‘‘(1) LIMITATION ON USE OF FUNDS.—None of 
the funds provided under a grant made under this 
section may be used for a project providing for the 
adoption or improvement of health information tech-
nology that is used exclusively for financial record 
keeping, billing, or other non-clinical applications. 
‘‘(2) MATCHING REQUIREMENT.—To be eligible 
for a grant under this section an integrated health 
care system shall contribute non-Federal contribu-
tions to the costs of carrying out the project for 
which the grant is awarded in an amount equal to 
$1 for each $5 of Federal funds provided under the 
grant. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$15,000,000 for each of fiscal years 2007 and 2008.’’. 
SEC. 105. SMALL PHYSICIAN PRACTICE DEMONSTRATION 
GRANTS. 
Part D of title II of the Public Health Service Act, 
as added by section 101(a) and amended by section 103, 
is amended by adding at the end the following new section: 
‘‘SEC. 273. SMALL PHYSICIAN PRACTICE DEMONSTRATION 
GRANTS. 
‘‘(a) IN GENERAL.—The Secretary shall establish a 
demonstration program under which the Secretary makes
grants to small physician practices (including such prac-
tices that furnish services to individuals with chronic ill-
nesses) that are located in rural areas or medically under-
served urban areas for the purchase and support of health 
information technology. 
‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 
under this section, an applicant shall prepare and submit 
to the Secretary an application, at such time, in such man-
ner, and containing such information, as the Secretary 
may require. 
‘‘(c) REPORTING.—
‘‘(1) REQUIRED REPORTS BY SMALL PHYSICIAN 
PRACTICES.—A small physician practice receiving a 
grant under subsection (a) shall submit to the Sec-
retary an evaluation on the health information tech-
nology funded by such grant. Such evaluation shall 
include information on—
‘‘(A) barriers to the adoption of health in-
formation technology by the small physician 
practice; 
‘‘(B) issues for such practice in the use of 
health information technology; 
‘‘(C) the effect health information tech-
nology will have on the quality of health care 
furnished by such practice; and
‘‘(D) the effect of any medical liability 
rules on such practice. 
‘‘(2) REPORT TO CONGRESS.—Not later than 
January 1, 2009, the Secretary shall submit to Con-
gress a report on the results of the demonstration 
program under this section. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$5,000,000 for each of fiscal years 2007 and 2008.’’. 
TITLE II—TRANSACTION STAND-
ARDS, CODES, AND INFORMA-
TION 
SEC. 201. PROCEDURES TO ENSURE TIMELY UPDATING OF 
STANDARDS THAT ENABLE ELECTRONIC EX-
CHANGES. 
Section 1174(b) of the Social Security Act (42 U.S.C. 
1320d–3(b)) is amended—
(1) in paragraph (1)—
(A) in the first sentence, by inserting ‘‘and 
in accordance with paragraph (3)’’ before the 
period; and 
(B) by adding at the end the following new 
sentence: ‘‘For purposes of this subsection and 
section 1173(c)(2), the term ‘modification’ in-
cludes a new version or a version upgrade.’’; 
and 
(2) by adding at the end the following new 
paragraph: 
‘‘(3) EXPEDITED PROCEDURES FOR ADOPTION 
OF
ADDITIONS
AND
MODIFICATIONS
TO
STAND-
ARDS.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the Secretary shall provide for an ex-
pedited upgrade program (in this paragraph re-
ferred to as the ‘upgrade program’), in accord-
ance with this paragraph, to develop and ap-
prove additions and modifications to the stand-
ards adopted under section 1173(a) to improve 
the quality of such standards or to extend the 
functionality of such standards to meet evolving 
requirements in health care. 
‘‘(B) PUBLICATION
OF
NOTICES.—Under 
the upgrade program: 
‘‘(i) VOLUNTARY
NOTICE
OF
INITI-
ATION
OF
PROCESS.—Not later than 30 
days after the date the Secretary receives 
a notice from a standard setting organiza-
tion that the organization is initiating a 
process to develop an addition or modifica-
tion to a standard adopted under section 
1173(a), the Secretary shall publish a no-
tice in the Federal Register that—
‘‘(I) identifies the subject matter 
of the addition or modification; 
‘‘(II) provides a description of 
how persons may participate in the 
development process; and 
‘‘(III) invites public participation 
in such process. 
‘‘(ii) VOLUNTARY
NOTICE
OF
PRE-
LIMINARY DRAFT OF ADDITIONS OR MODI-
FICATIONS
TO
STANDARDS.—Not later 
than 30 days after the date of the date the 
Secretary receives a notice from a standard 
setting organization that the organization 
has prepared a preliminary draft of an ad-
dition or modification to a standard adopt-
ed by section 1173(a), the Secretary shall 
publish a notice in the Federal Register 
that—
‘‘(I) identifies the subject matter 
of (and summarizes) the addition or 
modification;
‘‘(II) specifies the procedure for 
obtaining the draft; 
‘‘(III) provides a description of 
how persons may submit comments in 
writing and at any public hearing or 
meeting held by the organization on 
the addition or modification; and 
‘‘(IV) invites submission of such 
comments and participation in such 
hearing or meeting without requiring 
the public to pay a fee to participate. 
‘‘(iii) NOTICE OF PROPOSED ADDITION 
OR
MODIFICATION
TO
STANDARDS.—Not 
later than 30 days after the date of the 
date the Secretary receives a notice from a 
standard setting organization that the or-
ganization has a proposed addition or 
modification to a standard adopted under 
section 1173(a) that the organization in-
tends to submit under subparagraph 
(D)(iii), the Secretary shall publish a no-
tice in the Federal Register that contains, 
with respect to the proposed addition or 
modification, the information required in
the notice under clause (ii) with respect to 
the addition or modification. 
‘‘(iv) 
CONSTRUCTION.—Nothing 
in 
this paragraph shall be construed as re-
quiring a standard setting organization to 
request the notices described in clauses (i) 
and (ii) with respect to an addition or 
modification to a standard in order to 
qualify for an expedited determination 
under subparagraph (C) with respect to a 
proposal submitted to the Secretary for 
adoption of such addition or modification. 
‘‘(C) PROVISION
OF
EXPEDITED
DETER-
MINATION.—Under the upgrade program and 
with respect to a proposal by a standard setting 
organization for an addition or modification to 
a standard adopted under section 1173(a), if 
the Secretary determines that the standard set-
ting organization developed such addition or 
modification in accordance with the require-
ments of subparagraph (D) and the National 
Committee on Vital and Health Statistics rec-
ommends approval of such addition or modifica-
tion under subparagraph (E), the Secretary
shall provide for expedited treatment of such 
proposal in accordance with subparagraph (F). 
‘‘(D) REQUIREMENTS.—The requirements 
under this subparagraph with respect to a pro-
posed addition or modification to a standard by 
a standard setting organization are the fol-
lowing: 
‘‘(i) REQUEST FOR PUBLICATION OF 
NOTICE.—The standard setting organiza-
tion submits to the Secretary a request for 
publication in the Federal Register of a no-
tice described in subparagraph (B)(iii) for 
the proposed addition or modification. 
‘‘(ii) PROCESS
FOR
RECEIPT
AND 
CONSIDERATION
OF
PUBLIC
COMMENT.—
The standard setting organization provides 
for a process through which, after the pub-
lication of the notice referred to under 
clause (i), the organization—
‘‘(I) receives and responds to 
public comments submitted on a time-
ly basis on the proposed addition or 
modification before submitting such 
proposed addition or modification to
the National Committee on Vital and 
Health Statistics under clause (iii); 
‘‘(II) makes publicly available a 
written explanation for its response in 
the proposed addition or modification 
to comments submitted on a timely 
basis; and 
‘‘(III) makes public comments re-
ceived under clause (I) available, or 
provides access to such comments, to 
the Secretary. 
‘‘(iii) SUBMITTAL
OF
FINAL
PRO-
POSED
ADDITION
OR
MODIFICATION
TO 
NCVHS.—After completion of the process 
under clause (ii), the standard setting or-
ganization submits the proposed addition 
or modification to the National Committee 
on Vital and Health Statistics for review 
and consideration under subparagraph (E). 
Such submission shall include information 
on the organization’s compliance with the 
notice and comment requirements (and re-
sponses to those comments) under clause 
(ii).
‘‘(E) HEARING
AND
RECOMMENDATIONS 
BY
NATIONAL
COMMITTEE
ON
VITAL
AND 
HEALTH STATISTICS.—Under the upgrade pro-
gram, upon receipt of a proposal submitted by 
a standard setting organization under subpara-
graph (D)(iii) for the adoption of an addition or 
modification to a standard, the National Com-
mittee on Vital and Health Statistics shall pro-
vide notice to the public and a reasonable op-
portunity for public testimony at a hearing on 
such addition or modification. The Secretary 
may participate in such hearing in such capac-
ity (including presiding ex officio) as the Sec-
retary shall determine appropriate. Not later 
than 120 days after the date of receipt of the 
proposal, the Committee shall submit to the 
Secretary its recommendation to adopt (or not 
adopt) the proposed addition or modification. 
‘‘(F) DETERMINATION BY SECRETARY TO 
ACCEPT OR REJECT NATIONAL COMMITTEE ON 
VITAL AND HEALTH STATISTICS RECOMMENDA-
TION.—
‘‘(i) 
TIMELY
DETERMINATION.—
Under the upgrade program, if the Na-
tional Committee on Vital and Health Sta-
tistics submits to the Secretary a rec-
ommendation under subparagraph (E) to 
adopt a proposed addition or modification, 
not later than 90 days after the date of re-
ceipt of such recommendation the Sec-
retary shall make a determination to ac-
cept or reject the recommendation and 
shall publish notice of such determination 
in the Federal Register not later than 30 
days after the date of the determination. 
‘‘(ii) CONTENTS OF NOTICE.—If the 
determination is to reject the recommenda-
tion, such notice shall include the reasons 
for the rejection. If the determination is to 
accept the recommendation, as part of 
such notice the Secretary shall promulgate 
the modified standard (including the ac-
cepted proposed addition or modification 
accepted) as a final rule under this sub-
section without any further notice or public 
comment period. 
‘‘(iii) 
LIMITATION
ON
CONSIDER-
ATION.—The Secretary shall not consider a 
proposal under this subparagraph unless 
the Secretary determines that the require-
ments of subparagraph (D) (including pub-
lication of notice and opportunity for pub-
lic comment) have been met with respect to 
the proposal. 
‘‘(G) EXEMPTION FROM PAPERWORK RE-
DUCTION ACT.—Chapter 35 of title 44, United 
States Code, shall not apply to a final rule pro-
mulgated under subparagraph (F). 
‘‘(H) TREATMENT
AS
SATISFYING
RE-
QUIREMENTS
FOR
NOTICE-AND-COMMENT.—
Any requirements under section 553 of title 5, 
United States Code, relating to notice and an 
opportunity for public comment with respect to 
a final rule promulgated under subparagraph 
(F) shall be treated as having been met by 
meeting the requirements of the notice and op-
portunity for public comment provided under 
provisions of subparagraphs (B)(iii), (D), and 
(E). 
‘‘(I) NO JUDICIAL REVIEW.—A final rule 
promulgated under subparagraph (F) shall not 
be subject to judicial review.’’. 
SEC. 202. UPGRADING ASC X12 AND NCPDP STANDARDS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall provide by notice published in the
Federal Register for the following replacements of stand-
ards to apply to transactions occurring on or after April 
1, 2009: 
(1) ACCREDITED STANDARDS COMMITTEE X12 
(ASC X12) STANDARD.—The replacement of the Ac-
credited Standards Committee X12 (ASC X12) 
version 4010 adopted under section 1173(a) of such 
Act (42 U.S.C. 1320d–2(a)) with the ASC X12 
version 5010, as reviewed by the National Com-
mittee on Vital Health Statistics. 
(2) NATIONAL
COUNCIL
FOR
PRESCRIPTION 
DRUG
PROGRAMS
(NCPDP)
TELECOMMUNICATIONS 
STANDARDS.—The replacement of the National 
Council for Prescription Drug Programs (NCPDP) 
Telecommunications Standards version 5.1 adopted 
under section 1173(a) of such Act (42 U.S.C. 
1320d–2(a)) with whichever is the latest version of 
the NCPDP Telecommunications Standards that has 
been approved by such Council and reviewed by the 
National Committee on Vital Health Statistics as of 
April 1, 2007. 
(b) NO JUDICIAL REVIEW.—The implementation of 
subsection (a), including the determination of the latest 
version under subsection (a)(2), shall not be subject to ju-
dicial review.
SEC. 203. UPGRADING ICD CODES; CODING AND DOCU-
MENTATION 
OF 
NON-MEDICAL 
INFORMA-
TION. 
(a) UPGRADING ICD CODES.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall provide by notice published in 
the Federal Register for the replacement of the 
International Classification of Diseases, 9th revision, 
Clinical Modification (ICD–9-CM) under the regula-
tion promulgated under section 1173(c) of the Social 
Security Act (42 U.S.C. 1320d–2(c)), including for 
purposes of part A of title XVIII of such Act, with 
both of the following: 
(A) The International Classification of 
Diseases, 10th revision, Clinical Modification 
(ICD–10-CM). 
(B) The International Classification of 
Diseases, 10th revision, Procedure Coding Sys-
tem (ICD–10-PCS). 
(2) APPLICATION.—The replacement made by 
paragraph (1) shall apply, for purposes of section 
1175(b)(2) of the Social Security Act (42 U.S.C. 
1320d–4(b)(2)), to services furnished on or after Oc-
tober 1, 2010. 
(3) RULES
OF
CONSTRUCTION.—Nothing in 
paragraph (1) shall be construed—
(A) as affecting the application of classi-
fication methodologies or codes, such as CPT or 
HCPCS codes, other than under the Inter-
national Classification of Diseases (ICD); or 
(B) as superseding the authority of the 
Secretary of Health and Human Services to 
maintain and modify the coding set for ICD–
10-CM and ICD–10-PCS, including under the 
amendments made by section 201. 
(b) CODING AND DOCUMENTATION OF NON-MEDICAL 
INFORMATION.—In any regulation or other action imple-
menting the International Classification of Diseases, 10th 
revision, Clinical Modification (ICD–10-CM), the Inter-
national Classification of Diseases, 10th revision, Proce-
dure Coding System (ICD–10-PCS), or other version of 
the International Classification of Diseases, 10th revision, 
the Secretary of Health and Human Services shall ensure 
that no health care provider is required to code to a level 
of specificity that would require documentation of non-
medical information on the external cause of any given 
type of injury.
SEC. 204. STRATEGIC PLAN FOR COORDINATING IMPLE-
MENTATION OF TRANSACTION STANDARDS 
AND ICD CODES. 
Not later than the date that is 180 days after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services, in consultation with relevant public 
and private entities, shall develop a strategic plan with re-
spect to the need for coordination in the implementation 
of—
(1) transaction standards under section 1173(a) 
of the Social Security Act, including modifications to 
such standards under section 1174(b)(3) of such 
Act, as added by section 201; and 
(2) any updated versions of the International 
Classification of Diseases (ICD), including the re-
placement of ICD–9 provided for under section 
203(a). 
SEC. 205. STUDY AND REPORT TO DETERMINE IMPACT OF 
VARIATION AND COMMONALITY IN STATE 
HEALTH INFORMATION LAWS AND REGULA-
TIONS. 
Part C of title XI of the Social Security Act is amend-
ed by adding at the end the following new section:
‘‘STUDY AND REPORT TO DETERMINE IMPACT OF VARI-
ATION AND COMMONALITY IN STATE HEALTH INFOR-
MATION LAWS AND REGULATIONS 
‘‘SEC. 1180. (a) STUDY.—For purposes of promoting 
the development of a nationwide interoperable health in-
formation technology infrastructure consistent with sec-
tion 271(b) of the Public Health Service Act, the Sec-
retary shall conduct a study of the impact of variation in 
State security and confidentiality laws and current Fed-
eral security and confidentiality standards on the timely 
exchanges of health information in order to ensure the 
availability of health information necessary to make med-
ical decisions at the location in which the medical care in-
volved is provided. Such study shall examine—
‘‘(1)(A) the degree of variation and com-
monality among the requirements of such laws for 
States; and 
‘‘(B) the degree of variation and commonality 
between the requirements of such laws and the cur-
rent Federal standards; 
‘‘(2) insofar as there is variation among and be-
tween such requirements, the strengths and weak-
nesses of such requirements; and 
‘‘(3) the extent to which such variation may ad-
versely impact the secure, confidential, and timely
exchange of health information among States, the 
Federal government, and public and private entities, 
or may otherwise impact the reliability of such infor-
mation. 
‘‘(b) REPORT.—Not later than 18 months after the 
date of the enactment of this section, the Secretary shall 
submit to Congress a report on the study under subsection 
(a) and shall include in such report the following: 
‘‘(1) ANALYSIS OF NEED FOR GREATER COM-
MONALITY.—A determination by the Secretary on 
the extent to which there is a need for greater com-
monality of the requirements of State security and 
confidentiality laws and current Federal security and 
confidentiality standards to better protect, strength-
en, or otherwise improve the secure, confidential, 
and timely exchange of health information among 
States, the Federal government, and public and pri-
vate entities. 
‘‘(2) RECOMMENDATIONS FOR GREATER COM-
MONALITY.—Insofar as the Secretary determines 
under paragraph (1) that there is a need for greater 
commonality of such requirements, recommendations 
on the extent to which (and how) the current Fed-
eral security and confidentiality standards should be 
changed in order to provide the commonality needed