tives) 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 entity (or a representative 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 subparagraph (A), 
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 primarily for the elec-
tronic creation, maintenance, or exchange of 
health information to better coordinate care or 
improve health care quality, efficiency, or re-
search.’’. 
(b) EFFECTIVE DATE AND EFFECT ON STATE LAWS.— 
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(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 imposes a 
criminal or civil penalty for a transaction described 
in section 1877(b)(6) of such Act, as added by sub-
section (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 Inspector General of the 
Department of Health and Human Services shall con-
duct 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 par-
ticular, the study shall examine the following: 
(A) The effectiveness of the exception in in-
creasing the adoption of health information tech-
nology. 
(B) The types of health information tech-
nology provided under the exception. 
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(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). 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as 
the ‘‘Health Information Technology Pro-
motion Act of 2006’’. 
(b) TABLE OF CONTENTS.—The table of con-
tents of this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Office of the National Coordinator for Health Informa-
tion Technology. 
Sec. 3. Safe harbors for provision of health information tech-
nology and services to health care professionals. 
Sec. 4. Commonality and variation in health information laws 
and regulations. 
Sec. 5. Implementing modern coding system; application under 
part A of the Medicare program. 
Sec. 6. Procedures to ensure timely updating of standards that 
enable electronic exchanges. 
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Sec. 7. Report on the American Health Information Commu-
nity. 
Sec. 8. Strategic plan for coordinating implementation of 
health information technology. 
Sec. 9. Promotion of telehealth services. 
SEC. 2. OFFICE OF THE NATIONAL COORDINATOR FOR 
HEALTH INFORMATION TECHNOLOGY. 
(a) IN GENERAL.—Title II of the Public 
Health Service Act is amended by adding at 
the end the following new part: 
‘‘PART D—HEALTH INFORMATION TECHNOLOGY 
‘‘SEC. 271. OFFICE OF THE NATIONAL COORDINATOR FOR 
HEALTH INFORMATION TECHNOLOGY. 
‘‘(a) ESTABLISHMENT.—There is established 
within the Department of Health and Human 
Services an Office of the National Coordi-
nator for Health Information Technology that 
shall be headed by the National Coordinator 
for Health Information Technology (referred 
to in this section as the ‘National Coordi-
nator’). The National Coordinator shall be ap-
pointed by the President and shall report di-
rectly to the Secretary. The National Coordi-
nator shall be paid at a rate equal to the rate 
of basic pay for level IV of the Executive 
Schedule. 
‘‘(b) GOALS OF NATIONWIDE INTEROPERABLE 
HEALTH
INFORMATION
TECHNOLOGY
INFRA-
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STRUCTURE.—The National Coordinator shall 
perform the duties under subsection (c) in a 
manner consistent with the development of a 
nationwide interoperable health information 
technology infrastructure that— 
‘‘(1) improves health care quality, re-
duces medical errors, increases the effi-
ciency of care, and advances the delivery 
of appropriate, evidence-based health 
care services; 
‘‘(2) promotes wellness, disease pre-
vention, and management of chronic ill-
nesses by increasing the availability and 
transparency of information related to 
the health care needs of an individual for 
such individual; 
‘‘(3) ensures that appropriate infor-
mation necessary to make medical deci-
sions is available in a usable form at the 
time and in the location that the medical 
service involved is provided; 
‘‘(4) produces greater value for health 
care expenditures by reducing health 
care costs that result from inefficiency, 
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medical errors, inappropriate care, and 
incomplete information; 
‘‘(5) promotes a more effective mar-
ketplace, greater competition, greater 
systems analysis, increased choice, en-
hanced quality, and improved outcomes 
in health care services; 
‘‘(6) improves the coordination of in-
formation and the provision of such serv-
ices through an effective infrastructure 
for the secure and authorized exchange 
and use of health care information; and 
‘‘(7) ensures that the confidentiality 
of individually identifiable health infor-
mation of a patient is secure and pro-
tected. 
‘‘(c) DUTIES OF NATIONAL COORDINATOR.— 
‘‘(1) STRATEGIC
PLANNER
FOR
INTER-
OPERABLE
HEALTH
INFORMATION
TECH-
NOLOGY.—The National Coordinator shall 
maintain, direct, and oversee the contin-
uous improvement of a strategic plan to 
guide the nationwide implementation of 
interoperable health information tech-
nology in both the public and private 
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health care sectors consistent with sub-
section (b). 
‘‘(2) PRINCIPAL ADVISOR TO HHS.—The 
National Coordinator shall serve as the 
principal advisor of the Secretary on the 
development, application, and use of 
health information technology, and co-
ordinate the health information tech-
nology programs of the Department of 
Health and Human Services. 
‘‘(3) COORDINATOR OF FEDERAL GOVERN-
MENT ACTIVITIES.— 
‘‘(A) IN
GENERAL.—The National 
Coordinator shall serve as the coordi-
nator of Federal Government activi-
ties relating to health information 
technology. 
‘‘(B) SPECIFIC COORDINATION FUNC-
TIONS.—In carrying out subparagraph 
(A), the National Coordinator shall 
provide for— 
‘‘(i) the development and ap-
proval of standards used in the 
electronic creation, maintenance, 
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or exchange of health informa-
tion; and 
‘‘(ii) the certification and in-
spection of health information 
technology products, exchanges, 
and architectures to ensure that 
such products, exchanges, and ar-
chitectures conform to the appli-
cable standards approved under 
clause (i). 
‘‘(C) USE
OF
PRIVATE
ENTITIES.— 
The National Coordinator shall, to 
the maximum extent possible, con-
tract with or recognize private enti-
ties in carrying out subparagraph (B). 
‘‘(D) 
UNIFORM
APPLICATION
OF 
STANDARDS.—A 
standard 
approved 
under subparagraph (B)(i) for use in 
the electronic creation, maintenance, 
or exchange of health information 
shall preempt a standard adopted 
under State law, regulation, or rule 
for such a use. 
‘‘(4) 
INTRAGOVERNMENTAL
COORDI-
NATOR.—The National Coordinator shall 
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ensure that health information tech-
nology policies and programs of the De-
partment of Health and Human Services 
are coordinated with those of relevant 
executive branch agencies and depart-
ments with a goal to avoid duplication of 
effort and to ensure that each agency or 
department conducts programs within 
the areas of its greatest expertise and its 
mission in order to create a national 
interoperable health information system 
capable of meeting national public health 
needs effectively and efficiently. 
‘‘(5) ADVISOR
TO
OMB.—The National 
Coordinator shall provide to the Director 
of the Office of Management and Budget 
comments and advice with respect to spe-
cific Federal health information tech-
nology programs. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.— 
There are authorized to be appropriated such 
sums as may be necessary to carry out this 
section for each of fiscal years 2006 through 
2010.’’. 
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(b) 
TREATMENT
OF
EXECUTIVE
ORDER 
13335.—Executive Order 13335 shall not have 
any force or effect after the date of the enact-
ment of this Act. 
(c) TRANSITION FROM ONCHIT UNDER EX-
ECUTIVE ORDER.— 
(1) IN
GENERAL.—All functions, per-
sonnel, assets, liabilities, administrative 
actions, and statutory reporting require-
ments applicable to the old National Co-
ordinator or the Office of the old Na-
tional Coordinator on the date before the 
date of the enactment of this Act shall be 
transferred, and applied in the same 
manner and under the same terms and 
conditions, to the new National Coordi-
nator and the Office of the new National 
Coordinator as of the date of the enact-
ment of this Act. 
(2) ACTING
NATIONAL
COORDINATOR.— 
Before the appointment of the new Na-
tional Coordinator, the old National Co-
ordinator shall act as the National Coor-
dinator for Health Information Tech-
nology until the office is filled as pro-
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vided in section 271(a) of the Public 
Health Service Act, as added by sub-
section (a). The President may appoint 
the old National Coordinator as the new 
National Coordinator. 
(3) DEFINITIONS.—For purposes of this 
subsection: 
(A) NEW NATIONAL COORDINATOR.— 
The term ‘‘new National Coordinator’’ 
means the National Coordinator for 
Health Information Technology ap-
pointed under section 271(a) of the 
Public Health Service Act, as added 
by subsection (a). 
(B) OLD NATIONAL COORDINATOR.— 
The term ‘‘old National Coordinator’’ 
means the National Coordinator for 
Health Information Technology ap-
pointed under Executive Order 13335. 
SEC. 3. SAFE HARBORS FOR PROVISION OF HEALTH INFOR-
MATION TECHNOLOGY AND SERVICES TO 
HEALTH CARE PROFESSIONALS. 
(a) 
FOR
CIVIL
PENALTIES.—Section 
1128A(b) of the Social Security Act (42 U.S.C. 
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1320a–7a(b)) is amended by adding at the end 
the following new paragraph: 
‘‘(4)(A) For purposes of this subsection, a 
payment described in paragraph (1) does not 
include any nonmonetary remuneration (in 
the form of health information technology 
and related services) made on or after the HIT 
effective date (as defined in subparagraph 
(B)(ii)) by a hospital or critical access hospital 
to a physician if the following requirements 
are met: 
‘‘(i) The provision of such remunera-
tion is made without a condition that— 
‘‘(I) limits or restricts the use of 
the health information technology to 
services provided by the physician to 
individuals receiving services at the 
location of the hospital or critical ac-
cess hospital providing such tech-
nology; 
‘‘(II) limits or restricts the use of 
the health information technology in 
conjunction with other health infor-
mation technology; or 
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