(2) In the most recently concluded calendar
year, the hospital received more than 40 percent of
its gross revenue from payments made under Fed-
eral programs.
(3) There is in effect with respect to the hos-
pital a certificate issued by the Health Care Financ-
ing Administration specifying that such Administra-
tion has determined that Federal expenditures would
be reduced, and consumer costs would not increase,
if the 2 or more hospitals that request such certifi-
cate merge, or allocate the hospital services specified
in such request, as the case may be.
(c) DEFINITION.—For purposes of this section, the
term ‘‘antitrust laws’’ has the meaning given such term
in subsection (a) of the first section of the Clayton Act
(15 U.S.C. 12), except that such term includes section 5
of the Federal Trade Commission Act (15 U.S.C. 45) to
the extent that such section 5 applies with respect to un-
fair methods of competition.
TITLE III—MISCELLANEOUS
PROVISIONS
Subtitle A—Administrative
Simplification
SEC. 301. REQUIREMENTS FOR HEALTH BENEFIT PLANS.
(a) IN GENERAL.—Each health benefit plan (as de-
fined in subsection (b)) shall, with respect to individuals
entitled to benefits under the plan—
(1) issue to each such individual who is residing
in the United States a health claims card that meets
the requirements of section 304(a);
(2) provide to the health claims clearinghouse
assigned to each such individual under section
303(c)(1) information, in an electronic form consist-
ent with standards established under section 304(b),
on—
(A) the eligibility of the individual for ben-
efits under the plan, and
(B) the benefits of the individual under the
plan; and
(3) accept the determinations of clean claims
made by the health claims clearinghouse under sec-
tion 303(e) for the individual.
(b) HEALTH BENEFIT PLAN DEFINED.—
(1) IN
GENERAL.—In this subtitle, the term
‘‘health benefit plan’’ means, except as provided in
paragraphs (2) through (4), any public or private
entity or program that provides for payments for
health care services, including—
(A) a group health plan (as defined in sec-
tion 605 of the Employee Retirement Income
Security Act of 1974), a health plan of a mul-
tiple employer welfare association, and a health
plan of trustees of a fund established by one or
more employers or labor organizations (or com-
bination thereof), and
(B) any other health insurance arrange-
ment, including any arrangement consisting of
a hospital or medical expense incurred policy or
certificate, hospital or medical service plan con-
tract, or health maintenance organization sub-
scriber contract.
(2) PLANS EXCLUDED.—Such term does not in-
clude—
(A) accident-only, credit, or disability in-
come insurance;
(B) coverage issued as a supplement to li-
ability insurance;
(C) an individual making payment on the
individual’s own behalf (or on behalf of a rel-
ative or other individual) for deductibles, coin-
surance, or services not covered under a health
benefit plan; and
(D) such other plans as the Secretary may
determine, because of the limitation of benefits
to a single type or kind of health care, such as
dental services or hospital indemnity plans, or
other reasons should not be subject to the re-
quirements of this section.
(3) PLANS INCLUDED.—Such term includes—
(A) worker’s compensation or similar in-
surance, and
(B) automobile medical-payment insurance.
(c) OTHER DEFINITIONS.—In this subtitle:
(1) CLEAN
CLAIM.—The term ‘‘clean claim’’
means a request for payment under a health benefits
plan if the request has no defect or impropriety (in-
cluding any lack of any required substantiating doc-
umentation) or particular circumstance requiring
special treatment that prevents timely payment from
being made on the request under the plan.
(2) HEALTH
CLAIMS
CLEARINGHOUSE.—The
terms ‘‘health claims clearinghouse’’ and ‘‘clearing-
house’’ mean an entity with a contract under section
303 to perform functions as a clearinghouse under
that section.
(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
(4) 
UNITED
STATES.—The 
term 
‘‘United
States’’ means the 50 States and the District of Co-
lumbia.
(d) EFFECTIVE DATE.—The requirements of sub-
section (a) shall apply to plans as of a date specified by
the Secretary, which date shall be not later than 27
months after the date of the enactment of this Act.
SEC. 302. REQUIREMENTS FOR HEALTH SERVICE PROVID-
ERS.
(a) SUBMISSION OF CLAIMS.—
(1) IN GENERAL.—Each health service provider
which furnishes services in the United States for
which payment may be made under a health benefit
plan shall submit any claim for payment for such
services—
(A) only to the health claims clearinghouse
to which it is assigned, and
(B) only in a form and manner consistent
with 
standards 
established 
under 
section
304(b).
(2) ENFORCEMENT.—
(A) CIVIL MONEY PENALTY.—
(i) IN
GENERAL.—In the case of a
health service provider that submits a
claim in violation of paragraph (1), the
provider is subject to a civil money penalty
of not to exceed $100 (or, if greater, the
amount of the claim) for each such viola-
tion. The provisions of section 1128A of
the Social Security Act (other than the
first and second sentences of subsection (a)
and subsection (b)) shall apply to a civil
money penalty under this subparagraph in
the same manner as such provisions apply
to a penalty or proceeding under section
1128A(a) of such Act.
(ii) SUNSET.—No civil money penalty
may be imposed under clause (i) for sub-
mission of any claim on or after the date
that is 63 months after the date of the en-
actment of this Act.
(B) DENIAL OF PAYMENT UNDER MEDI-
CARE AND MEDICAID PROGRAMS.—In the case
of a health service provider that submits a
claim for services furnished under the medicare
program or medicaid program in violation of
paragraph (1), no payment shall be made under
such program for such services.
(3) HEALTH SERVICE PROVIDER DEFINED.—In
this subsection, the term ‘‘health service provider’’
includes a provider of services (as defined in section
1861(u) of the Social Security Act), physicians, sup-
pliers, and other persons furnishing health care serv-
ices for which benefits may be made available under
a health benefit plan.
(4) EFFECTIVE
DATE.—The requirements of
paragraph (1) shall apply to providers for claims
submitted on or after a date specified by the Sec-
retary, which date shall be not later than 27 months
after the date of the enactment of this Act.
(b) UNIFORM HOSPITAL REPORTING.—Each hos-
pital, as a requirement under a participation agreement
under section 1866(a) of the Social Security Act for each
cost reporting period beginning during or after fiscal year
1994, shall provide for the reporting of information to the
Secretary with respect to any hospital care provided in a
uniform manner consistent with standards established by
the Secretary to carry out section 4007(c) of the Omnibus
Budget Reconciliation Act of 1987.
SEC. 303. HEALTH CLAIMS CLEARINGHOUSES.
(a) DESIGNATION OF CLEARINGHOUSE AREAS.—For
purposes of carrying out this section, the Secretary shall
designate within the continental United States areas en-
compassing approximately 5 million residents each. To the
extent practicable, the areas shall be reasonably contig-
uous with State boundaries. Each such area, and each of
the States of Alaska and Hawaii, is referred to in this
section as a ‘‘clearinghouse area’’.
(b) CONTRACTS WITH HEALTH CLAIMS CLEARING-
HOUSES.—
(1) IN GENERAL.—Taking into account the con-
siderations listed in paragraph (2), the Secretary
shall enter into a contract with a public or private
organization to perform the functions of a health
claims clearinghouse described in subsections (d)
and (e) for residents and providers in each clearing-
house area. The Secretary shall enter into a single
and separate contract with respect to each such
area. The Secretary shall first enter into such con-
tracts by not later than 2 years after the date of the
enactment of this Act.
(2) CONSIDERATIONS.—In selecting among or-
ganizations to perform the functions of a health
claims clearinghouse in an area, the Secretary shall
consider at least the following:
(A) The price to be charged by the organi-
zation for services performed by the organiza-
tion under the contract, including the price per
claim processed.
(B) The organization’s ability to process,
and experience in processing, claims on a timely
and accurate basis and to perform other func-
tions of such a clearinghouse.
(C) The organization’s experience in proc-
essing claims with respect to the various health
service providers in the area.
(3) TERMS OF CONTRACTS.—
(A) IN
GENERAL.—Contracts under this
subsection shall be for a period, not to exceed
3 years, specified by the Secretary. The Sec-
retary may terminate such contract, at any
time after appropriate notice and opportunity
for correction, if the Secretary determines that
the organization has substantially failed to
carry out the contract.
(B) CHARGES
FOR
SERVICES.—A health
claims clearinghouse may impose reasonable
charges, consistent with the terms of its con-
tract and subsections (d) and (e), for the per-
formance of required functions under such sub-
sections.
(c) ASSIGNMENT OF RESIDENTS AND PROVIDERS TO
HEALTH CLAIMS CLEARINGHOUSES.—For purposes of
carrying out this subtitle—
(1) RESIDENTS.—Each individual entitled to
benefits under a health benefits plan and who has a
principal residence in a geographic area shall be as-
signed to the clearinghouse for that area.
(2) PROVIDERS.—Each health service provider
shall be assigned to the clearinghouse for the area
in which the provider is located or provides services.
(3) EXCEPTIONS.—The Secretary may permit
individuals and health service providers to be as-
signed to clearinghouses other than those otherwise
provided under this subsection in such cases as the
Secretary may specify.
(4) EFFECTIVE DATE.—Individuals and provid-
ers shall first be assigned to clearinghouses under
this subsection by not later than 2 years after the
date of the enactment of this Act.
(d) CLEARINGHOUSE REQUIRED FUNCTIONS RELAT-
ING TO ELIGIBILITY AND BENEFIT VERIFICATION.—
(1) ELIGIBILITY
AND
BENEFIT
VERIFICA-
TION.—
(A) IN GENERAL.—As set forth in its con-
tract with the Secretary, each health claims
clearinghouse for an area shall verify, with re-
spect to residents assigned to the clearinghouse,
inquiries from health service providers who have
furnished or are furnishing health services to
such residents concerning—
(i) the health benefit plan (or plans)
under which the residents are covered, and
(ii) the benefits under such a plan.
(B) INTER-CLEARINGHOUSE VERIFICATION
PROCESS.—In addition, in the case of a service
furnished to an individual assigned to another
clearinghouse—
(i) the clearinghouse serving the pro-
vider shall forward inquiries described in
subparagraph (A) on behalf of the provider
to the clearinghouse serving the individual,
and
(ii) the clearinghouse serving the indi-
vidual shall respond to the inquiry through
the clearinghouse serving the provider.
The Secretary may provide for such inter-clear-
inghouse electronic network as may expedite ac-
tivities under this subparagraph.
of the clearinghouse by the health benefit plan. If
the clearinghouse enters into such a contractual ar-
rangement with a health benefit plan, the clearing-
house may not refuse to enter into such an arrange-
ment with other health benefit plans that can meet
the same (or comparable) commercial terms as
under the previous arrangement.
(2) AUTHORIZATION.—The Secretary is author-
ized to enter into contractual arrangements with
clearinghouses to carry out the activities described in
paragraph (1) with respect to the medicare program.
SEC. 304. STANDARDS RELATING TO ELECTRONIC CLAIMS
PROCESSING.
(a) UNIFORM HEALTH CLAIMS CARDS.—
(1) IN GENERAL.—The Secretary shall establish
standards consistent with this subsection respecting
the form and information to be contained on uni-
form health claims cards (for purposes of section
301(a)(1)).
(2) ELECTRONIC.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the card shall be in a form similar
to that of credit cards and shall have, encoded
in electronic form—