(8) Electronic prescribing systems hold the po-
tential to substantially improve health care quality 
by reducing preventable adverse drug events. 
(9) Investment costs remain an obstacle for 
healthcare systems to create electronic prescribing 
systems. 
(b) PURPOSE.—The purpose of this Act is to encour-
age and create incentives for healthcare systems to develop 
an electronic prescribing system to improve safety and 
quality of care for all patients. 
SEC. 
3. 
DEMONSTRATION 
PROGRAM 
FOR 
MEDICARE 
HEALTH CARE PROVIDERS TO IMPLEMENT 
ELECTRONIC 
PRESCRIPTION 
DRUG 
PRO-
GRAMS. 
(a) ESTABLISHMENT
OF
DEMONSTRATION
PRO-
GRAM.—The Secretary of Health and Human Services 
shall establish a demonstration program (in this section 
referred to as the ‘‘demonstration program’’) under which 
assistance described in subsection (b) is made available, 
upon request and on a voluntary basis, to medicare health 
care providers for the purpose of assisting those providers 
to offset the costs of electronic prescribing systems for 
those providers.
(b) ASSISTANCE.—The assistance referred to in sub-
section (a) consists of the provision, directly or through 
grants under subsection (c), of the following: 
(1) Computer software and hardware, including 
handheld computer technologies and the installation 
of such software, hardware, and technologies. 
(2) Upgrades and other improvements to exist-
ing computer software and hardware to enable elec-
tronic prescribing systems. 
(3) Communications capabilities for clinical 
data access. storage, and exchange, including the in-
stallation of such capabilities. 
(4) Education and training to eligible staff of 
medicare health care providers on computer informa-
tion system technologies made available under this 
section. 
(c) AWARDING OF GRANTS.— 
(1) AUTHORITY.—The Secretary may make 
grants to medicare providers of services for the pur-
chase, lease, and installation of the items and tech-
nologies described in subsection (b). 
(2) APPLICATION.—No grant may be made 
under this section except pursuant to a grant appli-
cation that is submitted and approved in a time, 
manner, and form specified by the Secretary con-
taining such information as the Secretary may re-
quire. 
(3) LIMITATION
ON
GRANTS.—Only 1 grant 
may be awarded under this section with respect to 
any medicare health care provider or group or prac-
tice of providers or suppliers, including providers 
furnishing services to medicare beneficiaries in long- 
term care facilities, skilled nursing facilities, and 
hospitals. 
(4) TERMS AND CONDITIONS.— 
(A) IN GENERAL.—Grants under this sec-
tion shall be made under such terms and condi-
tions as the Secretary specifies consistent with 
this section. 
(B) PROVISION OF INFORMATION.—As a 
condition for the awarding of a grant under this 
section, an applicant shall provide to the Sec-
retary such information as the Secretary may 
require in order to— 
(i) evaluate the project for which the 
grant is made; and 
(ii) ensure that funding provided 
under the grant is expended only for the 
purposes for which it is made.
(C) AUDIT.—The Secretary shall conduct 
appropriate audits of grants under this section. 
(d) DEMONSTRATION PROJECT SITES.— 
(1) NUMBER
OF
SITES.—The demonstration 
project established under this section shall be con-
ducted in not more than 5 sites selected by the Sec-
retary. 
(2) SELECTION
CRITERIA.—In selecting such 
sites, the Secretary shall give priority to sites in the 
following order: 
(A) First to sites in counties, or equivalent 
areas, in which the largest numbers of medicare 
beneficiaries reside. 
(B) Second to sites in rural areas. 
(e) DURATION.—The authority of the Secretary to 
provide assistance under this section shall terminate on 
September 30, 2014. 
(f) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of titles XI and XVIII of the Social 
Security Act as may be necessary for the purposes of car-
rying out the demonstration project. 
(g) EVALUATION AND REPORT.— 
(1) EVALUATION.—The Secretary shall conduct 
evaluations of the clinical and cost-effectiveness of 
the demonstration project.
(2) REPORTS.—The Secretary shall submit to 
Congress interim reports on the demonstration 
project, and not later than 6 months after the com-
pletion of the project, a final report on the dem-
onstration project. Each report shall include the fol-
lowing: 
(A) An analysis of the patient outcomes 
and costs of furnishing care to the medicare 
beneficiaries participating in the project. 
(B) Such recommendations regarding the 
extension, expansion, or termination of the 
project as the Secretary determines appropriate. 
(h) DEFINITION.—In this section: 
(1) MEDICARE HEALTH CARE PROVIDER.—The 
term ‘‘medicare health care providers’’ means any of 
the following that furnishes items or services for 
which payment is made under title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.): 
(A) A provider of services, as that term is 
defined in section 1861(u) of the Social Secu-
rity Act (42 U.S.C. 1395x(u)). 
(B) A supplier, as that term is defined in 
section 1861(d) of the Social Security Act (42 
U.S.C. 1395x(d)).