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known, that the failure to comply oc-
curred.
‘‘(ii) EXTENSION OF PERIOD.—
‘‘(I) NO
PENALTY.—The period
referred to in clause (i)(II) may be ex-
tended as determined appropriate by
the Secretary based on the nature and
extent of the failure to comply.
‘‘(II) ASSISTANCE.—If the Sec-
retary determines that a health plan
failed to comply because such plan
was unable to comply, the Secretary
may provide technical assistance to
such plan during the period described
in clause (i)(II). Such assistance shall
be provided in any manner determined
appropriate by the Secretary.
‘‘(C) REDUCTION.—In the case of a failure
to comply which is due to reasonable cause and
not to willful neglect, any penalty under para-
graph (1) that is not entirely waived under sub-
paragraph (B) may be waived to the extent that
the payment of such penalty would be excessive
relative to the compliance failure involved.
‘‘(f) EFFECT ON STATE LAW.—
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‘‘(1) GENERAL EFFECT.—
‘‘(A) GENERAL RULE.—Except as provided
in subparagraph (B), a provision, requirement,
or standard under this section shall supersede
any contrary provision of State law, including a
provision of State law that requires medical or
health plan records (including billing informa-
tion) to be maintained or transmitted in written
rather than electronic form.
‘‘(B) EXCEPTIONS.—A provision, require-
ment, or standard under this section shall not
supersede a contrary provision of State law if
the Secretary determines that the provision of
State law should be continued for any reason,
including for reasons relating to prevention of
fraud and abuse or regulation of controlled sub-
stances.
‘‘(2) PUBLIC HEALTH REPORTING.—Nothing in
this section 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 investigation or inter-
vention.
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‘‘(g) MEDICARE INFORMATION ADVISORY COMMIT-
TEE.—
‘‘(1) ESTABLISHMENT.—There is established a
committee to be known as the Medicare Information
Advisory Committee (in this subsection referred to
as the ‘committee’).
‘‘(2) DUTIES.—The committee shall—
‘‘(A) advise the Secretary in the develop-
ment of standards under this section; and
‘‘(B) be generally responsible for advising
the Secretary and the Congress on the status
and the future of the medicare information net-
work.
‘‘(3) MEMBERSHIP.—
‘‘(A) IN GENERAL.—The committee shall
consist of 9 members of whom—
‘‘(i) 3 shall be appointed by the Presi-
dent;
‘‘(ii) 3 shall be appointed by the
Speaker of the House of Representatives
after consultation with the minority leader
of the House of Representatives; and
‘‘(iii) 3 shall be appointed by the
President pro tempore of the Senate after
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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 section. The President
shall designate 1 member as the Chair.
‘‘(B) EXPERTISE.—The membership of the
committee shall consist of individuals who are
of recognized standing and distinction in the
areas of information systems, information
networking and integration, consumer health,
or health care financial management, and who
possess the demonstrated capacity to discharge
the duties imposed on the committee.
‘‘(C) TERMS.—Each member of the com-
mittee 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 members expire at one time.
‘‘(D) INITIAL
MEETING.—Not later than
30 days after the date on which a majority of
the members have been appointed, the commit-
tee shall hold its first meeting.
‘‘(4) REPORTS.—Not later than 1 year after the
date of the enactment of this section, and annually
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thereafter, the committee shall submit to Congress
and the Secretary a report regarding—
‘‘(A) the extent to which entities using the
medicare information network are meeting the
standards adopted under this section and work-
ing together to form an integrated network that
meets the needs of its users;
‘‘(B) the extent to which such entities are
meeting the security standards established pur-
suant to this section and the types of penalties
assessed for noncompliance with such stand-
ards;
‘‘(C) any problems that exist with respect
to implementation of the medicare information
network; and
‘‘(D) the extent to which timetables under
this section are being met.
Reports made under this subsection shall be made
available to health care providers, health plans, and
other entities that use the medicare information net-
work to exchange medicare information.
‘‘(h) DEFINITIONS.—For purposes of this section:
‘‘(1) CODE SET.—The term ‘code set’ means
any set of codes used for encoding data elements,
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such as tables of terms, enrollment information, and
encounter data.
‘‘(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 such a
plan and under this title (including under a
MedicarePlus product).
‘‘(3) 
MEDICARE
INFORMATION.—The 
term
‘medicare information’ means any information that
relates to the enrollment of individuals under this
title (including information relating to elections of
MedicarePlus products under section 1805) and the
provision of health benefits (including benefits pro-
vided under such products) under this title.
‘‘(4) MEDICARE INFORMATION NETWORK.—The
term ‘medicare information network’ means the
medicare information system that is formed through
the application of the requirements and standards
established under this section.
‘‘(5) MEDICARE INFORMATION NETWORK SERV-
ICE.—The term ‘medicare information network serv-
ice’ means a public or private entity that—
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‘‘(A) processes or facilitates the processing
of nonstandard data elements of medicare infor-
mation into standard data elements;
‘‘(B) provides the means by which persons
may meet the requirements of this section; or
‘‘(C) provides specific information process-
ing services.
‘‘(6) 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 this title, and in-
cludes a MedicarePlus product.
‘‘(B) The medicaid program under title
XIX and the MediGrant program under title
XXI.
‘‘(C) A medicare supplemental policy (as
defined in section 1882(g)(1)).
‘‘(D) Worker’s compensation or similar in-
surance.
‘‘(E) Automobile or automobile medical-
payment insurance.
‘‘(F) A long-term care policy, other than a
fixed indemnity policy.
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‘‘(G) The Federal Employees Health Bene-
fit Plan under chapter 89 of title 5, United
States Code.
‘‘(H) 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.
‘‘(7) INDIVIDUALLY
IDENTIFIABLE
MEDICARE
INFORMATION.—The term ‘individually identifiable
medicare information’ means medicare enrollment
information, including demographic information col-
lected from an individual, that—
‘‘(A) is created or received by a health care
provider, health plan, employer, or medicare in-
formation network service, and
‘‘(B) identifies an individual.
‘‘(8) STANDARD SETTING ORGANIZATION.—The
term ‘standard setting organization’ means a stand-
ard setting organization accredited by the American
National Standards Institute.
‘‘(9) 
STANDARD
TRANSACTION.—The 
term
‘standard transaction’ means, when referring to an
information transaction or to data elements of medi-
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care information, any transaction that meets the re-
quirements and implementation specifications adopt-
ed by the Secretary under subsections (a) and (b).’’.
PART 5—OTHER PROVISIONS RELATING TO
PARTS A AND B
SEC. 15741. CLARIFICATION OF MEDICARE COVERAGE OF
ITEMS AND SERVICES ASSOCIATED WITH
CERTAIN MEDICAL DEVICES APPROVED FOR
INVESTIGATIONAL USE.
(a) COVERAGE.—Nothing in title XVIII of the Social
Security Act may be construed to prohibit coverage under
part A or part B of the medicare program of items and
services associated with the use of a medical device in the
furnishing of inpatient hospital services (as defined for
purposes of part A of the medicare program) solely on the
grounds that the device is not an approved device, if—
(1) the device is an investigational device; and
(2) the device is used instead of an approved
device.
(b) CLARIFICATION
OF PAYMENT AMOUNT.—Not-
withstanding any other provision of title XVIII of the So-
cial Security Act, the amount of payment made under the
medicare program for any item or service associated with
the use of an investigational device in the furnishing of
inpatient hospital services (as defined for purposes of part
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A of the medicare program) may not exceed the amount
of the payment which would have been made under the
program for the item or service if the item or service were
associated with the use of an approved device.
(c) DEFINITIONS.—In this section—
(1) the term ‘‘approved device’’ means a medi-
cal device which has been approved for marketing
under pre-market approval under the Federal Food,
Drug, and Cosmetic Act or cleared for marketing
under a 510(k) notice under such Act; and
(2) the term ‘‘investigational device’’ means a
medical device (other than a device described in
paragraph (1)) which is approved for investigational
use under section 520(g) of the Federal Food, Drug,
and Cosmetic Act.
SEC. 15742. ADDITIONAL EXCLUSION FROM COVERAGE.
(a) IN
GENERAL.—Section 1862(a) (42 U.S.C.
1395y(a)), as amended by section 15525(a)(2), section
15609B(a), and section 15701(c)(2)(C), is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(17),
(2) by striking the period at the end of para-
graph (18) and inserting ‘‘; or’’, and
(3) by inserting after paragraph (18) the fol-
lowing new paragraph:
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‘‘(19) where such expenses are for items or
services, or to assist in the purchase, in whole or in
part, of health benefit coverage that includes items
or services, for the purpose of causing, or assisting
in causing, the death, suicide, euthanasia, or mercy
killing of a person.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to payment for items and serv-
ices furnished on or after the date of the enactment of
this Act.
SEC. 15743. COMPETITIVE BIDDING FOR CERTAIN ITEMS
AND SERVICES.
(a) ESTABLISHMENT
OF
DEMONSTRATION.—Not
later than 1 year after the date of the enactment of this
Act, the Secretary of Health and Human Services shall
establish and operate over a 2-year period a demonstration
project in 2 geographic regions selected by the Secretary
under which (notwithstanding any provision of title XVIII
of the Social Security Act to the contrary) the amount
of payment made under the medicare program for a se-
lected item or service (other than clinical diagnostic lab-
oratory tests) furnished in the region shall be equal to the
price determined pursuant to a competitive bidding proc-
ess which meets the requirements of subsection (b).
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(b) REQUIREMENTS
FOR COMPETITIVE BIDDING
PROCESS.—The competitive bidding process used under
the demonstration project under this section shall meet
such requirements as the Secretary may impose to ensure
the cost-effective delivery to medicare beneficiaries in the
project region of items and services of high quality.
(c) DETERMINATION OF SELECTED ITEMS OR SERV-
ICES.—The Secretary shall select items and services to be
subject to the demonstration project under this section if
the Secretary determines that the use of competitive bid-
ding with respect to the item or service under the project
will be appropriate and cost-effective. In determining the
items or services to be selected, the Secretary shall consult
with an advisory taskforce which includes representatives
of providers and suppliers of items and services (including
small business providers and suppliers) in each geographic
region in which the project will be effective.
SEC. 15744. DISCLOSURE OF CRIMINAL CONVICTIONS RE-
LATING TO PROVISION OF HOME HEALTH
SERVICES.
(a) 
IN
GENERAL.—Section 
1891 
(42 
U.S.C.
1395bbb) is amended by adding at the end the following
new subsection:
‘‘(g) The Secretary, and each State or local survey
agency or other State agency responsible for monitoring