of the Social Security Act. 
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(2) SECRETARY.—The term ‘‘Secretary’’ 
means 
the 
Secretary 
of 
Health 
and 
Human Services. 
(3) STATE.—The term ‘‘State’’ has the 
meaning given such term when used in 
title XI of the Social Security Act, as pro-
vided under section 1101(a) of such Act 
(42 U.S.C. 1301(a)). 
(4) STATE
SECURITY
AND
CONFIDEN-
TIALITY
LAWS.—The term ‘‘State security 
and confidentiality laws’’ means State 
laws and regulations relating to the pri-
vacy and confidentiality of health infor-
mation or to the security of such informa-
tion. 
(d) CONFORMING AMENDMENTS.— 
(1) HIPAA.—Section 264(c)(2) of the 
Health Insurance Portability and Ac-
countability Act of 1996 (42 U.S.C. 1320d– 
2 note) is amended by striking ‘‘A regula-
tion’’ and inserting ‘‘Subject to section 
4(b) of the Health Information Tech-
nology Promotion Act of 2006, a regula-
tion’’. 
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(2) TITLE
XI.—Section 1178(a) of the 
Social Security Act (42 U.S.C. 1320d–7(a)) 
is amended, in the matter preceding 
paragraph (1), by inserting ‘‘Subject to 
section 4(b) of the Health Information 
Technology Promotion Act of 2006—’’ 
after ‘‘GENERAL EFFECT.—’’. 
SEC. 5. IMPLEMENTING MODERN CODING SYSTEM; APPLI-
CATION UNDER PART A OF THE MEDICARE 
PROGRAM. 
(a) UPGRADING
ASC X12 
AND
NCPDP 
STANDARDS.— 
(1) IN
GENERAL.—The Secretary of 
Health and Human Services shall provide 
by notice published in the Federal Reg-
ister for the following replacements of 
standards to apply, including for pur-
poses of part A of title XVIII of such Act: 
(A) ACCREDITED
STANDARDS
COM-
MITTEE
X12
(ASC
X12)
STANDARD.—The 
replacement of the Accredited Stand-
ards 
Committee 
X12 
(ASC 
X12) 
version 4010 adopted under section 
1173(a) of such Act (42 U.S.C. 1320d– 
2(a)) with the ASC X12 version 5010, 
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as reviewed by the National Com-
mittee on Vital Health Statistics. 
(B) NATIONAL
COUNCIL
FOR
PRE-
SCRIPTION
DRUG
PROGRAMS
(NCPDP) 
TELECOMMUNICATIONS
STANDARDS.— 
The replacement of the National 
Council for Prescription Drug Pro-
grams (NCPDP) Telecommunications 
Standards version 5.1 adopted under 
section 1173(a) of such Act (42 U.S.C. 
1320d–2(a)) with whichever is the lat-
est version (as determined by the Sec-
retary) of the NCPDP Telecommuni-
cations Standards that has been ap-
proved by such Council and reviewed 
by the National Committee on Vital 
Health Statistics as of April 1, 2008. 
(2) APPLICATION.—The replacements 
made by paragraph (1) shall apply, for 
purposes of section 1175(b)(2) of the So-
cial Security Act (42 U.S.C. 1320d–4(b)(2)), 
to transactions occurring on or after 
April 1, 2009. 
(3) NO
JUDICIAL
REVIEW.—The deter-
mination of the latest version under 
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paragraph (1)(B) shall not be subject to 
judicial review. 
(b) UPGRADING ICD CODES.— 
(1) IN
GENERAL.—The Secretary of 
Health and Human Services shall provide 
by notice published in the Federal Reg-
ister for the replacement of the Inter-
national Classification of Diseases, 9th re-
vision, Clinical Modification (ICD–9–CM) 
under the regulation promulgated under 
section 1173(c) of the Social Security Act 
(42 U.S.C. 1320d–2(c)), including for pur-
poses of part A of title XVIII of such Act, 
with both of the following: 
(A) The International Classifica-
tion of Diseases, 10th revision, Clin-
ical Modification (ICD–10–CM). 
(B) The International Classifica-
tion of Diseases, 10th revision, Proce-
dure Coding System (ICD–10–PCS). 
(2) 
APPLICATION.—The 
replacement 
made by paragraph (1) shall apply, for 
purposes of section 1175(b)(2) of the So-
cial Security Act (42 U.S.C. 1320d–4(b)(2)), 
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to services furnished on or after October 
1, 2009. 
(3) RULES OF CONSTRUCTION.—Nothing 
in paragraph (1) shall be construed— 
(A) as affecting the application of 
classification methodologies or codes, 
such as CPT or HCPCS codes, other 
than under the International Classi-
fication of Diseases (ICD); or 
(B) as superseding the authority 
of 
the 
Secretary 
of 
Health 
and 
Human Services to maintain and 
modify the coding set for ICD–10–CM 
and ICD–10–PCS, including under the 
amendments made by section 6. 
(c) APPLICATION OF UPGRADED STANDARDS 
UNDER PART A OF THE MEDICARE PROGRAM.— 
Section 1816 of the Social Security Act (42 
U.S.C. 1395h) is amended by inserting after 
subsection (a) the following new subsection: 
‘‘(b) With respect to— 
‘‘(1) transactions under this part oc-
curring on or after April 1, 2009, all pro-
viders of services shall use ASC X12 
version 5010 with respect to services pro-
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vided under this part in compliance with 
section 5(a) of the Health Information 
Technology Promotion Act of 2006; and 
‘‘(2) services furnished on or after Oc-
tober 1, 2009— 
‘‘(A) all providers of services shall 
use ICD–10–CM codes with respect to 
services provided under this part in 
compliance with section 5(b) of such 
Act; and 
‘‘(B) hospitals shall use ICD–10– 
PCS codes (as well as ICD–10–CM 
codes) with respect to inpatient hos-
pital services provided under this 
part in compliance with such sec-
tion.’’. 
SEC. 6. PROCEDURES TO ENSURE TIMELY UPDATING OF 
STANDARDS THAT ENABLE ELECTRONIC EX-
CHANGES. 
Section 1174(b) of the Social Security Act 
(42 U.S.C. 1320d–3(b)) is amended— 
(1) in paragraph (1)— 
(A) in the first sentence, by insert-
ing ‘‘and in accordance with para-
graph (3)’’ before the period; and 
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(B) by adding at the end the fol-
lowing new sentence: ‘‘For purposes 
of 
this 
subsection 
and 
section 
1173(c)(2), the term ‘modification’ in-
cludes a new version or a version up-
grade.’’; and 
(2) by adding at the end the following 
new paragraph: 
‘‘(3) EXPEDITED PROCEDURES FOR ADOP-
TION OF ADDITIONS AND MODIFICATIONS TO 
STANDARDS.— 
‘‘(A) IN GENERAL.—For purposes of 
paragraph (1), the Secretary shall 
provide for an expedited upgrade 
program (in this paragraph referred 
to as the ‘upgrade program’), in ac-
cordance with this paragraph, to de-
velop and approve additions and 
modifications to the standards adopt-
ed under section 1173(a) to improve 
the quality of such standards or to ex-
tend the functionality of such stand-
ards to meet evolving requirements 
in health care. 
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‘‘(B) PUBLICATION
OF
NOTICES.— 
Under the upgrade program: 
‘‘(i) VOLUNTARY NOTICE OF INI-
TIATION
OF
PROCESS.—Not later 
than 30 days after the date the 
Secretary receives a notice from a 
standard 
setting 
organization 
that the organization is initiating 
a process to develop an addition 
or modification to a standard 
adopted under section 1173, the 
Secretary shall publish a notice in 
the Federal Register that— 
‘‘(I) identifies the subject 
matter of the addition or 
modification; 
‘‘(II) provides a descrip-
tion of how persons may par-
ticipate in the development 
process; and 
‘‘(III) invites public par-
ticipation in such process. 
‘‘(ii) 
VOLUNTARY
NOTICE
OF 
PRELIMINARY
DRAFT
OF
ADDITIONS 
OR MODIFICATIONS TO STANDARDS.— 
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Not later than 30 days after the 
date the Secretary receives a no-
tice from a standard setting orga-
nization that the organization has 
prepared a preliminary draft of 
an addition or modification to a 
standard adopted by section 1173, 
the Secretary shall publish a no-
tice in the Federal Register that— 
‘‘(I) identifies the subject 
matter of (and summarizes) 
the draft; 
‘‘(II) specifies the proce-
dure 
for 
obtaining 
docu-
mentation for the draft; 
‘‘(III) provides a descrip-
tion of how persons may sub-
mit comments in writing and 
at any public hearing or meet-
ing held by the organization 
on the draft; and 
‘‘(IV) invites submission of 
such comments and participa-
tion in such hearing or meet-
ing. 
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