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creased by the annual percentage in-
crease in the medical care component 
of the consumer price index (United 
States city average) for the 12-month 
period ending with April of the pre-
ceding fiscal year. 
Any amount determined under subclause 
(II) shall be rounded to the nearest penny. 
‘‘(2) LIMITATION ON MEDICARE FUNDING.—In 
no case shall the amount transferred under sub-
section (b)(4)(B) for any fiscal year exceed 
$90,000,000. 
‘‘(d) EXPENDITURES FROM FUND.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
amounts in the CERTF are available to the Sec-
retary of Health and Human Services for carrying 
out section 1822 of the Social Security Act. 
‘‘(2) ALLOCATION FOR COMMISSION.—Not less 
than the following amounts in the CERTF for a fis-
cal year shall be available to carry out the activities 
of the Comparative Effectiveness Research Commis-
sion established under section 1822(b) of the Social 
Security Act for such fiscal year: 
‘‘(A) For fiscal year 2008, $7,000,000. 
‘‘(B) For fiscal year 2009, $9,000,000. 
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‘‘(C) For each fiscal year beginning with 
2010, $10,000,000. 
Nothing in this paragraph shall be construed as pre-
venting additional amounts in the CERTF from 
being made available to the Comparative Effective-
ness Research Commission for such activities. 
‘‘(e) NET REVENUES.—For purposes of this section, 
the term ‘net revenues’ means the amount estimated by 
the Secretary based on the excess of— 
‘‘(1) the fees received in the Treasury under 
subchapter B of chapter 34, over 
‘‘(2) the decrease in the tax imposed by chapter 
1 resulting from the fees imposed by such sub-
chapter.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for such subchapter A is amended by 
adding at the end thereof the following new 
item: 
‘‘Sec. 9511. Health Care Comparative Effectiveness Research Trust Fund.’’. 
(2) FINANCING FOR FUND FROM FEES ON IN-
SURED AND SELF-INSURED HEALTH PLANS.— 
(A) GENERAL RULE.—Chapter 34 of the 
Internal Revenue Code of 1986 is amended by 
adding at the end the following new subchapter: 
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‘‘Subchapter B—Insured and Self-Insured 
Health Plans 
‘‘Sec. 4375. Health insurance. 
‘‘Sec. 4376. Self-insured health plans. 
‘‘Sec. 4377. Definitions and special rules. 
‘‘SEC. 4375. HEALTH INSURANCE. 
‘‘(a) IMPOSITION OF FEE.—There is hereby imposed 
on each specified health insurance policy for each policy 
year a fee equal to the fair share per capita amount deter-
mined under section 9511(c)(1) multiplied by the average 
number of lives covered under the policy. 
‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub-
section (a) shall be paid by the issuer of the policy. 
‘‘(c) SPECIFIED HEALTH INSURANCE POLICY.—For 
purposes of this section: 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this section, the term ‘specified health in-
surance policy’ means any accident or health insur-
ance policy issued with respect to individuals resid-
ing in the United States. 
‘‘(2) EXEMPTION FOR CERTAIN POLICIES.—The 
term ‘specified health insurance policy’ does not in-
clude any insurance if substantially all of its cov-
erage is of excepted benefits described in section 
9832(c). 
‘‘(3) TREATMENT OF PREPAID HEALTH COV-
ERAGE ARRANGEMENTS.— 
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‘‘(A) IN GENERAL.—In the case of any ar-
rangement described in subparagraph (B)— 
‘‘(i) such arrangement shall be treated 
as a specified health insurance policy, and 
‘‘(ii) the person referred to in such 
subparagraph shall be treated as the 
issuer. 
‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 
An arrangement is described in this subpara-
graph if under such arrangement fixed pay-
ments or premiums are received as consider-
ation for any person’s agreement to provide or 
arrange for the provision of accident or health 
coverage to residents of the United States, re-
gardless of how such coverage is provided or ar-
ranged to be provided. 
‘‘SEC. 4376. SELF-INSURED HEALTH PLANS. 
‘‘(a) IMPOSITION OF FEE.—In the case of any appli-
cable self-insured health plan for each plan year, there is 
hereby imposed a fee equal to the fair share per capita 
amount determined under section 9511(c)(1) multiplied by 
the average number of lives covered under the plan. 
‘‘(b) LIABILITY FOR FEE.— 
‘‘(1) IN GENERAL.—The fee imposed by sub-
section (a) shall be paid by the plan sponsor. 
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‘‘(2) PLAN SPONSOR.—For purposes of para-
graph (1) the term ‘plan sponsor’ means— 
‘‘(A) the employer in the case of a plan es-
tablished or maintained by a single employer, 
‘‘(B) the employee organization in the case 
of a plan established or maintained by an em-
ployee organization, 
‘‘(C) in the case of— 
‘‘(i) a plan established or maintained 
by 2 or more employers or jointly by 1 or 
more employers and 1 or more employee 
organizations, 
‘‘(ii) a multiple employer welfare ar-
rangement, or 
‘‘(iii) a voluntary employees’ bene-
ficiary association described in section 
501(c)(9), 
the association, committee, joint board of trust-
ees, or other similar group of representatives of 
the parties who establish or maintain the plan, 
or 
‘‘(D) the cooperative or association de-
scribed in subsection (c)(2)(F) in the case of a 
plan established or maintained by such a coop-
erative or association. 
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‘‘(c) APPLICABLE SELF-INSURED HEALTH PLAN.— 
For purposes of this section, the term ‘applicable self-in-
sured health plan’ means any plan for providing accident 
or health coverage if— 
‘‘(1) any portion of such coverage is provided 
other than through an insurance policy, and 
‘‘(2) such plan is established or maintained— 
‘‘(A) by one or more employers for the 
benefit of their employees or former employees, 
‘‘(B) by one or more employee organiza-
tions for the benefit of their members or former 
members, 
‘‘(C) jointly by 1 or more employers and 1 
or more employee organizations for the benefit 
of employees or former employees, 
‘‘(D) by a voluntary employees’ beneficiary 
association described in section 501(c)(9), 
‘‘(E) by any organization described in sec-
tion 501(c)(6), or 
‘‘(F) in the case of a plan not described in 
the preceding subparagraphs, by a multiple em-
ployer welfare arrangement (as defined in sec-
tion 3(40) of Employee Retirement Income Se-
curity Act of 1974), a rural electric cooperative 
(as defined in section 3(40)(B)(iv) of such Act), 
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or a rural telephone cooperative association (as 
defined in section 3(40)(B)(v) of such Act). 
‘‘SEC. 4377. DEFINITIONS AND SPECIAL RULES. 
‘‘(a) DEFINITIONS.—For purposes of this sub-
chapter— 
‘‘(1) ACCIDENT AND HEALTH COVERAGE.—The 
term ‘accident and health coverage’ means any cov-
erage which, if provided by an insurance policy, 
would cause such policy to be a specified health in-
surance policy (as defined in section 4375(c)). 
‘‘(2) INSURANCE POLICY.—The term ‘insurance 
policy’ means any policy or other instrument where-
by a contract of insurance is issued, renewed, or ex-
tended. 
‘‘(3) UNITED
STATES.—The term ‘United 
States’ includes any possession of the United States. 
‘‘(b) TREATMENT OF GOVERNMENTAL ENTITIES.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
chapter— 
‘‘(A) the term ‘person’ includes any gov-
ernmental entity, and 
‘‘(B) notwithstanding any other law or rule 
of law, governmental entities shall not be ex-
empt from the fees imposed by this subchapter 
except as provided in paragraph (2). 
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‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL 
PROGRAMS.—In the case of an exempt governmental 
program, no fee shall be imposed under section 4375 
or section 4376 on any covered life under such pro-
gram. 
‘‘(3) EXEMPT
GOVERNMENTAL
PROGRAM
DE-
FINED.—For purposes of this subchapter, the term 
‘exempt governmental program’ means— 
‘‘(A) any insurance program established 
under title XVIII of the Social Security Act, 
‘‘(B) the medical assistance program es-
tablished by title XIX or XXI of the Social Se-
curity Act, 
‘‘(C) any program established by Federal 
law for providing medical care (other than 
through insurance policies) to individuals (or 
the spouses and dependents thereof) by reason 
of such individuals being— 
‘‘(i) members of the Armed Forces of 
the United States, or 
‘‘(ii) veterans, and 
‘‘(D) any program established by Federal 
law for providing medical care (other than 
through insurance policies) to members of In-
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dian tribes (as defined in section 4(d) of the In-
dian Health Care Improvement Act). 
‘‘(c) TREATMENT AS TAX.—For purposes of subtitle 
F, the fees imposed by this subchapter shall be treated 
as if they were taxes. 
‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith-
standing any other provision of law, no amount collected 
under this subchapter shall be covered over to any posses-
sion of the United States.’’. 
(B) CLERICAL AMENDMENTS.— 
(i) Chapter 34 of such Code is amend-
ed by striking the chapter heading and in-
serting the following: 
‘‘CHAPTER 34—TAXES ON CERTAIN 
INSURANCE POLICIES 
‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS 
‘‘SUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS 
‘‘Subchapter A—Policies Issued By Foreign 
Insurers’’. 
(ii) The table of chapters for subtitle 
D of such Code is amended by striking the 
item relating to chapter 34 and inserting 
the following new item: 
‘‘CHAPTER 34—TAXES ON CERTAIN INSURANCE POLICIES’’. 
(C) EFFECTIVE DATE.—The amendments 
made by this subsection shall apply with respect 
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to policies and plans for portions of policy or 
plan years beginning on or after October 1, 
2010. 
SEC. 905. IMPLEMENTATION OF HEALTH INFORMATION 
TECHNOLOGY (IT) UNDER MEDICARE. 
(a) IN GENERAL.—Not later than January 1, 2010, 
the Secretary of Health and Human Services shall submit 
to Congress a report that includes— 
(1) a plan to develop and implement a health 
information technology (health IT) system for all 
health care providers under the Medicare program 
that meets the specifications described in subsection 
(b); and 
(2) an analysis of the impact, feasibility, and 
costs associated with the use of health information 
technology in medically underserved communities. 
(b) PLAN SPECIFICATION.—The specifications de-
scribed in this subsection, with respect to a health infor-
mation technology system described in subsection (a), are 
the following: 
(1) The system protects the privacy and secu-
rity of individually identifiable health information. 
(2) The system maintains and provides per-
mitted access to health information in an electronic 
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format (such as through computerized patient 
records or a clinical data repository). 
(3) The system utilizes interface software that 
allows for interoperability. 
(4) The system includes clinical decision sup-
port. 
(5) The system incorporates e-prescribing and 
computerized physician order entry. 
(6) The system incorporates patient tracking 
and reminders. 
(7) The system utilizes technology that is open 
source (if available) or technology that has been de-
veloped by the government. 
The report shall include an analysis of the financial and 
administrative resources necessary to develop such system 
and recommendations regarding the level of subsidies 
needed for all such health care providers to adopt the sys-
tem. 
SEC. 
906. 
DEVELOPMENT, 
REPORTING, 
AND 
USE 
OF 
HEALTH CARE MEASURES. 
(a) IN GENERAL.—Part E of title XVIII of the Social 
Security Act (42 U.S.C. 1395x et seq.) is amended by in-
serting after section 1889 the following: 
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‘‘DEVELOPMENT, REPORTING, AND USE OF HEALTH CARE 
MEASURES 
‘‘SEC. 1890. (a) FOSTERING DEVELOPMENT
OF 
HEALTH CARE MEASURES.—The Secretary shall des-
ignate, and have in effect an arrangement with, a single 
organization (such as the National Quality Forum) that 
meets the requirements described in subsection (c), under 
which such organization provides the Secretary with ad-
vice on, and recommendations with respect to, the key ele-
ments and priorities of a national system for establishing 
health care measures. The arrangement shall be effective 
beginning no sooner than January 1, 2008, and no later 
than September 30, 2008. 
‘‘(b) DUTIES.—The duties of the organization des-
ignated under subsection (a) (in this title referred to as 
the ‘designated organization’) shall, in accordance with 
subsection (d), include— 
‘‘(1) establishing and managing an integrated 
national strategy and process for setting priorities 
and goals in establishing health care measures; 
‘‘(2) coordinating the development and speci-
fications of such measures; 
‘‘(3) establishing standards for the development 
and testing of such measures; 
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‘‘(4) endorsing national consensus health care 
measures; and 
‘‘(5) advancing the use of electronic health 
records for automating the collection, aggregation, 
and transmission of measurement information. 
‘‘(c) REQUIREMENTS DESCRIBED.—For purposes of 
subsection (a), the requirements described in this sub-
section, with respect to an organization, are the following: 
‘‘(1) PRIVATE
NONPROFIT.—The organization 
is a private nonprofit entity governed by a board and 
an individual designated as president and chief exec-
utive officer. 
‘‘(2) BOARD
MEMBERSHIP.—The members of 
the board of the organization include representatives 
of— 
‘‘(A) health care providers or groups rep-
resenting such providers; 
‘‘(B) health plans or groups representing 
health plans; 
‘‘(C) groups representing health care con-
sumers; 
‘‘(D) health care purchasers and employers 
or groups representing such purchasers or em-
ployers; and 
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