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‘‘(C) the information transmitted and re-
ceived in connection with the transaction shall
be in the form of standard data elements of
health information.
‘‘(2) SATISFACTION
OF
REQUIREMENTS.—A
health plan may satisfy the requirements under
paragraph (1) by—
‘‘(A) directly transmitting and receiving
standard data elements of health information;
or
‘‘(B) submitting nonstandard data ele-
ments to a clearinghouse for processing into
standard data elements and transmission by the
clearinghouse, and receiving standard data ele-
ments through the clearinghouse.
‘‘(3) TIMETABLE
FOR
COMPLIANCE.—Para-
graph (1) shall not be construed to require a health
plan to comply with any standard, implementation
specification, or modification to a standard or speci-
fication adopted or established by the Secretary
under sections 1172 and 1173 at any time prior to
the date on which the plan is required to comply
with the standard or specification under subsection
(b).
‘‘(b) COMPLIANCE WITH STANDARDS.—
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‘‘(1) INITIAL COMPLIANCE.—
‘‘(A) IN
GENERAL.—Not later than 24
months after the date on which an initial stand-
ard or implementation specification is adopted
or established under sections 1172 and 1173,
each person to whom the standard or imple-
mentation specification applies shall comply
with the standard or specification.
‘‘(B) SPECIAL RULE FOR SMALL HEALTH
PLANS.—In the case of a small health plan,
paragraph (1) shall be applied by substituting
‘‘36 months’’ for ‘‘24 months’’. For purposes of
this subsection, the Secretary shall determine
the plans that qualify as small health plans.
‘‘(2) COMPLIANCE
WITH
MODIFIED
STAND-
ARDS.—If the Secretary adopts a modification to a
standard or implementation specification under this
part, each person to whom the standard or imple-
mentation specification applies shall comply with the
modified standard or implementation specification 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. The
time determined appropriate under the preceding
sentence may not be earlier than the last day of the
153
180-day period beginning on the date such modifica-
tion is adopted. The Secretary may extend the time
for compliance for small health plans, if the Sec-
retary determines that such extension is appropriate.
‘‘SEC. 1176. GENERAL PENALTY FOR FAILURE TO COMPLY
WITH REQUIREMENTS AND STANDARDS.
‘‘(a) GENERAL PENALTY.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (b), the Secretary shall impose on any person
who violates a provision of this part a penalty of
not more than $100 for each such violation, except
that the total amount imposed on the person for all
violations of an identical requirement or prohibition
during a calendar year may not exceed $25,000.
‘‘(2) PROCEDURES.—The provisions of section
1128A (other than subsections (a) and (b) and the
second sentence of subsection (f)) shall apply to the
imposition of a civil money penalty under this sub-
section in the same manner as such provisions apply
to the imposition of a penalty under such section
1128A.
‘‘(b) LIMITATIONS.—
‘‘(1) OFFENSES OTHERWISE PUNISHABLE.—A
penalty may not be imposed under subsection (a)
154
with respect to an act if the act constitutes an of-
fense punishable under section 1177.
‘‘(2) NONCOMPLIANCE
NOT
DISCOVERED.—A
penalty may not be imposed under subsection (a)
with respect to a provision of this part if it is estab-
lished to the satisfaction of the Secretary that the
person liable for the penalty did not know, and by
exercising reasonable diligence would not have
known, that such person violated the provision.
‘‘(3) FAILURES DUE TO REASONABLE CAUSE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a penalty may not be im-
posed under subsection (a) if—
‘‘(i) the failure to comply was due to
reasonable cause and not to willful neglect;
and
‘‘(ii) the failure to comply is corrected
during the 30-day period beginning on the
1st date the person liable for the penalty
knew, or by exercising reasonable diligence
would have known, that the failure to com-
ply occurred.
‘‘(B) EXTENSION OF PERIOD.—
‘‘(i) NO
PENALTY.—The period re-
ferred to in subparagraph (A)(ii) may be
155
extended as determined appropriate by the
Secretary based on the nature and extent
of the failure to comply.
‘‘(ii) ASSISTANCE.—If the Secretary
determines that a person failed to comply
because the person was unable to comply,
the Secretary may provide technical assist-
ance to the person during the period de-
scribed in subparagraph (A)(ii). Such as-
sistance shall be provided in any manner
determined appropriate by the Secretary.
‘‘(4) REDUCTION.—In the case of a failure to
comply which is due to reasonable cause and not to
willful neglect, any penalty under subsection (a) that
is not entirely waived under paragraph (3) may be
waived to the extent that the payment of such pen-
alty would be excessive relative to the compliance
failure involved.
‘‘SEC. 1177. WRONGFUL DISCLOSURE OF INDIVIDUALLY
IDENTIFIABLE HEALTH INFORMATION.
‘‘(a) OFFENSE.—A person who knowingly—
‘‘(1) uses or causes to be used a unique health
identifier in violation of a provision of this part;
156
‘‘(2) obtains individually identifiable health in-
formation relating to an individual in violation of a
provision of this part; or
‘‘(3) discloses individually identifiable health in-
formation to another person in violation of a provi-
sion of this part,
shall be punished as provided in subsection (b).
‘‘(b) PENALTIES.—A person described in subsection
(a) shall—
‘‘(1) be fined not more than $50,000, impris-
oned not more than 1 year, or both;
‘‘(2) if the offense is committed under false pre-
tenses, be fined not more than $100,000, imprisoned
not more than 5 years, or both; and
‘‘(3) if the offense is committed with intent to
sell, transfer, or use individually identifiable health
information for commercial advantage, personal
gain, or malicious harm, fined not more than
$250,000, imprisoned not more than 10 years, or
both.
‘‘SEC. 1178. EFFECT ON STATE LAW.
‘‘(a) GENERAL EFFECT.—
‘‘(1) GENERAL RULE.—Except as provided in
paragraph (2), a provision or requirement under this
part, or a standard or implementation specification
158
for the reporting of disease or injury, child abuse, birth,
or death, public health surveillance, or public health inves-
tigation or intervention.
‘‘SEC. 1179. HEALTH INFORMATION ADVISORY COMMITTEE.
‘‘(a) ESTABLISHMENT.—There is established a com-
mittee to be known as the Health Information Advisory
Committee (in this section referred to as the ‘committee’).
‘‘(b) DUTIES.—The committee shall—
‘‘(1) provide assistance to the Secretary in com-
plying with the requirements imposed on the Sec-
retary under this part;
‘‘(2) study the issues related to the adoption of
uniform data standards for patient medical record
information and the electronic exchange of such in-
formation;
‘‘(3) report to the Secretary not later than 4
years after the date of the enactment of this part
recommendations and legislative proposals for such
standards and electronic exchange; and
‘‘(4) generally be responsible for advising the
Secretary and the Congress on the status of the im-
plementation of this part.
‘‘(c) MEMBERSHIP.—
‘‘(1) IN GENERAL.—The committee shall con-
sist of 15 members of whom—
159
‘‘(A) 3 shall be appointed by the President;
‘‘(B) 6 shall be appointed by the Speaker
of the House of Representatives after consulta-
tion with the minority leader of the House of
Representatives; and
‘‘(C) 6 shall be appointed by the President
pro tempore of the Senate after consultation
with the minority leader of the Senate.
The appointments of the members shall be made 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 in the areas of infor-
mation systems, information networking and inte-
gration, consumer health, health care financial man-
agement, or privacy, and who possess the dem-
onstrated capacity to discharge the duties imposed
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
terms such that the terms of not more than 3 mem-
bers expire at one time.
160
‘‘(4) INITIAL
MEETING.—Not later than 30
days after the date on which a majority of the mem-
bers have been appointed, the committee shall hold
its first meeting.
‘‘(d) REPORTS.—Not later than 1 year after the date
of the enactment of this part, and annually thereafter, the
committee shall submit to the Congress, and make public,
a report regarding—
‘‘(1) the extent to which persons required to
comply with this part are cooperating in implement-
ing the standards adopted under this part;
‘‘(2) the extent to which such entities are meet-
ing the privacy and security standards adopted
under this part and the types of penalties assessed
for noncompliance with such standards;
‘‘(3) whether the Federal and State Govern-
ments are receiving information of sufficient quality
to meet their responsibilities under this part;
‘‘(4) any problems that exist with respect to im-
plementation of this part; and
‘‘(5) the extent to which timetables under this
part are being met.’’.
(b) CONFORMING AMENDMENTS.—
161
(1) REQUIREMENT
FOR
MEDICARE
PROVID-
ERS.—Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1))
is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (P);
(B) by striking the period at the end of
subparagraph (Q) and inserting ‘‘; and’’; and
(C) by inserting immediately after sub-
paragraph (Q) the following new subparagraph:
‘‘(R) to contract only with a clearinghouse
(as defined in section 1171) that meets each
standard 
and 
implementation 
specification
adopted or established under sections 1172 and
1173 on or after the date on which the clear-
inghouse is required to comply with the stand-
ard or specification.’’.
(2) CLERICAL AMENDMENTS.—
(A) Title XI (42 U.S.C. 1301 et seq.) is
amended by striking the title heading and in-
serting the following:
‘‘TITLE XI—GENERAL PROVISIONS, PEER RE-
VIEW, AND ADMINISTRATIVE SIMPLIFICA-
TION’’.
(B) Parts A and B of title XI (42 U.S.C.
1301 et seq.) are amended by striking ‘‘this
162
title’’ each place such term appears and insert-
ing ‘‘parts A and B of this title’’.
Æ