TITLE I—PURPOSE AND REPEAL OF DATA BANK
Sec. 101. Purpose.
Sec. 102. Repeal of data bank.
TITLE II—ADMINISTRATIVE SIMPLIFICATION
Sec. 201. Administrative simplification.
TITLE III—EFFECTIVE DATES
Sec. 301. Effective dates.
TITLE I—PURPOSE AND REPEAL
OF DATA BANK
SEC. 101. PURPOSE.
It is the purpose of this Act to improve the medicare
program under title XVIII of the Social Security Act, the
medicaid program under title XIX of such Act, and the
efficiency and effectiveness of the health care system, by
encouraging the development of a health information net-
work through the establishment of standards and require-
ments for the electronic transmission of certain health in-
formation.
SEC. 102. REPEAL OF DATA BANK.
(a) IN GENERAL.—Section 1144 of the Social Secu-
rity Act (42 U.S.C. 1320b–14) and section 101(f) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1021(f)) are repealed.
(b) INTERNAL REVENUE CODE PROVISION.—Section
6103(l) of the Internal Revenue Code of 1986 is amended
by striking paragraph (12).
(c) IDENTIFICATION
OF
MEDICARE
SECONDARY
PAYER SITUATIONS.—Section 1862(b) of the Social Secu-
rity Act (42 U.S.C. 1395y(b)) is amended by striking
paragraph (5).
(d) CONFORMING AMENDMENTS.—
(1) Section 1902(a)(25)(A)(i) of the Social Se-
curity Act (42 U.S.C. 1396a(a)(25)(A)(i)) is amend-
ed by striking ‘‘including the use of information col-
lected by the Medicare and Medicaid Coverage Data
Bank under section 1144 and any additional meas-
ures’’.
(2) Subsection (a)(8)(B) of section 552a of title
5, United States Code, is amended—
(A) in clause (v), by inserting ‘‘; or’’ at the
end;
(B) in clause (vi), by striking ‘‘or’’ at the
end; and
(C) by striking clause (vii).
TITLE II—ADMINISTRATIVE
SIMPLIFICATION
SEC. 201. ADMINISTRATIVE SIMPLIFICATION.
(a) IN GENERAL.—Title XI of the Social Security Act
(42 U.S.C. 1301 et seq.) is amended by adding at the end
the following new part:
‘‘PART C—ADMINISTRATIVE SIMPLIFICATION
‘‘SEC. 1171. DEFINITIONS.
‘‘For purposes of this part:
‘‘(1) CODE SET.—The term ‘code set’ means
any set of codes used for encoding data elements,
such as tables of terms, medical concepts, medical
diagnostic codes, or medical procedure codes.
‘‘(2) COORDINATION OF BENEFITS.—The term
‘coordination of benefits’ means determining and co-
ordinating the financial obligations of health plans
when health care benefits are payable under 2 or
more health plans.
‘‘(3) EQUIVALENT HEALTH CARE PROGRAM.—
The term ‘equivalent health care program’ means—
‘‘(A) the health care program for active
military personnel under title 10, United States
Code;
‘‘(B) the veterans health care program
under chapter 17 of title 38, United States
Code;
‘‘(C) the Civilian Health and Medical Pro-
gram of the Uniformed Services (CHAMPUS),
as defined in section 1073(4) of title 10, United
States Code;
‘‘(D) the Indian health service program
under the Indian Health Care Improvement Act
(25 U.S.C. 1601 et seq.); and
‘‘(E) the Federal Employees Health Bene-
fit Plan under chapter 89 of title 5, United
States Code.
(4) HEALTH
CARE
PROVIDER.—The term
‘health care provider’ includes a provider of services
(as defined in section 1861(u), a provider of medical
or other health services (as defined in section
1861(s))), and any other person furnishing health
care services or supplies.
‘‘(5) HEALTH INFORMATION.—The term ‘health
information’ means any information, whether oral or
recorded in any form or medium that—
‘‘(A) is created or received by a health care
provider, health plan, public health authority,
employer, life insurer, school or university, or
health information network service; and
‘‘(B) relates to the past, present, or future
physical or mental health or condition of an in-
dividual, the provision of health care to an indi-
vidual, or the past, present, or future payment
for the provision of health care to an individual.
‘‘(6) HEALTH
INFORMATION
NETWORK.—The
term ‘health information network’ means the health
information system that is formed through the appli-
cation of the requirements and standards established
under this part.
‘‘(7) HEALTH INFORMATION NETWORK SERV-
ICE.—The term ‘health information network service’
means a public or private entity that—
‘‘(A) processes or facilitates the processing
of nonstandard data elements of health infor-
mation into standard data elements;
‘‘(B) provides the means by which persons
may meet the requirements of this part; or
‘‘(C) provides specific information process-
ing services.
‘‘(8) HEALTH PLAN.—The term ‘health plan’
means a plan which provides, or pays the cost of,
health benefits. Such term includes the following, or
any combination thereof:
‘‘(A) Part A or part B of the medicare
program under title XVIII.
‘‘(B) The medicaid program under title
XIX.
‘‘(C) A medicare supplemental policy (as
defined in section 1882(g)(1)).
‘‘(D) Coverage issued as a supplement to
liability insurance.
‘‘(E) General liability insurance.
‘‘(F) Worker’s compensation or similar in-
surance.
‘‘(G) Automobile or automobile medical-
payment insurance.
‘‘(H) A long-term care policy, including a
nursing home fixed indemnity policy (unless the
Secretary determines that such a policy does
not provide sufficiently comprehensive coverage
of a benefit so that the policy should be treated
as a health plan).
‘‘(I) A hospital or fixed indemnity income-
protection policy.
‘‘(J) An equivalent health care program.
‘‘(K) An employee welfare benefit plan, as
defined in section 3(1) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1002(1)), but only to the extent the plan is es-
tablished or maintained for the purpose of pro-
viding health benefits and has 50 or more par-
ticipating employees.
‘‘(L) An employee welfare benefit plan or
any other arrangement which is established or
maintained for the purpose of offering or pro-
viding health benefits to the employees of 2 or
more employers.
‘‘(M) Such other plan or arrangement as
the Secretary determines is a health plan.
‘‘(9) INDIVIDUALLY IDENTIFIABLE HEALTH IN-
FORMATION.—The term ‘individually identifiable
health information’ means any information, includ-
ing demographic information collected from an indi-
vidual, that—
‘‘(A) is created or received by a health care
provider, health plan, employer, or health infor-
mation network service; and
‘‘(B) relates to the past, present, or future
physical or mental health or condition of an in-
dividual, the provision of health care to an indi-
vidual, or the past, present, or future payment
for the provision of health care to an individual,
and—
‘‘(i) identifies an individual; or
‘‘(ii) with respect to which there is a
reasonable basis to believe that the infor-
mation can be used to identify an individ-
ual.
‘‘(10) 
SECRETARY.—The 
term 
‘Secretary’
means the Secretary of Health and Human Services.
‘‘(11) STANDARD
SETTING
ORGANIZATION.—
The term ‘standard setting organization’ means a
standard setting organization accredited by the
American National Standards Institute or any other
private organization (including the National Council
for Prescription Drug Programs and the Health In-
formation Standards Planning Panel) that develops
standards for information transactions, data ele-
ments, or any other standard that is necessary to or
will facilitate the implementation of this part, if the
standard development procedures of the organization
are open to the public and are based on a broad con-
sensus of opinion.
‘‘(12) STANDARD
TRANSACTION.—The term
‘standard transaction’ means, when referring to an
information transaction or to data elements of
health information, any transaction that meets the
requirements 
and 
implementation 
specifications
adopted by the Secretary under sections 1172 and
1173.
‘‘SEC. 1172. GENERAL REQUIREMENTS ON SECRETARY.
‘‘(a) ADOPTION OF STANDARDS.—
‘‘(1) IN GENERAL.—Pursuant to section 1173,
the Secretary shall adopt standards for information
transactions and data elements of health information
and modifications to the standards under this part
that are—
‘‘(A) consistent with the objective of reduc-
ing the administrative costs of providing and
paying for health care; and
‘‘(B) developed or modified by a standards
setting organization.
‘‘(2) ADDITIONAL STANDARDS UNDER CERTAIN
CONDITIONS.—If the Secretary determines that a
standard developed or modified by a standard set-
ting organization is impractical and more costly to
implement than a standard that is in use and gen-
erally accepted, the Secretary may adopt the stand-
ard that is in use and generally accepted in addition
to the standard developed or modified by the stand-
ard setting organization. The Secretary shall publish
in the Federal Register the analysis upon which the
Secretary based the determination to adopt such ad-
ditional standard.
‘‘(3) SPECIAL RULE RELATING TO DATA ELE-
MENTS.—The Secretary may adopt or modify a
standard relating to data elements that is different
from the standard developed by a standard setting
organization, if—
‘‘(A) the different standard or modification
will substantially reduce administrative costs to
health care providers and health plans com-
pared to the alternative; and
‘‘(B) the standard or modification is pro-
mulgated in accordance with the rulemaking
procedures of subchapter III of chapter 5 of
title 5, United States Code.
‘‘(b) SECURITY STANDARDS FOR HEALTH INFORMA-
TION NETWORK.—
‘‘(1) IN
GENERAL.—Each person, who main-
tains or transmits health information or data ele-
ments of health information and is subject to this
part, shall maintain reasonable and appropriate ad-
ministrative, technical, and physical safeguards—
‘‘(A) to ensure the integrity and confiden-
tiality of the information;
‘‘(B) to protect against any reasonably an-
ticipated—
‘‘(i) threats or hazards to the security
or integrity of the information; and
‘‘(ii) unauthorized uses or disclosures
of the information; and
‘‘(C) to otherwise ensure compliance with
this part by the officers and employees of such
person.
‘‘(2) SECURITY
STANDARDS.—The Secretary
shall establish security standards and modifications
to such standards with respect to health information
network services, health plans, and health care pro-
viders that—
‘‘(A) take into account—
‘‘(i) the technical capabilities of record
systems used to maintain health informa-
tion;
‘‘(ii) the costs of security measures;
‘‘(iii) the need for training persons
who have access to health information;
‘‘(iv) the value of audit trails in com-
puterized record systems; and
‘‘(v) the needs and capabilities of
small health care providers and rural
health care providers (as such providers
are defined by the Secretary); and
‘‘(B) ensure that a health information net-
work service, if it is part of a larger organiza-
tion, has policies and security procedures which
isolate the activities of such service with respect
to processing information in a manner that pre-
vents unauthorized access to such information
by such larger organization.
The security standards established by the Secretary
shall be based on the standards developed or modi-
fied by standard setting organizations. If such
standards do not exist, the Secretary shall rely on
the recommendations of the Health Information Ad-
visory Committee and shall consult with appropriate
government agencies and private organizations in ac-
cordance with subsection (e).
‘‘(c) PRIVACY STANDARDS FOR HEALTH INFORMA-
TION NETWORK.—The Secretary shall establish standards
and modifications to such standards with respect to the
privacy of individually identifiable health information that
is in the health information network. Such standards shall
include standards concerning at least the following:
‘‘(1) The rights of an individual who is the sub-
ject of such information.
‘‘(2) The procedures to be established for the
exercise of such rights.
‘‘(3) The uses and disclosures of such informa-
tion that are authorized or required.
‘‘(4) Safeguards for the security of such infor-
mation and adequate security practices.
‘‘(d) IMPLEMENTATION SPECIFICATIONS.—The Sec-
retary shall establish specifications for implementing each
of the standards and the modifications to the standards
adopted pursuant to subsection (a).
‘‘(e) ASSISTANCE TO THE SECRETARY.—In comply-
ing with the requirements of this part, the Secretary shall
rely on recommendations of the Health Information Advi-
sory Committee established under section 1179 and shall
consult with appropriate Federal and State agencies and
private organizations. The Secretary shall publish in the
Federal Register the recommendations of the Health In-
formation Advisory Committee regarding the adoption of
a standard under this part.
‘‘SEC. 1173. STANDARDS FOR INFORMATION TRANSACTIONS
AND DATA ELEMENTS.
‘‘(a) IN GENERAL.—
‘‘(1) GENERAL REQUIREMENTS.—The Secretary
shall adopt standards for transactions and data ele-
ments to make health information uniformly avail-
able to be exchanged electronically, that is—
‘‘(A) appropriate for the following financial
and administrative transactions: claims (includ-
ing coordination of benefits) or equivalent en-
counter information, claims attachments, enroll-
ment and disenrollment, eligibility, health care
payment and remittance advice, premium pay-
ments, first report of injury, claims status, and
referral certification and authorization; and
‘‘(B) related to other financial and admin-
istrative transactions determined appropriate by
the Secretary consistent with the goals of im-
proving the operation of the health care system
and reducing administrative costs.
‘‘(2) ACCOMMODATION
OF
SPECIFIC
PROVID-
ERS.—Nothing in this part shall prevent the Sec-
retary from adopting standards that accommodate
the specific needs of different types of health care
providers.
‘‘(b) UNIQUE HEALTH IDENTIFIERS.—
‘‘(1) ADOPTION
OF
STANDARDS.—The Sec-
retary shall adopt standards providing for a stand-
ard unique health identifier for each individual, em-
ployer, health plan, and health care provider for use
in the health care system. In developing unique
health identifiers for each health plan and health
care provider, the Secretary shall take into account
multiple uses for identifiers and multiple locations
and specialty classifications for health care provid-
ers.
‘‘(2) PENALTIES.—For provision regarding
criminal penalties, see section 1177.
‘‘(c) CODE SETS.—
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Health Information Advisory Commit-
tee, experts from the private sector, and Federal and
State agencies, shall—
‘‘(A) select code sets for appropriate data
elements from among the code sets that have
been developed by private and public entities; or
‘‘(B) establish code sets for such data ele-
ments if no code sets for the data elements
have been developed.
‘‘(2) DISTRIBUTION.—The Secretary shall es-
tablish efficient and low-cost procedures for distribu-
tion (including electronic distribution) of code sets
and modifications made to such code sets under sec-
tion 1174(b).
‘‘(d) ELECTRONIC SIGNATURE.—
‘‘(1) IN GENERAL.—The Secretary, in coordina-
tion with the Secretary of Commerce and after con-
sultation with the Health Information Advisory
Committee, shall promulgate regulations specifying
procedures for the electronic transmission and au-
thentication of signatures, compliance with which
will be deemed to satisfy Federal and State statu-
tory requirements for written signatures with respect
to information transactions required by this part
and written signatures on medical records and pre-
scriptions.
‘‘(2) PAYMENTS
FOR
SERVICES
AND
PRE-
MIUMS.—Nothing in this part shall be construed to
prohibit the payment of health care services or
health plan premiums by debit, credit, payment card
or numbers, or other electronic means.
‘‘(e) 
TRANSFER
OF
INFORMATION
BETWEEN
HEALTH PLANS.—The Secretary shall develop rules and
procedures—
‘‘(1) for determining the financial liability of
health plans when health care benefits are payable
under two or more health plans; and
‘‘(2) for transferring among health plans appro-
priate standard data elements needed for the coordi-
nation of benefits, the sequential processing of
claims, and other data elements for individuals who
have more than one health plan.
‘‘(f) COORDINATION OF BENEFITS.—If, at the end of
the 5-year period beginning on the date of the enactment
of this part, the Secretary determines that additional
transaction standards for coordinating benefits are nec-
essary to reduce administrative costs or duplicative (or in-
appropriate) payment of claims, the Secretary shall estab-
lish further transaction standards for the coordination of
benefits between health plans.
‘‘(g) PROTECTION OF TRADE SECRETS.—Except as
otherwise required by law, the standards adopted under
this part, shall not require disclosure of trade secrets or
confidential commercial information by an entity operat-
ing a health information network.
‘‘SEC. 1174. TIMETABLES FOR ADOPTION OF STANDARDS.
‘‘(a) INITIAL
STANDARDS.—Not later than 18
months after the date of the enactment of this part, the
Secretary shall adopt standards relating to the informa-
tion transactions, data elements of health information, se-
curity, and privacy described in sections 1172 and 1173.
Standards relating to claims attachments shall be adopted
not later than 30 months after such date.
‘‘(b) ADDITIONS AND MODIFICATIONS TO STAND-
ARDS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall review the standards
adopted under this part and shall adopt additional
or modified standards, that have been developed or
modified by a standard setting organization, as de-
termined appropriate, but not more frequently than
once every 6 months. Any addition or modification
to such standards shall be completed in a manner
which minimizes the disruption and cost of compli-
ance.
‘‘(2) SPECIAL RULES.—
‘‘(A) FIRST
12-MONTH
PERIOD.—Except
with respect to additions and modifications to
code sets under subparagraph (B), the Sec-
retary shall not adopt any modifications to the
standards adopted under this part during the
12-month period beginning on the date such
standards are initially adopted under paragraph
(1) unless the Secretary determines that a
modification is necessary in order to permit
compliance with requirements relating to the
standards.
‘‘(B) ADDITIONS AND MODIFICATIONS TO
CODE SETS.—
‘‘(i) IN
GENERAL.—The Secretary
shall ensure that procedures exist for the
routine maintenance, testing, enhancement,
and expansion of code sets.
‘‘(ii) ADDITIONAL RULES.—If a code
set is modified under this subsection, the
modified code set shall include instructions
on how data elements of health informa-
tion that were encoded prior to the modi-
fication may be converted or translated so
as to preserve the informational value of
the data elements that existed before the
modification. Any modification to a code
set under this subsection shall be imple-
mented in a manner that minimizes the
disruption and cost of complying with such
modification.
‘‘SEC. 1175. REQUIREMENTS FOR HEALTH PLANS.
‘‘(a) IN GENERAL.—If a person desires to conduct
any of the information transactions described in section
1173(a) with a health plan as a standard transaction, the
health plan shall conduct such standard transaction in a
timely manner and the information transmitted or re-
ceived in connection with such transaction shall be in the
form of standard data elements of health information.
‘‘(b) SATISFACTION OF REQUIREMENTS.—A health
plan may satisfy the requirement imposed on such plan
under subsection (a) by directly transmitting standard
data elements of health information or submitting non-
standard data elements to a health information network
service for processing into standard data elements and
transmission.
‘‘(c) HEALTH PLANS DEALING WITH PERSONS.—A
health plan conducting an information transaction with a
person may not—
‘‘(1) adversely affect the time, manner, or
amount of payment of a claim because an informa-
tion transaction is conducted as a standard trans-
action pursuant to this part; or
‘‘(2) in any other manner discourage the use of
a standard adopted under this part.
‘‘(d) TIMETABLES
FOR COMPLIANCE WITH RE-
QUIREMENTS.—
‘‘(1) INITIAL COMPLIANCE.—
‘‘(A) IN
GENERAL.—Not later than 24
months after the date on which standards are
adopted under sections 1172 and 1173 with re-
spect to any type of information transaction or
data element of health information or with re-
spect to security or privacy, a health plan shall
comply with the requirements of this part with
respect to such transaction or data element.
‘‘(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.
‘‘(e) COMPLIANCE WITH MODIFIED STANDARDS.—If
the Secretary adopts a modified standard under section
1172 or 1173, a health plan shall be required to comply
with the modified standard at such time as the Secretary
determines appropriate taking into account the time need-
ed to comply due to the nature and extent of the modifica-
tion. However, the time determined appropriate under the
preceding sentence shall be not earlier than the last day
of the 180-day period beginning on the date such modified
standard is adopted. The Secretary may extend the time
for compliance for small health plans, if the Secretary de-
termines 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
that violates a requirement or standard—
‘‘(A) with respect to information trans-
actions, data elements of health information, or
security imposed under section 1172 or 1173;
or
‘‘(B) with respect to health plans imposed
under section 1175;
a penalty of not more than $100 for each such viola-
tion of a specific standard or requirement, but the
total amount imposed for all such violations of a
specific standard or requirement during the calendar
year shall 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) NONCOMPLIANCE
NOT
DISCOVERED.—A
penalty may not be imposed under subsection (a) if
it is established 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 failed to comply with
the requirement or standard described in subsection
(a).
‘‘(2) 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
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 health plan failed to
comply because such plan was unable to
comply, the Secretary may provide tech-
nical assistance to such plan during the pe-
riod described in clause (i). Such assist-
ance shall be provided in any manner de-
termined appropriate by the Secretary.
‘‘(3) 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 (2) 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 for a purpose that is not authorized by the
Secretary;
‘‘(2) obtains individually identifiable health in-
formation relating to an individual in violation of the
privacy standards established pursuant to this part;
or
‘‘(3) discloses individually identifiable health in-
formation to another person in violation of the pri-
vacy standards established pursuant to 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, requirement, or standard
under this part shall supersede any contrary provi-
sion of State law, including a provision of State law
that requires medical or health plan records (includ-
ing billing information) to be maintained or trans-
mitted in written rather than electronic form.
‘‘(2) EXCEPTIONS.—A provision, requirement,
or standard under this part shall not supersede a
contrary provision of State law, if the provision of
State law—
‘‘(A) provides requirements or standards
that are more stringent than the requirements
or standards under this part with respect to the
privacy of individually identifiable health infor-
mation; or
‘‘(B) is a provision the Secretary deter-
mines is necessary to prevent fraud and abuse
with respect to controlled substances, or for
other purposes.
‘‘(b) PUBLIC HEALTH REPORTING.—Nothing in this
part shall be construed to invalidate or limit the authority,
power, or procedures established under any law providing
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 (hereafter 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) be generally responsible for advising the
Secretary and the Congress on the status and the
future of the health information network.
‘‘(c) MEMBERSHIP.—
‘‘(1) IN GENERAL.—The committee shall con-
sist of 15 members of whom—
‘‘(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.
‘‘(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 a report to Congress, health care
providers, health plans, and other entities that use the
health information network to exchange health informa-
tion regarding—
‘‘(1) the extent to which entities using the
health information network are meeting the stand-
ards adopted under this part and working together
to form an integrated network that meets the needs
of its users;
‘‘(2) the extent to which such entities are meet-
ing the privacy and security standards established
pursuant to this part and the types of penalties as-
sessed 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 the health information network; and
‘‘(5) the extent to which timetables under this
part are being met.
‘‘SEC. 1180. STANDARDS FOR PATIENT MEDICAL RECORD
INFORMATION.
‘‘The Secretary shall, not earlier than 4 years and
not later than 6 years after the date of the enactment of
this part recommend to Congress a plan for developing
and implementing uniform data standards for patient
medical record information and the electronic exchange of
such information.
‘‘SEC. 1181. GRANTS FOR DEMONSTRATION PROJECTS.
‘‘(a) IN GENERAL.—The Secretary may make grants
for demonstration projects to promote the development
and use of electronically integrated clinical information
systems and computerized patient medical records.
‘‘(b) APPLICATIONS.—
‘‘(1) SUBMISSION.—To apply for a grant under
this section for any fiscal year, an applicant shall
submit an application to the Secretary in accordance
with the procedures established by the Secretary.
‘‘(2) CRITERIA FOR APPROVAL.—The Secretary
may not approve an application submitted under
paragraph (1) unless the application includes assur-
ances satisfactory to the Secretary regarding the fol-
lowing:
‘‘(A) USE
OF
EXISTING
TECHNOLOGY.—
Funds received under this section will be used
to apply telecommunications and information
systems technology that is in existence on the
date the application is submitted in a manner
that improves the quality of health care, re-
duces the costs of such care, and protects the
privacy and confidentiality of information relat-
ing to the physical or mental condition of an in-
dividual.
‘‘(B) USE OF EXISTING INFORMATION SYS-
TEMS.—Funds received under this section will
be used—
‘‘(i) to enhance telecommunications or
information systems that are operating on
the date the application is submitted;
‘‘(ii) to integrate telecommunications
or information systems that are operating
on such date; or
‘‘(iii) to connect additional users to
telecommunications or information net-
works or systems that are operating on
such date.
‘‘(C) MATCHING
FUNDS.—The applicant
shall make available funds for the demonstra-
tion project in an amount that equals at least
50 percent of the cost of the project.
‘‘(c) GEOGRAPHIC DIVERSITY.—In making grants
under this section, the Secretary shall, to the extent prac-
ticable, make grants to persons representing different geo-
graphic areas of the United States, including urban and
rural areas.
‘‘(d) REVIEW AND SANCTIONS.—The Secretary shall
review at least annually the compliance of a person receiv-
ing a grant under this section with the provisions of this
part. The Secretary shall establish a procedure for deter-
mining whether such a person has failed to comply sub-
stantially with the provisions of this part and the sanctions
to be imposed for any such noncompliance.
‘‘(e) ANNUAL REPORT.—The Secretary shall submit
an annual report to the President for transmittal to Con-
gress containing a description of the activities carried out
under this section.
‘‘SEC. 1182. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated such sums
as may be necessary to carry out the purposes of this
part.’’.
(b) CONFORMING AMENDMENTS.—
(1) REQUIREMENT
FOR
MEDICARE
PROVID-
ERS.—Section 1866(a)(1) of the Social Security Act
(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 health infor-
mation network service (as defined in section
1171(7)) that meets the standards established
under sections 1172 and 1173.’’.
(2) CLERICAL AMENDMENTS.—
(A) Title XI of the Social Security Act (42
U.S.C. 1301 et seq.) is amended by striking the
title and inserting the following:
‘‘TITLE 
XI—GENERAL 
PROVI-
SIONS, PEER REVIEW, AND
ADMINISTRATIVE 
SIM-
PLIFICATION
(B) Parts A and B of title XI of the Social
Security Act (42 U.S.C. 1301 et seq.) are
amended by striking ‘‘this title’’ each place it
appears and inserting ‘‘parts A and B of this
title’’.
TITLE III—EFFECTIVE DATES
SEC. 301. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided in subsection
(b), the provisions of this Act shall take effect on the date
of the enactment of this Act.
(b) REPEAL OF DATA BANK.—The provisions of sec-
tion 102 shall take effect on the date the Secretary of
Health and Human Services provides written notice to the
Congress that the Medicare and Medicaid Coverage Data
Bank is no longer necessary because of the operation of
the health information network established pursuant to
this Act.
Æ
HR 1766 IH——2
HR 1766 IH——3