I 
111TH CONGRESS 
1ST SESSION H. R. 3134 
To direct the Secretary of Health and Human Services to establish a 
Healthcare Innovation Zone pilot program. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 8, 2009 
Ms. SCHWARTZ introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To direct the Secretary of Health and Human Services to 
establish a Healthcare Innovation Zone pilot program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Healthcare Innovation 
Zone Program Act of 2009’’. 
SEC. 2. HEALTHCARE INNOVATION ZONE DEMONSTRATION 
PROGRAM. 
(a) ESTABLISHMENT.—Not later than 6 months after 
the date of enactment of this Act, the Secretary of Health 
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and Human Services shall establish a Healthcare Innova-
tion Zone pilot program to increase healthcare provider 
integration and align healthcare provider incentives to im-
prove health and to reduce healthcare costs. 
(b) FEATURES OF PROGRAM.—The HIZ pilot pro-
gram established under subsection (a) shall consist of the 
following: 
(1) An HIZ planning grant program, as de-
scribed in section 3. 
(2) An HIZ demonstration project, as described 
in section 4. 
(c) DEFINITIONS.—In this Act: 
(1) GRANT PROGRAM.—The term ‘‘grant pro-
gram’’ means the HIZ planning grant program as 
described in section 3. 
(2) 
HIZ.—The 
term 
‘‘HIZ’’ 
means 
a 
Healthcare Innovation Zone, consisting of an inte-
grated healthcare delivery network that works with 
local employers, community leaders, and private and 
governmental payors in a geographic region, that— 
(A) provides a full spectrum of care, in-
cluding inpatient, outpatient, post-acute, and 
preventive care, to individuals including Medi-
care beneficiaries; 
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(B) has an academic medical center that 
provides tertiary and quaternary care, has ex-
isting capabilities to conduct health services re-
search, and provides clinical training for health 
professionals; and 
(C) is able to accept alternative payment 
structures beyond fee-for-service and per diem 
amounts. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
SEC. 3. HIZ PLANNING GRANT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary shall make 
grants to eligible entities for the purposes of researching 
and preparing an HIZ model plan, in accordance with sub-
section (f). 
(b) CONDITIONS.—A grant recipient under this sec-
tion must apply for the HIZ demonstration project de-
scribed in section 4. If a grant recipient under this section 
is not selected to participate in such project, then such 
recipient must return any unused grant funds to the Sec-
retary. 
(c) ELIGIBILITY.—The following persons are eligible 
entities for purposes of this section: 
(1) A healthcare institution or provider licensed 
and accredited in the United States. 
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demonstrates a likelihood that the HIZ model plan will 
meet the requirements of subsection (f). 
(f) HIZ MODEL PLAN REQUIREMENTS.—A recipient 
of a grant under this section must submit to the Secretary, 
within 6 months of receiving such grant, an HIZ model 
plan describing the HIZ to be implemented in the dem-
onstration project under section 4. Such HIZ model plan 
must contain the following: 
(1) A description of innovative models of care 
that improve quality and decrease costs. 
(2) A provider network that will provide the full 
spectrum of care. 
(3) A target population and mechanisms to en-
roll such population, supported by evidence that 
such population is willing to participate in an HIZ 
demonstration. 
(4) A mechanism to provide for knowledge and 
information-sharing across the HIZ participants. 
(5) A description of how the HIZ would incor-
porate the training of the next generation of physi-
cians, nurses, and allied health professionals in a 
new model of cost-effective quality healthcare. 
(6) A description of the governance of the HIZ, 
and how it would affect the administration of the 
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model and management of the organizational and 
cultural changes necessary for a successful HIZ. 
(7) A description of non-financial barriers to in-
novation that must be addressed for the creation of 
a successful HIZ, including physician self-referral 
laws, anti-trust considerations, State laws, and ac-
creditation or certification requirements. 
(8) A process for data reporting, annual site 
visits, and developing community health impact as-
sessments. 
(9) A set of indicators to help track perform-
ance and success of the HIZ model plan, including 
measures to address cost containment, access to 
care, and quality improvement, and how the HIZ 
model plan would facilitate achievement of these im-
provements. 
(10) A description of mechanisms to achieve in-
volvement by the community and external experts as 
ongoing monitors of the success of the HIZ model 
plan. 
(11) Payment methodology options that address 
both funding mechanisms to the HIZ as well as how 
the HIZ would distribute funds to the HIZ partici-
pants. 
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(g) NUMBER AND AMOUNT OF PLANNING GRANTS.— 
The Secretary shall award at least 10 but not more than 
25 grants under this section in an amount of at least 
$250,000 and not more than $1,000,000 per grant. 
(h) FUNDING.—Amounts made available under the 
heading ‘‘Agency for Healthcare Research and Quality— 
Healthcare Research and Quality’’ in title VIII of division 
I of the American Recovery and Reinvestment Act of 2009 
(Public Law 111–5) may be used by the Secretary to make 
grants under this section. 
SEC. 4. HEALTHCARE INNOVATION ZONE DEMONSTRATION 
PROJECT. 
(a) ESTABLISHMENT.—The Secretary shall establish 
an HIZ demonstration project in order to test the effec-
tiveness of HIZs in increasing healthcare provider integra-
tion, 
improving 
healthcare 
services, 
and 
reducing 
healthcare costs. Such demonstration project shall not be 
subject to current requirements regarding shared savings 
under demonstration projects. The Secretary shall select 
demonstration project participants from the persons that 
have received grants under section 3. 
(b) DURATION.—The demonstration project shall op-
erate for a period of at least 3 years, and shall be subject 
to renewal at the Secretary’s discretion. 
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(c) APPLICATION.—An eligible entity shall submit an 
application for participation in the HIZ demonstration 
project to the Secretary at such time and manner, and 
containing such information as the Secretary may require. 
(d) ELIGIBILITY.—To be eligible to participate in the 
demonstration project established under this section, a 
person must— 
(1) have submitted an HIZ model plan in ac-
cordance with section 3(f) that is approved by the 
Secretary; 
(2) agree to submit the necessary data so that 
Secretary can assess the costs, quality of care, and 
access to care for the population participating in the 
HIZ demonstration project; 
(3) demonstrate a culture of innovation and 
commitment to preventive and public health; 
(4) possess structural elements to provide the 
full range of care necessary for a successful HIZ; 
(5) provide clinical training for healthcare pro-
fessionals in a medical environment that emphasizes 
coordinated, integrated, high-quality care delivered 
at a controlled cost; 
(6) have the ability to allocate resources within 
the members of the HIZ; 
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(7) have a broad research infrastructure that 
supports data gathering, analytics, and synthesis of 
unrelated population elements, including quality-re-
lated data elements; 
(8) have significant investment in health infor-
mation technology that extends across the system to 
include healthcare providers, physicians, and other 
clinicians; 
(9) possess advance innovations including, but 
not limited to, creation of medical homes, pay for 
performance, and other cost-effective delivery plat-
forms; 
(10) demonstrate long-term economic sustain-
ability; 
(11) demonstrate strong hospital and physician 
leadership and the willingness to undergo a full port-
folio assessment and reengineering of core patient 
care and administrative processes; 
(12) possess robust financial infrastructure and 
administrative support to assure the HIZ’s success; 
and 
(13) demonstrate arrangements that maintain 
oversight and accreditation standards. 
(e) HIZ REQUIREMENTS.—An HIZ established 
under this section shall— 
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