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Title I, Subtitle I
emergency preauthorization’ means a request
for preauthorization.0 by a group health plan in
any case in which the medical, surgical, or hos-
pital benefits for which the expense is to be in-
curred constitutes urgent medical care or emer-
gency medical care.
‘‘(F) REQUEST FOR UTILIZATION REVIEW
DETERMINATION.—The term ‘request for a uti-
lization review determination’ means a request
by or on behalf of a participant or beneficiary,
made before an expense for medical, hospital, or
surgical care has been incurred, for a utilization
review determination by a plan.
‘‘(G) REQUEST FOR EMERGENCY UTILIZA-
TION REVIEW DETERMINATION.—The term ‘re-
quest for an emergency utilization review deter-
mination’ means a request for a utilization re-
view determination in any case in which the
medical, hospital, or surgical care to be in-
curred constitutes urgent medical care or emer-
gency medical care.
‘‘(H) URGENT MEDICAL CARE.—The term
‘urgent medical care’ means medical, surgical,
or hospital care in any case in which a physi-
cian with appropriate expertise has certified in
282
Title I, Subtitle I
writing that failure to provide the participant or
beneficiary with such care within 45 days will
result in either—
‘‘(i) the death of the participant or
beneficiary within 120 days, or
‘‘(ii) the immediate, serious, and irre-
versible deterioration of the health of the
participant or beneficiary within 120 days
which will significantly increase the reason-
able likelihood of death of the participant
or beneficiary.
‘‘(I) EMERGENCY
MEDICAL
CARE.—The
term ‘emergency medical care’ means medical,
surgical, or hospital care in any case in which
a physician with appropriate expertise has cer-
tified in writing—
‘‘(i) that failure to immediately pro-
vide the care to the participant or bene-
ficiary could reasonably be expected to re-
sult in—
‘‘(I) placing the health of such
participant or beneficiary (or, with re-
spect to such a participant or bene-
ficiary who is a pregnant woman, the
283
Title I, Subtitle I
health of the woman or her unborn
child) in serious jeopardy,
‘‘(II) serious impairment to bod-
ily functions, or
‘‘(III) serious dysfunction of any
bodily organ or part,
or
‘‘(ii) that immediate provision of the
care is necessary because the participant
or beneficiary has made or is at serious
risk of making an attempt to harm himself
or herself or another individual.
‘‘(J) FILING
COMPLETION
DATE.—The
term ‘filing completion date’ means, in connec-
tion with a group health plan, the date as of
which the plan is in receipt of all information
reasonably required to make an initial decision
to approve or deny a claim for medical, sur-
gical, or hospital benefits, a request for
preauthorization, a request for emergency
preauthorization, a request for a utilization re-
view determination or a request for an emer-
gency utilization review determination.
‘‘(K) REVIEW
FILING
DATE.—The term
‘review filing date’ means, in connection with a
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Title I, Subtitle I
group health plan, the date as of which the ap-
propriate fiduciary is in receipt of all informa-
tion reasonably required to make a decision
upon a full and fair review of the denial, in
whole or in part, of a claim for medical, sur-
gical, or hospital benefits, a request for
preauthorization, a request for emergency
preauthorization, a request for a utilization re-
view determination or a request for an emer-
gency utilization review determination.
‘‘(L) APPROPRIATE FIDUCIARY.—The term
‘appropriate fiduciary’ means with respect to
any determination under a group health plan a
person designated by the plan to make such de-
termination. One or more appropriate fidu-
ciaries shall be designated under each group
health plan for making determinations under
the plan.’’.
(b) DEFINITION OF GROUP HEALTH PLAN.—
(1) IN GENERAL.—Section 3 of such Act (29
U.S.C. 1002) is amended by adding at the end the
following new paragraph:
‘‘(42) The term ‘group health plan’ means an em-
ployee welfare benefit plan providing medical care (as de-
fined in section 213(d) of the Internal Revenue Code of
285
Title I, Subtitle I
1986) to participants or beneficiaries directly or through
insurance, reimbursement, or otherwise.’’.
(2) CONFORMING
AMENDMENT.—Section 607
of such Act (29 U.S.C. 1167) is amended by striking
paragraph (1).
SEC. 1802. MEDIATION OF GROUP HEALTH PLAN CLAIMS.
(a) IN GENERAL.—Part 5 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 is
amended—
(1) by inserting below the heading for part 5
the following:
‘‘Subpart A—In General’’;
and
(2) by adding at the end the following new sub-
part:
‘‘Subpart B—Mediation of Group Health Plan Claims
‘‘SEC. 521. ELIGIBILITY FOR SUBMISSION TO MEDIATION.
‘‘(a) IN GENERAL.—The Secretary shall establish a
mediation program under this subpart (hereinafter in this
subpart referred to as the ‘mediation program’) for the
purpose of facilitating mediation of disputes meeting the
requirements specified in subsection (b). At the time no-
tice is provided to any participant or beneficiary of a
group health plan’s denial of any claim for benefits pursu-
ant to section 503, the plan shall provide reasonable notice
286
Title I, Subtitle I
in writing to the participant or beneficiary whose claim
for benefits under the plan has been denied of the avail-
ability of mediation under this subpart at the election of
either the claimant or the plan.
‘‘(b) DISPUTE CRITERIA.—A dispute may be submit-
ted for mediation under the mediation program only if the
following requirements are met with respect to such dis-
pute:
‘‘(1) PARTIES.—The dispute consists of an as-
sertion by a participant, a beneficiary, or the duly
authorized representative of a participant or bene-
ficiary (or, in the case of an assignment, the as-
signee) of one or more claims under a group health
plan, and a denial of such claims, or a denial of ap-
propriate reimbursement based on such claims, by
such plan or an appropriate fiduciary.
‘‘(2) NATURE OF CLAIM.—The claim consists of
a claim for benefits for medical, surgical, or hospital
expenses under a group health plan which consist of
benefits described in section 3(1).
‘‘(3) SUBMISSION AFTER EXHAUSTION OF PLAN
REMEDIES.—The claimant has received a final deter-
mination regarding the claim under the plans’ claims
procedure under section 503, or has otherwise ex-
287
Title I, Subtitle I
hausted all remedies under the plan provided pursu-
ant to section 503.
‘‘(4) APPROPRIATE FIDUCIARY.—For purposes
of this subpart, the term ‘appropriate fiduciary’ has
the meaning provided in section 503(b)(5)(K).
‘‘SEC. 522. FACILITATORS.
‘‘(a) ROSTER.—The Secretary shall maintain a list
of individuals with appropriate expertise to serve as
facilitators in proceedings under the mediation program.
‘‘(b) CRITERIA.—In identifying individuals to serve
as facilitators, the Secretary shall consider the following:
‘‘(1) The individual’s experience in dispute reso-
lution.
‘‘(2) The individual’s ability to act impartially.
‘‘(3) The individual’s ability to perform evalua-
tions quickly and to present them in nontechnical
terms.
‘‘(4) The individual’s experience in employee
medical, hospital, and surgical benefits.
‘‘(c) APPOINTMENT
OF FACILITATOR.—Within 15
days after either party files with the Secretary an election
of mediation with respect to a dispute, the Secretary shall
propose a facilitator, selected under a random selection
procedure prescribed in regulations, and notify the parties
of such selection. Within 10 days after receipt of the noti-
288
Title I, Subtitle I
fication of the selection of a facilitator, either party may
reject the proposed facilitator. If neither party objects to
the Secretary’s proposed facilitator within such 10-day pe-
riod, the appointment shall become final. If either party
objects to the Secretary’s proposed facilitator, the proce-
dure set forth in the preceding provisions of this sub-
section shall be repeated. Each party is limited to 1 objec-
tion to the Secretary’s proposed facilitator for each medi-
ation.
‘‘SEC. 523. ROLE OF ATTORNEYS.
‘‘Parties may represent themselves or be represented
by attorneys throughout the mediation process.
‘‘SEC. 524. INITIATION OF MEDIATION.
‘‘(a) CLAIMANT INITIATION.—A claimant may initi-
ate mediation of a dispute under this subpart only if no
action has been commenced by the claimant under section
502 with respect to any claim involved. To initiate medi-
ation, a claimant shall file an election for mediation with
the Secretary (and shall file a copy of the election with
the plan or the appropriate fiduciary) within 30 days after
a final determination regarding the claim pursuant to sec-
tion 503.
‘‘(b) PLAN INITIATION.—A participant or beneficiary
may not commence an action under section 502 with re-
spect to any claim until the participant or beneficiary has
289
Title I, Subtitle I
provided to the plan or the appropriate fiduciary 10 days
advance notice of the filing of such action. Within the ear-
lier of (1) 25 days after receipt of such a notice with re-
spect to any claim or (2) the date preceding the date on
which such claim is filed in court, the plan or the appro-
priate fiduciary may elect mediation of a dispute under
this subpart involving such claim by filing an election for
mediation with the Secretary (and a copy of the election
with the claimant). Upon a timely election of mediation
by the plan or the appropriate fiduciary, the claimant’s
right to pursue the claim under section 502 shall be sus-
pended until the earlier of 75 days after the date of the
filing of the election of mediation or the termination of
the mediation proceedings.
‘‘(c) ELECTION FOR MEDIATION.—An election by any
party for mediation under this subpart shall be in such
form and manner as the Secretary shall prescribe by regu-
lation.
‘‘(d) PARTICIPATION.—The claimant and the plan
shall participate in the mediation. Each party shall provide
the facilitator a written summary of its position with re-
spect to the dispute accompanied by supporting docu-
mentation.
‘‘(e) FILING FEE.—The party initiating mediation
under this section shall include with any election for medi-
290
Title I, Subtitle I
ation under this subpart a reasonable nonrefundable filing
fee payable to the Secretary. The filing fee shall be deter-
mined pursuant to regulations prescribed by the Sec-
retary.
‘‘(f) TOLLING OF STATUTES OF LIMITATIONS.—The
applicable statute of limitations with respect to any claim
involved in a dispute subject to mediation proceedings
under this subpart shall be tolled for the period commenc-
ing with the 10-day notice period required under sub-
section (b) and ending with the termination of the medi-
ation proceedings with respect to such dispute. In no event
shall the applicable statute of limitations be tolled beyond
the 60-day-time limit for completion of mediation provided
under section 526.
‘‘SEC. 525. MEDIATION PROCEDURE.
‘‘(a) IN GENERAL.—Mediation proceedings under
this subpart shall be conducted, at locations convenient
to complainants, by facilitators recruited and assigned by
the Secretary under section 522.
‘‘(b) DUTIES OF FACILITATOR.—The Secretary shall
prescribe by regulation the duties and role of the
facilitator during the mediation process. Such regulations
may require the facilitator to identify parties, establish a
schedule, request position papers from the parties, and
evaluate positions of the parties. Such regulations shall
291
Title I, Subtitle I
provide that the mediation will be informal, convenient,
inexpensive, and expeditious for all parties.
‘‘(c) NEUTRALITY OF FACILITATOR.—The facilitator
shall maintain a neutral stance between the parties.
‘‘SEC. 526. MEDIATION TIME LIMIT.
‘‘Any mediation proceedings commenced under this
subpart shall be completed within 60 days from the final
appointment of a facilitator pursuant to section 522(c).
‘‘SEC. 527. COST OF MEDIATION.
‘‘All reasonable costs of the mediation process under
this subpart with respect to any dispute, including the cost
of the facilitator, shall be divided equally among the par-
ties. Facilitators shall be compensated at a rate estab-
lished by the Secretary by regulation. The Secretary shall
prescribe regulations specifying reasonable mediation costs
and alternative means of allocating the costs in cases of
hardship on the part of the claimant.
‘‘SEC. 528. LEGAL EFFECT OF PARTICIPATION IN MEDI-
ATION PROGRAM.
‘‘(a) NONBINDING MEDIATION.—The results of any
mediation under this subpart shall be treated as advisory
in nature and nonbinding. Except as provided in sub-
section (b), the rights of the parties shall not be affected
by participation in the mediation program.
292
Title I, Subtitle I
‘‘(b) RESOLUTION THROUGH SETTLEMENT AGREE-
MENT.—If a dispute is settled through participation in the
mediation program, the facilitator shall, upon the request
of either party, assist the parties in drawing up a settle-
ment agreement between the parties.
‘‘SEC. 529. CONFIDENTIALITY AND ADMISSIBILITY.
‘‘(a) IN GENERAL.—All documents and communica-
tions made during or generated in connection with the me-
diation program, as well as any settlement offers or agree-
ments made or entered into under such program—
‘‘(1) shall be privileged and confidential, and
‘‘(2) shall not be admissible as evidence in any
Federal or State judicial proceeding unless all par-
ties to the mediation consent in writing.
‘‘(b) EXECUTION OF PRIVILEGE.—Any individual or
entity involved in the mediation (including any party or
facilitator or other individual who acts on behalf of a party
or who provides information or an opinion in connection
with the mediation) receiving a subpoena or other lawful
process seeking disclosure of any information or docu-
ments rendered privileged and confidential under sub-
section (a) shall assert the privilege provided under sub-
section (a) and promptly notify all parties to the mediation
proceedings of the request for disclosure. The privilege
provided for in this section shall be in addition to any at-
293
Title I, Subtitle I
torney-client privilege or other privilege which may be as-
serted by a party and nothing in this section shall con-
stitute a waiver of such attorney-client privilege or other
privilege.’’.
(b) CLERICAL AMENDMENTS.—The table of contents
in section 1 of such Act is amended—
(1) by inserting after the item relating to the
heading for part 5 of subtitle B of title I the follow-
ing new item:
‘‘Subpart A—General Provisions’’;
and
(2) by inserting after the item relating to sec-
tion 514 the following new items:
‘‘Subpart B—Mediation of Group Health Plan Claims
‘‘Sec. 521. Eligibility for submission to mediation.
‘‘Sec. 522. Facilitators.
‘‘Sec. 523. Role of attorneys.
‘‘Sec. 524. Initiation of mediation.
‘‘Sec. 525. Mediation procedure.
‘‘Sec. 526. Mediation time limit.
‘‘Sec. 527. Cost of mediation.
‘‘Sec. 528. Legal effect of participation in mediation program.
‘‘Sec. 529. Confidentiality and admissibility.’’.
SEC. 1803. AVAILABLE COURT REMEDIES.
(a) IN GENERAL.—Section 502(c) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1132)
is amended by adding at the end the following new para-
graphs:
‘‘(5) In any action commenced under subsection (a)
by a participant or beneficiary with respect to a group
294
Title I, Subtitle I
health plan in which the plaintiff alleges that a person,
in the capacity of a fiduciary and in violation of the terms
of the plan or this title, has taken an action resulting in
a failure to provide an item or service, or payment there-
for, or has failed to take an action for which such person
is responsible under the plan and which is necessary under
the plan for provision of such item or service, or payment
therefor, upon finding in favor of the plaintiff, the court
shall cause to be served on the defendant an order requir-
ing the defendant—
‘‘(i) to cease and desist from the alleged action
or failure to act,
‘‘(ii) to provide the item or service, or payment
therefor, and to otherwise comply with the terms of
the plan and the applicable requirements of this
title,
‘‘(iii) to pay to the plaintiff prejudgment inter-
est on the actual costs incurred in obtaining any
item or service, or payment therefor, at issue in the
complaint, and
‘‘(iv) to pay to the plaintiff a reasonable attor-
ney’s fee, reasonable expert witness fees, and other
reasonable costs relating to the action on the
charges on which the plaintiff prevails.
295
Title I, Subtitle I
The remedies provided under this paragraph shall be in
addition to remedies otherwise provided under this section.
‘‘(6)(A) The Secretary may assess a civil penalty
against the plan administrator of, or the appropriate fidu-
ciary (as defined in section 503(b)(5)(K)) of, one or more
group health plans for any pattern or practice thereof of
repeated failures to provide benefits under the terms of
the plan or plans without any reasonable basis or repeated
violations thereby of the requirements of section 503 with
respect to such plan or plans. Such penalty shall be pay-
able only upon proof by clear and convincing evidence of
such pattern or practice.
‘‘(B) Such penalty shall be in an amount not to ex-
ceed the lesser of—
‘‘(i) 20 percent of the aggregate value of claims
shown by the Secretary to have been denied, or un-
lawfully delayed in violation of section 503, under
such pattern or practice, or
‘‘(ii) $1,000,000.
‘‘(C) The plan administrator or the appropriate fidu-
ciary of any group health plan or plans who has engaged
in any such pattern or practice with respect to such plans,
upon the petition of the Secretary, may be removed by
the court from that position, and from any other involve-
296
Title I, Subtitle I
ment, with respect to such plan or plans, for a period of
not less than 7 years.
‘‘(D) For purposes of this paragraph, the phrase
‘without any reasonable basis’ means, in connection with
any denial of claims for benefits under a group health
plan, that such denial does not have any reasonable basis,
support, or justification under—
‘‘(i) the facts regarding such claim which were
reasonably available to the plan administrator or the
appropriate fiduciary at the time the claim was de-
nied, and
‘‘(ii) the terms of the plan.’’.
(b) CONFORMING AMENDMENT.—Section 502(a)(6)
of such Act (29 U.S.C. 1132(a)(6)) is amended by insert-
ing ‘‘or (c)(6)’’ after ‘‘(c)(2)’’.
SEC. 1804. EFFECTIVE DATE.
The amendments made by this subtitle shall take ef-
fect January 1, 1995, except that the Secretary of Labor
may issue regulations before such date under such amend-
ments. The Secretary shall issue all regulations necessary
to carry out the amendments made by this subtitle before
the effective date thereof.
297
Title I, Subtitle J
Subtitle J—Delivery of Health Care
Services to Illegal Immigrants
SEC. 1901. STUDY ON THE DELIVERY OF HEALTH CARE
SERVICES TO ILLEGAL IMMIGRANTS.
(a) IN GENERAL.—As soon as practicable after the
date of the enactment of this Act, the Secretary of Health
and Human Services shall conduct a detailed study of
health care in the United States to populations of individ-
uals immigrating to the United States illegally, including
the effect of illegal immigration on levels of health costs
and the shifting of health costs.
(b) MATTERS TO BE ANALYZED.—In conducting the
study under this section, the Secretary shall analyze—
(1) the extent to which individuals illegally im-
migrating into the United States obtain health care
services in the United States,
(2) the costs of such services,
(3) the means currently used to finance such
costs,
(4) the means currently used for identifying,
evaluating, preventing, and resolving health prob-
lems of populations comprised of such individuals,
(5) the extent of efforts currently being under-
taken to prevent or resolve such health problems,
298
Title I, Subtitle J
(6) the extent of efforts currently being under-
taken to educate populations comprised of such indi-
viduals concerning such health problems and to co-
ordinate such efforts,
(7) the programs currently in place for carrying
out the activities described in paragraphs (3)
through (6), and
(8) the extent of intergovernmental cooperation
currently in place between the United States and
other countries in dealing with health problems de-
scribed in the preceding provisions of this sub-
section.
SEC. 1902. REPORT.
Not later than one year after the date of the enact-
ment of this Act, the Secretary of Health and Human
Services shall submit to each House of the Congress a
final report on the matters analyzed in the study con-
ducted under section 1801. The Secretary shall include in
such report any recommendations derived by the Secretary
regarding appropriate means of—
(1) alleviating the health problems peculiar to
populations of individuals who have immigrated to
the United States illegally,
(2) financing health care provided to such pop-
ulations, and
299
Title II
(3) increasing intergovernmental cooperation
and coordination of efforts between the United
States and other countries to alleviate such health
problems and to finance such efforts.
TITLE II—HEALTH CARE COST
CONTAINMENT AND QUALITY
ENHANCEMENT
TABLE OF CONTENTS OF SUBTITLE
Subtitle A—Medical Malpractice Liability Reform
PART 1—GENERAL PROVISIONS
Sec. 2001. Federal reform of medical malpractice liability actions.
Sec. 2002. Definitions.
Sec. 2003. Effective date.
PART 2—MEDICAL MALPRACTICE AND PRODUCT LIABILITY REFORM
Sec. 2011. Requirement for initial resolution of action through alternative dis-
pute resolution.
Sec. 2012. Calculation and payment of damages.
Sec. 2013. Treatment of attorney’s fees and other costs.
Sec. 2014. Joint and several liability.
Sec. 2015. Statute of limitations.
Sec. 2016. Uniform standard for determining negligence.
Sec. 2017. Special provision for certain obstetric services.
PART 3—REQUIREMENTS FOR STATE ALTERNATIVE DISPUTE RESOLUTION
SYSTEMS (ADR)
Sec. 2031. Basic requirements.
Sec. 2032. Certification of State systems; applicability of alternative Federal
system.
Sec. 2033. Reports on implementation and effectiveness of alternative dispute
resolution systems.
PART 4—OTHER PROVISIONS RELATING TO MEDICAL MALPRACTICE
LIABILITY
Sec. 2041. Permitting State professional societies to participate in disciplinary
activities.
Sec. 2042. Study of incentives to encourage voluntary service by physicians.
Sec. 2043. Requirements for risk management programs.
Sec. 2044. Grants for medical safety promotion.
Subtitle B—Administrative Cost Savings and Fair Health
Information Practices
300
Title II
PART 1—ADMINISTRATIVE COST SAVINGS
Sec. 2100. Purpose.
Sec. 2101. Definitions.
SUBPART A—STANDARDS FOR DATA ELEMENTS AND TRANSACTIONS
Sec. 2103. General requirements on Secretary.
Sec. 2104. Standards for data elements of health information.
Sec. 2105. Information transaction standards.
Sec. 2106. Timetables for adoption of standards.
SUBPART B—REQUIREMENTS WITH RESPECT TO CERTAIN TRANSACTIONS AND
INFORMATION
Sec. 2111. Standard transactions and information.
Sec. 2112. Accessing health information for authorized purposes.
Sec. 2113. Ensuring availability of information.
Sec. 2114. Timetables for compliance with requirements.
SUBPART C—MISCELLANEOUS PROVISIONS
Sec. 2121. Standards and certification for health information network services.
Sec. 2122. Imposition of additional requirements.
Sec. 2123. Effect on State law.
Sec. 2124. Grants for demonstration projects.
SUBPART D—ASSISTANCE TO THE SECRETARY
Sec. 2131. General requirement on Secretary.
Sec. 2132. Health Information Advisory Committee.
PART 2—FAIR HEALTH INFORMATION PRACTICES
Sec. 2140. Definitions.
SUBPART A—DUTIES OF HEALTH INFORMATION TRUSTEES
Sec. 2141. Inspection of protected health information.
Sec. 2142. Amendment of protected health information.
Sec. 2143. Notice of information practices.
Sec. 2144. Accounting for disclosures.
Sec. 2145. Security.
SUBPART B—USE AND DISCLOSURE OF PROTECTED HEALTH INFORMATION
Sec. 2151. General limitations on use and disclosure.
Sec. 2152. Authorizations for disclosure of protected health information.
Sec. 2153. Treatment, payment, and oversight.
Sec. 2154. Next of kin and directory information.
Sec. 2155. Public health.
Sec. 2156. Health research.
Sec. 2157. Emergency circumstances.
Sec. 2158. Judicial and administrative purposes.
Sec. 2159. Law enforcement.
Sec. 2160. Subpoenas, warrants, and search warrants.
Sec. 2161. Health information service organizations.
301
Title II
SUBPART C—ACCESS PROCEDURES AND CHALLENGE RIGHTS
Sec. 2171. Access procedures for law enforcement subpoenas, warrants, and
search warrants.
Sec. 2172. Challenge procedures for law enforcement subpoenas.
Sec. 2173. Access and challenge procedures for other subpoenas.
Sec. 2174. Construction of subpart; suspension of statute of limitations.
Sec. 2175. Responsibilities of Secretary.
SUBPART D—MISCELLANEOUS PROVISIONS
Sec. 2181. Payment card and electronic payment transactions.
Sec. 2182. Access to protected health information outside of the United States.
Sec. 2183. Standards for electronic documents and communications.
Sec. 2184. Duties and authorities of affiliated persons.
Sec. 2185. Agents and attorneys.
Sec. 2186. Minors.
Sec. 2187. Maintenance of certain protected health information.
SUBPART E—ENFORCEMENT
Sec. 2191. Civil actions.
Sec. 2192. Civil money penalties.
Sec. 2193. Alternative dispute resolution.
Sec. 2194. Amendments to criminal law.
SUBPART F—AMENDMENTS TO TITLE 5, UNITED STATES CODE
Sec. 2195. Amendments to title 5, United States Code.
SUBPART G—REGULATIONS, RESEARCH, AND EDUCATION; EFFECTIVE DATES;
APPLICABILITY; AND RELATIONSHIP TO OTHER LAWS
Sec. 2196. Regulations; research and education.
Sec. 2197. Effective dates.
Sec. 2198. Applicability.
Sec. 2199. Relationship to other laws.
Subtitle C—Deduction for Cost of Catastrophic Health Plan;
Medical Savings Accounts
Sec. 2201. Individuals allowed deduction from gross income for cost of cata-
strophic health plan.
Sec. 2202. Medical savings accounts.
Subtitle D—Anti-Fraud
PART 1—ESTABLISHMENT OF ALL-PAYER HEALTH CARE FRAUD AND ABUSE
CONTROL PROGRAM
Sec. 2301. All-payer health care fraud and abuse control program.
Sec. 2302. Authorization of additional appropriations for investigators and
other personnel.
Sec. 2303. Establishment of anti-fraud and abuse trust fund.
PART 2—REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND ABUSE
Sec. 2311. Mandatory exclusion from participation in medicare and State
health care programs.
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Title II
Sec. 2312. Establishment of minimum period of exclusion for certain individ-
uals and entities subject to permissive exclusion from medicare
and State health care programs.
Sec. 2313. Revisions to criminal penalties.
Sec. 2314. Revisions to limitations on physician self-referral.
Sec. 2315. Medicare health maintenance organizations.
Sec. 2316. Effective date.
PART 3—AMENDMENTS TO CRIMINAL LAW
Sec. 2321. Penalties for health care fraud.
Sec. 2322. Rewards for information leading to prosecution and conviction.
Sec. 2323. Broadening application of mail fraud statute.
PART 4—ADVISORY OPINIONS
Sec. 2331. Authorizing the Secretary of Health and Human Services to issue
advisory opinions under title XI.
Sec. 2332. Authorizing the Secretary of Health and Human Services to issue
advisory opinions relating to physician ownership and referral.
Sec. 2333. Effective date.
Subtitle E—Increased Medicare Beneficiary Choice; Additional
Medicare Reforms
PART 1—INCREASED MEDICARE BENEFICIARY CHOICE
Sec. 2401. Requirements for health maintenance organizations under medicare.
Sec. 2402. Expansion and revision of medicare select policies.
Sec. 2403. Including notice of available health maintenance organizations in an-
nual notice to beneficiaries.
Sec. 2404. Legislative proposal on enrolling medicare beneficiaries in qualified
health plans.
Sec. 2405. Optional interim enrollment of medicare beneficiaries in private
health plans.
PART 2—MEDICARE PART B PREMIUM; OTHER MEDICARE PAYMENT
CHANGES
Sec. 2411. Extension of current rules for computing medicare part B premium.
Sec. 2412. Increase in medicare part B premium for individuals with high in-
come.
Sec. 2413. Improved efficiency through consolidation of administration of parts
A and B.
Sec. 2414. Extension of medicare secondary payment provisions.
Subtitle F—Health Care Antitrust Improvements
Sec. 2501. Protection from antitrust laws for certain competitive and collabo-
rative activities.
Sec. 2502. Designation of safe harbors.
Sec. 2503. Certificates of review.
Sec. 2504. Notifications providing reduction in certain penalties under antitrust
law for health care joint ventures.
Sec. 2505. Review and reports on safe harbors, certificates of review, and noti-
fications.
Sec. 2506. Rules, regulations, and guidelines.
Sec. 2507. Establishment of HHS Office of Health Care Competition Policy.
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Title II, Subtitle A
Sec. 2508. Definitions.
Subtitle G—Encouraging Enforcement Activities of Medical
Self-Regulatory Entities
PART 1—APPLICATION OF THE CLAYTON ACT TO MEDICAL SELF-
REGULATORY ENTITIES
Sec. 2601. Antitrust exemption for medical self-regulatory entities.
Sec. 2602. Definitions.
PART 2—CONSULTATION BY FEDERAL AGENCIES
Sec. 2611. Consultation with medical self-regulatory entities respecting medical
professional guidelines and standards.
Subtitle H—Reform of Clinical Laboratory Requirements for
Simple Tests
Sec. 2701. Eliminating CLIA requirement for certificate of waiver for simple
laboratory examinations and procedures.
Sec. 2702. Amendment related to simple laboratory examinations.
Sec. 2703. Amendment related to study.
Sec. 2704. Amendments related to the Clinical Laboratory Improvement Advi-
sory Committee.
Subtitle I—Miscellaneous Provisions
Sec. 2801. Requirement that certain agencies prefund government health bene-
fits contributions for their annuitants.
Sec. 2802. Ineligibility of aliens for SSI and medicaid.
Sec. 2803. Limitation on SSI benefits for drug and alcohol addicts.
Subtitle A—Medical Malpractice
Liability Reform
PART 1—GENERAL PROVISIONS
SEC. 2001. FEDERAL REFORM OF MEDICAL MALPRACTICE
LIABILITY ACTIONS.
(a) APPLICABILITY.—This subtitle shall apply with
respect to any medical malpractice liability claim and to
any medical malpractice liability action brought in any
State or Federal court, except that this subtitle shall not
apply to a claim or action for damages arising from a
vaccine-related injury or death to the extent that title
304
Title II, Subtitle A
XXI of the Public Health Service Act applies to the claim
or action.
(b) PREEMPTION.—The provisions of this subtitle
shall preempt any State law to the extent such law is in-
consistent with the limitations contained in such provi-
sions. The provisions of this subtitle shall not preempt any
State law that provides for defenses or places limitations
on a person’s liability in addition to those contained in
this subtitle, places greater limitations on the amount of
attorneys’ fees that can be collected, or otherwise imposes
greater restrictions than those provided in this subtitle.
(c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in subsection (b) shall be
construed to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any provision of
law;
(2) waive or affect any defense of sovereign im-
munity asserted by the United States;
(3) affect the applicability of any provision of
the Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with re-
spect to claims brought by a foreign nation or a citi-
zen of a foreign nation; or
305
Title II, Subtitle A
(5) affect the right of any court to transfer
venue or to apply the law of a foreign nation or to
dismiss a claim of a foreign nation or of a citizen
of a foreign nation on the ground of inconvenient
forum.
(d) FEDERAL COURT JURISDICTION NOT ESTAB-
LISHED ON FEDERAL QUESTION GROUNDS.—Nothing in
this subtitle shall be construed to establish any jurisdiction
in the district courts of the United States over medical
malpractice liability actions on the basis of section 1331
or 1337 of title 28, United States Code.
SEC. 2002. DEFINITIONS.
As used in this subtitle:
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM; ADR.—The term ‘‘alternative dispute resolution
system’’ or ‘‘ADR’’ means a system established
under this subtitle that provides for the resolution of
medical malpractice liability claims in a manner
other than through medical malpractice liability ac-
tions.
(2) CLAIMANT.—The term ‘‘claimant’’ means
any person who alleges a medical malpractice liabil-
ity claim, and any person on whose behalf such a
claim is alleged, including the decedent in the case
306
Title II, Subtitle A
of an action brought through or on behalf of an es-
tate.
(3) CLEAR AND CONVINCING EVIDENCE.—The
term ‘‘clear and convincing evidence’’ is that meas-
ure or degree of proof that will produce in the mind
of the trier of fact a firm belief or conviction as to
the truth of the allegations sought to be established,
except that such measure or degree of proof is more
than that required under preponderance of the evi-
dence, but less than that required for proof beyond
a reasonable doubt.
(4) ECONOMIC DAMAGES.—The term ‘‘economic
damages’’ means damages paid to compensate an in-
dividual for hospital and other medical expenses, lost
wages, lost employment, and other pecuniary losses.
(5) HEALTH CARE PROFESSIONAL.—The term
‘‘health care professional’’ means any individual who
provides health care services in a State and who is
required by the laws or regulations of the State to
be licensed or certified by the State to provide such
services in the State.
(6) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any organization or
institution that is engaged in the delivery of health
care services in a State and that is required by the
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Title II, Subtitle A
laws or regulations of the State to be licensed or
certified by the State to engage in the delivery of
such services in the State.
(7) INJURY.—The term ‘‘injury’’ means any ill-
ness, disease, or other harm that is the subject of
a medical malpractice liability action or a medical
malpractice liability claim.
(8) MEDICAL
MALPRACTICE
LIABILITY
AC-
TION.—The term ‘‘medical malpractice liability ac-
tion’’ means a civil action brought in a State or Fed-
eral court against a health care provider or health
care professional in which the plaintiff alleges a
medical malpractice liability claim, but does not in-
clude any action in which the plaintiff’s sole allega-
tion is an allegation of an intentional tort.
(9) 
MEDICAL
MALPRACTICE
LIABILITY
CLAIM.—The term ‘‘medical malpractice liability
claim’’ means a claim in which the claimant alleges
that injury was caused by the provision of (or the
failure to provide) health care services or the use of
a medical product.
(10) MEDICAL PRODUCT.—
(A) IN
GENERAL.—The term ‘‘medical
product’’ means, with respect to the allegation
of a claimant, a drug (as defined in section
308
Title II, Subtitle A
201(g)(1) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 321(g)(1)) or a medical
device (as defined in section 201(h) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C.
321(h)) if—
(i) such drug or device was subject to
premarket approval under section 505,
507, or 515 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355, 357, or
360e) or section 351 of the Public Health
Service Act (42 U.S.C. 262) with respect
to the safety of the formulation or per-
formance of the aspect of such drug or de-
vice which is the subject of the claimant’s
allegation or the adequacy of the packag-
ing or labeling of such drug or device, and
such drug or device is approved by the
Food and Drug Administration; or
(ii) the drug or device is generally rec-
ognized as safe and effective under regula-
tions issued by the Secretary of Health
and Human Services under section 201(p)
of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321(p)).
309
Title II, Subtitle A
(B) EXCEPTION
IN
CASE
OF
MISREPRE-
SENTATION OR FRAUD.—Notwithstanding sub-
paragraph (A), the term ‘‘medical product’’
shall not include any product described in such
subparagraph if the claimant shows that the
product is approved by the Food and Drug Ad-
ministration for marketing as a result of with-
held information, misrepresentation, or an ille-
gal payment by manufacturer of the product.
(11) 
NONECONOMIC
DAMAGES.—The 
term
‘‘noneconomic damages’’ means damages paid to
compensate an individual for physical and emotional
pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of
life, loss of consortium, and other nonpecuniary
losses, but does not include punitive damages.
(12) PUNITIVE
DAMAGES; EXEMPLARY
DAM-
AGES.—The terms ‘‘punitive damages’’ and ‘‘exem-
plary damages’’ mean compensation, in addition to
compensation for actual harm suffered, that is
awarded for the purpose of punishing a person for
conduct deemed to be malicious, wanton, willful, or
excessively reckless.
(13) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Health and Human Services.
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Title II, Subtitle A
(14) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
Guam, and American Samoa.
SEC. 2003. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b) and section 2017(c), this subtitle shall apply with re-
spect to claims accruing or actions brought on or after
the expiration of the 3-year period that begins on the date
of the enactment of this Act.
(b) EXCEPTION FOR STATES REQUESTING EARLIER
IMPLEMENTATION OF REFORMS.—
(1) APPLICATION.—A State may submit an ap-
plication to the Secretary requesting the early imple-
mentation of this subtitle with respect to claims or
actions brought in the State.
(2) DECISION BY SECRETARY.—The Secretary
shall issue a response to a State’s application under
paragraph (1) not later than 90 days after receiving
the application. If the Secretary determines that the
State meets the requirements of this subtitle at the
time of submitting its application, the Secretary
shall approve the State’s application, and this sub-
title shall apply with respect to actions brought in
the State on or after the expiration of the 90-day
311
Title II, Subtitle A
period that begins on the date the Secretary issues
the response. If the Secretary denies the State’s ap-
plication, the Secretary shall provide the State with
a written explanation of the grounds for the deci-
sion.
PART 2—MEDICAL MALPRACTICE AND PRODUCT
LIABILITY REFORM
SEC. 2011. REQUIREMENT FOR INITIAL RESOLUTION OF
ACTION THROUGH ALTERNATIVE DISPUTE
RESOLUTION.
(a) IN GENERAL.—
(1) STATE CASES.—A medical malpractice li-
ability action may not be brought in any State court
during a calendar year unless the medical mal-
practice liability claim that is the subject of the ac-
tion has been initially resolved under an alternative
dispute resolution system certified for the year by
the Secretary under section 2032(a), or, in the case
of a State in which such a system is not in effect
for the year, under the alternative Federal system
established under section 2032(b).
(2) FEDERAL DIVERSITY ACTIONS.—A medical
malpractice liability action may not be brought in
any Federal court under section 1332 of title 28,
United States Code, during a calendar year unless
313
Title II, Subtitle A
lished by the Attorney General under such sub-
paragraph.
(b) INITIAL
RESOLUTION
OF
CLAIMS
UNDER
ADR.—For purposes of subsection (a), an action is ‘‘ini-
tially resolved’’ under an alternative dispute resolution
system if—
(1) the ADR reaches a decision on whether the
defendant is liable to the plaintiff for damages; and
(2) if the ADR determines that the defendant
is liable, the ADR reaches a decision on the amount
of damages assessed against the defendant.
(c) PROCEDURES FOR FILING ACTIONS.—
(1) NOTICE
OF
INTENT
TO
CONTEST
DECI-
SION.—Not later than 60 days after a decision is is-
sued with respect to a medical malpractice liability
claim under an alternative dispute resolution system,
each party affected by the decision shall submit a
sealed statement to a court of competent jurisdiction
indicating whether or not the party intends to con-
test the decision.
(2) DEADLINE FOR FILING ACTION.—A medical
malpractice liability action may not be brought by a
party unless—
(A) the party has filed the notice of intent
required by paragraph (1); and
314
Title II, Subtitle A
(B) the party files the action in a court of
competent jurisdiction not later than 90 days
after the decision resolving the medical mal-
practice liability claim that is the subject of the
action is issued under the applicable alternative
dispute resolution system.
(3) COURT
OF
COMPETENT
JURISDICTION.—
For purposes of this subsection, the term ‘‘court of
competent jurisdiction’’ means—
(A) with respect to actions filed in a State
court, the appropriate State trial court; and
(B) with respect to actions filed in a Fed-
eral court, the appropriate United States dis-
trict court.
(d) LEGAL EFFECT OF UNCONTESTED ADR DECI-
SION.—The decision reached under an alternative dispute
resolution system shall, for purposes of enforcement by a
court of competent jurisdiction, have the same status in
the court as the verdict of a medical malpractice liability
action adjudicated in a State or Federal trial court. The
previous sentence shall not apply to a decision that is con-
tested by a party affected by the decision pursuant to sub-
section (c)(1).
315
Title II, Subtitle A
SEC. 2012. CALCULATION AND PAYMENT OF DAMAGES.
(a) LIMITATION ON NONECONOMIC DAMAGES.—The
total amount of noneconomic damages that may be award-
ed to a claimant and the members of the claimant’s family
for losses resulting from the injury which is the subject
of a medical malpractice liability action may not exceed
$250,000, regardless of the number of parties against
whom the action is brought or the number of actions
brought with respect to the injury.
(b) TREATMENT OF PUNITIVE DAMAGES.—
(1) BASIS FOR RECOVERY.—Punitive or exem-
plary damages shall not be awarded in a medical
malpractice liability action unless the claimant es-
tablishes by clear and convincing evidence that the
injury suffered was the direct result of conduct
manifesting a malicious, wanton, willful, or exces-
sively reckless disregard of the safety of others.
(2) NO
AWARD
AGAINST
MANUFACTURER
OF
MEDICAL PRODUCT.—In the case of a medical mal-
practice liability action in which the plaintiff alleges
a claim against the manufacturer of a medical prod-
uct, no punitive or exemplary damages may be
awarded against such manufacturer.
(3) PAYMENTS TO STATE FOR MEDICAL QUAL-
ITY ASSURANCE ACTIVITIES.—
316
Title II, Subtitle A
(A) IN GENERAL.—Any punitive or exem-
plary damages awarded in a medical mal-
practice liability action shall be paid to the
State in which the action is brought or, in a
case brought in Federal court, in the State in
which the health care services that caused the
injury that is the subject of the action were
provided.
(B) ACTIVITIES
DESCRIBED.—A State
shall use amounts paid pursuant to subpara-
graph (A) to carry out activities to assure the
safety and quality of health care services pro-
vided in the State, including (but not limited
to)—
(i) licensing or certifying health care
professionals and health care providers in
the State;
(ii) operating alternative dispute reso-
lution systems;
(iii) carrying out public education pro-
grams relating to medical malpractice and
the availability of alternative dispute reso-
lution systems in the State; and
(iv) carrying out programs to reduce
malpractice-related costs for retired provid-
317
Title II, Subtitle A
ers or other providers volunteering to pro-
vide services in medically underserved
areas.
(C) MAINTENANCE OF EFFORT.—A State
shall use any amounts paid pursuant to sub-
paragraph (A) to supplement and not to replace
amounts spent by the State for the activities
described in subparagraph (B).
(c) PERIODIC PAYMENTS FOR FUTURE LOSSES.—
(1) GENERAL
RULE.—In any medical mal-
practice liability action in which the damages award-
ed for future economic loss exceeds $100,000, a de-
fendant may not be required to pay such damages
in a single, lump-sum payment, but shall be per-
mitted to make such payments periodically based on
when the damages are found likely to occur, as such
payments are determined by the court.
(2) WAIVER.—A court may waive the applica-
tion of paragraph (1) with respect to a defendant if
the court determines that it is not in the best inter-
ests of the plaintiff to receive payments for damages
on such a periodic basis.
(d) MANDATORY OFFSETS FOR DAMAGES PAID BY
A COLLATERAL SOURCE.—
318
Title II, Subtitle A
(1) IN GENERAL.—With respect to a medical
malpractice liability claim or action, the total
amount of damages received by an individual under
such claim or action shall be reduced, in accordance
with paragraph (2), by any other payment that has
been, or will be, made to an individual to com-
pensate such individual for the injury that was the
subject of such claim or action.
(2) AMOUNT OF REDUCTION.—The amount by
which an award of damages to an individual for an
injury shall be reduced under paragraph (1) shall
be—
(A) the total amount of any payments
(other than such award) that have been made
or that will be made to such individual to pay
costs of or compensate such individual for the
injury that was the subject of the claim or ac-
tion; minus
(B) the amount paid by such individual (or
by the spouse, parent, or legal guardian of such
individual) to secure the payments described in
subparagraph (A).
319
Title II, Subtitle A
SEC. 2013. TREATMENT OF ATTORNEY’S FEES AND OTHER
COSTS.
(a) LIMITATION
ON AMOUNT
OF CONTINGENCY
FEES.—
(1) IN GENERAL.—An attorney who represents,
on a contingency fee basis, a claimant in a medical
malpractice liability claim may not charge, demand,
receive, or collect for services rendered in connection
with such claim in excess of the following amount re-
covered by judgment or settlement under such claim:
(A) 25 percent of the first $150,000 (or
portion thereof) recovered, plus
(B) 10 percent of any amount in excess of
$150,000 recovered.
(2) CALCULATION OF PERIODIC PAYMENTS.—In
the event that a judgment or settlement includes
periodic or future payments of damages, the amount
recovered for purposes of computing the limitation
on the contingency fee under paragraph (1) shall be
based on the cost of the annuity or trust established
to make the payments. In any case in which an an-
nuity or trust is not established to make such pay-
ments, such amount shall be based on the present
value of the payments.
(b) REQUIRING PARTY CONTESTING ADR RULING
TO PAY ATTORNEY’S FEES AND OTHER COSTS.—
320
Title II, Subtitle A
(1) IN GENERAL.—The court in a medical mal-
practice liability action shall require the party that
(pursuant to section 2011(c)(1)) contested the ruling
of the alternative dispute resolution system with re-
spect to the medical malpractice liability claim that
is the subject of the action to pay to the opposing
party the costs incurred by the opposing party under
the action, including attorney’s fees, fees paid to ex-
pert witnesses, and other litigation expenses (but not
including court costs, filing fees, or other expenses
paid directly by the party to the court, or any fees
or costs associated with the resolution of the claim
under the alternative dispute resolution system), but
only if—
(A) in the case of an action in which the
party that contested the ruling is the claimant,
the amount of damages awarded to the party
under the action does not exceed the amount of
damages awarded to the party under the ADR
system by at least 10 percent; and
(B) in the case of an action in which the
party that contested the ruling is the defendant,
the amount of damages assessed against the
party under the action is not at least 10 per-
321
Title II, Subtitle A
cent less than the amount of damages assessed
under the ADR system.
(2) EXCEPTIONS.—Paragraph (1) shall not
apply if—
(A) the party contesting the ruling made
under the previous alternative dispute resolu-
tion system shows that—
(i) the ruling was procured by corrup-
tion, fraud, or undue means,
(ii) there was partiality or corruption
under the system,
(iii) there was other misconduct under
the system that materially prejudiced the
party’s rights, or
(iv) the ruling was based on an error
of law;
(B) the party contesting the ruling made
under the alternative dispute resolution system
presents new evidence before the trier of fact
that was not available for presentation under
the ADR system;
(C) the medical malpractice liability action
raised a novel issue of law; or
(D) the court finds that the application of
such paragraph to a party would constitute an
322
Title II, Subtitle A
undue hardship, and issues an order waiving or
modifying the application of such paragraph
that specifies the grounds for the court’s deci-
sion.
(3) 
REQUIREMENT
FOR
PERFORMANCE
BOND.—The court in a medical malpractice liability
action shall require the party that (pursuant to sec-
tion 2011(c)(1)) contested the ruling of the alter-
native dispute resolution system with respect to the
medical malpractice liability claim that is the subject
of the action to post a performance bond (in such
amount and consisting of such funds and assets as
the court determines to be appropriate), except that
the court may waive the application of such require-
ment to a party if the court determines that the
posting of such a bond is not necessary to ensure
that the party shall meet the requirements of this
subsection to pay the opposing party the costs in-
curred by the opposing party under the action.
(4) LIMIT ON ATTORNEY’S FEES PAID.—Attor-
neys’ fees that are required to be paid under para-
graph (1) by the contesting party shall not exceed
the amount of the attorneys’ fees incurred by the
contesting party in the action. If the attorneys’ fees
of the contesting party are based on a contingency
323
Title II, Subtitle A
fee agreement, the amount of attorneys’ fees for
purposes of the preceding sentence shall not exceed
the reasonable value of those services.
(5) RECORDS.—In order to receive attorneys’
fees under paragraph (1), counsel of record in the
medical malpractice liability action involved shall
maintain accurate, complete records of hours worked
on the action, regardless of the fee arrangement
with the client involved.
(c) CONTINGENCY FEE DEFINED.—As used in this
section, the term ‘‘contingency fee’’ means any fee for pro-
fessional legal services which is, in whole or in part, con-
tingent upon the recovery of any amount of damages,
whether through judgment or settlement.
SEC. 2014. JOINT AND SEVERAL LIABILITY.
A defendant may be held severally but not jointly lia-
ble in a medical malpractice action. A person found liable
for damages in any such action may be found liable, if
at all, only for those damages directly attributable to the
person’s proportionate share of fault or responsibility for
the injury, and may not be found liable for damages at-
tributable to the proportionate share of fault or respon-
sibility of any other person (without regard to whether
that person is a party to the action) for the injury, includ-
ing any person bringing the action.
324
Title II, Subtitle A
SEC. 2015. STATUTE OF LIMITATIONS.
A medical malpractice liability claim may not be
brought after the expiration of the 7-year period that be-
gins on the date the alleged injury that is the subject of
the claim occurred. If the commencement of such an ac-
tion is stayed or enjoined, the running of the statute of
limitations under this section shall be suspended for the
period of the stay or injunction.
SEC. 2016. UNIFORM STANDARD FOR DETERMINING NEG-
LIGENCE.
A defendant in a medical malpractice liability action
may not be found to have acted negligently unless the de-
fendant’s conduct at the time of providing the health care
services that are the subject of the action was not reason-
able.
SEC. 2017. SPECIAL PROVISION FOR CERTAIN OBSTETRIC
SERVICES.
(a) IMPOSITION OF HIGHER STANDARD OF PROOF.—
In the case of a medical malpractice liability claim relating
to services provided during labor or the delivery of a baby,
if the health care professional against whom the claim is
brought did not previously treat the individual alleged to
have been injured for the pregnancy, the trier of fact may
not find that the defendant committed malpractice and
may not assess damages against the health care profes-
325
Title II, Subtitle A
sional unless the malpractice is proven by clear and con-
vincing evidence.
(b) APPLICABILITY
TO
GROUP
PRACTICES
OR
AGREEMENTS AMONG PROVIDERS.—For purposes of sub-
section (a), a health care professional shall be considered
to have previously treated an individual for a pregnancy
if the professional is a member of a group practice whose
members previously treated the individual for the preg-
nancy or is providing services to the individual during
labor or the delivery of a baby pursuant to an agreement
with another health care professional.
(c) EFFECTIVE DATE.—This section shall apply with
respect to claims accruing or actions brought on or after
the expiration of the 2-year period that begins on the date
of the enactment of this Act.
PART 3—REQUIREMENTS FOR STATE ALTER-
NATIVE 
DISPUTE 
RESOLUTION 
SYSTEMS
(ADR)
SEC. 2031. BASIC REQUIREMENTS.
(a) IN GENERAL.—A State’s alternative dispute reso-
lution system meets the requirements of this section if the
system—
(1) applies to all medical malpractice liability
claims under the jurisdiction of the courts of that
State;
326
Title II, Subtitle A
(2) requires that a written opinion resolving the
dispute be issued not later than 6 months after the
date by which each party against whom the claim is
filed has received notice of the claim (other than in
exceptional cases for which a longer period is re-
quired for the issuance of such an opinion), and that
the opinion contain—
(A) findings of fact relating to the dispute,
and
(B) a description of the costs incurred in
resolving the dispute under the system (includ-
ing any fees paid to the individuals hearing and
resolving the claim), together with an appro-
priate assessment of the costs against any of
the parties;
(3) requires individuals who hear and resolve
claims under the system to meet such qualifications
as the State may require (in accordance with regula-
tions of the Secretary);
(4) is approved by the State or by local govern-
ments in the State;
(5) with respect to a State system that consists
of multiple dispute resolution procedures—
327
Title II, Subtitle A
(A) permits the parties to a dispute to se-
lect the procedure to be used for the resolution
of the dispute under the system, and
(B) if the parties do not agree on the pro-
cedure to be used for the resolution of the dis-
pute, assigns a particular procedure to the par-
ties;
(6) provides for the transmittal to the State
agency responsible for monitoring or disciplining
health care professionals and health care providers
of any findings made under the system that such a
professional or provider committed malpractice, un-
less, during the 90-day period beginning on the date
the system resolves the claim against the profes-
sional or provider, the professional or provider
brings an action contesting the decision made under
the system; and
(7) provides for the regular transmittal to the
Administrator for Health Care Policy and Research
of information on disputes resolved under the sys-
tem, in a manner that assures that the identity of
the parties to a dispute shall not be revealed.
(b) APPLICATION
OF
MALPRACTICE
LIABILITY
STANDARDS TO ALTERNATIVE DISPUTE RESOLUTION.—
The provisions of part 2 shall apply with respect to claims
328
Title II, Subtitle A
brought under a State alternative dispute resolution sys-
tem or the alternative Federal system in the same manner
as such provisions apply with respect to medical mal-
practice liability actions brought in the State.
SEC. 2032. CERTIFICATION OF STATE SYSTEMS; APPLICA-
BILITY OF ALTERNATIVE FEDERAL SYSTEM.
(a) CERTIFICATION.—
(1) IN GENERAL.—Not later than October 1 of
each year (beginning with 1995), the Secretary, in
consultation with the Attorney General, shall deter-
mine whether a State’s alternative dispute resolution
system meets the requirements of this part for the
following calendar year.
(2) BASIS FOR CERTIFICATION.—The Secretary
shall certify a State’s alternative dispute resolution
system under this subsection for a calendar year if
the Secretary determines under paragraph (1) that
the system meets the requirements of section 2031.
(b) APPLICABILITY OF ALTERNATIVE FEDERAL SYS-
TEM.—
(1) ESTABLISHMENT
AND
APPLICABILITY.—
Not later than October 1, 1995, the Secretary, in
consultation with the Attorney General, shall estab-
lish by rule an alternative Federal ADR system for
the resolution of medical malpractice liability claims
329
Title II, Subtitle A
during a calendar year in States that do not have
in effect an alternative dispute resolution system
certified under subsection (a) for the year.
(2) REQUIREMENTS FOR SYSTEM.—Under the
alternative Federal ADR system established under
paragraph (1)—
(A) paragraphs (1), (2), (6), and (7) of
section 2031(a) shall apply to claims brought
under the system;
(B) if the system provides for the resolu-
tion of claims through arbitration, the claims
brought under the system shall be heard and
resolved by arbitrators appointed by the Sec-
retary in consultation with the Attorney Gen-
eral; and
(C) with respect to a State in which the
system is in effect, the Secretary may (at the
State’s request) modify the system to take into
account the existence of dispute resolution pro-
cedures in the State that affect the resolution
of medical malpractice liability claims.
(3) TREATMENT
OF
STATES
WITH
ALTER-
NATIVE SYSTEM IN EFFECT.—If the alternative Fed-
eral ADR system established under this subsection is
applied with respect to a State for a calendar year—
330
Title II, Subtitle A
(A) the State shall reimburse the United
States (at such time and in such manner as the
Secretary may require) for the costs incurred
by the United States during the year as a result
of the application of the system with respect to
the State; and
(B) notwithstanding any other provision of
law, no funds may be paid to the State (or to
any unit of local government in the State) or to
any entity in the State pursuant to the Public
Health Service Act.
SEC. 2033. REPORTS ON IMPLEMENTATION AND EFFEC-
TIVENESS OF ALTERNATIVE DISPUTE RESO-
LUTION SYSTEMS.
(a) IN GENERAL.—Not later than 5 years after the
date of the enactment of this Act, the Secretary shall pre-
pare and submit to the Congress a report describing and
evaluating State alternative dispute resolution systems op-
erated pursuant to this part and the alternative Federal
system established under section 2032(b).
(b) CONTENTS OF REPORT.—The Secretary shall in-
clude in the report prepared and submitted under sub-
section (a)—
(1) information on—
331
Title II, Subtitle A
(A) the effect of the alternative dispute
resolution systems on the cost of health care
within each State,
(B) the impact of such systems on the ac-
cess of individuals to health care within the
State, and
(C) the effect of such systems on the qual-
ity of health care provided within the State; and
(2) to the extent that such report does not pro-
vide information on no-fault systems operated by
States as alternative dispute resolution systems pur-
suant to this part, an analysis of the feasibility and
desirability of establishing a system under which
medical malpractice liability claims shall be resolved
on a no-fault basis.
PART 4—OTHER PROVISIONS RELATING TO
MEDICAL MALPRACTICE LIABILITY
SEC. 2041. PERMITTING STATE PROFESSIONAL SOCIETIES
TO PARTICIPATE IN DISCIPLINARY ACTIVI-
TIES.
(a) ROLE OF PROFESSIONAL SOCIETIES.—Notwith-
standing any other provision of State or Federal law, a
State agency responsible for the conduct of disciplinary
actions for a type of health care practitioner may enter
into agreements with State or county professional societies
333
Title II, Subtitle A
the individual’s actions in conducting such activities
or review.
(c) AGREEMENTS NOT MANDATORY.—Nothing in
this section may be construed to require a State to enter
into agreements with societies described in subsection (a)
to conduct the activities described in such subsection.
(d) EFFECTIVE DATE.—This section shall take effect
2 years after the date of the enactment of this Act.
SEC. 2042. STUDY OF INCENTIVES TO ENCOURAGE VOL-
UNTARY SERVICE BY PHYSICIANS.
(a) STUDY.—The Secretary shall conduct a study
analyzing the existence and effectiveness of incentives
adopted by State and local governments, insurers, medical
societies, and other entities to encourage physicians
(whether practicing or retired) to volunteer to provide
health care services in medically underserved areas.
(b) REPORTS.—(1) Not later than 1 year after the
date of the enactment of this Act, the Secretary shall sub-
mit an interim report to Congress on the study conducted
under subsection (a), together with the Secretary’s rec-
ommendations for actions to increase the number of physi-
cians volunteering to provide health care services in medi-
cally underserved areas.
(2) Not later than 5 years after the date of the enact-
ment of this Act, the Secretary shall submit a final report
334
Title II, Subtitle A
to the Congress on the study conducted under subsection
(a) (taking into account the effects of this subtitle on the
incidence and costs of medical malpractice), together with
the Secretary’s recommendations for actions to increase
the number of physicians volunteering to provide health
care services in medically underserved areas.
SEC. 2043. REQUIREMENTS FOR RISK MANAGEMENT PRO-
GRAMS.
(a) REQUIREMENTS FOR PROVIDERS.—Each State
shall require each health care professional and health care
provider providing services in the State to participate in
a risk management program to prevent and provide early
warning of practices which may result in injuries to pa-
tients or which otherwise may endanger patient safety.
(b) REQUIREMENTS
FOR INSURERS.—Each State
shall require each entity which provides health care profes-
sional or provider liability insurance to health care profes-
sionals and health care providers in the State to—
(1) establish risk management programs based
on data available to such entity or sanction pro-
grams of risk management for health care profes-
sionals and health care providers provided by other
entities; and
(2) require each such professional or provider,
as a condition of maintaining insurance, to partici-
335
Title II, Subtitle A
pate in one program described in paragraph (1) at
least once in each 3-year period.
(c) EFFECTIVE DATE.—This section shall take effect
2 years after the date of the enactment of this Act.
SEC. 2044. GRANTS FOR MEDICAL SAFETY PROMOTION.
(a) RESEARCH ON MEDICAL INJURY PREVENTION
AND COMPENSATION.
(1) IN GENERAL.—The Secretary shall make
grants for the conduct of basic research in the pre-
vention of and compensation for injuries resulting
from health care professional or health care provider
malpractice, and research of the outcomes of health
care procedures.
(2) PREFERENCE FOR RESEARCH ON CERTAIN
ACTIVITIES.—In making grants under paragraph
(1), the Secretary shall give preference to applica-
tions for grants to conduct research on the behavior
of health care providers and health care profes-
sionals in carrying out their professional duties and
of other participants in systems for compensating in-
dividuals injured by medical malpractice, the effects
of financial and other incentives on such behavior,
the determinants of compensation system outcomes,
and the costs and benefits of alternative compensa-
tion policy options.
336
Title II, Subtitle A
(3) APPLICATION.—The Secretary may not
make a grant under paragraph (1) unless an appli-
cant submits an application to the Secretary at such
time, in such form, in such manner, and containing
such information as the Secretary may require.
(b) GRANTS FOR LICENSING AND DISCIPLINARY AC-
TIVITIES.—
(1) IN GENERAL.—The Secretary shall make
grants to States to assist States in improving the
State’s ability to license and discipline health care
professionals.
(2) USES FOR GRANTS.—A State may use a
grant awarded under subsection (a) to develop and
implement improved mechanisms for monitoring the
practices of health care professionals or for conduct-
ing disciplinary activities.
(3) TECHNICAL
ASSISTANCE.—The Secretary
shall provide technical assistance to States receiving
grants under paragraph (1) to assist them in evalu-
ating their medical practice acts and procedures and
to encourage the use of efficient and effective early
warning systems and other mechanisms for detecting
practices which endanger patient safety and for dis-
ciplining health care professionals.
337
Title II, Subtitle A
(4) APPLICATIONS.—The Secretary may not
make a grant under paragraph (1) unless the appli-
cant submits an application to the Secretary at such
time, in such form, in such manner, and containing
such information as the Secretary shall require.
(c) GRANTS FOR PUBLIC EDUCATION PROGRAMS.—
(1) IN GENERAL.—The Secretary shall make
grants to States and to local governments, private
nonprofit organizations, and health professional
schools (as defined in paragraph (3)) for—
(A) educating the general public about the
appropriate use of health care and realistic ex-
pectations of medical intervention;
(B) educating the public about the re-
sources and role of health care professional li-
censing and disciplinary boards in investigating
claims of incompetence or health care mal-
practice; and
(C) developing programs of faculty train-
ing and curricula for educating health care pro-
fessionals in quality assurance, risk manage-
ment, and medical injury prevention.
(2) APPLICATIONS.—The Secretary may not
make a grant under paragraph (1) unless the appli-
cant submits an application to the Secretary at such
338
Title II, Subtitle B
time, in such form, in such manner, and containing
such information as the Secretary shall require.
(3) 
HEALTH
PROFESSIONAL
SCHOOL
DE-
FINED.—In paragraph (1), the term ‘‘health profes-
sional school’’ means a school of nursing (as defined
in section 853(2) of the Public Health Service Act)
or a school or program under section 799(1) of such
Act.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated not more than
$15,000,000 for each of the first 5 fiscal years beginning
on or after the date of the enactment of this Act for grants
under this section.
Subtitle 
B—Administrative 
Cost
Savings and Fair Health Infor-
mation Practices
PART 1—ADMINISTRATIVE COST SAVINGS
SEC. 2100. PURPOSE.
It is the purpose of this part to improve the efficiency
and effectiveness of the health care system, including the
medicare program under title XVIII of the Social Security
Act and the medicaid program under title XIX of such
Act, by encouraging the development of a health informa-
tion network through the adoption of standards and the
339
Title II, Subtitle B
establishment of requirements for the electronic trans-
mission of certain health information.
SEC. 2101. DEFINITIONS.
For purposes of this part:
(1) CODE SET.—The term ‘‘code set’’ means
any set of codes used for encoding data elements,
such as tables of terms, medical concepts, medical
diagnostic codes, or medical procedure codes.
(2) COORDINATION OF BENEFITS.—The term
‘‘coordination of benefits’’ means determining and
coordinating the financial obligations of plan spon-
sors when health care benefits are payable by more
than one such sponsor.
(3) EMPLOYER.—The term ‘‘employer’’ has the
meaning given such term in section 3(5) of the Em-
ployee Retirement Income Security Act of 1974.
(4) HEALTH INFORMATION.—The term ‘‘health
information’’ means any information that relates to
the past, present, or future physical or mental health
or condition or functional status of an individual,
the provision of health care to an individual, or pay-
ment for the provision of health care to an individ-
ual.
(5) HEALTH
INFORMATION
NETWORK.—The
term ‘‘health information network’’ means the health
340
Title II, Subtitle B
information system that is formed through the appli-
cation of the requirements and standards established
under this part.
(6) HEALTH
INFORMATION
NETWORK
SERV-
ICE.—The term ‘‘health information network serv-
ice’’—
(A) means a private entity or an entity op-
erated by a State that enters into contracts—
(i) to process or facilitate the process-
ing of nonstandard data elements of health
information into standard data elements;
(ii) to provide the means by which
persons are connected to the health infor-
mation network for purposes of meeting
the requirements of this part, including the
holding of standard data elements of
health information;
(iii) to provide authorized access to
health information through the health in-
formation network; or
(iv) to provide specific information
processing services, such as automated co-
ordination of benefits and claims trans-
action routing; and
341
Title II, Subtitle B
(B) includes a health information protec-
tion service.
(7) HEALTH INFORMATION PROTECTION SERV-
ICE.—The term ‘‘health information protection serv-
ice’’ means a private entity or an entity operated by
a State that accesses standard data elements of
health information through the health information
network, processes such information into non-identi-
fiable health information, and may store such infor-
mation.
(8) HEALTH
PROVIDER.—The term ‘‘health
provider’’ includes a provider of services (as defined
in section 1861(u) of the Social Security Act), a pro-
vider of medical or other health services (as defined
in section 1861(s) of such Act), and any other per-
son (other than a plan sponsor) furnishing health
care items or services.
(9) NON-IDENTIFIABLE
HEALTH
INFORMA-
TION.—The term ‘‘non-identifiable health informa-
tion’’ means health information that is not protected
health information (as defined in part 2).
(10) PLAN SPONSOR.—The term ‘‘plan spon-
sor’’ means—
(A) 
a 
plan 
(as 
defined 
in 
section
1033(6)(B));
342
Title II, Subtitle B
(B) an insurer (as defined in section
1131(6)) providing health insurance coverage
(as defined in section 1131(4)); and
(C) a State, or the Federal Government,
acting in a capacity as a provider of health ben-
efits to eligible individuals that is equivalent to
that of an insurer.
(11) PURCHASING
ARRANGEMENT.—The term
‘‘purchasing arrangement’’ means a voluntary health
purchasing arrangement described in part 3 of sub-
title B of title I.
(12) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Health and Human Services.
(13) STANDARD.—The term ‘‘standard’’, when
used with reference to a transaction or to data ele-
ments of health information, means that the trans-
action or data elements meet any standard adopted
by the Secretary under subpart A that applies to the
transaction or data elements.
Subpart A—Standards for Data Elements and
Transactions
SEC. 2103. GENERAL REQUIREMENTS ON SECRETARY.
(a) IN GENERAL.—The Secretary shall adopt stand-
ards and modifications to standards under this part that
are—
343
Title II, Subtitle B
(1) consistent with the objective of reducing the
costs of providing and paying for health care; and
(2) in use and generally accepted, developed, or
modified by the standard-setting organizations ac-
credited by the American National Standard Insti-
tute.
(b) INITIAL STANDARDS.—The Secretary may de-
velop an expedited process for the adoption of initial
standards under this subpart.
(c) PROTECTION OF COMMERCIAL INFORMATION.—
In adopting standards under this part, the Secretary may
not require disclosure of trade secrets and confidential
commercial information by any person.
SEC. 2104. STANDARDS FOR DATA ELEMENTS OF HEALTH
INFORMATION.
(a) IN GENERAL.—The Secretary shall adopt stand-
ards necessary to make uniform and compatible for elec-
tronic transmission through the health information net-
work the data elements of any health information that the
Secretary determines is appropriate for transmission in
connection with a transaction described in section 2111.
(b) ADDITIONS.—The Secretary may make additions
to any set of data elements adopted under subsection (a)
as the Secretary determines appropriate in a manner that
344
Title II, Subtitle B
minimizes the disruption and cost of compliance with such
additions.
(c) CERTAIN DATA ELEMENTS.—
(1) UNIQUE HEALTH IDENTIFIERS.—The Sec-
retary shall establish a system to provide for a
standard unique health identifier for each individual,
employer, plan sponsor, and health provider for use
in the health care system.
(2) CODE SETS.—
(A) IN GENERAL.—The Secretary, in con-
sultation with experts from the private sector
and Federal agencies, shall—
(i) select code sets for appropriate
data elements from among the code sets
that have been developed by private and
public entities; or
(ii) establish code sets for such data
elements if no code sets for the data ele-
ments have been developed.
(B) DISTRIBUTION.—The Secretary shall
establish efficient and low-cost procedures for
distribution of code sets and modifications to
code sets.
345
Title II, Subtitle B
SEC. 2105. INFORMATION TRANSACTION STANDARDS.
(a) IN GENERAL.—The Secretary shall adopt tech-
nical standards that are consistent with part 2 relating
to the method by which standard data elements of health
information may be transmitted electronically, including
standards with respect to the format in which such data
elements may be transmitted.
(b) SPECIAL RULE FOR COORDINATION OF BENE-
FITS.—Any standard adopted by the Secretary under
paragraph (1) that relates to coordination of benefits shall
provide that a claim for reimbursement for health services
furnished shall be tested, by an algorithm specified by the
Secretary, against all records of enrollment and eligibility
for the individual who received such services that are avail-
able to the recipient of the claim through the health infor-
mation network to determine any primary and secondary
obligors for payment.
(c) ELECTRONIC SIGNATURE.—The Secretary, in co-
ordination with the Secretary of Commerce, shall promul-
gate regulations specifying procedures for the electronic
transmission and authentication of signatures, compliance
with which shall be deemed to satisfy State and Federal
statutory requirements for written signatures with respect
to transactions described in section 2111 and written sig-
natures on health records and prescriptions.
346
Title II, Subtitle B
(d) STANDARDS FOR CLAIMS FOR CLINICAL LABORA-
TORY TESTS.—The standards under this section shall pro-
vide that claims for clinical laboratory tests for which ben-
efits are payable by a plan sponsor shall be submitted di-
rectly by the person or entity that performed (or super-
vised the performance of) the tests to the sponsor in a
manner consistent with (and subject to such exceptions
as are provided under) the requirement for direct submis-
sion of such claims under the medicare program.
SEC. 2106. TIMETABLES FOR ADOPTION OF STANDARDS.
(a) INITIAL STANDARDS FOR DATA ELEMENTS.—
The Secretary shall adopt standards relating to—
(1) the data elements for the information de-
scribed in section 2104(a) not later than 9 months
after the date of the enactment of this Act (except
in the case of standards with respect to data ele-
ments for claims attachments, which shall be adopt-
ed not later than 24 months after the date of the
enactment of this Act); and
(2) any addition to a set of data elements, in
conjunction with making such an addition.
(b) INITIAL STANDARDS FOR INFORMATION TRANS-
ACTIONS.—The Secretary shall adopt standards relating
to information transactions under section 2105 not later
than 9 months after the date of the enactment of this Act
347
Title II, Subtitle B
(except in the case of standards for claims attachments,
which shall be adopted not later than 24 months after the
date of the enactment of this Act).
(c) MODIFICATIONS TO STANDARDS.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall review the standards
adopted under this subpart and shall adopt modified
standards as determined appropriate, but not more
frequently than once every 6 months. Any modifica-
tion to standards shall be completed in a manner
which minimizes the disruption to, and costs of com-
pliance incurred by, a plan sponsor, health provider,
or purchasing arrangement that is required to com-
ply with subpart B.
(2) SPECIAL RULES.—
(A) MODIFICATIONS
DURING
FIRST
12-
MONTH PERIOD.—Except with respect to addi-
tions and modifications to code sets under sub-
paragraph (B), the Secretary may not adopt
any modification to a standard adopted under
this subpart during the 12-month period begin-
ning on the date the standard is adopted, un-
less the Secretary determines that the modifica-
tion is necessary in order to permit a plan spon-
348
Title II, Subtitle B
sor, a health provider, or a purchasing arrange-
ment to comply with subpart B.
(B) ADDITIONS
AND
MODIFICATIONS
TO
CODE SETS.—
(i) IN GENERAL.—The Secretary shall
ensure that procedures exist for the rou-
tine maintenance, testing, enhancement,
and expansion of code sets.
(ii) ADDITIONAL RULES.—If a code
set is modified under this subsection, the
modified code set shall include instructions
on how data elements that were encoded
prior to the modification are to be con-
verted or translated so as to preserve the
value of the data elements. Any modifica-
tion to a code set under this subsection
shall be implemented in a manner that
minimizes the disruption to, and costs of
compliance incurred by, a plan sponsor,
health provider, or purchasing arrange-
ment that is required to comply with sub-
part B.
(d) EVALUATION
OF STANDARDS.—The Secretary
may establish a process to measure or verify the consist-
ency of standards adopted or modified under this subpart.
349
Title II, Subtitle B
Such process may include demonstration projects and
analyses of the cost of implementing such standards and
modifications.
Subpart B—Requirements With Respect to Certain
Transactions and Information
SEC. 2111. STANDARD TRANSACTIONS AND INFORMATION.
(a) TRANSACTIONS BY SPONSORS.—
(1) TRANSACTIONS
WITH
PROVIDERS.—If a
plan sponsor conducts any of the transactions de-
scribed in paragraph (3) with a health provider—
(A) the transaction shall be a standard
transaction; and
(B) the health information transmitted by
the sponsor to the provider or by the provider
to the sponsor in connection with the trans-
action shall be in the form of standard data ele-
ments.
(2) TRANSACTIONS WITH SPONSORS.—If a plan
sponsor conducts any of the transactions described
in paragraph (3) with another plan sponsor—
(A) the transaction shall be a standard
transaction; and
(B) the health information transmitted by
either sponsor in connection with the trans-
350
Title II, Subtitle B
action shall be in the form of standard data ele-
ments.
(3) TRANSACTIONS.—The transactions referred
to in paragraphs (1) and (2) are the following:
(A) Verification of eligibility for benefits.
(B) Coordination of benefits.
(C) Claim submission.
(D) Claim attachment submission.
(E) Claim status notification.
(F) Claim status verification.
(G) Claim adjudication.
(H) Payment and remittance advice.
(I) Certification or authorization of a re-
ferral to a health provider who is not part of
the defined set of providers providing items and
services under a network plan (as defined in
section 1131(5)).
(b) TRANSACTIONS
BY
PURCHASING
ARRANGE-
MENTS.—
(1) IN GENERAL.—If a purchasing arrangement
conducts any of the transactions described in para-
graph (2) with a plan sponsor—
(A) the transaction shall be a standard
transaction; and
351
Title II, Subtitle B
(B) the health information transmitted by
the arrangement to the sponsor or by the spon-
sor to the arrangement in connection with the
transaction shall be in the form of standard
data elements.
(2) TRANSACTIONS.—The transactions referred
to in paragraph (1) are the following:
(A) Enrollment and disenrollment.
(B) Premium payment.
(c) USE OF HEALTH INFORMATION NETWORK SERV-
ICES.—A plan sponsor, a health provider, or a purchasing
arrangement may comply with any provision of this sec-
tion by entering into an agreement or other arrangement
with a health information network service certified under
section 2121 pursuant to which the service undertakes the
duties applicable to the sponsor, provider, or arrangement
under the provision.
SEC. 2112. ACCESSING HEALTH INFORMATION FOR AU-
THORIZED PURPOSES.
(a) PROCUREMENT RULE FOR GOVERNMENT AGEN-
CIES.—
(1) IN GENERAL.—A health information protec-
tion service that is certified under section 2121 shall
make available to a Federal or State agency, pursu-
ant to a cost-type contract (as defined under the
353
Title II, Subtitle B
(a) shall make such non-identifiable information available,
for a charge that does not exceed the reasonable cost of
transmitting the information, to any other health informa-
tion protection service that—
(A) is certified under section 2121; and
(B) requests the information.
SEC. 2113. ENSURING AVAILABILITY OF INFORMATION.
The Secretary shall establish a procedure under
which a plan sponsor or health provider that does not have
the ability to transmit standard data elements directly,
and does not have access to a health information network
service certified under section 2121, may comply with the
provisions of this subpart.
SEC. 2114. TIMETABLES FOR COMPLIANCE WITH REQUIRE-
MENTS.
(a) INITIAL COMPLIANCE.—
(1) IN GENERAL.—Not later than 12 months
after the date on which standards are adopted under
subpart A with respect to a type of transaction, or
data elements for a type of health information, a
plan sponsor, health provider, or purchasing ar-
rangement shall comply with the requirements of
this subpart with respect to such transaction or in-
formation.
354
Title II, Subtitle B
(2) ADDITIONAL DATA ELEMENTS.—Not later
than 12 months after the date on which the Sec-
retary adopts an addition to a set of data elements
for health information under section 2104, a plan
sponsor, health provider, or purchasing arrangement
shall comply with the requirements of this subpart
using such data elements.
(b) COMPLIANCE WITH MODIFIED STANDARDS.—
(1) IN GENERAL.—If the Secretary adopts a
modified standard under section 2106(c), a plan
sponsor, health provider, or purchasing arrangement
shall comply with the modified standard at such
time as the Secretary determines appropriate, taking
into account the time needed to comply due to the
nature and extent of the modification.
(2) SPECIAL RULE.—In the case of a modifica-
tion to a standard that does not occur within the 12-
month period beginning on the date the standard is
adopted, the time determined appropriate by the
Secretary under paragraph (1) may not be—
(A) earlier than the last day of the 90-day
period beginning on the date the modified
standard is adopted; or
355
Title II, Subtitle B
(B) later than the last day of the 12-
month period beginning on the date the modi-
fied standard is adopted.
Subpart C—Miscellaneous Provisions
SEC. 2121. STANDARDS AND CERTIFICATION FOR HEALTH
INFORMATION NETWORK SERVICES.
(a) STANDARDS
FOR OPERATION.—The Secretary
shall establish standards with respect to the operation of
health information network services, including standards
ensuring that such services—
(1) develop, operate, and cooperate with one an-
other to form the health information network;
(2) meet all of the requirements under part 2
that are applicable to the services;
(3) make public information concerning their
performance, as measured by uniform indicators
such as accessibility, transaction responsiveness, ad-
ministrative efficiency, reliability, dependability, and
any other indicator determined appropriate by the
Secretary;
(4) have security procedures that are consistent
with the requirements under part 2, including secure
methods of accessing and transmitting data; and
(5) if they are part of a larger organization,
have policies and procedures in place which isolate
356
Title II, Subtitle B
their activities with respect to processing informa-
tion in a manner that prevents access to such infor-
mation by such larger organization.
(b) CERTIFICATION BY THE SECRETARY.—
(1) ESTABLISHMENT.—Not later than 12
months after the date of the enactment of this Act,
the Secretary shall establish a certification proce-
dure for health information network services which
ensures that certified services are qualified to meet
the requirements of this part and the standards es-
tablished by the Secretary under this section. Such
certification procedure shall be implemented in a
manner that minimizes the costs and delays of oper-
ations for such services.
(2) APPLICATION.—Each entity desiring to be
certified as a health information network service
shall apply to the Secretary for certification in a
form and manner determined appropriate by the
Secretary.
(3) AUDITS AND REPORTS.—The procedure es-
tablished under paragraph (1) shall provide for au-
dits by the Secretary and reports by an entity cer-
tified under this section as the Secretary determines
appropriate in order to monitor such entity’s compli-
ance with the requirements of this part, part 2, and
357
Title II, Subtitle B
the standards established by the Secretary under
this section.
(4) RECERTIFICATION.—A health information
network service shall be recertified under this sub-
section at least every 3 years.
(c) LOSS OF CERTIFICATION.—
(1) MANDATORY
TERMINATION.—Except as
provided in paragraph (2), if a health information
network service violates a requirement imposed on
such service under part 2, its certification under this
section shall be terminated unless the Secretary de-
termines that appropriate corrective action has been
taken.
(2) CONDITIONAL
CERTIFICATION.—The Sec-
retary may establish a procedure under which a
health information network service may remain cer-
tified on a conditional basis if the service is operat-
ing consistently with a plan intended to correct any
violations described in paragraph (1). Such proce-
dure may provide for the appointment of a trustee
to continue operation of the service until the require-
ments for full certification are met.
(d) CERTIFICATION
BY PRIVATE ENTITIES.—The
Secretary may designate private entities to conduct the
certification procedures established by the Secretary under
358
Title II, Subtitle B
this section. A health information network service certified
by such an entity in accordance with such designation
shall be considered to be certified by the Secretary.
(e) INFORMATION HELD BY HEALTH INFORMATION
NETWORK SERVICES.—If a health information network
service certified under this section loses its certified status
or takes any action that would threaten the continued
availability of the standard data elements of health infor-
mation held by such service, such data elements shall be
transferred to another health information network service
certified under this section that has been designated by
the Secretary.
SEC. 2122. IMPOSITION OF ADDITIONAL REQUIREMENTS.
(a) IN GENERAL.—Except as provided in subsection
(c), after the Secretary has established standards under
section 2104 that are necessary to make uniform and com-
patible for electronic transmission the data elements that
the Secretary determines are appropriate for transmission
in connection with a transaction described in subpart B,
an individual or entity may not require an individual or
entity, to provide in any manner any additional data ele-
ment in connection with—
(1) the transaction; or
(2) an inquiry with respect to the transaction.
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Title II, Subtitle B
(b) TRANSMISSION METHOD.—Except as provided in
subsection (c), after the Secretary has established stand-
ards under section 2105 relating to the method by which
data elements that the Secretary determines are appro-
priate for transmission in connection with a transaction
described in subpart B may be transmitted electronically,
an individual or entity may not require an individual or
entity to transmit any data element in a manner inconsist-
ent with the standards in connection with—
(1) the transaction; or
(2) an inquiry with respect to the transaction.
(c) EXCEPTION.—Subsections (a) and (b) do not
apply if—
(1) an individual or entity voluntarily agrees to
provide the additional data element; or
(2) a waiver is granted under subsection (d) to
permit the requirement.
(d) CONDITIONS FOR WAIVERS.—
(1) IN GENERAL.—An individual or entity may
request a waiver from the Secretary in order to im-
pose on an individual or entity a requirement other-
wise prohibited under subsection (a) or (b).
(2) CONSIDERATION OF WAIVER REQUESTS.—A
waiver may not be granted under this subsection to
impose an otherwise prohibited requirement unless
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Title II, Subtitle B
the Secretary determines that the value of any addi-
tional information to be provided under the require-
ment for research or other purposes significantly
outweighs the administrative cost of the imposition
of the requirement, taking into account the burden
of the timing of the imposition of the requirement.
(3) ANONYMOUS REPORTING.—If an individual
or entity attempts to impose on an individual or en-
tity a requirement prohibited under subsection (a) or
(b), the individual or entity on whom the require-
ment is being imposed may contact the Secretary.
The Secretary shall develop a procedure under which
an individual or entity that contacts the Secretary
under the preceding sentence shall remain anony-
mous. The Secretary shall notify the individual or
entity imposing the requirement that the require-
ment may not be imposed unless the other individual
or entity voluntarily agrees to such requirement or
a waiver is obtained under this subsection.
SEC. 2123. EFFECT ON STATE LAW.
(a) IN GENERAL.—Except as otherwise provided in
this section, a provision, requirement, or standard under
this part shall supersede any contrary provision of State
law.
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Title II, Subtitle B
(b) STATE ‘‘QUILL AND PEN’’ LAWS.—A State may
not establish, continue in effect, or enforce any provision
of State law that requires medical or health plan records
(including billing information) to be maintained or trans-
mitted in written rather than electronic form, except
where the Secretary determines that the provision is nec-
essary to prevent fraud and abuse, with respect to con-
trolled substances, or for other purposes.
(c) PUBLIC HEALTH REPORTING.—Nothing in this
part shall be construed to invalidate or limit the authority,
power, or procedures established under any law providing
for the reporting of disease or injury, child abuse, birth,
or death, public health surveillance, or public health inves-
tigation or intervention.
(d) PUBLIC USE FUNCTIONS.—Nothing in this part
shall be construed to limit the authority of a Federal or
State agency to make non-identifiable health information
available for public use.
(e) PAYMENT FOR HEALTH CARE SERVICES OR PRE-
MIUMS.—Nothing in this part shall be construed to pro-
hibit a consumer from paying for health care items or
services, or plan or health insurance coverage premiums,
by debit, credit, or other payment cards or numbers or
other electronic payment means.
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Title II, Subtitle B
SEC. 2124. GRANTS FOR DEMONSTRATION PROJECTS.
(a) IN GENERAL.—The Secretary may make grants
for demonstration projects to promote the development
and use of electronically integrated community-based clini-
cal information systems and computerized patient medical
records.
(b) APPLICATIONS.—
(1) SUBMISSION.—To apply for a grant under
this section for any fiscal year, an applicant shall
submit an application to the Secretary in accordance
with the procedures established by the Secretary.
(2) CRITERIA FOR APPROVAL.—The Secretary
may not approve an application submitted under
paragraph (1) unless the application includes assur-
ances satisfactory to the Secretary regarding the fol-
lowing:
(A) USE
OF
EXISTING
TECHNOLOGY.—
Funds received under this section will be used
to apply telecommunications and information
systems technology that is in existence on the
date the application is submitted in a manner
that improves the quality of health care, re-
duces the costs of such care, and protects the
privacy and confidentiality of information relat-
ing to the physical or mental condition of an in-
dividual.
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Title II, Subtitle B
(B) USE OF EXISTING INFORMATION SYS-
TEMS.—Funds received under this section will
be used—
(i) to enhance telecommunications or
information systems that are operating on
the date the application is submitted;
(ii) to integrate telecommunications or
information systems that are operating on
the date the application is submitted; or
(iii) to connect additional users to
telecommunications or information net-
works or systems that are operating on the
date the application is submitted.
(C) MATCHING
FUNDS.—The applicant
shall make available funds for the demonstra-
tion project in an amount that equals at least
20 percent of the cost of the project.
(c) GEOGRAPHIC DIVERSITY.—In making any grants
under this section, the Secretary shall, to the extent prac-
ticable, make grants to persons representing different geo-
graphic areas of the United States, including urban and
rural areas.
(d) REVIEW AND SANCTIONS.—The Secretary shall
review at least annually the compliance of a person receiv-
ing a grant under this section with the provisions of this
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Title II, Subtitle B
section. The Secretary shall establish a procedure for de-
termining whether such a person has failed to comply sub-
stantially within the provisions of this section and the
sanctions to be imposed for any such noncompliance.
(e) ANNUAL REPORT.—The Secretary shall submit
an annual report to the President for transmittal to Con-
gress containing a description of the activities carried out
under this section.
Subpart D—Assistance to the Secretary
SEC. 2131. GENERAL REQUIREMENT ON SECRETARY.
In complying with any requirements imposed on the
Secretary under this part, the Secretary shall rely on rec-
ommendations of the Health Information Advisory Com-
mittee established under section 2132 and shall consult
with appropriate Federal agencies.
SEC. 2132. HEALTH INFORMATION ADVISORY COMMITTEE.
(a) ESTABLISHMENT.—There is established a com-
mittee to be known as the Health Care Information Advi-
sory Committee.
(b) DUTY.—
(1) IN GENERAL.—The committee shall—
(A) provide assistance to the Secretary in
complying with the requirements imposed on
the Secretary under this part and part 2;
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Title II, Subtitle B
(B) be generally responsible for advising
the Secretary and the Congress on the status of
the health information network; and
(C) make recommendations to correct any
problems that may occur in the network’s im-
plementation and ongoing operations and to re-
fine and improve the network.
(2) TECHNICAL
ASSISTANCE.—In performing
its duties under this subsection, the committee shall
receive technical assistance from appropriate Federal
agencies.
(c) MEMBERSHIP.—
(1) IN GENERAL.—The committee shall consist
of 15 members to be appointed by the President not
later than 60 days after the date of the enactment
of this part. The President shall designate 1 member
as the Chair.
(2) EXPERTISE.—The membership of the com-
mittee shall consist of individuals who are of recog-
nized standing and distinction and who possess the
demonstrated capacity to discharge the duties im-
posed on the committee.
(3) TERMS.—Each member of the committee
shall be appointed for a term of 5 years, except that
the members first appointed shall serve staggered
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Title II, Subtitle B
(1) shall permit a protected individual to in-
spect any protected health information about the in-
dividual that the trustee maintains, any accounting
with respect to such information required under sec-
tion 2144, and any copy of an authorization re-
quired under section 2152 that pertains to such in-
formation;
(2) shall provide the protected individual with a
copy of the information upon request by the individ-
ual and subject to any conditions imposed by the
trustee under subsection (d);
(3) shall permit a person who has been des-
ignated in writing by the protected individual to in-
spect the information on behalf of the individual or
to accompany the individual during the inspection;
and
(4) may offer to explain or interpret informa-
tion that is inspected or copied under this sub-
section.
(b) EXCEPTIONS.—A health information trustee is
not required by this section to permit inspection or copy-
ing of protected health information by a protected individ-
ual if any of the following conditions apply:
(1) MENTAL
HEALTH
TREATMENT
NOTES.—
The information consists of psychiatric, psycho-