416 
‘‘(III) medical and clinical re-
search; and 
‘‘(IV) drug safety. 
‘‘(ii) Self-service technologies that fa-
cilitate the use and exchange of patient in-
formation and reduce wait times. 
‘‘(iii) Telemedicine technologies, in 
order to reduce travel requirements for pa-
tients in remote areas. 
‘‘(iv) Technologies that facilitate home 
health care and the monitoring of patients 
recuperating at home. 
‘‘(v) Technologies that help reduce 
medical errors. 
‘‘(vi) Technologies that facilitate the 
continuity of care among health settings. 
‘‘(vii) Technologies that meet the 
needs of diverse populations. 
‘‘(viii) Any other technology that the 
HIT Policy Committee finds to be among 
the technologies with the greatest potential 
to improve the quality and efficiency of 
health care. 
‘‘(3) FORUM.—The HIT Policy Committee shall 
serve as a forum for broad stakeholder input with 
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specific expertise in policies relating to the matters 
described in paragraphs (1) and (2). 
‘‘(c) MEMBERSHIP AND OPERATIONS.— 
‘‘(1) IN GENERAL.—The National Coordinator 
shall provide leadership in the establishment and op-
erations of the HIT Policy Committee. 
‘‘(2) MEMBERSHIP.—The membership of the 
HIT Policy Committee shall at least reflect pro-
viders, ancillary healthcare workers, consumers, pur-
chasers, health plans, technology vendors, research-
ers, relevant Federal agencies, and individuals with 
technical expertise on health care quality, privacy 
and security, and on the electronic exchange and use 
of health information. 
‘‘(3) CONSIDERATION.—The National Coordi-
nator shall ensure that the relevant recommenda-
tions and comments from the National Committee 
on Vital and Health Statistics are considered in the 
development of policies. 
‘‘(d) APPLICATION OF FACA.—The Federal Advisory 
Committee Act (5 U.S.C. App.), other than section 14 of 
such Act, shall apply to the HIT Policy Committee. 
‘‘(e) PUBLICATION.—The Secretary shall provide for 
publication in the Federal Register and the posting on the 
Internet website of the Office of the National Coordinator 
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for Health Information Technology of all policy rec-
ommendations made by the HIT Policy Committee under 
this section. 
‘‘SEC. 3003. HIT STANDARDS COMMITTEE. 
‘‘(a) ESTABLISHMENT.—There is established a com-
mittee to be known as the HIT Standards Committee to 
recommend to the National Coordinator standards, imple-
mentation specifications, and certification criteria for the 
electronic exchange and use of health information for pur-
poses of adoption under section 3004, consistent with the 
implementation of the strategic plan described in section 
3001(c)(3) and beginning with the areas listed in section 
3002(b)(2)(B) in accordance with policies developed by 
the HIT Policy Committee. 
‘‘(b) DUTIES.— 
‘‘(1) STANDARDS DEVELOPMENT.— 
‘‘(A) IN GENERAL.—The HIT Standards 
Committee shall recommend to the National 
Coordinator standards, implementation speci-
fications, and certification criteria described in 
subsection (a) that have been developed, har-
monized, or recognized by the HIT Standards 
Committee. The HIT Standards Committee 
shall update such recommendations and make 
new recommendations as appropriate, including 
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in response to a notification sent under section 
3004(a)(2)(B). Such recommendations shall be 
consistent with the latest recommendations 
made by the HIT Policy Committee. 
‘‘(B) PILOT TESTING OF STANDARDS AND 
IMPLEMENTATION SPECIFICATIONS.—In the de-
velopment, harmonization, or recognition of 
standards and implementation specifications, 
the HIT Standards Committee shall, as appro-
priate, provide for the testing of such standards 
and specifications by the National Institute for 
Standards 
and 
Technology 
under 
section 
4201(a) of the HITECH Act. 
‘‘(C) CONSISTENCY.—The standards, im-
plementation specifications, and certification 
criteria recommended under this subsection 
shall be consistent with the standards for infor-
mation transactions and data elements adopted 
pursuant to section 1173 of the Social Security 
Act. 
‘‘(2) FORUM.—The HIT Standards Committee 
shall serve as a forum for the participation of a 
broad range of stakeholders to provide input on the 
development, harmonization, and recognition of 
standards, implementation specifications, and certifi-
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cation criteria necessary for the development and 
adoption of a nationwide health information tech-
nology infrastructure that allows for the electronic 
use and exchange of health information. 
‘‘(3) SCHEDULE.—Not later than 90 days after 
the date of the enactment of this title, the HIT 
Standards Committee shall develop a schedule for 
the assessment of policy recommendations developed 
by the HIT Policy Committee under section 3002. 
The HIT Standards Committee shall update such 
schedule annually. The Secretary shall publish such 
schedule in the Federal Register. 
‘‘(4) PUBLIC
INPUT.—The HIT Standards 
Committee shall conduct open public meetings and 
develop a process to allow for public comment on the 
schedule described in paragraph (3) and rec-
ommendations described in this subsection. Under 
such process comments shall be submitted in a time-
ly manner after the date of publication of a rec-
ommendation under this subsection. 
‘‘(c) MEMBERSHIP AND OPERATIONS.— 
‘‘(1) IN GENERAL.—The National Coordinator 
shall provide leadership in the establishment and op-
erations of the HIT Standards Committee. 
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‘‘(2) MEMBERSHIP.—The membership of the 
HIT Standards Committee shall at least reflect pro-
viders, ancillary healthcare workers, consumers, pur-
chasers, health plans, technology vendors, research-
ers, relevant Federal agencies, and individuals with 
technical expertise on health care quality, privacy 
and security, and on the electronic exchange and use 
of health information. 
‘‘(3) CONSIDERATION.—The National Coordi-
nator shall ensure that the relevant recommenda-
tions and comments from the National Committee 
on Vital and Health Statistics are considered in the 
development of standards. 
‘‘(4) ASSISTANCE.—For the purposes of car-
rying out this section, the Secretary may provide or 
ensure that financial assistance is provided by the 
HIT Standards Committee to defray in whole or in 
part any membership fees or dues charged by such 
Committee to those consumer advocacy groups and 
not for profit entities that work in the public inter-
est as a part of their mission. 
‘‘(d) APPLICATION OF FACA.—The Federal Advisory 
Committee Act (5 U.S.C. App.), other than section 14, 
shall apply to the HIT Standards Committee. 
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‘‘(2) DETERMINATION TO ADOPT STANDARDS, 
IMPLEMENTATION
SPECIFICATIONS, AND
CERTIFI-
CATION CRITERIA.—If the Secretary determines— 
‘‘(A) to propose adoption of any grouping 
of such standards, implementation specifica-
tions, or certification criteria, the Secretary 
shall, by regulation, determine whether or not 
to adopt such grouping of standards, implemen-
tation specifications, or certification criteria; or 
‘‘(B) not to propose adoption of any group-
ing of standards, implementation specifications, 
or certification criteria, the Secretary shall no-
tify the National Coordinator and the HIT 
Standards Committee in writing of such deter-
mination and the reasons for not proposing the 
adoption of such recommendation. 
‘‘(3) PUBLICATION.—The Secretary shall pro-
vide for publication in the Federal Register of all de-
terminations made by the Secretary under para-
graph (1). 
‘‘(b) ADOPTION OF INITIAL SET OF STANDARDS, IM-
PLEMENTATION SPECIFICATIONS, AND CERTIFICATION 
CRITERIA.— 
‘‘(1) IN GENERAL.—Not later than December 
31, 2009, the Secretary shall, through the rule-
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making process described in section 3004(a), adopt 
an initial set of standards, implementation specifica-
tions, and certification criteria for the areas required 
for consideration under section 3002(b)(2)(B). 
‘‘(2) APPLICATION
OF
CURRENT
STANDARDS, 
IMPLEMENTATION
SPECIFICATIONS, AND
CERTIFI-
CATION CRITERIA.—The standards, implementation 
specifications, and certification criteria adopted be-
fore the date of the enactment of this title through 
the process existing through the Office of the Na-
tional Coordinator for Health Information Tech-
nology may be applied towards meeting the require-
ment of paragraph (1). 
‘‘SEC. 3005. APPLICATION AND USE OF ADOPTED STAND-
ARDS 
AND 
IMPLEMENTATION 
SPECIFICA-
TIONS BY FEDERAL AGENCIES. 
‘‘For requirements relating to the application and use 
by Federal agencies of the standards and implementation 
specifications adopted under section 3004, see section 
4111 of the HITECH Act. 
‘‘SEC. 3006. VOLUNTARY APPLICATION AND USE OF ADOPT-
ED 
STANDARDS 
AND 
IMPLEMENTATION 
SPECIFICATIONS BY PRIVATE ENTITIES. 
‘‘(a) IN GENERAL.—Except as provided under section 
4112 of the HITECH Act, any standard or implementa-
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tion specification adopted under section 3004 shall be vol-
untary with respect to private entities. 
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sub-
title shall be construed to require that a private entity that 
enters into a contract with the Federal Government apply 
or use the standards and implementation specifications 
adopted under section 3004 with respect to activities not 
related to the contract. 
‘‘SEC. 
3007. 
FEDERAL 
HEALTH 
INFORMATION 
TECH-
NOLOGY. 
‘‘(a) IN GENERAL.—The National Coordinator shall 
support the development, routine updating, and provision 
of qualified EHR technology (as defined in section 3000) 
consistent with subsections (b) and (c) unless the Sec-
retary determines that the needs and demands of pro-
viders are being substantially and adequately met through 
the marketplace. 
‘‘(b) CERTIFICATION.—In making such EHR tech-
nology publicly available, the National Coordinator shall 
ensure that the qualified EHR technology described in 
subsection (a) is certified under the program developed 
under section 3001(c)(3) to be in compliance with applica-
ble standards adopted under section 3003(a). 
‘‘(c) AUTHORIZATION
TO
CHARGE
A
NOMINAL 
FEE.—The National Coordinator may impose a nominal 
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fee for the adoption by a health care provider of the health 
information technology system developed or approved 
under subsection (a) and (b). Such fee shall take into ac-
count the financial circumstances of smaller providers, low 
income providers, and providers located in rural or other 
medically underserved areas. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to require that a private or govern-
ment entity adopt or use the technology provided under 
this section. 
‘‘SEC. 3008. TRANSITIONS. 
‘‘(a) ONCHIT.—To the extent consistent with sec-
tion 3001, all functions, personnel, assets, liabilities, and 
administrative actions applicable to the National Coordi-
nator for Health Information Technology appointed under 
Executive Order 13335 or the Office of such National Co-
ordinator on the date before the date of the enactment 
of this title shall be transferred to the National Coordi-
nator appointed under section 3001(a) and the Office of 
such National Coordinator as of the date of the enactment 
of this title. 
‘‘(b) AHIC.— 
‘‘(1) To the extent consistent with sections 
3002 and 3003, all functions, personnel, assets, and 
liabilities applicable to the AHIC Successor, Inc. 
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doing business as the National eHealth Collaborative 
as of the day before the date of the enactment of 
this title shall be transferred to the HIT Policy 
Committee or the HIT Standards Committee, estab-
lished under section 3002(a) or 3003(a), as appro-
priate, as of the date of the enactment of this title. 
‘‘(2) In carrying out section 3003(b)(1)(A), 
until recommendations are made by the HIT Policy 
Committee, recommendations of the HIT Standards 
Committee shall be consistent with the most recent 
recommendations made by such AHIC Successor, 
Inc. 
‘‘(c) RULES OF CONSTRUCTION.— 
‘‘(1) ONCHIT.—Nothing in section 3001 or 
subsection (a) shall be construed as requiring the 
creation of a new entity to the extent that the Office 
of the National Coordinator for Health Information 
Technology established pursuant to Executive Order 
13335 is consistent with the provisions of section 
3001. 
‘‘(2) AHIC.—Nothing in sections 3002 or 3003 
or subsection (b) shall be construed as prohibiting 
the AHIC Successor, Inc. doing business as the Na-
tional eHealth Collaborative from modifying its char-
ter, duties, membership, and any other structure or 
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function required to be consistent with section 3002 
and 3003 in a manner that would permit the Sec-
retary to choose to recognize such AHIC Successor, 
Inc. as the HIT Policy Committee or the HIT 
Standards Committee. 
‘‘SEC. 3009. RELATION TO HIPAA PRIVACY AND SECURITY 
LAW. 
‘‘(a) IN GENERAL.—With respect to the relation of 
this title to HIPAA privacy and security law: 
‘‘(1) This title may not be construed as having 
any effect on the authorities of the Secretary under 
HIPAA privacy and security law. 
‘‘(2) The purposes of this title include ensuring 
that the health information technology standards 
and implementation specifications adopted under 
section 3004 take into account the requirements of 
HIPAA privacy and security law. 
‘‘(b) DEFINITION.—For purposes of this section, the 
term ‘HIPAA privacy and security law’ means— 
‘‘(1) the provisions of part C of title XI of the 
Social Security Act, section 264 of the Health Insur-
ance Portability and Accountability Act of 1996, and 
subtitle D of title IV of the HITECH Act; and 
‘‘(2) regulations under such provisions. 
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‘‘SEC. 3010. AUTHORIZATION FOR APPROPRIATIONS. 
‘‘There is authorized to be appropriated to the Office 
of the National Coordinator for Health Information Tech-
nology to carry out this subtitle $250,000,000 for fiscal 
year 2009.’’. 
SEC. 4102. TECHNICAL AMENDMENT. 
Section 1171(5) of the Social Security Act (42 U.S.C. 
1320d) is amended by striking ‘‘or C’’ and inserting ‘‘C, 
or D’’. 
PART II—APPLICATION AND USE OF ADOPTED 
HEALTH 
INFORMATION 
TECHNOLOGY 
STANDARDS; REPORTS 
SEC. 4111. COORDINATION OF FEDERAL ACTIVITIES WITH 
ADOPTED STANDARDS AND IMPLEMENTA-
TION SPECIFICATIONS. 
(a) SPENDING
ON HEALTH INFORMATION TECH-
NOLOGY SYSTEMS.—As each agency (as defined in the Ex-
ecutive Order issued on August 22, 2006, relating to pro-
moting quality and efficient health care in Federal govern-
ment administered or sponsored health care programs) im-
plements, acquires, or upgrades health information tech-
nology systems used for the direct exchange of individually 
identifiable health information between agencies and with 
non-Federal entities, it shall utilize, where available, 
health information technology systems and products that 
meet standards and implementation specifications adopted 
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under section 3004 of the Public Health Service Act, as 
added by section 4101. 
(b) FEDERAL INFORMATION COLLECTION ACTIVI-
TIES.—With respect to a standard or implementation 
specification adopted under section 3004 of the Public 
Health Service Act, as added by section 4101, the Presi-
dent shall take measures to ensure that Federal activities 
involving the broad collection and submission of health in-
formation are consistent with such standard or implemen-
tation specification, respectively, within three years after 
the date of such adoption. 
(c) APPLICATION OF DEFINITIONS.—The definitions 
contained in section 3000 of the Public Health Service 
Act, as added by section 4101, shall apply for purposes 
of this part. 
SEC. 4112. APPLICATION TO PRIVATE ENTITIES. 
Each agency (as defined in such Executive Order 
issued on August 22, 2006, relating to promoting quality 
and efficient health care in Federal government adminis-
tered or sponsored health care programs) shall require in 
contracts or agreements with health care providers, health 
plans, or health insurance issuers that as each provider, 
plan, or issuer implements, acquires, or upgrades health 
information technology systems, it shall utilize, where 
available, health information technology systems and prod-
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ucts that meet standards and implementation specifica-
tions adopted under section 3004 of the Public Health 
Service Act, as added by section 4101. 
SEC. 4113. STUDY AND REPORTS. 
(a) REPORT ON ADOPTION OF NATIONWIDE SYS-
TEM.—Not later than 2 years after the date of the enact-
ment of this Act and annually thereafter, the Secretary 
of Health and Human Services shall submit to the appro-
priate committees of jurisdiction of the House of Rep-
resentatives and the Senate a report that— 
(1) describes the specific actions that have been 
taken by the Federal Government and private enti-
ties to facilitate the adoption of a nationwide system 
for the electronic use and exchange of health infor-
mation; 
(2) describes barriers to the adoption of such a 
nationwide system; and 
(3) contains recommendations to achieve full 
implementation of such a nationwide system. 
(b) REIMBURSEMENT INCENTIVE STUDY AND RE-
PORT.— 
(1) STUDY.—The Secretary of Health and 
Human Services shall carry out, or contract with a 
private entity to carry out, a study that examines 
methods to create efficient reimbursement incentives 
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for improving health care quality in Federally quali-
fied health centers, rural health clinics, and free 
clinics. 
(2) REPORT.—Not later than 2 years after the 
date of the enactment of this Act, the Secretary of 
Health and Human Services shall submit to the ap-
propriate committees of jurisdiction of the House of 
Representatives and the Senate a report on the 
study carried out under paragraph (1). 
(c) AGING SERVICES TECHNOLOGY STUDY AND RE-
PORT.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall carry out, or contract with a 
private entity to carry out, a study of matters relat-
ing to the potential use of new aging services tech-
nology to assist seniors, individuals with disabilities, 
and their caregivers throughout the aging process. 
(2) MATTERS
TO
BE
STUDIED.—The study 
under paragraph (1) shall include— 
(A) an evaluation of— 
(i) methods for identifying current, 
emerging, and future health technology 
that can be used to meet the needs of sen-
iors and individuals with disabilities and 
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their caregivers across all aging services 
settings, as specified by the Secretary; 
(ii) methods for fostering scientific in-
novation with respect to aging services 
technology within the business and aca-
demic communities; and 
(iii) developments in aging services 
technology in other countries that may be 
applied in the United States; and 
(B) identification of— 
(i) barriers to innovation in aging 
services technology and devising strategies 
for removing such barriers; and 
(ii) barriers to the adoption of aging 
services technology by health care pro-
viders and consumers and devising strate-
gies to removing such barriers. 
(3) REPORT.—Not later than 24 months after 
the date of the enactment of this Act, the Secretary 
shall submit to the appropriate committees of juris-
diction of the House of Representatives and of the 
Senate a report on the study carried out under para-
graph (1). 
(4) DEFINITIONS.—For purposes of this sub-
section: 
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(A) AGING SERVICES TECHNOLOGY.—The 
term ‘‘aging services technology’’ means health 
technology that meets the health care needs of 
seniors, individuals with disabilities, and the 
caregivers of such seniors and individuals. 
(B) SENIOR.—The term ‘‘senior’’ has such 
meaning as specified by the Secretary. 
Subtitle B—Testing of Health 
Information Technology 
SEC. 4201. NATIONAL INSTITUTE FOR STANDARDS AND 
TECHNOLOGY TESTING. 
(a) PILOT TESTING OF STANDARDS AND IMPLEMEN-
TATION SPECIFICATIONS.—In coordination with the HIT 
Standards Committee established under section 3003 of 
the Public Health Service Act, as added by section 4101, 
with respect to the development of standards and imple-
mentation specifications under such section, the Director 
of the National Institute for Standards and Technology 
shall test such standards and implementation specifica-
tions, as appropriate, in order to assure the efficient im-
plementation and use of such standards and implementa-
tion specifications. 
(b) VOLUNTARY TESTING PROGRAM.—In coordina-
tion with the HIT Standards Committee established under 
section 3003 of the Public Health Service Act, as added 
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by section 4101, with respect to the development of stand-
ards and implementation specifications under such sec-
tion, the Director of the National Institute of Standards 
and Technology shall support the establishment of a con-
formance testing infrastructure, including the develop-
ment of technical test beds. The development of this con-
formance testing infrastructure may include a program to 
accredit independent, non-Federal laboratories to perform 
testing. 
SEC. 4202. RESEARCH AND DEVELOPMENT PROGRAMS. 
(a) HEALTH CARE INFORMATION ENTERPRISE INTE-
GRATION RESEARCH CENTERS.— 
(1) IN GENERAL.—The Director of the National 
Institute of Standards and Technology, in consulta-
tion with the Director of the National Science Foun-
dation and other appropriate Federal agencies, shall 
establish a program of assistance to institutions of 
higher education (or consortia thereof which may in-
clude nonprofit entities and Federal Government 
laboratories) to establish multidisciplinary Centers 
for Health Care Information Enterprise Integration. 
(2) REVIEW; COMPETITION.—Grants shall be 
awarded under this subsection on a merit-reviewed, 
competitive basis. 
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(3) PURPOSE.—The purposes of the Centers de-
scribed in paragraph (1) shall be— 
(A) to generate innovative approaches to 
health care information enterprise integration 
by conducting cutting-edge, multidisciplinary 
research on the systems challenges to health 
care delivery; and 
(B) the development and use of health in-
formation technologies and other complemen-
tary fields. 
(4) RESEARCH AREAS.—Research areas may in-
clude— 
(A) interfaces between human information 
and communications technology systems; 
(B) voice-recognition systems; 
(C) software that improves interoperability 
and connectivity among health information sys-
tems; 
(D) software dependability in systems crit-
ical to health care delivery; 
(E) measurement of the impact of informa-
tion technologies on the quality and productivity 
of health care; 
(F) health information enterprise manage-
ment; 
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(G) health information technology security 
and integrity; and 
(H) relevant health information technology 
to reduce medical errors. 
(5) APPLICATIONS.—An institution of higher 
education (or a consortium thereof) seeking funding 
under this subsection shall submit an application to 
the Director of the National Institute of Standards 
and Technology at such time, in such manner, and 
containing such information as the Director may re-
quire. The application shall include, at a minimum, 
a description of— 
(A) the research projects that will be un-
dertaken by the Center established pursuant to 
assistance under paragraph (1) and the respec-
tive contributions of the participating entities; 
(B) how the Center will promote active col-
laboration among scientists and engineers from 
different disciplines, such as information tech-
nology, biologic sciences, management, social 
sciences, and other appropriate disciplines; 
(C) technology transfer activities to dem-
onstrate and diffuse the research results, tech-
nologies, and knowledge; and 
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(D) how the Center will contribute to the 
education and training of researchers and other 
professionals in fields relevant to health infor-
mation enterprise integration. 
(b) NATIONAL
INFORMATION
TECHNOLOGY
RE-
SEARCH AND DEVELOPMENT PROGRAM.—The National 
High-Performance Computing Program established by 
section 101 of the High-Performance Computing Act of 
1991 (15 U.S.C. 5511) shall coordinate Federal research 
and development programs related to the development and 
deployment of health information technology, including ac-
tivities related to— 
(1) computer infrastructure; 
(2) data security; 
(3) development of large-scale, distributed, reli-
able computing systems; 
(4) wired, wireless, and hybrid high-speed net-
working; 
(5) development of software and software-inten-
sive systems; 
(6) human-computer interaction and informa-
tion management technologies; and 
(7) the social and economic implications of in-
formation technology. 
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Subtitle C—Incentives for the Use 
of Health Information Technology 
PART I—GRANTS AND LOANS FUNDING 
SEC. 4301. GRANT, LOAN, AND DEMONSTRATION PRO-
GRAMS. 
Title XXX of the Public Health Service Act, as added 
by section 4101, is amended by adding at the end the fol-
lowing new subtitle: 
‘‘Subtitle B—Incentives for the Use 
of Health Information Technology 
‘‘SEC. 3011. IMMEDIATE FUNDING TO STRENGTHEN THE 
HEALTH INFORMATION TECHNOLOGY INFRA-
STRUCTURE. 
‘‘(a) IN
GENERAL.—The Secretary shall, using 
amounts appropriated under section 3018, invest in the 
infrastructure necessary to allow for and promote the elec-
tronic exchange and use of health information for each 
individual in the United States consistent with the goals 
outlined in the strategic plan developed by the National 
Coordinator (and as available) under section 3001. To the 
greatest extent practicable, the Secretary shall ensure that 
any funds so appropriated shall be used for the acquisition 
of health information technology that meets standards and 
certification criteria adopted before the date of the enact-
ment of this title until such date as the standards are 
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adopted under section 3004. The Secretary shall invest 
funds through the different agencies with expertise in such 
goals, such as the Office of the National Coordinator for 
Health Information Technology, the Health Resources and 
Services Administration, the Agency for Healthcare Re-
search and Quality, the Centers of Medicare & Medicaid 
Services, the Centers for Disease Control and Prevention, 
and the Indian Health Service to support the following: 
‘‘(1) Health information technology architecture 
that will support the nationwide electronic exchange 
and use of health information in a secure, private, 
and accurate manner, including connecting health 
information exchanges, and which may include up-
dating and implementing the infrastructure nec-
essary within different agencies of the Department 
of Health and Human Services to support the elec-
tronic use and exchange of health information. 
‘‘(2) Development and adoption of appropriate 
certified electronic health records for categories of 
providers, as defined in section 3000, not eligible for 
support under title XVIII or XIX of the Social Secu-
rity Act for the adoption of such records. 
‘‘(3) Training on and dissemination of informa-
tion on best practices to integrate health information 
technology, including electronic health records, into 
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a provider’s delivery of care, consistent with best 
practices learned from the Health Information Tech-
nology Research Center developed under section 
3012(b), including community health centers receiv-
ing assistance under section 330, covered entities 
under section 340B, and providers participating in 
one or more of the programs under titles XVIII, 
XIX, and XXI of the Social Security Act (relating 
to Medicare, Medicaid, and the State Children’s 
Health Insurance Program). 
‘‘(4) Infrastructure and tools for the promotion 
of telemedicine, including coordination among Fed-
eral agencies in the promotion of telemedicine. 
‘‘(5) Promotion of the interoperability of clinical 
data repositories or registries. 
‘‘(6) Promotion of technologies and best prac-
tices that enhance the protection of health informa-
tion by all holders of individually identifiable health 
information. 
‘‘(7) Improvement and expansion of the use of 
health information technology by public health de-
partments. 
‘‘(8) Provision of $300 million to support re-
gional or sub-national efforts towards health infor-
mation exchange. 
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‘‘(b) COORDINATION.—The Secretary shall ensure 
funds under this section are used in a coordinated manner 
with other health information promotion activities. 
‘‘(c) ADDITIONAL USE OF FUNDS.—In addition to 
using funds as provided in subsection (a), the Secretary 
may use amounts appropriated under section 3018 to 
carry out health information technology activities that are 
provided for under laws in effect on the date of the enact-
ment of this title. 
‘‘SEC. 3012. HEALTH INFORMATION TECHNOLOGY IMPLE-
MENTATION ASSISTANCE. 
‘‘(a) HEALTH INFORMATION TECHNOLOGY EXTEN-
SION PROGRAM.—To assist health care providers to adopt, 
implement, and effectively use certified EHR technology 
that allows for the electronic exchange and use of health 
information, the Secretary, acting through the Office of 
the National Coordinator, shall establish a health informa-
tion technology extension program to provide health infor-
mation technology assistance services to be carried out 
through the Department of Health and Human Services. 
The National Coordinator shall consult with other Federal 
agencies with demonstrated experience and expertise in in-
formation technology services, such as the National Insti-
tute of Standards and Technology, in developing and im-
plementing this program. 
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‘‘(b) HEALTH
INFORMATION
TECHNOLOGY
RE-
SEARCH CENTER.— 
‘‘(1) IN GENERAL.—The Secretary shall create 
a Health Information Technology Research Center 
(in this section referred to as the ‘Center’) to pro-
vide technical assistance and develop or recognize 
best practices to support and accelerate efforts to 
adopt, implement, and effectively utilize health infor-
mation technology that allows for the electronic ex-
change and use of information in compliance with 
standards, implementation specifications, and certifi-
cation criteria adopted under section 3004. 
‘‘(2) INPUT.—The Center shall incorporate 
input from— 
‘‘(A) other Federal agencies with dem-
onstrated experience and expertise in informa-
tion technology services such as the National 
Institute of Standards and Technology; 
‘‘(B) users of health information tech-
nology, such as providers and their support and 
clerical staff and others involved in the care and 
care coordination of patients, from the health 
care and health information technology indus-
try; and 
‘‘(C) others as appropriate. 
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‘‘(3) PURPOSES.—The purposes of the Center 
are to— 
‘‘(A) provide a forum for the exchange of 
knowledge and experience; 
‘‘(B) accelerate the transfer of lessons 
learned from existing public and private sector 
initiatives, including those currently receiving 
Federal financial support; 
‘‘(C) assemble, analyze, and widely dis-
seminate evidence and experience related to the 
adoption, implementation, and effective use of 
health information technology that allows for 
the electronic exchange and use of information 
including through the regional centers described 
in subsection (c); 
‘‘(D) provide technical assistance for the 
establishment and evaluation of regional and 
local health information networks to facilitate 
the electronic exchange of information across 
health care settings and improve the quality of 
health care; 
‘‘(E) provide technical assistance for the 
development and dissemination of solutions to 
barriers to the exchange of electronic health in-
formation; and 
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‘‘(F) learn about effective strategies to 
adopt and utilize health information technology 
in medically underserved communities. 
‘‘(c) HEALTH
INFORMATION
TECHNOLOGY
RE-
GIONAL EXTENSION CENTERS.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
assistance for the creation and support of regional 
centers (in this subsection referred to as ‘regional 
centers’) to provide technical assistance and dissemi-
nate best practices and other information learned 
from the Center to support and accelerate efforts to 
adopt, implement, and effectively utilize health infor-
mation technology that allows for the electronic ex-
change and use of information in compliance with 
standards, implementation specifications, and certifi-
cation criteria adopted under section 3004. Activities 
conducted under this subsection shall be consistent 
with the strategic plan developed by the National 
Coordinator, (and, as available) under section 3001. 
‘‘(2) AFFILIATION.—Regional centers shall be 
affiliated with any United States-based nonprofit in-
stitution or organization, or group thereof, that ap-
plies and is awarded financial assistance under this 
section. Individual awards shall be decided on the 
basis of merit. 
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‘‘(3) OBJECTIVE.—The objective of the regional 
centers is to enhance and promote the adoption of 
health information technology through— 
‘‘(A) assistance with the implementation, 
effective use, upgrading, and ongoing mainte-
nance of health information technology, includ-
ing electronic health records, to healthcare pro-
viders nationwide; 
‘‘(B) broad participation of individuals 
from industry, universities, and State govern-
ments; 
‘‘(C) active dissemination of best practices 
and research on the implementation, effective 
use, upgrading, and ongoing maintenance of 
health information technology, including elec-
tronic health records, to health care providers 
in order to improve the quality of healthcare 
and protect the privacy and security of health 
information; 
‘‘(D) participation, to the extent prac-
ticable, in health information exchanges; 
‘‘(E) utilization, when appropriate, of the 
expertise and capability that exists in Federal 
agencies other than the Department; and 
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‘‘(F) integration of health information 
technology, including electronic health records, 
into the initial and ongoing training of health 
professionals and others in the healthcare in-
dustry that would be instrumental to improving 
the quality of healthcare through the smooth 
and accurate electronic use and exchange of 
health information. 
‘‘(4) REGIONAL
ASSISTANCE.—Each regional 
center shall aim to provide assistance and education 
to all providers in a region, but shall prioritize any 
direct assistance first to the following: 
‘‘(A) Public or not-for-profit hospitals or 
critical access hospitals. 
‘‘(B) Federally qualified health centers (as 
defined in section 1861(aa)(4) of the Social Se-
curity Act). 
‘‘(C) Entities that are located in rural and 
other areas that serve uninsured, underinsured, 
and medically underserved individuals (regard-
less of whether such area is urban or rural). 
‘‘(D) Individual or small group practices 
(or a consortium thereof) that are primarily fo-
cused on primary care. 
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‘‘(5) FINANCIAL SUPPORT.—The Secretary may 
provide financial support to any regional center cre-
ated under this subsection for a period not to exceed 
four years. The Secretary may not provide more 
than 50 percent of the capital and annual operating 
and maintenance funds required to create and main-
tain such a center, except in an instance of national 
economic conditions which would render this cost- 
share requirement detrimental to the program and 
upon notification to Congress as to the justification 
to waive the cost-share requirement. 
‘‘(6) NOTICE OF PROGRAM DESCRIPTION AND 
AVAILABILITY OF FUNDS.—The Secretary shall pub-
lish in the Federal Register, not later than 90 days 
after the date of the enactment of this title, a draft 
description of the program for establishing regional 
centers under this subsection. Such description shall 
include the following: 
‘‘(A) A detailed explanation of the program 
and the programs goals. 
‘‘(B) Procedures to be followed by the ap-
plicants. 
‘‘(C) Criteria for determining qualified ap-
plicants. 
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‘‘(D) Maximum support levels expected to 
be available to centers under the program. 
‘‘(7) APPLICATION
REVIEW.—The Secretary 
shall subject each application under this subsection 
to merit review. In making a decision whether to ap-
prove such application and provide financial support, 
the Secretary shall consider at a minimum the mer-
its of the application, including those portions of the 
application regarding— 
‘‘(A) the ability of the applicant to provide 
assistance under this subsection and utilization 
of health information technology appropriate to 
the needs of particular categories of health care 
providers; 
‘‘(B) the types of service to be provided to 
health care providers; 
‘‘(C) geographical diversity and extent of 
service area; and 
‘‘(D) the percentage of funding and 
amount of in-kind commitment from other 
sources. 
‘‘(8) BIENNIAL
EVALUATION.—Each regional 
center which receives financial assistance under this 
subsection shall be evaluated biennially by an evalua-
tion panel appointed by the Secretary. Each evalua-
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tion panel shall be composed of private experts, none 
of whom shall be connected with the center involved, 
and of Federal officials. Each evaluation panel shall 
measure the involved center’s performance against 
the objective specified in paragraph (3). The Sec-
retary shall not continue to provide funding to a re-
gional center unless its evaluation is overall positive. 
‘‘(9) CONTINUING SUPPORT.—After the second 
year of assistance under this subsection, a regional 
center may receive additional support under this 
subsection if it has received positive evaluations and 
a finding by the Secretary that continuation of Fed-
eral funding to the center was in the best interest 
of provision of health information technology exten-
sion services. 
‘‘SEC. 3013. STATE GRANTS TO PROMOTE HEALTH INFOR-
MATION TECHNOLOGY. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the National Coordinator, shall establish a program in ac-
cordance with this section to facilitate and expand the 
electronic movement and use of health information among 
organizations according to nationally recognized stand-
ards. 
‘‘(b) PLANNING GRANTS.—The Secretary may award 
a grant to a State or qualified State-designated entity (as 
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described in subsection (f)) that submits an application 
to the Secretary at such time, in such manner, and con-
taining such information as the Secretary may specify, for 
the purpose of planning activities described in subsection 
(d). 
‘‘(c) IMPLEMENTATION
GRANTS.—The Secretary 
may award a grant to a State or qualified State designated 
entity that— 
‘‘(1) has submitted, and the Secretary has ap-
proved, a plan described in subsection (e) (regardless 
of whether such plan was prepared using amounts 
awarded under subsection (b); and 
‘‘(2) submits an application at such time, in 
such manner, and containing such information as 
the Secretary may specify. 
‘‘(d) USE OF FUNDS.—Amounts received under a 
grant under subsection (c) shall be used to conduct activi-
ties to facilitate and expand the electronic movement and 
use of health information among organizations according 
to nationally recognized standards through activities that 
include— 
‘‘(1) enhancing broad and varied participation 
in the authorized and secure nationwide electronic 
use and exchange of health information; 
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‘‘(2) identifying State or local resources avail-
able towards a nationwide effort to promote health 
information technology; 
‘‘(3) complementing other Federal grants, pro-
grams, and efforts towards the promotion of health 
information technology; 
‘‘(4) providing technical assistance for the de-
velopment and dissemination of solutions to barriers 
to the exchange of electronic health information; 
‘‘(5) promoting effective strategies to adopt and 
utilize health information technology in medically 
underserved communities; 
‘‘(6) assisting patients in utilizing health infor-
mation technology; 
‘‘(7) encouraging clinicians to work with Health 
Information Technology Regional Extension Centers 
as described in section 3012, to the extent they are 
available and valuable; 
‘‘(8) supporting public health agencies’ author-
ized use of and access to electronic health informa-
tion; 
‘‘(9) promoting the use of electronic health 
records for quality improvement including through 
quality measures reporting; and 
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‘‘(10) such other activities as the Secretary may 
specify. 
‘‘(e) PLAN.— 
‘‘(1) IN GENERAL.—A plan described in this 
subsection is a plan that describes the activities to 
be carried out by a State or by the qualified State- 
designated entity within such State to facilitate and 
expand the electronic movement and use of health 
information among organizations according to na-
tionally recognized standards and implementation 
specifications. 
‘‘(2) REQUIRED ELEMENTS.—A plan described 
in paragraph (1) shall— 
‘‘(A) be pursued in the public interest; 
‘‘(B) be consistent with the strategic plan 
developed by the National Coordinator, (and, as 
available) under section 3001; 
‘‘(C) include a description of the ways the 
State or qualified State-designated entity will 
carry out the activities described in subsection 
(b); and 
‘‘(D) contain such elements as the Sec-
retary may require. 
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‘‘(f) QUALIFIED STATE-DESIGNATED ENTITY.—For 
purposes of this section, to be a qualified State-designated 
entity, with respect to a State, an entity shall— 
‘‘(1) be designated by the State as eligible to 
receive awards under this section; 
‘‘(2) be a not-for-profit entity with broad stake-
holder representation on its governing board; 
‘‘(3) demonstrate that one of its principal goals 
is to use information technology to improve health 
care quality and efficiency through the authorized 
and secure electronic exchange and use of health in-
formation; 
‘‘(4) adopt nondiscrimination and conflict of in-
terest policies that demonstrate a commitment to 
open, fair, and nondiscriminatory participation by 
stakeholders; and 
‘‘(5) conform to such other requirements as the 
Secretary may establish. 
‘‘(g) REQUIRED CONSULTATION.—In carrying out 
activities described in subsections (b) and (c), a State or 
qualified State-designated entity shall consult with and 
consider the recommendations of— 
‘‘(1) health care providers (including providers 
that provide services to low income and underserved 
populations); 
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‘‘(2) health plans; 
‘‘(3) patient or consumer organizations that 
represent the population to be served; 
‘‘(4) health information technology vendors; 
‘‘(5) health care purchasers and employers; 
‘‘(6) public health agencies; 
‘‘(7) health professions schools, universities and 
colleges; 
‘‘(8) clinical researchers; 
‘‘(9) other users of health information tech-
nology such as the support and clerical staff of pro-
viders and others involved in the care and care co-
ordination of patients; and 
‘‘(10) such other entities, as may be determined 
appropriate by the Secretary. 
‘‘(h) CONTINUOUS IMPROVEMENT.—The Secretary 
shall annually evaluate the activities conducted under this 
section and shall, in awarding grants under this section, 
implement the lessons learned from such evaluation in a 
manner so that awards made subsequent to each such 
evaluation are made in a manner that, in the determina-
tion of the Secretary, will lead towards the greatest im-
provement in quality of care, decrease in costs, and the 
most effective authorized and secure electronic exchange 
of health information. 
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‘‘(i) REQUIRED MATCH.— 
‘‘(1) IN GENERAL.—For a fiscal year (begin-
ning with fiscal year 2011), the Secretary may not 
make a grant under this section to a State unless 
the State agrees to make available non-Federal con-
tributions (which may include in-kind contributions) 
toward the costs of a grant awarded under sub-
section (c) in an amount equal to— 
‘‘(A) for fiscal year 2011, not less than $1 
for each $10 of Federal funds provided under 
the grant; 
‘‘(B) for fiscal year 2012, not less than $1 
for each $7 of Federal funds provided under 
the grant; and 
‘‘(C) for fiscal year 2013 and each subse-
quent fiscal year, not less than $1 for each $3 
of Federal funds provided under the grant. 
‘‘(2) AUTHORITY
TO
REQUIRE
STATE
MATCH 
FOR FISCAL YEARS BEFORE FISCAL YEAR 2011.—For 
any fiscal year during the grant program under this 
section before fiscal year 2011, the Secretary may 
determine the extent to which there shall be required 
a non-Federal contribution from a State receiving a 
grant under this section. 
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‘‘SEC. 3014. COMPETITIVE GRANTS TO STATES AND INDIAN 
TRIBES FOR THE DEVELOPMENT OF LOAN 
PROGRAMS 
TO 
FACILITATE 
THE 
WIDE-
SPREAD ADOPTION OF CERTIFIED EHR TECH-
NOLOGY. 
‘‘(a) IN GENERAL.—The National Coordinator may 
award competitive grants to eligible entities for the estab-
lishment of programs for loans to health care providers 
to conduct the activities described in subsection (e). 
‘‘(b) ELIGIBLE ENTITY DEFINED.—For purposes of 
this subsection, the term ‘eligible entity’ means a State 
or Indian tribe (as defined in the Indian Self-Determina-
tion and Education Assistance Act) that— 
‘‘(1) submits to the National Coordinator an 
application at such time, in such manner, and con-
taining such information as the National Coordi-
nator may require; 
‘‘(2) submits to the National Coordinator a 
strategic plan in accordance with subsection (d) and 
provides to the National Coordinator assurances that 
the entity will update such plan annually in accord-
ance with such subsection; 
‘‘(3) provides assurances to the National Coor-
dinator that the entity will establish a Loan Fund 
in accordance with subsection (c); 
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‘‘(4) provides assurances to the National Coor-
dinator that the entity will not provide a loan from 
the Loan Fund to a health care provider unless the 
provider agrees to— 
‘‘(A) submit reports on quality measures 
adopted by the Federal Government (by not 
later than 90 days after the date on which such 
measures are adopted), to— 
‘‘(i) the Administrator of the Centers 
for Medicare & Medicaid Services (or his 
or her designee), in the case of an entity 
participating in the Medicare program 
under title XVIII of the Social Security 
Act or the Medicaid program under title 
XIX of such Act; or 
‘‘(ii) the Secretary in the case of other 
entities; 
‘‘(B) demonstrate to the satisfaction of the 
Secretary (through criteria established by the 
Secretary) that any certified EHR technology 
purchased, improved, or otherwise financially 
supported under a loan under this section is 
used to exchange health information in a man-
ner that, in accordance with law and standards 
(as adopted under section 3004) applicable to 
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the exchange of information, improves the qual-
ity of health care, such as promoting care co-
ordination; and 
‘‘(C) comply with such other requirements 
as the entity or the Secretary may require; 
‘‘(D) include a plan on how health care 
providers involved intend to maintain and sup-
port the certified EHR technology over time; 
‘‘(E) include a plan on how the health care 
providers involved intend to maintain and sup-
port the certified EHR technology that would 
be purchased with such loan, including the type 
of resources expected to be involved and any 
such other information as the State or Indian 
Tribe, respectively, may require; and 
‘‘(5) agrees to provide matching funds in ac-
cordance with subsection (h). 
‘‘(c) ESTABLISHMENT OF FUND.—For purposes of 
subsection (b)(3), an eligible entity shall establish a cer-
tified EHR technology loan fund (referred to in this sub-
section as a ‘Loan Fund’) and comply with the other re-
quirements contained in this section. A grant to an eligible 
entity under this section shall be deposited in the Loan 
Fund established by the eligible entity. No funds author-
ized by other provisions of this title to be used for other 
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purposes specified in this title shall be deposited in any 
Loan Fund. 
‘‘(d) STRATEGIC PLAN.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b)(2), a strategic plan of an eligible entity under 
this subsection shall identify the intended uses of 
amounts available to the Loan Fund of such entity. 
‘‘(2) CONTENTS.—A strategic plan under para-
graph (1), with respect to a Loan Fund of an eligi-
ble entity, shall include for a year the following: 
‘‘(A) A list of the projects to be assisted 
through the Loan Fund during such year. 
‘‘(B) A description of the criteria and 
methods established for the distribution of 
funds from the Loan Fund during the year. 
‘‘(C) A description of the financial status 
of the Loan Fund as of the date of submission 
of the plan. 
‘‘(D) The short-term and long-term goals 
of the Loan Fund. 
‘‘(e) USE OF FUNDS.—Amounts deposited in a Loan 
Fund, including loan repayments and interest earned on 
such amounts, shall be used only for awarding loans or 
loan guarantees, making reimbursements described in sub-
section (g)(4)(A), or as a source of reserve and security 
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for leveraged loans, the proceeds of which are deposited 
in the Loan Fund established under subsection (c). Loans 
under this section may be used by a health care provider 
to— 
‘‘(1) facilitate the purchase of certified EHR 
technology; 
‘‘(2) enhance the utilization of certified EHR 
technology; 
‘‘(3) train personnel in the use of such tech-
nology; or 
‘‘(4) improve the secure electronic exchange of 
health information. 
‘‘(f) TYPES OF ASSISTANCE.—Except as otherwise 
limited by applicable State law, amounts deposited into a 
Loan Fund under this section may only be used for the 
following: 
‘‘(1) To award loans that comply with the fol-
lowing: 
‘‘(A) The interest rate for each loan shall 
not exceed the market interest rate. 
‘‘(B) The principal and interest payments 
on each loan shall commence not later than 1 
year after the date the loan was awarded, and 
each loan shall be fully amortized not later than 
10 years after the date of the loan. 
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‘‘(C) The Loan Fund shall be credited with 
all payments of principal and interest on each 
loan awarded from the Loan Fund. 
‘‘(2) To guarantee, or purchase insurance for, 
a local obligation (all of the proceeds of which fi-
nance a project eligible for assistance under this 
subsection) if the guarantee or purchase would im-
prove credit market access or reduce the interest 
rate applicable to the obligation involved. 
‘‘(3) As a source of revenue or security for the 
payment of principal and interest on revenue or gen-
eral obligation bonds issued by the eligible entity if 
the proceeds of the sale of the bonds will be depos-
ited into the Loan Fund. 
‘‘(4) To earn interest on the amounts deposited 
into the Loan Fund. 
‘‘(5) To make reimbursements described in sub-
section (g)(4)(A). 
‘‘(g) ADMINISTRATION OF LOAN FUNDS.— 
‘‘(1) COMBINED FINANCIAL ADMINISTRATION.— 
An eligible entity may (as a convenience and to 
avoid unnecessary administrative costs) combine, in 
accordance with applicable State law, the financial 
administration of a Loan Fund established under 
this subsection with the financial administration of 
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any other revolving fund established by the entity if 
otherwise not prohibited by the law under which the 
Loan Fund was established. 
‘‘(2) COST OF ADMINISTERING FUND.—Each el-
igible entity may annually use not to exceed 4 per-
cent of the funds provided to the entity under a 
grant under this section to pay the reasonable costs 
of the administration of the programs under this 
section, including the recovery of reasonable costs 
expended to establish a Loan Fund which are in-
curred after the date of the enactment of this title. 
‘‘(3) GUIDANCE AND REGULATIONS.—The Na-
tional Coordinator shall publish guidance and pro-
mulgate regulations as may be necessary to carry 
out the provisions of this section, including— 
‘‘(A) provisions to ensure that each eligible 
entity commits and expends funds allotted to 
the entity under this section as efficiently as 
possible in accordance with this title and appli-
cable State laws; and 
‘‘(B) guidance to prevent waste, fraud, and 
abuse. 
‘‘(4) PRIVATE SECTOR CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—A Loan Fund estab-
lished under this section may accept contribu-
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tions from private sector entities, except that 
such entities may not specify the recipient or 
recipients of any loan issued under this sub-
section. An eligible entity may agree to reim-
burse a private sector entity for any contribu-
tion made under this subparagraph, except that 
the amount of such reimbursement may not be 
greater than the principal amount of the con-
tribution made. 
‘‘(B) AVAILABILITY
OF
INFORMATION.— 
An eligible entity shall make publicly available 
the identity of, and amount contributed by, any 
private sector entity under subparagraph (A) 
and may issue letters of commendation or make 
other awards (that have no financial value) to 
any such entity. 
‘‘(h) MATCHING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—The National Coordinator 
may not make a grant under subsection (a) to an el-
igible entity unless the entity agrees to make avail-
able (directly or through donations from public or 
private entities) non-Federal contributions in cash to 
the costs of carrying out the activities for which the 
grant is awarded in an amount equal to not less 
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than $1 for each $5 of Federal funds provided under 
the grant. 
‘‘(2) DETERMINATION
OF
AMOUNT
OF
NON- 
FEDERAL
CONTRIBUTION.—In 
determining 
the 
amount of non-Federal contributions that an eligible 
entity has provided pursuant to subparagraph (A), 
the National Coordinator may not include any 
amounts provided to the entity by the Federal Gov-
ernment. 
‘‘(i) EFFECTIVE DATE.—The Secretary may not 
make an award under this section prior to January 1, 
2010. 
‘‘SEC. 3015. DEMONSTRATION PROGRAM TO INTEGRATE IN-
FORMATION TECHNOLOGY INTO CLINICAL 
EDUCATION. 
‘‘(a) IN GENERAL.—The Secretary may award grants 
under this section to carry out demonstration projects to 
develop academic curricula integrating certified EHR 
technology in the clinical education of health professionals. 
Such awards shall be made on a competitive basis and 
pursuant to peer review. 
‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 
under subsection (a), an entity shall— 
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‘‘(1) submit to the Secretary an application at 
such time, in such manner, and containing such in-
formation as the Secretary may require; 
‘‘(2) submit to the Secretary a strategic plan 
for integrating certified EHR technology in the clin-
ical education of health professionals to reduce med-
ical errors and enhance health care quality; 
‘‘(3) be— 
‘‘(A) a school of medicine, osteopathic 
medicine, dentistry, or pharmacy, a graduate 
program in behavioral or mental health, or any 
other graduate health professions school; 
‘‘(B) a graduate school of nursing or phy-
sician assistant studies; 
‘‘(C) a consortium of two or more schools 
described in subparagraph (A) or (B); or 
‘‘(D) an institution with a graduate med-
ical education program in medicine, osteopathic 
medicine, dentistry, pharmacy, nursing, or phy-
sician assistance studies; 
‘‘(4) provide for the collection of data regarding 
the effectiveness of the demonstration project to be 
funded under the grant in improving the safety of 
patients, the efficiency of health care delivery, and 
in increasing the likelihood that graduates of the 
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grantee will adopt and incorporate certified EHR 
technology, in the delivery of health care services; 
and 
‘‘(5) provide matching funds in accordance with 
subsection (d). 
‘‘(c) USE OF FUNDS.— 
‘‘(1) IN GENERAL.—With respect to a grant 
under subsection (a), an eligible entity shall— 
‘‘(A) use grant funds in collaboration with 
2 or more disciplines; and 
‘‘(B) use grant funds to integrate certified 
EHR technology into community-based clinical 
education. 
‘‘(2) LIMITATION.—An eligible entity shall not 
use amounts received under a grant under sub-
section (a) to purchase hardware, software, or serv-
ices. 
‘‘(d) FINANCIAL SUPPORT.—The Secretary may not 
provide more than 50 percent of the costs of any activity 
for which assistance is provided under subsection (a), ex-
cept in an instance of national economic conditions which 
would render the cost-share requirement under this sub-
section detrimental to the program and upon notification 
to Congress as to the justification to waive the cost-share 
requirement. 
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‘‘(e) EVALUATION.—The Secretary shall take such 
action as may be necessary to evaluate the projects funded 
under this section and publish, make available, and dis-
seminate the results of such evaluations on as wide a basis 
as is practicable. 
‘‘(f) REPORTS.—Not later than 1 year after the date 
of enactment of this title, and annually thereafter, the Sec-
retary shall submit to the Committee on Health, Edu-
cation, Labor, and Pensions and the Committee on Fi-
nance of the Senate, and the Committee on Energy and 
Commerce of the House of Representatives a report 
that— 
‘‘(1) describes the specific projects established 
under this section; and 
‘‘(2) contains recommendations for Congress 
based on the evaluation conducted under subsection 
(e). 
‘‘SEC. 3016. INFORMATION TECHNOLOGY PROFESSIONALS 
ON HEALTH CARE. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the Director of the National Science Foundation, 
shall provide assistance to institutions of higher education 
(or consortia thereof) to establish or expand medical 
health informatics education programs, including certifi-
cation, undergraduate, and masters degree programs, for 
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both health care and information technology students to 
ensure the rapid and effective utilization and development 
of health information technologies (in the United States 
health care infrastructure). 
‘‘(b) ACTIVITIES.—Activities for which assistance 
may be provided under subsection (a) may include the fol-
lowing: 
‘‘(1) Developing and revising curricula in med-
ical health informatics and related disciplines. 
‘‘(2) Recruiting and retaining students to the 
program involved. 
‘‘(3) Acquiring equipment necessary for student 
instruction in these programs, including the installa-
tion of testbed networks for student use. 
‘‘(4) Establishing or enhancing bridge programs 
in the health informatics fields between community 
colleges and universities. 
‘‘(c) PRIORITY.—In providing assistance under sub-
section (a), the Secretary shall give preference to the fol-
lowing: 
‘‘(1) Existing education and training programs. 
‘‘(2) Programs designed to be completed in less 
than six months. 
‘‘(d) FINANCIAL SUPPORT.—The Secretary may not 
provide more than 50 percent of the costs of any activity 
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for which assistance is provided under subsection (a), ex-
cept in an instance of national economic conditions which 
would render the cost-share requirement under this sub-
section detrimental to the program and upon notification 
to Congress as to the justification to waive the cost-share 
requirement. 
‘‘SEC. 3017. GENERAL GRANT AND LOAN PROVISIONS. 
‘‘(a) REPORTS.—The Secretary may require that an 
entity receiving assistance under this subtitle shall submit 
to the Secretary, not later than the date that is 1 year 
after the date of receipt of such assistance, a report that 
includes— 
‘‘(1) an analysis of the effectiveness of the ac-
tivities for which the entity receives such assistance, 
as compared to the goals for such activities; and 
‘‘(2) an analysis of the impact of the project on 
health care quality and safety. 
‘‘(b) REQUIREMENT TO IMPROVE QUALITY OF CARE 
AND DECREASE IN COSTS.—The National Coordinator 
shall annually evaluate the activities conducted under this 
subtitle and shall, in awarding grants, implement the les-
sons learned from such evaluation in a manner so that 
awards made subsequent to each such evaluation are made 
in a manner that, in the determination of the National 
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Coordinator, will result in the greatest improvement in the 
quality and efficiency of health care. 
‘‘SEC. 3018. AUTHORIZATION FOR APPROPRIATIONS. 
‘‘For the purposes of carrying out this subtitle, there 
is authorized to be appropriated such sums as may be nec-
essary for each of the fiscal years 2009 through 2013. 
Amounts so appropriated shall remain available until ex-
pended.’’. 
PART II—MEDICARE PROGRAM 
SEC. 4311. INCENTIVES FOR ELIGIBLE PROFESSIONALS. 
(a) INCENTIVE PAYMENTS.—Section 1848 of the So-
cial Security Act (42 U.S.C. 1395w–4) is amended by add-
ing at the end the following new subsection: 
‘‘(o) INCENTIVES FOR ADOPTION AND MEANINGFUL 
USE OF CERTIFIED EHR TECHNOLOGY.— 
‘‘(1) INCENTIVE PAYMENTS.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding subparagraphs of this paragraph, with 
respect to covered professional services fur-
nished by an eligible professional during a pay-
ment year (as defined in subparagraph (E)), if 
the eligible professional is a meaningful EHR 
user (as determined under paragraph (2)) for 
the reporting period with respect to such year, 
in addition to the amount otherwise paid under 
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this part, there also shall be paid to the eligible 
professional (or to an employer or facility in the 
cases described in clause (A) of section 
1842(b)(6)), from the Federal Supplementary 
Medical Insurance Trust Fund established 
under section 1841 an amount equal to 75 per-
cent of the Secretary’s estimate (based on 
claims submitted not later than 2 months after 
the end of the payment year) of the allowed 
charges under this part for all such covered 
professional services furnished by the eligible 
professional during such year. 
‘‘(B) LIMITATIONS
ON
AMOUNTS
OF
IN-
CENTIVE PAYMENTS.— 
‘‘(i) IN GENERAL.—In no case shall 
the amount of the incentive payment pro-
vided under this paragraph for an eligible 
professional for a payment year exceed the 
applicable amount specified under this sub-
paragraph with respect to such eligible 
professional and such year. 
‘‘(ii) AMOUNT.—Subject to clause 
(iii), the applicable amount specified in this 
subparagraph for an eligible professional is 
as follows: 
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‘‘(I) For the first payment year 
for such professional, $15,000. 
‘‘(II) For the second payment 
year for such professional, $12,000. 
‘‘(III) For the third payment 
year for such professional, $8,000. 
‘‘(IV) For the fourth payment 
year for such professional, $4,000. 
‘‘(V) For the fifth payment year 
for such professional, $2,000. 
‘‘(VI) For any succeeding pay-
ment year for such professional, $0. 
‘‘(iii) PHASE
DOWN
FOR
ELIGIBLE 
PROFESSIONALS
FIRST
ADOPTING
EHR 
AFTER 2013.—If the first payment year for 
an eligible professional is after 2013, then 
the amount specified in this subparagraph 
for a payment year for such professional is 
the same as the amount specified in clause 
(ii) for such payment year for an eligible 
professional whose first payment year is 
2013. If the first payment year for an eli-
gible professional is after 2015 then the 
applicable amount specified in this sub-
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paragraph for such professional for such 
year and any subsequent year shall be $0. 
‘‘(C) NON-APPLICATION
TO
HOSPITAL- 
BASED ELIGIBLE PROFESSIONALS.— 
‘‘(i) IN GENERAL.—No incentive pay-
ment may be made under this paragraph 
in the case of a hospital-based eligible pro-
fessional. 
‘‘(ii) HOSPITAL-BASED ELIGIBLE PRO-
FESSIONAL.—For purposes of clause (i), 
the term ‘hospital-based eligible profes-
sional’ means, with respect to covered pro-
fessional services furnished by an eligible 
professional during the reporting period for 
a payment year, an eligible professional, 
such as a pathologist, anesthesiologist, or 
emergency physician, who furnishes sub-
stantially all of such services in a hospital 
setting (whether inpatient or outpatient) 
and through the use of the facilities and 
equipment, including computer equipment, 
of the hospital. 
‘‘(D) PAYMENT.— 
‘‘(i) FORM OF PAYMENT.—The pay-
ment under this paragraph may be in the 
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form of a single consolidated payment or 
in the form of such periodic installments 
as the Secretary may specify. 
‘‘(ii) COORDINATION OF APPLICATION 
OF
LIMITATION
FOR
PROFESSIONALS
IN 
DIFFERENT PRACTICES.—In the case of an 
eligible professional furnishing covered pro-
fessional services in more than one practice 
(as specified by the Secretary), the Sec-
retary shall establish rules to coordinate 
the incentive payments, including the ap-
plication of the limitation on amounts of 
such incentive payments under this para-
graph, among such practices. 
‘‘(iii) 
COORDINATION
WITH
MED-
ICAID.—The Secretary shall seek, to the 
maximum extent practicable, to avoid du-
plicative requirements from Federal and 
State Governments to demonstrate mean-
ingful use of certified EHR technology 
under this title and title XIX. The Sec-
retary may also adjust the reporting peri-
ods under such title and such subsections 
in order to carry out this clause. 
‘‘(E) PAYMENT YEAR DEFINED.— 
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‘‘(i) MEANINGFUL USE OF CERTIFIED 
EHR
TECHNOLOGY.—The eligible profes-
sional demonstrates to the satisfaction of 
the Secretary, in accordance with subpara-
graph (C)(i), that during such period the 
professional is using certified EHR tech-
nology in a meaningful manner, which 
shall include the use of electronic pre-
scribing as determined to be appropriate 
by the Secretary. 
‘‘(ii) INFORMATION EXCHANGE.—The 
eligible professional demonstrates to the 
satisfaction of the Secretary, in accordance 
with subparagraph (C)(i), that during such 
period such certified EHR technology is 
connected in a manner that provides, in 
accordance with law and standards appli-
cable to the exchange of information, for 
the electronic exchange of health informa-
tion to improve the quality of health care, 
such as promoting care coordination. 
‘‘(iii) 
REPORTING
ON
MEASURES 
USING
EHR.—Subject to subparagraph 
(B)(ii) and using such certified EHR tech-
nology, the eligible professional submits in-
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formation for such period, in a form and 
manner specified by the Secretary, on such 
clinical quality measures and such other 
measures as selected by the Secretary 
under subparagraph (B)(i). 
The Secretary may provide for the use of alter-
native means for meeting the requirements of 
clauses (i), (ii), and (iii) in the case of an eligi-
ble professional furnishing covered professional 
services in a group practice (as defined by the 
Secretary). The Secretary shall seek to improve 
the use of electronic health records and health 
care quality over time by requiring more strin-
gent measures of meaningful use selected under 
this paragraph. 
‘‘(B) REPORTING ON MEASURES.— 
‘‘(i) SELECTION.—The Secretary shall 
select measures for purposes of subpara-
graph (A)(iii) but only consistent with the 
following: 
‘‘(I) The Secretary shall provide 
preference to clinical quality measures 
that have been endorsed by the entity 
with a contract with the Secretary 
under section 1890(a). 
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‘‘(II) Prior to any measure being 
selected under this subparagraph, the 
Secretary shall publish in the Federal 
Register such measure and provide for 
a period of public comment on such 
measure. 
‘‘(ii) 
LIMITATION.—The 
Secretary 
may not require the electronic reporting of 
information on clinical quality measures 
under subparagraph (A)(iii) unless the 
Secretary has the capacity to accept the in-
formation electronically, which may be on 
a pilot basis. 
‘‘(iii) COORDINATION OF REPORTING 
OF
INFORMATION.—In 
selecting 
such 
measures, and in establishing the form and 
manner for reporting measures under sub-
paragraph (A)(iii), the Secretary shall seek 
to avoid redundant or duplicative reporting 
otherwise required, including reporting 
under subsection (k)(2)(C). 
‘‘(C) DEMONSTRATION
OF
MEANINGFUL 
USE OF CERTIFIED EHR TECHNOLOGY AND IN-
FORMATION EXCHANGE.— 
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‘‘(i) IN
GENERAL.—A professional 
may satisfy the demonstration requirement 
of clauses (i) and (ii) of subparagraph (A) 
through means specified by the Secretary, 
which may include— 
‘‘(I) an attestation; 
‘‘(II) the submission of claims 
with appropriate coding (such as a 
code indicating that a patient encoun-
ter was documented using certified 
EHR technology); 
‘‘(III) a survey response; 
‘‘(IV) reporting under subpara-
graph (A)(iii); and 
‘‘(V) other means specified by the 
Secretary. 
‘‘(ii) USE
OF
PART
D
DATA.—Not-
withstanding sections 1860D–15(d)(2)(B) 
and 1860D–15(f)(2), the Secretary may 
use data regarding drug claims submitted 
for purposes of section 1860D–15 that are 
necessary for purposes of subparagraph 
(A). 
‘‘(3) APPLICATION.— 
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‘‘(A) 
PHYSICIAN
REPORTING
SYSTEM 
RULES.—Paragraphs (5), (6), and (8) of sub-
section (k) shall apply for purposes of this sub-
section in the same manner as they apply for 
purposes of such subsection. 
‘‘(B) COORDINATION
WITH
OTHER
PAY-
MENTS.—The provisions of this subsection shall 
not be taken into account in applying the provi-
sions of subsection (m) of this section and of 
section 1833(m) and any payment under such 
provisions shall not be taken into account in 
computing allowable charges under this sub-
section. 
‘‘(C) LIMITATIONS
ON
REVIEW.—There 
shall be no administrative or judicial review 
under section 1869, section 1878, or otherwise 
of the determination of any incentive payment 
under this subsection and the payment adjust-
ment under subsection (a)(7), including the de-
termination of a meaningful EHR user under 
paragraph (2), a limitation under paragraph 
(1)(B), and the exception under subsection 
(a)(7)(B). 
‘‘(D) POSTING
ON
WEBSITE.—The Sec-
retary shall post on the Internet website of the 
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Centers for Medicare & Medicaid Services, in an 
easily understandable format, a list of the 
names, business addresses, and business phone 
numbers of the eligible professionals who are 
meaningful EHR users and, as determined ap-
propriate by the Secretary, of group practices 
receiving incentive payments under paragraph 
(1). 
‘‘(4) CERTIFIED EHR TECHNOLOGY DEFINED.— 
For purposes of this section, the term ‘certified 
EHR technology’ means a qualified electronic health 
record (as defined in 3000(13) of the Public Health 
Service Act) that is certified pursuant to section 
3001(c)(5) of such Act as meeting standards adopt-
ed under section 3004 of such Act that are applica-
ble to the type of record involved (as determined by 
the Secretary, such as an ambulatory electronic 
health record for office-based physicians or an inpa-
tient hospital electronic health record for hospitals). 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) 
COVERED
PROFESSIONAL
SERV-
ICES.—The term ‘covered professional services’ 
has the meaning given such term in subsection 
(k)(3). 
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‘‘(B) ELIGIBLE PROFESSIONAL.—The term 
‘eligible professional’ means a physician, as de-
fined in section 1861(r). 
‘‘(C) REPORTING PERIOD.—The term ‘re-
porting period’ means any period (or periods), 
with respect to a payment year, as specified by 
the Secretary.’’. 
(b) INCENTIVE PAYMENT ADJUSTMENT.—Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w– 
4(a)) is amended by adding at the end the following new 
paragraph: 
‘‘(7) INCENTIVES
FOR
MEANINGFUL
USE
OF 
CERTIFIED EHR TECHNOLOGY.— 
‘‘(A) ADJUSTMENT.— 
‘‘(i) IN
GENERAL.—Subject to sub-
paragraphs (B) and (D), with respect to 
covered professional services furnished by 
an eligible professional during 2016 or any 
subsequent payment year, if the eligible 
professional is not a meaningful EHR user 
(as determined under subsection (o)(2)) for 
a reporting period for the year, the fee 
schedule amount for such services fur-
nished by such professional during the year 
(including the fee schedule amount for pur-
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poses of determining a payment based on 
such amount) shall be equal to the applica-
ble percent of the fee schedule amount that 
would otherwise apply to such services 
under this subsection (determined after ap-
plication of paragraph (3) but without re-
gard to this paragraph). 
‘‘(ii) APPLICABLE PERCENT.—Subject 
to clause (iii), for purposes of clause (i), 
the term ‘applicable percent’ means— 
‘‘(I) for 2016, 99 percent; 
‘‘(II) for 2017, 98 percent; and 
‘‘(III) for 2018 and each subse-
quent year, 97 percent. 
‘‘(iii) AUTHORITY TO DECREASE AP-
PLICABLE
PERCENTAGE
FOR
2019
AND 
SUBSEQUENT YEARS.—For 2019 and each 
subsequent year, if the Secretary finds that 
the proportion of eligible professionals who 
are meaningful EHR users (as determined 
under subsection (o)(2)) is less than 75 
percent, the applicable percent shall be de-
creased by 1 percentage point from the ap-
plicable percent in the preceding year, but 
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485 
in no case shall the applicable percent be 
less than 95 percent. 
‘‘(B) 
SIGNIFICANT
HARDSHIP
EXCEP-
TION.—The Secretary may, on a case-by-case 
basis, exempt an eligible professional from the 
application of the payment adjustment under 
subparagraph (A) if the Secretary determines, 
subject to annual renewal, that compliance with 
the requirement for being a meaningful EHR 
user would result in a significant hardship, such 
as in the case of an eligible professional who 
practices in a rural area without sufficient 
Internet access. In no case may an eligible pro-
fessional be granted an exemption under this 
subparagraph for more than 5 years. 
‘‘(C) APPLICATION OF PHYSICIAN REPORT-
ING SYSTEM RULES.—Paragraphs (5), (6), and 
(8) of subsection (k) shall apply for purposes of 
this paragraph in the same manner as they 
apply for purposes of such subsection. 
‘‘(D) NON-APPLICATION
TO
HOSPITAL- 
BASED
ELIGIBLE
PROFESSIONALS.—No pay-
ment adjustment may be made under subpara-
graph (A) in the case of hospital-based eligible 
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486 
professionals 
(as 
defined 
in 
subsection 
(o)(1)(C)(ii)). 
‘‘(E) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) COVERED
PROFESSIONAL
SERV-
ICES.—The 
term 
‘covered 
professional 
services’ has the meaning given such term 
in subsection (k)(3). 
‘‘(ii) ELIGIBLE PROFESSIONAL.—The 
term ‘eligible professional’ means a physi-
cian, as defined in section 1861(r). 
‘‘(iii) REPORTING PERIOD.—The term 
‘reporting period’ means, with respect to a 
year, a period specified by the Secretary.’’. 
(c) APPLICATION
TO CERTAIN HMO-AFFILIATED 
ELIGIBLE PROFESSIONALS.—Section 1853 of the Social 
Security Act (42 U.S.C. 1395w–23) is amended by adding 
at the end the following new subsection: 
‘‘(l) APPLICATION OF ELIGIBLE PROFESSIONAL IN-
CENTIVES FOR CERTAIN MA ORGANIZATIONS FOR ADOP-
TION AND MEANINGFUL USE OF CERTIFIED EHR TECH-
NOLOGY.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (3) 
and (4), in the case of a qualifying MA organization, 
the provisions of sections 1848(o) and 1848(a)(7) 
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487 
shall apply with respect to eligible professionals de-
scribed in paragraph (2) of the organization who the 
organization attests under paragraph (6) to be 
meaningful EHR users in a similar manner as they 
apply to eligible professionals under such sections. 
Incentive payments under paragraph (3) shall be 
made to and payment adjustments under paragraph 
(4) shall apply to such qualifying organizations. 
‘‘(2) ELIGIBLE
PROFESSIONAL
DESCRIBED.— 
With respect to a qualifying MA organization, an eli-
gible professional described in this paragraph is an 
eligible professional (as defined for purposes of sec-
tion 1848(o)) who— 
‘‘(A)(i) is employed by the organization; or 
‘‘(ii)(I) is employed by, or is a partner of, 
an entity that through contract with the organi-
zation furnishes at least 80 percent of the enti-
ty’s patient care services to enrollees of such or-
ganization; and 
‘‘(II) furnishes at least 80 percent of the 
professional services of the eligible professional 
to enrollees of the organization; and 
‘‘(B) furnishes, on average, at least 20 
hours per week of patient care services. 
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488 
‘‘(3) ELIGIBLE PROFESSIONAL INCENTIVE PAY-
MENTS.— 
‘‘(A) IN
GENERAL.—In applying section 
1848(o) under paragraph (1), instead of the ad-
ditional 
payment 
amount 
under 
section 
1848(o)(1)(A) and subject to subparagraph 
(B), the Secretary may substitute an amount 
determined by the Secretary to the extent fea-
sible and practical to be similar to the esti-
mated amount in the aggregate that would be 
payable if payment for services furnished by 
such professionals was payable under part B in-
stead of this part. 
‘‘(B) AVOIDING
DUPLICATION
OF
PAY-
MENTS.— 
‘‘(i) IN GENERAL.—If an eligible pro-
fessional described in paragraph (2) is eli-
gible for the maximum incentive payment 
under section 1848(o)(1)(A) for the same 
payment period, the payment incentive 
shall be made only under such section and 
not under this subsection. 
‘‘(ii) METHODS.—In the case of an el-
igible professional described in paragraph 
(2) who is eligible for an incentive payment 
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489 
under section 1848(o)(1)(A) but is not de-
scribed in clause (i) for the same payment 
period, the Secretary shall develop a proc-
ess— 
‘‘(I) to ensure that duplicate pay-
ments are not made with respect to 
an eligible professional both under 
this subsection and under section 
1848(o)(1)(A); and 
‘‘(II) to collect data from Medi-
care Advantage organizations to en-
sure against such duplicate payments. 
‘‘(C) FIXED SCHEDULE FOR APPLICATION 
OF LIMITATION ON INCENTIVE PAYMENTS FOR 
ALL
ELIGIBLE
PROFESSIONALS.—In applying 
section 1848(o)(1)(B)(ii) under subparagraph 
(A), in accordance with rules specified by the 
Secretary, a qualifying MA organization shall 
specify a year (not earlier than 2011) that shall 
be treated as the first payment year for all eli-
gible professionals with respect to such organi-
zation. 
‘‘(4) PAYMENT ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In applying section 
1848(a)(7) under paragraph (1), instead of the 
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490 
payment adjustment being an applicable per-
cent of the fee schedule amount for a year 
under such section, subject to subparagraph 
(D), the payment adjustment under paragraph 
(1) shall be equal to the percent specified in 
subparagraph (B) for such year of the payment 
amount otherwise provided under this section 
for such year. 
‘‘(B) SPECIFIED
PERCENT.—The percent 
specified under this subparagraph for a year is 
100 percent minus a number of percentage 
points equal to the product of— 
‘‘(i) the number of percentage points 
by which the applicable percent (under sec-
tion 1848(a)(7)(A)(ii)) for the year is less 
than 100 percent; and 
‘‘(ii) the Medicare physician expendi-
ture proportion specified in subparagraph 
(C) for the year. 
‘‘(C) MEDICARE PHYSICIAN EXPENDITURE 
PROPORTION.—The Medicare physician expend-
iture proportion under this subparagraph for a 
year is the Secretary’s estimate of the propor-
tion, of the expenditures under parts A and B 
that are not attributable to this part, that are 
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491 
attributable to expenditures for physicians’ 
services. 
‘‘(D) APPLICATION OF PAYMENT ADJUST-
MENT.—In the case that a qualifying MA orga-
nization attests that not all eligible profes-
sionals are meaningful EHR users with respect 
to a year, the Secretary shall apply the payment 
adjustment under this paragraph based on the 
proportion of such eligible professionals that are 
not meaningful EHR users for such year. 
‘‘(5) 
QUALIFYING
MA
ORGANIZATION
DE-
FINED.—In this subsection and subsection (m), the 
term ‘qualifying MA organization’ means a Medicare 
Advantage organization that is organized as a health 
maintenance organization (as defined in section 
2791(b)(3) of the Public Health Service Act). 
‘‘(6) MEANINGFUL EHR USER ATTESTATION.— 
For purposes of this subsection and subsection (m), 
a qualifying MA organization shall submit an attes-
tation, in a form and manner specified by the Sec-
retary which may include the submission of such at-
testation as part of submission of the initial bid 
under section 1854(a)(1)(A)(iv), identifying— 
‘‘(A) whether each eligible professional de-
scribed in paragraph (2), with respect to such 
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492 
organization is a meaningful EHR user (as de-
fined in section 1848(o)(2)) for a year specified 
by the Secretary; and 
‘‘(B) whether each eligible hospital de-
scribed in subsection (m)(1), with respect to 
such organization, is a meaningful EHR user 
(as defined in section 1886(n)(3)) for an appli-
cable period specified by the Secretary.’’. 
(d) CONFORMING AMENDMENTS.—Section 1853 of 
the Social Security Act (42 U.S.C. 1395w–23) is amend-
ed— 
(1) in subsection (a)(1)(A), by striking ‘‘and 
(i)’’ and inserting ‘‘(i), and (l)’’; 
(2) in subsection (c)— 
(A) in paragraph (1)(D)(i), by striking 
‘‘section 1886(h)’’ and inserting ‘‘sections 
1848(o) and 1886(h)’’; and 
(B) in paragraph (6)(A), by inserting after 
‘‘under part B,’’ the following: ‘‘excluding ex-
penditures attributable to subsections (a)(7) 
and (o) of section 1848,’’; and 
(3) in subsection (f), by inserting ‘‘and for pay-
ments under subsection (l)’’ after ‘‘with the organi-
zation’’. 
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(e) 
CONFORMING
AMENDMENTS
TO
E-PRE-
SCRIBING.— 
(1) Section 1848(a)(5)(A) of the Social Security 
Act (42 U.S.C. 1395w–4(a)(5)(A)) is amended— 
(A) in clause (i), by striking ‘‘or any sub-
sequent year’’ and inserting ‘‘, 2013, 2014, or 
2015’’; and 
(B) in clause (ii), by striking ‘‘and each 
subsequent year’’ and inserting ‘‘and 2015’’. 
(2) Section 1848(m)(2) of such Act (42 U.S.C. 
1395w–4(m)(2)) is amended— 
(A) in subparagraph (A), by striking ‘‘For 
2009’’ and inserting ‘‘Subject to subparagraph 
(D), for 2009’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(D) LIMITATION WITH RESPECT TO EHR 
INCENTIVE PAYMENTS.—The provisions of this 
paragraph shall not apply to an eligible profes-
sional (or, in the case of a group practice under 
paragraph (3)(C), to the group practice) if, for 
the reporting period the eligible professional (or 
group practice) receives an incentive payment 
under subsection (o)(1)(A) with respect to a 
certified EHR technology (as defined in sub-
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494 
section (o)(4)) that has the capability of elec-
tronic prescribing.’’. 
SEC. 4312. INCENTIVES FOR HOSPITALS. 
(a) INCENTIVE PAYMENT.—Section 1886 of the So-
cial Security Act (42 U.S.C. 1395ww) is amended by add-
ing at the end the following new subsection: 
‘‘(n) INCENTIVES FOR ADOPTION AND MEANINGFUL 
USE OF CERTIFIED EHR TECHNOLOGY.— 
‘‘(1) IN GENERAL.—Subject to the succeeding 
provisions of this subsection, with respect to inpa-
tient hospital services furnished by an eligible hos-
pital during a payment year (as defined in para-
graph (2)(G)), if the eligible hospital is a meaningful 
EHR user (as determined under paragraph (3)) for 
the reporting period with respect to such year, in ad-
dition to the amount otherwise paid under this sec-
tion, there also shall be paid to the eligible hospital, 
from the Federal Hospital Insurance Trust Fund es-
tablished under section 1817, an amount equal to 
the applicable amount specified in paragraph (2)(A) 
for the hospital for such payment year. 
‘‘(2) PAYMENT AMOUNT.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding subparagraphs of this paragraph, the 
applicable amount specified in this subpara-
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496 
gardless of any source of payment) for the pe-
riod, for each discharge up to the 23,000th dis-
charge as follows: 
‘‘(i) For the 1,150th through the 
23,000th discharge, $200. 
‘‘(ii) For any discharge greater than 
the 23,000th, $0. 
‘‘(D) MEDICARE
SHARE.—The Medicare 
share specified under this subparagraph for a 
hospital for a period selected by the Secretary 
for a payment year is equal to the fraction— 
‘‘(i) the numerator of which is the 
sum (for such period and with respect to 
the hospital) of— 
‘‘(I) the number of inpatient-bed- 
days (as established by the Secretary) 
which are attributable to individuals 
with respect to whom payment may be 
made under part A; and 
‘‘(II) the number of inpatient- 
bed-days (as so established) which are 
attributable to individuals who are en-
rolled with a Medicare Advantage or-
ganization under part C; and 
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‘‘(ii) the denominator of which is the 
product of— 
‘‘(I) the total number of inpa-
tient-bed-days with respect to the hos-
pital during such period; and 
‘‘(II) the total amount of the hos-
pital’s charges during such period, not 
including any charges that are attrib-
utable to charity care (as such term is 
used for purposes of hospital cost re-
porting under this title), divided by 
the total amount of the hospital’s 
charges during such period. 
Insofar as the Secretary determines that data 
are not available on charity care necessary to 
calculate the portion of the formula specified in 
clause (ii)(II), the Secretary shall use data on 
uncompensated care and may adjust such data 
so as to be an appropriate proxy for charity 
care including a downward adjustment to elimi-
nate bad debt data from uncompensated care 
data. In the absence of the data necessary, with 
respect to a hospital, for the Secretary to com-
pute the amount described in clause (ii)(II), the 
amount under such clause shall be deemed to 
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be 1. In the absence of data, with respect to a 
hospital, necessary to compute the amount de-
scribed in clause (i)(II), the amount under such 
clause shall be deemed to be 0. 
‘‘(E) TRANSITION FACTOR SPECIFIED.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the transition factor specified in this 
subparagraph for an eligible hospital for a 
payment year is as follows: 
‘‘(I) For the first payment year 
for such hospital, 1. 
‘‘(II) For the second payment 
year for such hospital, 3⁄4. 
‘‘(III) For the third payment 
year for such hospital, 1⁄2. 
‘‘(IV) For the fourth payment 
year for such hospital, 1⁄4. 
‘‘(V) For any succeeding pay-
ment year for such hospital, 0. 
‘‘(ii) PHASE
DOWN
FOR
ELIGIBLE 
HOSPITALS FIRST ADOPTING EHR AFTER 
2013.—If the first payment year for an eli-
gible hospital is after 2013, then the tran-
sition factor specified in this subparagraph 
for a payment year for such hospital is the 
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same as the amount specified in clause (i) 
for such payment year for an eligible hos-
pital for which the first payment year is 
2013. If the first payment year for an eli-
gible hospital is after 2015 then the transi-
tion factor specified in this subparagraph 
for such hospital and for such year and 
any subsequent year shall be 0. 
‘‘(F) FORM OF PAYMENT.—The payment 
under this subsection for a payment year may 
be in the form of a single consolidated payment 
or in the form of such periodic installments as 
the Secretary may specify. 
‘‘(G) PAYMENT YEAR DEFINED.— 
‘‘(i) IN
GENERAL.—For purposes of 
this subsection, the term ‘payment year’ 
means a fiscal year beginning with fiscal 
year 2011. 
‘‘(ii) FIRST, SECOND, ETC. PAYMENT 
YEAR.—The term ‘first payment year’ 
means, with respect to inpatient hospital 
services furnished by an eligible hospital, 
the first fiscal year for which an incentive 
payment is made for such services under 
this subsection. The terms ‘second pay-
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ment year’, ‘third payment year’, and 
‘fourth payment year’ mean, with respect 
to an eligible hospital, each successive year 
immediately following the first payment 
year for that hospital. 
‘‘(3) MEANINGFUL EHR USER.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), an eligible hospital shall be treated 
as a meaningful EHR user for a reporting pe-
riod for a payment year (or, for purposes of 
subsection (b)(3)(B)(ix), for a reporting period 
under such subsection for a fiscal year) if each 
of the following requirements are met: 
‘‘(i) MEANINGFUL USE OF CERTIFIED 
EHR TECHNOLOGY.—The eligible hospital 
demonstrates to the satisfaction of the Sec-
retary, in accordance with subparagraph 
(C)(i), that during such period the hospital 
is using certified EHR technology in a 
meaningful manner. 
‘‘(ii) INFORMATION EXCHANGE.—The 
eligible hospital demonstrates to the satis-
faction of the Secretary, in accordance 
with subparagraph (C)(i), that during such 
period such certified EHR technology is 
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501 
connected in a manner that provides, in 
accordance with law and standards appli-
cable to the exchange of information, for 
the electronic exchange of health informa-
tion to improve the quality of health care, 
such as promoting care coordination. 
‘‘(iii) 
REPORTING
ON
MEASURES 
USING
EHR.—Subject to subparagraph 
(B)(ii) and using such certified EHR tech-
nology, the eligible hospital submits infor-
mation for such period, in a form and 
manner specified by the Secretary, on such 
clinical quality measures and such other 
measures as selected by the Secretary 
under subparagraph (B)(i). 
The Secretary shall seek to improve the use of 
electronic health records and health care quality 
over time by requiring more stringent measures 
of meaningful use selected under this para-
graph. 
‘‘(B) REPORTING ON MEASURES.— 
‘‘(i) SELECTION.—The Secretary shall 
select measures for purposes of subpara-
graph (A)(iii) but only consistent with the 
following: 
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502 
‘‘(I) The Secretary shall provide 
preference to clinical quality measures 
that have been selected for purposes 
of applying subsection (b)(3)(B)(viii) 
or that have been endorsed by the en-
tity with a contract with the Secretary 
under section 1890(a). 
‘‘(II) Prior to any measure (other 
than a clinical quality measure that 
has been selected for purposes of ap-
plying 
subsection 
(b)(3)(B)(viii)) 
being selected under this subpara-
graph, the Secretary shall publish in 
the Federal Register such measure 
and provide for a period of public 
comment on such measure. 
‘‘(ii) LIMITATIONS.—The Secretary 
may not require the electronic reporting of 
information on clinical quality measures 
under subparagraph (A)(iii) unless the 
Secretary has the capacity to accept the in-
formation electronically, which may be on 
a pilot basis. 
‘‘(iii) COORDINATION OF REPORTING 
OF
INFORMATION.—In 
selecting 
such 
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503 
measures, and in establishing the form and 
manner for reporting measures under sub-
paragraph (A)(iii), the Secretary shall seek 
to avoid redundant or duplicative reporting 
with reporting otherwise required, includ-
ing 
reporting 
under 
subsection 
(b)(3)(B)(viii). 
‘‘(C) DEMONSTRATION
OF
MEANINGFUL 
USE OF CERTIFIED EHR TECHNOLOGY AND IN-
FORMATION EXCHANGE.— 
‘‘(i) IN
GENERAL.—A hospital may 
satisfy the demonstration requirement of 
clauses (i) and (ii) of subparagraph (A) 
through means specified by the Secretary, 
which may include— 
‘‘(I) an attestation; 
‘‘(II) the submission of claims 
with appropriate coding (such as a 
code indicating that inpatient care 
was documented using certified EHR 
technology); 
‘‘(III) a survey response; 
‘‘(IV) reporting under subpara-
graph (A)(iii); and 
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504 
‘‘(V) other means specified by the 
Secretary. 
‘‘(ii) USE
OF
PART
D
DATA.—Not-
withstanding sections 1860D–15(d)(2)(B) 
and 1860D–15(f)(2), the Secretary may 
use data regarding drug claims submitted 
for purposes of section 1860D–15 that are 
necessary for purposes of subparagraph 
(A). 
‘‘(4) APPLICATION.— 
‘‘(A) LIMITATIONS
ON
REVIEW.—There 
shall be no administrative or judicial review 
under section 1869, section 1878, or otherwise 
of the determination of any incentive payment 
under this subsection and the payment adjust-
ment under subsection (b)(3)(B)(ix), including 
the determination of a meaningful EHR user 
under paragraph (3), determination of meas-
ures applicable to services furnished by eligible 
hospitals under this subsection, and the excep-
tion under subsection (b)(3)(B)(ix)(II). 
‘‘(B) POSTING
ON
WEBSITE.—The Sec-
retary shall post on the Internet website of the 
Centers for Medicare & Medicaid Services, in an 
easily understandable format, a list of the 
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505 
names of the eligible hospitals that are mean-
ingful EHR users under this subsection or sub-
section (b)(3)(B)(ix) and other relevant data as 
determined appropriate by the Secretary. The 
Secretary shall ensure that a hospital has the 
opportunity to review the other relevant data 
that are to be made public with respect to the 
hospital prior to such data being made public. 
‘‘(5) CERTIFIED EHR TECHNOLOGY DEFINED.— 
The term ‘certified EHR technology’ has the mean-
ing given such term in section 1848(o)(4). 
‘‘(6) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ELIGIBLE HOSPITAL.—The term ‘eli-
gible hospital’ means a subsection (d) hospital. 
‘‘(B) REPORTING PERIOD.—The term ‘re-
porting period’ means any period (or periods), 
with respect to a payment year, as specified by 
the Secretary.’’. 
(b) INCENTIVE MARKET BASKET ADJUSTMENT.— 
Section 1886(b)(3)(B) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)(B)) is amended— 
(1) in clause (viii)(I), by inserting ‘‘(or, begin-
ning with fiscal year 2016, by one-quarter)’’ after 
‘‘2.0 percentage points’’; and 
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506 
(2) by adding at the end the following new 
clause: 
‘‘(ix)(I) For purposes of clause (i) for fiscal year 
2016 and each subsequent fiscal year, in the case of an 
eligible hospital (as defined in subsection (n)(6)(A)) that 
is not a meaningful EHR user (as defined in subsection 
(n)(3)) for the reporting period for such fiscal year, three- 
quarters of the applicable percentage increase otherwise 
applicable under clause (i) for such fiscal year shall be 
reduced by 331⁄3 percent for fiscal year 2016, 662⁄3 per-
cent for fiscal year 2017, and 100 percent for fiscal year 
2018 and each subsequent fiscal year. Such reduction 
shall apply only with respect to the fiscal year involved 
and the Secretary shall not take into account such reduc-
tion in computing the applicable percentage increase under 
clause (i) for a subsequent fiscal year. 
‘‘(II) The Secretary may, on a case-by-case basis, ex-
empt a subsection (d) hospital from the application of sub-
clause (I) with respect to a fiscal year if the Secretary 
determines, subject to annual renewal, that requiring such 
hospital to be a meaningful EHR user during such fiscal 
year would result in a significant hardship, such as in the 
case of a hospital in a rural area without sufficient Inter-
net access. In no case may a hospital be granted an ex-
emption under this subclause for more than 5 years. 
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‘‘(III) For fiscal year 2016 and each subsequent fis-
cal year, a State in which hospitals are paid for services 
under section 1814(b)(3) shall adjust the payments to 
each subsection (d) hospital in the State that is not a 
meaningful EHR user (as defined in subsection (n)(3)) 
in a manner that is designed to result in an aggregate 
reduction in payments to hospitals in the State that is 
equivalent to the aggregate reduction that would have oc-
curred if payments had been reduced to each subsection 
(d) hospital in the State in a manner comparable to the 
reduction under the previous provisions of this clause. The 
State shall report to the Secretary the methodology it will 
use to make the payment adjustment under the previous 
sentence. 
‘‘(IV) For purposes of this clause, the term ‘reporting 
period’ means, with respect to a fiscal year, any period 
(or periods), with respect to the fiscal year, as specified 
by the Secretary.’’. 
(c) APPLICATION
TO CERTAIN HMO-AFFILIATED 
ELIGIBLE HOSPITALS.—Section 1853 of the Social Secu-
rity Act (42 U.S.C. 1395w–23), as amended by section 
4311(c), is further amended by adding at the end the fol-
lowing new subsection: 
‘‘(m) APPLICATION OF ELIGIBLE HOSPITAL INCEN-
TIVES FOR CERTAIN MA ORGANIZATIONS FOR ADOPTION 
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AND MEANINGFUL USE
OF CERTIFIED EHR TECH-
NOLOGY.— 
‘‘(1) APPLICATION.—Subject to paragraphs (3) 
and (4), in the case of a qualifying MA organization, 
the 
provisions 
of 
sections 
1886(n) 
and 
1886(b)(3)(B)(ix) shall apply with respect to eligible 
hospitals described in paragraph (2) of the organiza-
tion which the organization attests under subsection 
(l)(6) to be meaningful EHR users in a similar man-
ner as they apply to eligible hospitals under such 
sections. Incentive payments under paragraph (3) 
shall be made to and payment adjustments under 
paragraph (4) shall apply to such qualifying organi-
zations. 
‘‘(2) ELIGIBLE
HOSPITAL
DESCRIBED.—With 
respect to a qualifying MA organization, an eligible 
hospital described in this paragraph is an eligible 
hospital that is under common corporate governance 
with such organization and serves individuals en-
rolled under an MA plan offered by such organiza-
tion. 
‘‘(3) ELIGIBLE
HOSPITAL
INCENTIVE
PAY-
MENTS.— 
‘‘(A) IN
GENERAL.—In applying section 
1886(n)(2) under paragraph (1), instead of the 
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additional payment amount under section 
1886(n)(2), there shall be substituted an 
amount determined by the Secretary to be simi-
lar to the estimated amount in the aggregate 
that would be payable if payment for services 
furnished by such hospitals was payable under 
part A instead of this part. In implementing the 
previous sentence, the Secretary— 
‘‘(i) shall, insofar as data to deter-
mine the discharge related amount under 
section 1886(n)(2)(C) for an eligible hos-
pital are not available to the Secretary, use 
such alternative data and methodology to 
estimate such discharge related amount as 
the Secretary determines appropriate; and 
‘‘(ii) shall, insofar as data to deter-
mine the medicare share described in sec-
tion 1886(n)(2)(D) for an eligible hospital 
are not available to the Secretary, use such 
alternative data and methodology to esti-
mate such share, which data and method-
ology may include use of the inpatient bed 
days (or discharges) with respect to an eli-
gible hospital during the appropriate pe-
riod which are attributable to both individ-
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uals for whom payment may be made 
under part A or individuals enrolled in an 
MA plan under a Medicare Advantage or-
ganization under this part as a proportion 
of the total number of patient-bed-days (or 
discharges) with respect to such hospital 
during such period. 
‘‘(B) AVOIDING
DUPLICATION
OF
PAY-
MENTS.— 
‘‘(i) IN GENERAL.—In the case of a 
hospital that for a payment year is an eli-
gible hospital described in paragraph (2), 
is an eligible hospital under section 
1886(n), and for which at least one-third 
of their discharges (or bed-days) of Medi-
care patients for the year are covered 
under part A, payment for the payment 
year shall be made only under section 
1886(n) and not under this subsection. 
‘‘(ii) METHODS.—In the case of a 
hospital that is an eligible hospital de-
scribed in paragraph (2) and also is eligi-
ble for an incentive payment under section 
1886(n) but is not described in clause (i) 
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511 
for the same payment period, the Secretary 
shall develop a process— 
‘‘(I) to ensure that duplicate pay-
ments are not made with respect to 
an eligible hospital both under this 
subsection and under section 1886(n); 
and 
‘‘(II) to collect data from Medi-
care Advantage organizations to en-
sure against such duplicate payments. 
‘‘(4) PAYMENT ADJUSTMENT.— 
‘‘(A) Subject to paragraph (3), in the case 
of a qualifying MA organization (as defined in 
section 1853(l)(5)), if, according to the attesta-
tion of the organization submitted under sub-
section (l)(6) for an applicable period, one or 
more eligible hospitals (as defined in section 
1886(n)(6)(A)) that are under common cor-
porate governance with such organization and 
that serve individuals enrolled under a plan of-
fered by such organization are not meaningful 
EHR users (as defined in section 1886(n)(3)) 
with respect to a period, the payment amount 
payable under this section for such organization 
for such period shall be the percent specified in 
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512 
subparagraph (B) for such period of the pay-
ment amount otherwise provided under this sec-
tion for such period. 
‘‘(B) SPECIFIED
PERCENT.—The percent 
specified under this subparagraph for a year is 
100 percent minus a number of percentage 
points equal to the product of— 
‘‘(i) the number of the percentage 
point reduction effected under section 
1886(b)(3)(B)(ix)(I) for the period; and 
‘‘(ii) the Medicare hospital expendi-
ture proportion specified in subparagraph 
(C) for the year. 
‘‘(C) MEDICARE HOSPITAL EXPENDITURE 
PROPORTION.—The Medicare hospital expendi-
ture proportion under this subparagraph for a 
year is the Secretary’s estimate of the propor-
tion, of the expenditures under parts A and B 
that are not attributable to this part, that are 
attributable to expenditures for inpatient hos-
pital services. 
‘‘(D) APPLICATION OF PAYMENT ADJUST-
MENT.—In the case that a qualifying MA orga-
nization attests that not all eligible hospitals 
are meaningful EHR users with respect to an 
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513 
applicable period, the Secretary shall apply the 
payment adjustment under this paragraph 
based on a methodology specified by the Sec-
retary, taking into account the proportion of 
such eligible hospitals, or discharges from such 
hospitals, that are not meaningful EHR users 
for such period.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1814(b) of the Social Security Act 
(42 U.S.C. 1395f(b)) is amended— 
(A) in paragraph (3), in the matter pre-
ceding subparagraph (A), by inserting ‘‘, sub-
ject to section 1886(d)(3)(B)(ix)(III),’’ after 
‘‘then’’; and 
(B) by adding at the end the following: 
‘‘For purposes of applying paragraph (3), there 
shall be taken into account incentive payments, 
and payment adjustments under subsection 
(b)(3)(B)(ix) or (n) of section 1886.’’. 
(2) Section 1851(i)(1) of the Social Security 
Act (42 U.S.C. 1395w–21(i)(1)) is amended by 
striking 
‘‘and 
1886(h)(3)(D)’’ 
and 
inserting 
‘‘1886(h)(3)(D), and 1853(m)’’. 
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514 
(3) Section 1853 of the Social Security Act (42 
U.S.C. 
1395w–23), 
as 
amended 
by 
section 
4311(d)(1), is amended— 
(A) in subsection (c)— 
(i) in paragraph (1)(D)(i), by striking 
‘‘1848(o)’’ and inserting ‘‘, 1848(o), and 
1886(n)’’; and 
(ii) in paragraph (6)(A), by inserting 
‘‘and subsections (b)(3)(B)(ix) and (n) of 
section 1886’’ after ‘‘section 1848’’; and 
(B) in subsection (f), by inserting ‘‘and 
subsection (m)’’ after ‘‘under subsection (l)’’. 
SEC. 4313. TREATMENT OF PAYMENTS AND SAVINGS; IM-
PLEMENTATION FUNDING. 
(a) PREMIUM HOLD HARMLESS.— 
(1) IN GENERAL.—Section 1839(a)(1) of the 
Social Security Act (42 U.S.C. 1395r(a)(1)) is 
amended by adding at the end the following: ‘‘In ap-
plying this paragraph there shall not be taken into 
account additional payments under section 1848(o) 
and section 1853(l)(3) and the Government con-
tribution under section 1844(a)(3).’’. 
(2) PAYMENT.—Section 1844(a) of such Act 
(42 U.S.C. 1395w(a)) is amended— 
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(A) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; plus’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(3) a Government contribution equal to the 
amount of payment incentives payable under sec-
tions 1848(o) and 1853(l)(3).’’. 
(b) MEDICARE IMPROVEMENT FUND.—Section 1898 
of the Social Security Act (42 U.S.C. 1395iii), as added 
by section 7002(a) of the Supplemental Appropriations 
Act, 2008 (Public Law 110–252) and as amended by sec-
tion 188(a)(2) of the Medicare Improvements for Patients 
and Providers Act of 2008 (Public Law 110–275; 122 
Stat. 2589) and by section 6 of the QI Program Supple-
mental Funding Act of 2008, is amended— 
(1) in subsection (a)— 
(A) by inserting ‘‘medicare’’ before ‘‘fee- 
for-service’’; and 
(B) by inserting before the period at the 
end the following: ‘‘including, but not limited 
to, an increase in the conversion factor under 
section 1848(d) to address, in whole or in part, 
any projected shortfall in the conversion factor 
for 2014 relative to the conversion factor for 
2008 and adjustments to payments for items 
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516 
and services furnished by providers of services 
and suppliers under such original medicare fee- 
for-service program’’; and 
(2) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘during 
fiscal year 2014,’’ and all that follows and in-
serting the following: ‘‘during— 
‘‘(A) fiscal year 2014, $22,290,000,000; 
and 
‘‘(B) fiscal year 2020 and each subsequent 
fiscal year, the Secretary’s estimate, as of July 
1 of the fiscal year, of the aggregate reduction 
in expenditures under this title during the pre-
ceding fiscal year directly resulting from the re-
duction in payment amounts under sections 
1848(a)(7), 
1853(l)(4), 
1853(m)(4), 
and 
1886(b)(3)(B)(ix).’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(4) NO
EFFECT
ON
PAYMENTS
IN
SUBSE-
QUENT YEARS.—In the case that expenditures from 
the Fund are applied to, or otherwise affect, a pay-
ment rate for an item or service under this title for 
a year, the payment rate for such item or service 
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517 
shall be computed for a subsequent year as if such 
application or effect had never occurred.’’. 
(c) IMPLEMENTATION FUNDING.—In addition to 
funds otherwise available, out of any funds in the Treas-
ury not otherwise appropriated, there are appropriated to 
the Secretary of Health and Human Services for the Cen-
ter for Medicare & Medicaid Services Program Manage-
ment Account, $60,000,000 for each of fiscal years 2009 
through 2015 and $30,000,000 for each succeeding fiscal 
year through fiscal year 2019, which shall be available for 
purposes of carrying out the provisions of (and amend-
ments made by) this part. Amounts appropriated under 
this subsection for a fiscal year shall be available until ex-
pended. 
SEC. 4314. STUDY ON APPLICATION OF EHR PAYMENT IN-
CENTIVES FOR PROVIDERS NOT RECEIVING 
OTHER INCENTIVE PAYMENTS. 
(a) STUDY.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a study to determine 
the extent to which and manner in which payment 
incentives (such as under title XVIII or XIX of the 
Social Security Act) and other funding for purposes 
of implementing and using certified EHR technology 
(as defined in section 3000 of the Public Health 
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518 
Service Act) should be made available to health care 
providers who are receiving minimal or no payment 
incentives or other funding under this Act, under 
title XVIII or XIX of the Social Security Act, or 
otherwise, for such purposes. 
(2) DETAILS OF STUDY.—Such study shall in-
clude an examination of— 
(A) the adoption rates of certified EHR 
technology by such health care providers; 
(B) the clinical utility of such technology 
by such health care providers; 
(C) whether the services furnished by such 
health care providers are appropriate for or 
would benefit from the use of such technology; 
(D) the extent to which such health care 
providers work in settings that might otherwise 
receive an incentive payment or other funding 
under this Act, title XVIII or XIX of the Social 
Security Act, or otherwise; 
(E) the potential costs and the potential 
benefits of making payment incentives and 
other funding available to such health care pro-
viders; and 
(F) any other issues the Secretary deems 
to be appropriate. 
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(b) REPORT.—Not later than June 30, 2010, the 
Secretary shall submit to Congress a report on the find-
ings and conclusions of the study conducted under sub-
section (a). 
PART III—MEDICAID FUNDING 
SEC. 4321. MEDICAID PROVIDER HIT ADOPTION AND OPER-
ATION PAYMENTS; IMPLEMENTATION FUND-
ING. 
(a) IN GENERAL.—Section 1903 of the Social Secu-
rity Act (42 U.S.C. 1396b) is amended— 
(1) in subsection (a)(3)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D); 
(B) by striking ‘‘plus’’ at the end of sub-
paragraph (E) and inserting ‘‘and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F)(i) 100 percent of so much of the 
sums expended during such quarter as are at-
tributable to payments for certified EHR tech-
nology (and support services including mainte-
nance and training that is for, or is necessary 
for the adoption and operation of, such tech-
nology) by Medicaid providers described in sub-
section (t)(1); and 
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‘‘(ii) 90 percent of so much of the sums ex-
pended during such quarter as are attributable 
to payments for reasonable administrative ex-
penses related to the administration of pay-
ments described in clause (i) if the State meets 
the condition described in subsection (t)(9); 
plus’’; and 
(2) by inserting after subsection (s) the fol-
lowing new subsection: 
‘‘(t)(1)(A) For purposes of subsection (a)(3)(F), the 
payments for certified EHR technology (and support serv-
ices including maintenance that is for, or is necessary for 
the operation of, such technology) by Medicaid providers 
described in this paragraph are payments made by the 
State in accordance with this subsection of the applicable 
percent (as specified in subparagraph (B)) of the net al-
lowable costs of Medicaid providers (as defined in para-
graph (2)) for such technology (and support services). 
‘‘(B) For purposes of subparagraph (A), the applica-
ble percent is— 
‘‘(i) in the case of a Medicaid provider de-
scribed in paragraph (2)(A), 85 percent; and 
‘‘(ii) in the case of a Medicaid provider de-
scribed in paragraph (2)(B), 100 percent. 
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521 
‘‘(2) In this subsection and subsection (a)(3)(F), the 
term ‘Medicaid provider’ means— 
‘‘(A) an eligible professional (as defined in 
paragraph (3)(B)) who is not hospital-based and has 
at least 30 percent of the professional’s patient vol-
ume (as estimated in accordance with standards es-
tablished by the Secretary) attributable to individ-
uals who are receiving medical assistance under this 
title; and 
‘‘(B)(i) a children’s hospital, (ii) an acute-care 
hospital that is not described in clause (i) and that 
has at least 10 percent of the hospital’s patient vol-
ume (as estimated in accordance with standards es-
tablished by the Secretary) attributable to individ-
uals who are receiving medical assistance under this 
title, or (iii) a Federally-qualified health center or 
rural health clinic that has at least 30 percent of the 
center’s or clinic’s patient volume (as estimated in 
accordance with standards established by the Sec-
retary) attributable to individuals who are receiving 
medical assistance under this title. 
An eligible professional shall not qualify as a Medicaid 
provider under this subsection unless the eligible profes-
sional has waived, in a manner specified by the Secretary, 
any right to payment under section 1848(o) with respect 
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to the adoption or support of certified EHR technology 
by the professional. In applying clauses (ii) and (iii) of 
subparagraph (B), the standards established by the Sec-
retary for patient volume shall include individuals enrolled 
in a Medicaid managed care plan (under section 1903(m) 
or section 1932). 
‘‘(3) In this subsection and subsection (a)(3)(F): 
‘‘(A) The term ‘certified EHR technology’ 
means a qualified electronic health record (as de-
fined in 3000(13) of the Public Health Service Act) 
that is certified pursuant to section 3001(c)(5) of 
such Act as meeting standards adopted under sec-
tion 3004 of such Act that are applicable to the type 
of record involved (as determined by the Secretary, 
such as an ambulatory electronic health record for 
office-based physicians or an inpatient hospital elec-
tronic health record for hospitals). 
‘‘(B) The term ‘eligible professional’ means a 
physician as defined in paragraphs (1) and (2) of 
section 1861(r), and includes a certified nurse mid- 
wife and a nurse practitioner. 
‘‘(C) The term ‘hospital-based’ means, with re-
spect to an eligible professional, a professional (such 
as a pathologist, anesthesiologist, or emergency phy-
sician) who furnishes substantially all of the individ-
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ual’s professional services in a hospital setting 
(whether inpatient or outpatient) and through the 
use of the facilities and equipment, including com-
puter equipment, of the hospital. 
‘‘(4)(A) The term ‘allowable costs’ means, with re-
spect to certified EHR technology of a Medicaid provider, 
costs of such technology (and support services including 
maintenance and training that is for, or is necessary for 
the adoption and operation of, such technology) as deter-
mined by the Secretary to be reasonable. 
‘‘(B) The term ‘net allowable costs’ means allowable 
costs reduced by any payment that is made to the Med-
icaid provider involved from any other source that is di-
rectly attributable to payment for certified EHR tech-
nology or services described in subparagraph (A). 
‘‘(C) In no case shall— 
‘‘(i) the aggregate allowable costs under this 
subsection (covering one or more years) with respect 
to a Medicaid provider described in paragraph 
(2)(A) for purchase and initial implementation of 
certified EHR technology (and services described in 
subparagraph (A)) exceed $25,000 or include costs 
over a period of longer than 5 years; 
‘‘(ii) for costs not described in clause (i) relat-
ing to the operation, maintenance, or use of certified 
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EHR technology, the annual allowable costs under 
this subsection with respect to such a Medicaid pro-
vider for costs not described in clause (i) for any 
year exceed $10,000; 
‘‘(iii) payment described in paragraph (1) for 
costs described in clause (ii) be made with respect 
to such a Medicaid provider over a period of more 
than 5 years; 
‘‘(iv) the aggregate allowable costs under this 
subsection with respect to such a Medicaid provider 
for all costs exceed $75,000; or 
‘‘(v) the allowable costs, whether for purchase 
and initial implementation, maintenance, or other-
wise, for a Medicaid provider described in paragraph 
(2)(B)(iii) exceed such aggregate or annual limita-
tion as the Secretary shall establish, based on an 
amount determined by the Secretary as being ade-
quate to adopt and maintain certified EHR tech-
nology, consistent with paragraph (6). 
‘‘(5) Payments described in paragraph (1) are not in 
accordance with this subsection unless the following re-
quirements are met: 
‘‘(A) The State provides assurances satisfactory 
to the Secretary that amounts received under sub-
section (a)(3)(F) with respect to costs of a Medicaid 
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provider are paid directly to such provider without 
any deduction or rebate. 
‘‘(B) Such Medicaid provider is responsible for 
payment of the costs described in such paragraph 
that are not provided under this title. 
‘‘(C) With respect to payments to such Med-
icaid provider for costs other than costs related to 
the initial adoption of certified EHR technology, the 
Medicaid provider demonstrates meaningful use of 
certified EHR technology through a means that is 
approved by the State and acceptable to the Sec-
retary, and that may be based upon the methodolo-
gies applied under section 1848(o) or 1886(n). 
‘‘(D) To the extent specified by the Secretary, 
the certified EHR technology is compatible with 
State or Federal administrative management sys-
tems. 
‘‘(6)(A) In no case shall the payments described in 
paragraph (1), with respect to a hospital, exceed in the 
aggregate the product of— 
‘‘(i) the overall hospital EHR amount for the 
hospital computed under subparagraph (B); and 
‘‘(ii) the Medicaid share for such hospital com-
puted under subparagraph (C). 
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‘‘(B) For purposes of this paragraph, the overall hos-
pital EHR amount, with respect to a hospital, is the sum 
of 
the 
applicable 
amounts 
specified 
in 
section 
1886(n)(2)(A) for such hospital for the first 4 payment 
years (as estimated by the Secretary) determined as if the 
Medicare share specified in clause (ii) of such section were 
1. The Secretary shall publish in the Federal Register the 
overall hospital EHR amount for each hospital eligible for 
payments under this subsection. In computing amounts 
under paragraph 1886(n)(2)(C) for payment years after 
the first payment year, the Secretary shall assume that 
in subsequent payment years discharges increase at the 
average annual rate of growth of the most recent 3 years 
for which discharge data are available per year. 
‘‘(C) The Medicaid share computed under this sub-
paragraph, for a hospital for a period specified by the Sec-
retary, shall be calculated in the same manner as the 
Medicare share under section 1886(n)(2)(D) for such a 
hospital and period, except that there shall be substituted 
for the numerator under clause (i) of such section the 
amount that is equal to the number of inpatient-bed-days 
(as established by the Secretary) which are attributable 
to individuals who are receiving medical assistance under 
this title and who are not described in section 
1886(n)(2)(D)(i). In computing inpatient-bed-days under 
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the previous sentence, the Secretary shall take into ac-
count inpatient-bed-days attributable to inpatient-bed- 
days that are paid for individuals enrolled in a Medicaid 
managed care plan (under section 1903(m) or section 
1932). 
‘‘(7) With respect to health care providers other than 
hospitals, the Secretary shall ensure coordination of the 
different programs for payment of such health care pro-
viders for adoption or use of health information technology 
(including certified EHR technology), as well as payments 
for such health care providers provided under this title or 
title XVIII, to assure no duplication of funding. 
‘‘(8) In carrying out paragraph (5)(C), the State and 
Secretary shall seek, to the maximum extent practicable, 
to avoid duplicative requirements from Federal and State 
Governments to demonstrate meaningful use of certified 
EHR technology under this title and title XVIII. In doing 
so, the Secretary may deem satisfaction of requirements 
for such meaningful use for a payment year under title 
XVIII to be sufficient to qualify as meaningful use under 
this subsection. The Secretary may also specify the report-
ing periods under this subsection in order to carry out this 
paragraph. 
‘‘(9) In order to be provided Federal financial partici-
pation under subsection (a)(3)(F)(ii), a State must dem-
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onstrate to the satisfaction of the Secretary, that the 
State— 
‘‘(A) is using the funds provided for the pur-
poses of administering payments under this sub-
section, including tracking of meaningful use by 
Medicaid providers; 
‘‘(B) is conducting adequate oversight of the 
program under this subsection, including routine 
tracking of meaningful use attestations and report-
ing mechanisms; and 
‘‘(C) is pursuing initiatives to encourage the 
adoption of certified EHR technology to promote 
health care quality and the exchange of health care 
information under this title, subject to applicable 
laws and regulations governing such exchange. 
‘‘(10) The Secretary shall periodically submit reports 
to the Committee on Energy and Commerce of the House 
of Representatives and the Committee on Finance of the 
Senate on status, progress, and oversight of payments 
under paragraph (1).’’. 
(b) IMPLEMENTATION FUNDING.—In addition to 
funds otherwise available, out of any funds in the Treas-
ury not otherwise appropriated, there are appropriated to 
the Secretary of Health and Human Services for the Cen-
ter for Medicare & Medicaid Services Program Manage-
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ment Account, $40,000,000 for each of fiscal years 2009 
through 2015 and $20,000,000 for each succeeding fiscal 
year through fiscal year 2019, which shall be available for 
purposes of carrying out the provisions of (and the amend-
ments made by) this part. Amounts appropriated under 
this subsection for a fiscal year shall be available until ex-
pended. 
SEC. 4322. MEDICAID NURSING FACILITY GRANT PROGRAM. 
(a) IN GENERAL.—The Secretary shall establish a 
grant program to enhance the meaningful use of certified 
electronic health records in nursing facilities. In estab-
lishing such program, the Secretary shall use payment in-
centives for meaningful use of certified EHR technology, 
similar to those specified in sections 4311, 4312, and 
4321, as appropriate. For the purpose of such incentives, 
the Secretary shall define meaningful use in a manner so 
as to be consistent with such sections to the extent prac-
ticable. The Secretary shall award funds to not more than 
10 States to carry out activities under this section. 
(b) ACTIVITIES.—The Secretary shall require a State 
participating in the grant program to— 
(1) provide payment incentives to nursing facili-
ties contingent on the demonstration of meaningful 
use of certified electronic health records; 
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(2) require participating nursing facilities to en-
gage in programs to improve the quality and coordi-
nation of care through the use of certified EHR 
technology, including for persons who are repeatedly 
admitted to acute care hospitals from the nursing 
facility and persons who receive services across mul-
tiple medical and social services providers (including 
facility and community-based providers); and 
(3) provide for training of appropriate per-
sonnel in the use of certified electronic health 
records. 
(c) TARGETING.—The Secretary shall require a State 
participating in the grant program to target nursing facili-
ties with a significant percentage (but not less than the 
average in the State) of the facility’s patient volume (as 
estimated in accordance with standards established by the 
Secretary) attributable to individuals who are receiving 
medical assistance under title XIX of the Social Security 
Act. 
(d) PRIORITY.—In making grants under this section, 
the Secretary shall give priority to States with a high pro-
portion of total national nursing facility days paid under 
title XIX of the Social Security Act. 
(e) LIMITATIONS ON USE OF FUNDS.—A State may 
not make payments to a nursing facility in excess of 90 
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percent of the costs of such nursing facility for the adop-
tion and operation of certified EHR technology. 
(f) APPLICATION.—No grant may be made to a State 
under this section unless the State submits an application 
to the Secretary in a form and manner specified by the 
Secretary. 
(g) REPORT.—Not later than the end of the 3-year 
period beginning on the date that grants under this sec-
tion are first awarded, the Secretary shall submit a report 
to Congress on the activities under this grant program and 
the effect of this program on quality and coordination of 
care under title XIX of the Social Security Act. 
(h) APPROPRIATION.—Out of any money in the 
Treasury not otherwise appropriated, there is appro-
priated to the Secretary of Health and Human Services 
to carry out this section $600,000,000, to remain available 
until expended. 
Subtitle D—Privacy 
SEC. 4400. DEFINITIONS. 
In this subtitle, except as specified otherwise: 
(1) BREACH.—The term ‘‘breach’’ means the 
unauthorized acquisition, access, use, or disclosure 
of protected health information which compromises 
the security, privacy, or integrity of protected health 
information maintained by or on behalf of a person. 
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Such term does not include any unintentional acqui-
sition, access, use, or disclosure of such information 
by an employee or agent of the covered entity or 
business associate involved if such acquisition, ac-
cess, use, or disclosure, respectively, was made in 
good faith and within the course and scope of the 
employment or other contractual relationship of such 
employee or agent, respectively, with the covered en-
tity or business associate and if such information is 
not further acquired, accessed, used, or disclosed by 
such employee or agent. 
(2) BUSINESS ASSOCIATE.—The term ‘‘business 
associate’’ has the meaning given such term in sec-
tion 160.103 of title 45, Code of Federal Regula-
tions. 
(3) COVERED ENTITY.—The term ‘‘covered en-
tity’’ has the meaning given such term in section 
160.103 of title 45, Code of Federal Regulations. 
(4) DISCLOSE.—The terms ‘‘disclose’’ and ‘‘dis-
closure’’ have the meaning given the term ‘‘disclo-
sure’’ in section 160.103 of title 45, Code of Federal 
Regulations. 
(5) ELECTRONIC HEALTH RECORD.—The term 
‘‘electronic health record’’ means an electronic 
record of health-related information on an individual 
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that is created, gathered, managed, and consulted by 
authorized health care clinicians and staff. 
(6) HEALTH
CARE
OPERATIONS.—The term 
‘‘health care operation’’ has the meaning given such 
term in section 164.501 of title 45, Code of Federal 
Regulations. 
(7) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ has the meaning given such 
term in section 160.103 of title 45, Code of Federal 
Regulations. 
(8) HEALTH PLAN.—The term ‘‘health plan’’ 
has the meaning given such term in section 1171(5) 
of the Social Security Act. 
(9) NATIONAL COORDINATOR.—The term ‘‘Na-
tional Coordinator’’ means the head of the Office of 
the National Coordinator for Health Information 
Technology established under section 3001(a) of the 
Public Health Service Act, as added by section 
4101. 
(10) PAYMENT.—The term ‘‘payment’’ has the 
meaning given such term in section 164.501 of title 
45, Code of Federal Regulations. 
(11) PERSONAL HEALTH RECORD.—The term 
‘‘personal health record’’ means an electronic record 
of individually identifiable health information on an 
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individual that can be drawn from multiple sources 
and that is managed, shared, and controlled by or 
for the individual. 
(12) PROTECTED HEALTH INFORMATION.—The 
term ‘‘protected health information’’ has the mean-
ing given such term in section 160.103 of title 45, 
Code of Federal Regulations. 
(13) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
(14) SECURITY.—The term ‘‘security’’ has the 
meaning given such term in section 164.304 of title 
45, Code of Federal Regulations. 
(15) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. 
(16) TREATMENT.—The term ‘‘treatment’’ has 
the meaning given such term in section 164.501 of 
title 45, Code of Federal Regulations. 
(17) USE.—The term ‘‘use’’ has the meaning 
given such term in section 160.103 of title 45, Code 
of Federal Regulations. 
(18) 
VENDOR
OF
PERSONAL
HEALTH 
RECORDS.—The term ‘‘vendor of personal health 
records’’ means an entity, other than a covered enti-
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ty (as defined in paragraph (3)), that offers or 
maintains a personal health record. 
PART I—IMPROVED PRIVACY PROVISIONS AND 
SECURITY PROVISIONS 
SEC. 4401. APPLICATION OF SECURITY PROVISIONS AND 
PENALTIES TO BUSINESS ASSOCIATES OF 
COVERED ENTITIES; ANNUAL GUIDANCE ON 
SECURITY PROVISIONS. 
(a) APPLICATION OF SECURITY PROVISIONS.—Sec-
tions 164.308, 164.310, 164.312, and 164.316 of title 45, 
Code of Federal Regulations, shall apply to a business as-
sociate of a covered entity in the same manner that such 
sections apply to the covered entity. The additional re-
quirements of this title that relate to security and that 
are made applicable with respect to covered entities shall 
also be applicable to such a business associate and shall 
be incorporated into the business associate agreement be-
tween the business associate and the covered entity. 
(b) APPLICATION
OF CIVIL
AND CRIMINAL PEN-
ALTIES.—In the case of a business associate that violates 
any security provision specified in subsection (a), sections 
1176 and 1177 of the Social Security Act (42 U.S.C. 
1320d–5, 1320d–6) shall apply to the business associate 
with respect to such violation in the same manner such 
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sections apply to a covered entity that violates such secu-
rity provision. 
(c) ANNUAL GUIDANCE.—For the first year begin-
ning after the date of the enactment of this Act and annu-
ally thereafter, the Secretary of Health and Human Serv-
ices shall, in consultation with industry stakeholders, an-
nually issue guidance on the most effective and appro-
priate technical safeguards for use in carrying out the sec-
tions referred to in subsection (a) and the security stand-
ards in subpart C of part 164 of title 45, Code of Federal 
Regulations, including the use of standards developed 
under section 3002(b)(2)(B)(vi) of the Public Health 
Service Act, as added by section 4101, as such provisions 
are in effect as of the date before the enactment of this 
Act. 
SEC. 4402. NOTIFICATION IN THE CASE OF BREACH. 
(a) IN GENERAL.—A covered entity that accesses, 
maintains, retains, modifies, records, stores, destroys, or 
otherwise holds, uses, or discloses unsecured protected 
health information (as defined in subsection (h)(1)) shall, 
in the case of a breach of such information that is discov-
ered by the covered entity, notify each individual whose 
unsecured protected health information has been, or is 
reasonably believed by the covered entity to have been, 
accessed, acquired, or disclosed as a result of such breach. 
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(b) NOTIFICATION OF COVERED ENTITY BY BUSI-
NESS ASSOCIATE.—A business associate of a covered enti-
ty that accesses, maintains, retains, modifies, records, 
stores, destroys, or otherwise holds, uses, or discloses un-
secured protected health information shall, following the 
discovery of a breach of such information, notify the cov-
ered entity of such breach. Such notice shall include the 
identification of each individual whose unsecured protected 
health information has been, or is reasonably believed by 
the business associate to have been, accessed, acquired, 
or disclosed during such breach. 
(c) BREACHES TREATED AS DISCOVERED.—For pur-
poses of this section, a breach shall be treated as discov-
ered by a covered entity or by a business associate as of 
the first day on which such breach is known to such entity 
or associate, respectively, (including any person, other 
than the individual committing the breach, that is an em-
ployee, officer, or other agent of such entity or associate, 
respectively) or should reasonably have been known to 
such entity or associate (or person) to have occurred. 
(d) TIMELINESS OF NOTIFICATION.— 
(1) IN GENERAL.—Subject to subsection (g), all 
notifications required under this section shall be 
made without unreasonable delay and in no case 
later than 60 calendar days after the discovery of a 
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breach by the covered entity involved (or business 
associate involved in the case of a notification re-
quired under subsection (b)). 
(2) BURDEN OF PROOF.—The covered entity in-
volved (or business associate involved in the case of 
a notification required under subsection (b)), shall 
have the burden of demonstrating that all notifica-
tions were made as required under this part, includ-
ing evidence demonstrating the necessity of any 
delay. 
(e) METHODS OF NOTICE.— 
(1) 
INDIVIDUAL
NOTICE.—Notice 
required 
under this section to be provided to an individual, 
with respect to a breach, shall be provided promptly 
and in the following form: 
(A) Written notification by first-class mail 
to the individual (or the next of kin of the indi-
vidual if the individual is deceased) at the last 
known address of the individual or the next of 
kin, respectively, or, if specified as a preference 
by the individual, by electronic mail. The notifi-
cation may be provided in one or more mailings 
as information is available. 
(B) In the case in which there is insuffi-
cient, or out-of-date contact information (in-
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SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP. 
(a) PERMITTING MAINTENANCE OF FMAP.—Subject 
to subsections (e), (f), and (g), if the FMAP determined 
without regard to this section for a State for— 
(1) fiscal year 2009 is less than the FMAP as 
so determined for fiscal year 2008, the FMAP for 
the State for fiscal year 2008 shall be substituted 
for the State’s FMAP for fiscal year 2009, before 
the application of this section; 
(2) fiscal year 2010 is less than the FMAP as 
so determined for fiscal year 2008 or fiscal year 
2009 (after the application of paragraph (1)), the 
greater of such FMAP for the State for fiscal year 
2008 or fiscal year 2009 shall be substituted for the 
State’s FMAP for fiscal year 2010, before the appli-
cation of this section; and 
(3) fiscal year 2011 is less than the FMAP as 
so determined for fiscal year 2008, fiscal year 2009 
(after the application of paragraph (1)), or fiscal 
year 2010 (after the application of paragraph (2)), 
the greatest of such FMAP for the State for fiscal 
year 2008, fiscal year 2009, or fiscal year 2010 shall 
be substituted for the State’s FMAP for fiscal year 
2011, before the application of this section, but only 
for the first calendar quarter in fiscal year 2011. 
(b) GENERAL 4.9 PERCENTAGE POINT INCREASE.— 
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