‘‘(I) limits or restricts the use of 
the health information technology to 
services provided by the physician to 
individuals receiving services at the 
specified entity; 
‘‘(II) limits or restricts the use of 
the health information technology in 
conjunction with other health informa-
tion technology; or 
‘‘(III) conditions the provision of 
such remuneration on the referral of 
patients or business to the specified 
entity; 
‘‘(ii) such remuneration is arranged 
for in a written agreement that is signed 
by the parties involved (or their represent-
atives) and that specifies the remuneration 
made and states that the provision of such 
remuneration is made for the primary pur-
pose of better coordination of care or im-
provement of health quality, efficiency, or 
research; and 
‘‘(iii) the specified entity (or a rep-
resentative of such entity) has not taken 
any action to disable any basic feature of
any hardware or software component of 
such remuneration that would permit 
interoperability. 
‘‘(B) HEALTH INFORMATION TECHNOLOGY 
DEFINED.—For purposes of this paragraph, the 
term ‘health information technology’ means 
hardware, software, license, right, intellectual 
property, equipment, or other information tech-
nology (including new versions, upgrades, and 
connectivity) designed or provided primarily for 
the electronic creation, maintenance, or ex-
change of health information to better coordi-
nate care or improve health care quality, effi-
ciency, or research. 
‘‘(C) SPECIFIED
ENTITY
DEFINED.—For 
purposes of this paragraph, the term ‘specified 
entity’ means an entity that is a hospital, group 
practice, prescription drug plan sponsor, a 
Medicare Advantage organization, or any other 
such entity specified by the Secretary, consid-
ering the goals and objectives of this section, as 
well as the goals to better coordinate the deliv-
ery of health care and to promote the adoption 
and use of health information technology.’’. 
(b) EFFECTIVE DATE; EFFECT ON STATE LAWS.—
(1) EFFECTIVE DATE.—The amendment made 
by subsection (a) shall take effect on the date that 
is 120 days after the date of the enactment of this 
Act. 
(2) PREEMPTION OF STATE LAWS.—No State 
(as defined in section 1101(a) of the Social Security 
Act (42 U.S.C. 1301(a)) for purposes of title XI of 
such Act) shall have in effect a State law that im-
poses a criminal or civil penalty for a transaction de-
scribed in section 1877(b)(6) of such Act, as added 
by subsection (a), if the conditions described in such 
section, with respect to such transaction, are met. 
(c) STUDY AND REPORT TO ASSESS EFFECT OF EX-
CEPTION ON HEALTH SYSTEM.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a study to determine 
the impact of the exception under section 1877(b)(6) 
of such Act (42 U.S.C. 1395nn(b)(6)), as added by 
subsection (a). In particular, the study shall examine 
the following: 
(A) The effectiveness of the exception in 
increasing the adoption of health information 
technology. 
(B) The types of health information tech-
nology provided under the exception.
(C) The extent to which the financial or 
other business relationships between providers 
under the exception have changed as a result of 
the exception in a way that adversely affects or 
benefits the health care system or choices avail-
able to consumers. 
(D) The impact of the adoption of health 
information technology on health care quality, 
cost, and access under the exception. 
(2) REPORT.—Not later than three years after 
the effective date described in subsection (b)(1), the 
Secretary of Health and Human Services shall sub-
mit to Congress a report on the study under para-
graph (1). 
SEC. 303. RULES OF CONSTRUCTION REGARDING USE OF 
CONSORTIA. 
(a) APPLICATION TO SAFE HARBOR FROM CRIMINAL 
PENALTIES.—Section 1128B(b)(3) of the Social Security 
Act (42 U.S.C. 1320a–7b(b)(3)) is amended by adding 
after and below subparagraph (J), as added by section 
301(b)(1), the following: ‘‘For purposes of subparagraph 
(J), nothing in such subparagraph shall be construed as 
preventing a specified entity, consistent with the specific 
requirements of such subparagraph, from forming a con-
sortium composed of health care providers, payers, em-
ployers, and other interested entities to collectively pur-
chase and donate health information technology, or from 
offering health care providers a choice of health informa-
tion technology products in order to take into account the 
varying needs of such providers receiving such products.’’. 
(b) APPLICATION
TO STARK EXCEPTION.—Para-
graph (6) of section 1877(b) of the Social Security Act 
(42 U.S.C. 1395nn(b)), as added by section 302(a), is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) RULE OF CONSTRUCTION.—For pur-
poses of subparagraph (A), nothing in such 
subparagraph shall be construed as preventing 
a specified entity, consistent with the specific 
requirements of such subparagraph, from—
‘‘(i) forming a consortium composed 
of health care providers, payers, employers, 
and other interested entities to collectively 
purchase and donate health information 
technology; or 
‘‘(ii) offering health care providers a 
choice of health information technology 
products in order to take into account the 
varying needs of such providers receiving 
such products.’’.
TITLE IV—ADDITIONAL 
PROVISIONS 
SEC. 401. PROMOTION OF TELEHEALTH SERVICES. 
(a) FACILITATING THE PROVISION OF TELEHEALTH 
SERVICES ACROSS STATE LINES.—The Secretary of 
Health and Human Services shall, in coordination with 
physicians, health care practitioners, patient advocates, 
and representatives of States, encourage and facilitate the 
adoption of State reciprocity agreements for practitioner 
licensure in order to expedite the provision across State 
lines of telehealth services. 
(b) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services shall submit to Congress a report 
on the actions taken to carry out subsection (a). 
(c) STATE DEFINED.—For purposes of this sub-
section, the term ‘‘State’’ has the meaning given that term 
for purposes of title XVIII of the Social Security Act. 
SEC. 402. STUDY AND REPORT ON EXPANSION OF HOME 
HEALTH-RELATED TELEHEALTH SERVICES. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study to determine the feasibility, 
advisability, and the costs of—
(1) including coverage and payment for home 
health-related telehealth services as part of home
health services under title XVIII of the Social Secu-
rity Act; and 
(2) expanding the list of sites described in para-
graph (4)(C)(ii) of section 1834(m) of the Social Se-
curity Act (42 U.S.C. 1395m(m)) to include county 
mental health clinics or other publicly funded mental 
health facilities for the purpose of payment under 
such section for the provision of telehealth services 
at such clinics or facilities. 
(b) SPECIFICS OF STUDY.—Such study shall dem-
onstrate whether the changes described in paragraphs (1) 
and (2) of subsection (a) will result in the following: 
(1) Enhanced health outcomes for individuals 
with one or more chronic conditions. 
(2) Health outcomes for individuals furnished 
telehealth services or home health-related telehealth 
services that are at least comparable to the health 
outcomes for individuals furnished similar items and 
services by a health care provider at the same loca-
tion of the individual or at the home of the indi-
vidual, respectively. 
(3) Facilitation of communication of more accu-
rate clinical information between health care pro-
viders.
(4) Closer monitoring of individuals by health 
care providers. 
(5) Overall reduction in expenditures for health 
care items and services. 
(6) Improved access to health care. 
(c) HOME HEALTH-RELATED TELEHEALTH SERV-
ICES DEFINED.—For purposes of this section, the term 
‘‘home health-related telehealth services’’ means tech-
nology-based professional consultations, patient moni-
toring, patient training services, clinical observation, pa-
tient assessment, and any other health services that utilize 
telecommunications technologies. Such term does not in-
clude a telecommunication that consists solely of a tele-
phone audio conversation, facsimile, electronic text mail, 
or consultation between two health care providers. 
(d) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services shall submit to Congress a report 
on the study conducted under subsection (a) and shall in-
clude in such report such recommendations for legislation 
or administration action as the Secretary determines ap-
propriate.
SEC. 403. STUDY AND REPORT ON STORE AND FORWARD 
TECHNOLOGY FOR TELEHEALTH. 
(a) STUDY.—The Secretary of Health and Human 
Services, acting through the Director of the Office for the 
Advancement of Telehealth, shall conduct a study on the 
use of store and forward technologies (that provide for the 
asynchronous transmission of health care information in 
single or multimedia formats) in the provision of tele-
health services. Such study shall include an assessment of 
the feasibility, advisability, and the costs of expanding the 
use of such technologies for use in the diagnosis and treat-
ment of certain conditions. 
(b) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services shall submit to Congress a report 
on the study conducted under subsection (a) and shall in-
clude in such report such recommendations for legislation 
or administration action as the Secretary determines ap-
propriate. 
SEC. 404. ENSURING HEALTH CARE PROVIDERS PARTICI-
PATING 
IN 
PHSA 
PROGRAMS, 
MEDICAID, 
SCHIP, OR THE MCH PROGRAM MAY MAIN-
TAIN HEALTH INFORMATION IN ELECTRONIC 
FORM. 
Part D of title II of the Public Health Service Act, 
as added by section 101(a) and amended by sections 103
and 105, is further amended by adding at the end the 
following new section: 
‘‘SEC. 274. ENSURING HEALTH CARE PROVIDERS MAY MAIN-
TAIN HEALTH INFORMATION IN ELECTRONIC 
FORM. 
‘‘(a) IN GENERAL.—Any health care provider that 
participates in a health care program that receives Federal 
funds under this Act, or under title V, XIX, or XXI of 
the Social Security Act, shall be deemed as meeting any 
requirement for the maintenance of data in paper form 
under such program (whether or not for purposes of man-
agement, billing, reporting, reimbursement, or otherwise) 
if the required data is maintained in an electronic form. 
‘‘(b) RELATION TO STATE LAWS.—Beginning on the 
date that is one year after the date of the enactment of 
this section, subsection (a) shall supersede any contrary 
provision of State law. 
‘‘(c) CONSTRUCTION.—Nothing in this section shall 
be construed as—
‘‘(1) requiring health care providers to maintain 
or submit data in electronic form; 
‘‘(2) preventing a State from permitting health 
care providers to maintain or submit data in paper 
form; or
‘‘(3) preventing a State from requiring health 
care providers to maintain or submit data in elec-
tronic form.’’. 
SEC. 405. ENSURING HEALTH CARE PROVIDERS PARTICI-
PATING IN THE MEDICARE PROGRAM MAY 
MAINTAIN HEALTH INFORMATION IN ELEC-
TRONIC FORM. 
Section 1871 of the Social Security Act (42 U.S.C. 
1395hh) is amended by adding at the end the following 
new subsection: 
‘‘(g)(1) Any provider of services or supplier shall be 
deemed as meeting any requirement for the maintenance 
of data in paper form under this title (whether or not for 
purposes of management, billing, reporting, reimburse-
ment, or otherwise) if the required data is maintained in 
an electronic form. 
‘‘(2) Nothing in this subsection shall be construed as 
requiring health care providers to maintain or submit data 
in electronic form.’’. 
SEC. 406. STUDY AND REPORT ON STATE, REGIONAL, AND 
COMMUNITY 
HEALTH 
INFORMATION 
EX-
CHANGES. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study on issues related to the de-
velopment, operation, and implementation of State, re-
gional, and community health information exchanges. 
Such study shall include the following, with respect to 
such health information exchanges: 
(1) Profiles detailing the current stages of such 
health information exchanges with respect to the 
progression of the development, operation, imple-
mentation, organization, and governance of such ex-
changes. 
(2) The impact of such exchanges on healthcare 
quality, safety, and efficiency, including—
(A) any impact on the coordination of 
health 
information 
and 
services 
across 
healthcare providers and other organizations 
relevant to health care; 
(B) any impact on the availability of health 
information at the point-of-care to make timely 
medical decisions; 
(C) any benefits with respect to the pro-
motion of wellness, disease prevention, and 
chronic disease management; 
(D) any improvement with respect to pub-
lic health preparedness and response; 
(E) any impact on the widespread adoption 
of interoperable health information technology, 
including electronic health records;
(F) any contributions to achieving an 
Internet-based national health information net-
work; 
(G) any contribution of health information 
exchanges to consumer access and to con-
sumers’ use of their health information; and 
(H) any impact on the operation of—
(i) the Medicaid and Medicare pro-
grams; 
(ii) the State Children’s Health Insur-
ance Program (SCHIP); 
(iii) disproportionate share hospitals 
described in section 1923 of the Social Se-
curity Act; 
(iv) Federally-qualified health centers; 
or 
(v) managed care plans, if a signifi-
cant number of the plan’s enrollees are 
beneficiaries in the Medicaid program or 
SCHIP. 
(3) 
Best 
practice 
models 
for 
financing, 
incentivizing, and sustaining such health information 
exchanges. 
(4) Information identifying the common prin-
ciples, policies, tools, and standards used (or pro-
posed) in the public and private sectors to support 
the development, operation, and implementation of 
such health information exchanges. 
(5) A description of any areas in which Federal 
government leadership is needed to support growth 
and sustainability of such health information ex-
changes. 
(b) REPORT.—Not later than one year after the date 
of enactment of this Act, the Secretary of Health and 
Human Services shall submit to Congress a report on the 
study described in subsection (a), including such rec-
ommendations as the Secretary determines appropriate to 
facilitate the development, operation, and implementation 
of health information exchanges. 
SEC. 
407. 
PROMOTING 
HEALTH 
INFORMATION 
TECH-
NOLOGY AS A TOOL FOR CHRONIC DISEASE 
MANAGEMENT. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall establish a two-year project to dem-
onstrate the impact of health information technology on 
disease management for individuals entitled to medical as-
sistance under a State plan under title XIX of the Social 
Security Act. 
(b) STRUCTURE OF PROJECT.—The project under 
subsection (a) shall—
(1) create a web-based virtual case management 
tool that provides access to best practices for man-
aging chronic disease; and 
(2) provide chronic disease patients and care-
givers access to their own medical records and to a 
single source of information on chronic disease. 
(c) COMPETITION.—Not later than the date that is 
90 days after the date of the enactment of this Act, the 
Secretary of Health and Human Services shall seek pro-
posals from States to carry out the project under sub-
section (a). The Secretary shall select not less than four 
of such proposals submitted, and at least one proposal se-
lected shall include a regional approach that features ac-
cess to an integrated hospital information system in at 
least two adjoining States and that permits the measure-
ment of health outcomes. 
(d) REPORT.—Not later than the date that is 90 days 
after the last day of the project under subsection (a), the 
Secretary of Health and Human Services shall submit to 
Congress a report on such project and shall include in 
such report the amount of any cost-savings resulting from 
the project and such recommendations for legislation or
administrative action as the Secretary determines appro-
priate.
Passed the House of Representatives July 27, 2006. 
Attest:
Clerk.
109TH CONGRESS 
2D SESSION 
H. R. 4157
AN ACT 
To promote a better health information system.