429 
‘‘(C) A final progress report on new re-
search submitted for publication by a peer re-
view journal. 
‘‘(D) Stakeholder comments. 
‘‘(E) A final report. 
‘‘(3) ACCESS BY CONGRESS AND THE COMMIS-
SION
TO
THE
CENTER’S
INFORMATION.—Congress 
and the Commission shall each have unrestricted ac-
cess to all deliberations, records, and nonproprietary 
data of the Center, immediately upon request. 
‘‘(e) DISSEMINATION AND INCORPORATION OF COM-
PARATIVE EFFECTIVENESS INFORMATION.— 
‘‘(1) DISSEMINATION.—The Center shall pro-
vide for the dissemination of appropriate findings 
produced by research supported, conducted, or syn-
thesized under this section to health care providers, 
patients, vendors of health information technology 
focused on clinical decision support, appropriate pro-
fessional associations, and Federal and private 
health plans. 
‘‘(2) INCORPORATION.—The Center shall assist 
users of health information technology focused on 
clinical decision support to promote the timely incor-
poration of the findings described in paragraph (1) 
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into clinical practices and to promote the ease of use 
of such incorporation. 
‘‘(f) REPORTS TO CONGRESS.— 
‘‘(1) ANNUAL REPORTS.—Beginning not later 
than one year after the date of the enactment of this 
section, the Director of the Agency of Healthcare 
Research and Quality and the Center for Compara-
tive Effectiveness Research shall submit to Congress 
an annual report on the activities of the Center and 
the Commission, as well as the research, conducted 
under this section. 
‘‘(2) RECOMMENDATION FOR FAIR SHARE PER 
CAPITA AMOUNT FOR ALL-PAYER FINANCING.—Be-
ginning not later than December 31, 2009, the Sec-
retary shall submit to Congress an annual rec-
ommendation for a fair share per capita amount de-
scribed in subsection (c)(1) of section 9511 of the 
Internal Revenue Code of 1986 for purposes of 
funding the CERTF under such section. 
‘‘(3) ANALYSIS AND REVIEW.—Not later than 
December 31, 2011, the Secretary, in consultation 
with the Commission, shall submit to Congress a re-
port on all activities conducted or supported under 
this section as of such date. Such report shall in-
clude an evaluation of the return on investment re-
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431 
sulting from such activities, the overall costs of such 
activities, and an analysis of the backlog of any re-
search proposals approved by the Commission but 
not funded. Such report shall also address whether 
Congress should expand the responsibilities of the 
Center and of the Commission to include studies of 
the effectiveness of various aspects of the health care 
delivery system, including health plans and delivery 
models, such as health plan features, benefit designs 
and performance, and the ways in which health serv-
ices are organized, managed, and delivered. 
‘‘(g) COORDINATING COUNCIL FOR HEALTH SERV-
ICES RESEARCH.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a permanent council (in this section referred 
to as the ‘Council’) for the purpose of— 
‘‘(A) assisting the offices and agencies of 
the Department of Health and Human Services, 
the Department of Veterans Affairs, the De-
partment of Defense, and any other Federal de-
partment or agency to coordinate the conduct 
or support of health services research; and 
‘‘(B) advising the President and Congress 
on— 
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‘‘(i) the national health services re-
search agenda; 
‘‘(ii) strategies with respect to infra-
structure needs of health services research; 
and 
‘‘(iii) appropriate organizational ex-
penditures in health services research by 
relevant Federal departments and agen-
cies. 
‘‘(2) MEMBERSHIP.— 
‘‘(A) NUMBER
AND
APPOINTMENT.—The 
Council shall be composed of 20 members. One 
member shall be the Director of the Agency for 
Healthcare Research and Quality. The Director 
shall appoint the other members not later than 
30 days after the enactment of this Act. 
‘‘(B) TERMS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), each member of the 
Council shall be appointed for a term of 4 
years. 
‘‘(ii) 
TERMS
OF
INITIAL
AP-
POINTEES.—Of the members first ap-
pointed— 
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‘‘(I) 8 shall be appointed for a 
term of 4 years; and 
‘‘(II) 7 shall be appointed for a 
term of 3 years. 
‘‘(iii) 
VACANCIES.—Any 
vacancies 
shall not affect the power and duties of the 
Council and shall be filled in the same 
manner as the original appointment. 
‘‘(C) QUALIFICATIONS.— 
‘‘(i) IN GENERAL.—The members of 
the Council shall include one senior official 
from each of the following agencies: 
‘‘(I) The Veterans Health Ad-
ministration. 
‘‘(II) The Department of Defense 
Military Health Care System. 
‘‘(III) The Centers for Disease 
Control and Prevention. 
‘‘(IV) The National Center for 
Health Statistics. 
‘‘(V) The National Institutes of 
Health. 
‘‘(VI) The Center for Medicare & 
Medicaid Services. 
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‘‘(VII) The Federal Employees 
Health Benefits Program. 
‘‘(ii) 
NATIONAL, 
PHILANTHROPIC 
FOUNDATIONS.—The 
members 
of 
the 
Council shall include 4 senior leaders from 
major national, philanthropic foundations 
that fund and use health services research. 
‘‘(iii) STAKEHOLDERS.—The remain-
ing members of the Council shall be rep-
resentatives of other stakeholders in health 
services research, including private pur-
chasers, health plans, hospitals and other 
health facilities, and health consumer 
groups. 
‘‘(3) ANNUAL REPORT.—The Council shall sub-
mit to Congress an annual report on the progress of 
the implementation of the national health services 
research agenda. 
‘‘(h) FUNDING
OF COMPARATIVE EFFECTIVENESS 
RESEARCH.—For fiscal year 2009 and each subsequent 
fiscal year, amounts in the Comparative Effectiveness Re-
search Trust Fund (referred to in this section as the 
‘CERTF’) under section 9511 of the Internal Revenue 
Code of 1986 shall be available to the Secretary to carry 
out this section.’’. 
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(b) 
COMPARATIVE
EFFECTIVENESS
RESEARCH 
TRUST FUND; FINANCING FOR TRUST FUND.— 
(1) ESTABLISHMENT OF TRUST FUND.— 
(A) IN GENERAL.—Subchapter A of chap-
ter 98 of the Internal Revenue Code of 1986 
(relating to trust fund code) is amended by 
adding at the end the following new section: 
‘‘SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS 
RESEARCH TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘Health Care Comparative Effective-
ness Research Trust Fund’ (hereinafter in this section re-
ferred to as the ‘CERTF’), consisting of such amounts 
as may be appropriated or credited to such Trust Fund 
as provided in this section and section 9602(b). 
‘‘(b) TRANSFERS TO FUND.—There are hereby ap-
propriated to the Trust Fund the following: 
‘‘(1) For fiscal year 2008, $90,000,000. 
‘‘(2) For fiscal year 2009, $100,000,000. 
‘‘(3) For fiscal year 2010, $110,000,000. 
‘‘(4) For each fiscal year beginning with fiscal 
year 2011— 
‘‘(A) an amount equivalent to the net reve-
nues received in the Treasury from the fees im-
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posed under subchapter B of chapter 34 (relat-
ing to fees on health insurance and self-insured 
plans) for such fiscal year; and 
‘‘(B) subject to subsection (c)(2), amounts 
determined by the Secretary of Health and 
Human Services to be equivalent to the fair 
share per capita amount computed under sub-
section (c)(1) for the fiscal year multiplied by 
the average number of individuals entitled to 
benefits under part A, or enrolled under part B, 
of title XVIII of the Social Security Act during 
such fiscal year. 
The amounts appropriated under paragraphs (1), (2), (3), 
and (4)(B) shall be transferred from the Federal Hospital 
Insurance Trust Fund and from the Federal Supple-
mentary Medical Insurance Trust Fund (established 
under section 1841 of such Act), and from the Medicare 
Prescription Drug Account within such Trust Fund, in 
proportion (as estimated by the Secretary) to the total ex-
penditures during such fiscal year that are made under 
title XVIII of such Act from the respective trust fund or 
account. 
‘‘(c) FAIR SHARE PER CAPITA AMOUNT.— 
‘‘(1) COMPUTATION.— 
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437 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the fair share per capita amount 
under this paragraph for a fiscal year (begin-
ning with fiscal year 2011) is an amount com-
puted by the Secretary of Health and Human 
Services for such fiscal year that, when applied 
under this section and subchapter B of chapter 
34 of the Internal Revenue Code of 1986, will 
result 
in 
revenues 
to 
the 
CERTF 
of 
$375,000,000 for the fiscal year. 
‘‘(B) ALTERNATIVE COMPUTATION.— 
‘‘(i) IN GENERAL.—If the Secretary is 
unable to compute the fair share per capita 
amount under subparagraph (A) for a fis-
cal year, the fair share per capita amount 
under this paragraph for the fiscal year 
shall be the default amount determined 
under clause (ii) for the fiscal year. 
‘‘(ii) DEFAULT AMOUNT.—The default 
amount under this clause for— 
‘‘(I) fiscal year 2011 is equal to 
$2; or 
‘‘(II) a subsequent year is equal 
to the default amount under this 
clause for the preceeding fiscal year 
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438 
increased 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.—The fol-
lowing amounts in the CERTF for a fiscal year shall 
be available to carry out the activities of the Com-
parative Effectiveness Research Commission estab-
lished 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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439 
‘‘(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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440 
‘‘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 OF CERTAIN POLICIES.—The 
term ‘specified health insurance policy’ does not in-
clude any insurance policy if substantially all of the 
coverage provided under such policy relates to— 
‘‘(A) liabilities incurred under workers’ 
compensation laws, 
‘‘(B) tort liabilities, 
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‘‘(C) liabilities relating to ownership or use 
of property, 
‘‘(D) credit insurance, 
‘‘(E) medicare supplemental coverage, or 
‘‘(F) such other similar liabilities as the 
Secretary may specify by regulations. 
‘‘(3) TREATMENT OF PREPAID HEALTH COV-
ERAGE ARRANGEMENTS.— 
‘‘(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. 
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442 
‘‘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. 
‘‘(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), 
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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. 
‘‘(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), 
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‘‘(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), 
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.— 
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445 
‘‘(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). 
‘‘(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 
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446 
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-
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 AMENDMENT.—Chapter 34 
of such Code is amended by striking the chap-
ter heading and inserting the following: 
‘‘CHAPTER 34—TAXES ON CERTAIN 
INSURANCE POLICIES 
‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS 
‘‘SUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS 
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‘‘Subchapter A—Policies Issued By Foreign 
Insurers’’. 
(C) EFFECTIVE DATE.—The amendments 
made by this subsection shall apply with respect 
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: 
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(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 
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. 
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449 
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: 
‘‘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; 
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450 
‘‘(2) coordinating the development and speci-
fications of such measures; 
‘‘(3) establishing standards for the development 
and testing of such measures; 
‘‘(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; 
VerDate Aug 31 2005 
05:18 Jul 25, 2007
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