H. R. 3323
One Hundred Seventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, two thousand and one
An Act
To ensure that covered entities comply with the standards for electronic health
care transactions and code sets adopted under part C of title XI of the Social
Security Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Administrative Simplification
Compliance Act’’.
SEC. 2. EXTENSION OF DEADLINE FOR COVERED ENTITIES SUBMIT-
TING COMPLIANCE PLANS.
(a) IN GENERAL.—
(1) EXTENSION.—Subject to paragraph (2), notwithstanding
section 1175(b)(1)(A) of the Social Security Act (42 U.S.C.
1320d–4(b)(1)(A)) and section 162.900 of title 45, Code of Fed-
eral Regulations, a health care provider, health plan (other
than a small health plan), or a health care clearinghouse shall
not be considered to be in noncompliance with the applicable
requirements of subparts I through R of part 162 of title 45,
Code of Federal Regulations, before October 16, 2003.
(2) CONDITION.—Paragraph (1) shall apply to a person
described in such paragraph only if, before October 16, 2002,
the person submits to the Secretary of Health and Human
Services a plan of how the person will come into compliance
with the requirements described in such paragraph not later
than October 16, 2003. Such plan shall be a summary of the
following:
(A) An analysis reflecting the extent to which, and
the reasons why, the person is not in compliance.
(B) A budget, schedule, work plan, and implementation
strategy for achieving compliance.
(C) Whether the person plans to use or might use
a contractor or other vendor to assist the person in
achieving compliance.
(D) A timeframe for testing that begins not later than
April 16, 2003.
(3) ELECTRONIC SUBMISSION.—Plans described in paragraph
(2) may be submitted electronically.
(4) MODEL
FORM.—Not later than March 31, 2002, the
Secretary of Health and Human Services shall promulgate a
model form that persons may use in drafting a plan described
in paragraph (2). The promulgation of such form shall be made
H. R. 3323—2
without regard to chapter 35 of title 44, United States Code
(commonly known as the ‘‘Paperwork Reduction Act’’).
(5) ANALYSIS OF PLANS; REPORTS ON SOLUTIONS.—
(A) ANALYSIS OF PLANS.—
(i) FURNISHING
OF
PLANS.—Subject to subpara-
graph (D), the Secretary of Health and Human Services
shall furnish the National Committee on Vital and
Health Statistics with a sample of the plans submitted
under paragraph (2) for analysis by such Committee.
(ii) ANALYSIS.—The National Committee on Vital
and Health Statistics shall analyze the sample of the
plans furnished under clause (i).
(B) REPORTS ON SOLUTIONS.—The National Committee
on Vital and Health Statistics shall regularly publish, and
widely disseminate to the public, reports containing effec-
tive solutions to compliance problems identified in the plans
analyzed under subparagraph (A). Such reports shall not
relate specifically to any one plan but shall be written
for the purpose of assisting the maximum number of per-
sons to come into compliance by addressing the most
common or challenging problems encountered by persons
submitting such plans.
(C) CONSULTATION.—In carrying out this paragraph,
the National Committee on Vital and Health Statistics
shall consult with each organization—
(i) described in section 1172(c)(3)(B) of the Social
Security Act (42 U.S.C. 1320d–1(c)(3)(B)); or
(ii) designated by the Secretary of Health and
Human Services under section 162.910(a) of title 45,
Code of Federal Regulations.
(D) PROTECTION OF CONFIDENTIAL INFORMATION.—
(i) IN
GENERAL.—The Secretary of Health and
Human Services shall ensure that any material pro-
vided under subparagraph (A) to the National Com-
mittee on Vital and Health Statistics or any organiza-
tion described in subparagraph (C) is redacted so as
to prevent the disclosure of any—
(I) trade secrets;
(II) commercial or financial information that
is privileged or confidential; and
(III) other information the disclosure of which
would constitute a clearly unwarranted invasion
of personal privacy.
(ii) CONSTRUCTION.—Nothing in clause (i) shall be
construed to affect the application of section 552 of
title 5, United States Code (commonly known as the
‘‘Freedom of Information Act’’), including the exceptions
from disclosure provided under subsection (b) of such
section.
(6) ENFORCEMENT THROUGH EXCLUSION FROM PARTICIPA-
TION IN MEDICARE.—
(A) IN GENERAL.—In the case of a person described
in paragraph (1) who fails to submit a plan in accordance
with paragraph (2), and who is not in compliance with
the applicable requirements of subparts I through R of
part 162 of title 45, Code of Federal Regulations, on or
after October 16, 2002, the person may be excluded at
H. R. 3323—3
the discretion of the Secretary of Health and Human Serv-
ices from participation (including under part C or as a
contractor under sections 1816, 1842, and 1893) in title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).
(B) PROCEDURE.—The provisions of section 1128A of
the Social Security Act (42 U.S.C. 1320a–7a) (other than
the first and second sentences of subsection (a) and sub-
section (b)) shall apply to an exclusion under this paragraph
in the same manner as such provisions apply with respect
to an exclusion or proceeding under section 1128A(a) of
such Act.
(C) CONSTRUCTION.—The availability of an exclusion
under this paragraph shall not be construed to affect the
imposition of penalties under section 1176 of the Social
Security Act (42 U.S.C. 1320d–5).
(D) NONAPPLICABILITY TO COMPLYING PERSONS.—The
exclusion under subparagraph (A) shall not apply to a
person who—
(i) submits a plan in accordance with paragraph
(2); or
(ii) who is in compliance with the applicable
requirements of subparts I through R of part 162 of
title 45, Code of Federal Regulations, on or before
October 16, 2002.
(b) SPECIAL RULES.—
(1) RULES OF CONSTRUCTION.—Nothing in this section shall
be construed—
(A) as modifying the October 16, 2003, deadline for
a small health plan to comply with the requirements of
subparts I through R of part 162 of title 45, Code of
Federal Regulations; or
(B) as modifying—
(i) the April 14, 2003, deadline for a health care
provider, a health plan (other than a small health
plan), or a health care clearinghouse to comply with
the requirements of subpart E of part 164 of title
45, Code of Federal Regulations; or
(ii) the April 14, 2004, deadline for a small health
plan to comply with the requirements of such subpart.
(2) APPLICABILITY OF PRIVACY STANDARDS BEFORE COMPLI-
ANCE DEADLINE FOR INFORMATION TRANSACTION STANDARDS.—
(A) IN GENERAL.—Notwithstanding any other provision
of law, during the period that begins on April 14, 2003,
and ends on October 16, 2003, a health care provider
or, subject to subparagraph (B), a health care clearing-
house, that transmits any health information in electronic
form in connection with a transaction described in subpara-
graph (C) shall comply with the requirements of subpart
E of part 164 of title 45, Code of Federal Regulations,
without regard to whether the transmission meets the
standards required by part 162 of such title.
(B) APPLICATION TO HEALTH CARE CLEARINGHOUSES.—
For purposes of this paragraph, during the period described
in subparagraph (A), an entity that processes or facilitates
the processing of information in connection with a trans-
action described in subparagraph (C) and that otherwise
would be treated as a health care clearinghouse shall be
H. R. 3323—4
treated as a health care clearinghouse without regard to
whether the processing or facilitation produces (or is
required to produce) standard data elements or a standard
transaction as required by part 162 of title 45, Code of
Federal Regulations.
(C) 
TRANSACTIONS
DESCRIBED.—The 
transactions
described in this subparagraph are the following:
(i) A health care claims or equivalent encounter
information transaction.
(ii) A health care payment and remittance advice
transaction.
(iii) A coordination of benefits transaction.
(iv) A health care claim status transaction.
(v) An enrollment and disenrollment in a health
plan transaction.
(vi) An eligibility for a health plan transaction.
(vii) A health plan premium payments transaction.
(viii) A referral certification and authorization
transaction.
(c) DEFINITIONS.—In this section—
(1) the terms ‘‘health care provider’’, ‘‘health plan’’, and
‘‘health care clearinghouse’’ have the meaning given those terms
in section 1171 of the Social Security Act (42 U.S.C. 1320d)
and section 160.103 of title 45, Code of Federal Regulations;
(2) the terms ‘‘small health plan’’ and ‘‘transaction’’ have
the meaning given those terms in section 160.103 of title 45,
Code of Federal Regulations; and
(3) the terms ‘‘health care claims or equivalent encounter
information transaction’’, ‘‘health care payment and remittance
advice transaction’’, ‘‘coordination of benefits transaction’’,
‘‘health care claim status transaction’’, ‘‘enrollment and
disenrollment in a health plan transaction’’, ‘‘eligibility for a
health plan transaction’’, ‘‘health plan premium payments
transaction’’, and ‘‘referral certification and authorization trans-
action’’ have the meanings given those terms in sections
162.1101, 162.1601, 162.1801, 162.1401, 162.1501, 162.1201,
162.1701, and 162.1301 of title 45, Code of Federal Regulations,
respectively.
SEC. 3. REQUIRING ELECTRONIC SUBMISSION OF MEDICARE CLAIMS.
(a) IN GENERAL.—Section 1862 of the Social Security Act (42
U.S.C. 1395y) is amended—
(1) in subsection (a)—
(A) by striking ‘‘or’’ at the end of paragraph (20);
(B) by striking the period at the end of paragraph
(21) and inserting ‘‘; or’’; and
(C) by inserting after paragraph (21) the following
new paragraph:
‘‘(22) subject to subsection (h), for which a claim is sub-
mitted other than in an electronic form specified by the Sec-
retary.’’; and
(2) by inserting after subsection (g) the following new sub-
section:
‘‘(h)(1) The Secretary—
‘‘(A) shall waive the application of subsection (a)(22) in
cases in which—
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‘‘(i) there is no method available for the submission
of claims in an electronic form; or
‘‘(ii) the entity submitting the claim is a small provider
of services or supplier; and
‘‘(B) may waive the application of such subsection in such
unusual cases as the Secretary finds appropriate.
‘‘(2) For purposes of this subsection, the term ‘small provider
of services or supplier’ means—
‘‘(A) a provider of services with fewer than 25 full-time
equivalent employees; or
‘‘(B) a physician, practitioner, facility, or supplier (other
than provider of services) with fewer than 10 full-time equiva-
lent employees.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to claims submitted on or after October 16, 2003.
SEC. 4. CLARIFICATION WITH RESPECT TO APPLICABILITY OF
ADMINISTRATIVE SIMPLIFICATION REQUIREMENTS TO
MEDICARE+CHOICE ORGANIZATIONS.
Section 1171(5)(D) of the Social Security Act (42 U.S.C.
1320d(5)(D)) is amended by striking ‘‘Part A or part B’’ and inserting
‘‘Parts A, B, or C’’.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION
OF REGULATIONS.
(a) IN GENERAL.—Subject to subsection (b), and in addition
to any other amounts that may be authorized to be appropriated,
there are authorized to be appropriated a total of $44,200,000,
for—
(1) technical assistance, education and outreach, and
enforcement activities related to subparts I through R of part
162 of title 45, Code of Federal Regulations; and
(2) adopting the standards required to be adopted under
section 1173 of the Social Security Act (42 U.S.C. 1320d–2).
(b) REDUCTIONS.—
(1) MODEL FORM 14 DAYS LATE.—If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 14 days after the deadline described in such section,
the amount referred to in subsection (a) shall be reduced by
25 percent.
(2) MODEL FORM 30 DAYS LATE.—If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 30 days after the deadline described in such section,
the amount referred to in subsection (a) shall be reduced by
50 percent.
(3) MODEL FORM 45 DAYS LATE.—If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 45 days after the deadline described in such section,
the amount referred to in subsection (a) shall be reduced by
75 percent.
(4) MODEL FORM 60 DAYS LATE.—If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 60 days after the deadline described in such section,
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the amount referred to in subsection (a) shall be reduced by
100 percent.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.