Title: Reducing Administrative Costs and Burdens in Health Care Act of 2019
Policy area: Health

Summary:
Reducing Administrative Costs and Burdens in Health Care Act of 2019
This bill requires the Department of Health and Human Services (HHS) to take a series of actions relating to health care administrative costs. Specifically, HHS must develop a strategy and take associated action to reduce unnecessary costs and administrative burdens in the health care system, including Medicare, Medicaid, and the private health-insurance market, by at least half over a period of 10 years. HHS must also award grants so that states may establish commissions targeting such costs.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1260 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 1260

To amend the Public Health Service Act to provide for grants to enable 
   States to carry out activities to reduce administrative costs and 
                        burdens in health care.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 1, 2019

Ms. Smith (for herself and Mr. Cassidy) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Public Health Service Act to provide for grants to enable 
   States to carry out activities to reduce administrative costs and 
                        burdens in health care.

    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 ``Reducing Administrative Costs and 
Burdens in Health Care Act of 2019''.

SEC. 2. REDUCING ADMINISTRATIVE COSTS AND BURDENS IN HEALTH CARE.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) 
is amended by adding at the end the following:

   ``PART E--REDUCING ADMINISTRATIVE COSTS AND BURDENS IN HEALTH CARE

``SEC. 281. ELIMINATING UNNECESSARY ADMINISTRATIVE BURDENS AND COSTS.

    ``(a) Reducing Administrative Burdens and Costs.--The Secretary, in 
consultation with providers of health services, health care suppliers 
of services, health care payers, health professional societies, health 
vendors and developers, health care standard development organizations 
and operating rule entities, health care quality organizations, health 
care accreditation organizations, public health entities, States, 
patients, and other appropriate entities, shall, in accordance with 
subsection (b)--
            ``(1) establish a goal of reducing unnecessary costs and 
        administrative burdens across the health care system, including 
        the Medicare program under title XVIII of the Social Security 
        Act, the Medicaid program under title XIX of such Act, and the 
        private health insurance market, by at least half over a period 
        of 10 years from the date of enactment of this section;
            ``(2) develop strategies and benchmarks for meeting the 
        goal established under paragraph (1);
            ``(3) develop recommendations for meeting the goal 
        established under paragraph (1); and
            ``(4) take action to reduce unnecessary costs and 
        administrative burdens based on recommendations identified in 
        this subsection.
    ``(b) Strategies, Recommendations, and Actions.--
            ``(1) In general.--To achieve the goal established under 
        subsection (a)(1), the Secretary, in consultation with the 
        entities described in such subsection, shall not later than 1 
        year after the date of enactment of this section, develop 
        strategies and recommendations and take actions to meet such 
        goal in accordance with this subsection. No strategies, 
        recommendation, or action shall undermine the quality of 
        patient care or patient health outcomes.
            ``(2) Strategies.--The strategies developed under paragraph 
        (1) shall address unnecessary costs and administrative burdens. 
        Such strategies shall include broad public comment and shall 
        prioritize--
                    ``(A) recommendations identified as a result of 
                efforts undertaken to implement section 3001;
                    ``(B) recommendations and best practices identified 
                as a result of efforts undertaken under this part;
                    ``(C) a review of regulations, rules, and 
                requirements of the Department of Health and Human 
                Services that could be modified or eliminated to reduce 
                unnecessary costs and administrative burden imposed on 
                patients, providers, payers, and other stakeholders 
                across the health care system; and
                    ``(D) feedback from stakeholders in rural or 
                frontier areas on how to reduce unnecessary costs and 
                administrative burdens on the health care system in 
                those areas.
            ``(3) Recommendations.--The recommendations developed under 
        paragraph (1) shall include--
                    ``(A) actions that improve the standardization and 
                automation of administrative transactions;
                    ``(B) actions that integrate clinical and 
                administrative functions;
                    ``(C) actions that improve patient care and reduce 
                unnecessary costs and administrative burdens borne by 
                patients, their families, and other caretakers;
                    ``(D) actions that advance the development and 
                adoption of open application programming interfaces and 
                other emerging technologies to increase transparency 
                and interoperability, empower patients, and facilitate 
                better integration of clinical and administrative 
                functions;
                    ``(E) actions to be taken by the Secretary and 
                actions that need to be taken by other entities; and
                    ``(F) other areas, as the Secretary determines 
                appropriate, to reduce unnecessary costs and 
                administrative burdens required of health care 
                providers.
            ``(4) Consistency.--Any improvements in electronic 
        processes proposed by the Secretary under this section should 
        leverage existing information technology definitions under 
        Federal Law. Specifically, any electronic processes should not 
        be construed to include a facsimile, a proprietary payer portal 
        that does not meet standards specified by the Secretary, or an 
        electronic form image.
            ``(5) Actions.--The Secretary shall take action to achieve 
        the goal established under subsection (a)(1), and, not later 
        than 1 year after the date of enactment of this section, and 
        biennially thereafter, submit to Congress and make publically 
        available, a report describing the actions taken by the 
        Secretary pursuant to goals, strategies, and recommendations 
        described in this subsection.
            ``(6) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
        App.) shall not apply to the development of the goal, 
        strategies, recommendations, or actions described in this 
        section.
            ``(7) Rule of construction.--Nothing in this subsection 
        shall be construed to authorize, or be used by, the Federal 
        Government to inhibit or otherwise restrain efforts made to 
        reduce waste, fraud, and abuse across the health care system.

``SEC. 282. GRANTS TO STATES TO DEVELOP AND IMPLEMENT RECOMMENDATIONS 
              TO ACCELERATE STATE INNOVATION TO REDUCE HEALTH CARE 
              ADMINISTRATIVE COSTS.

    ``(a) Grants.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this section, the Secretary shall award grants 
        to at least 15 States, and one coordinating entity designated 
        as provided for under subsection (e), to enable such States to 
        establish and administer private-public multi-stakeholder 
        commissions for the purpose of reducing health care 
        administrative costs and burden within and across States. Not 
        less than 3 of such grants shall be awarded to States that are 
        primarily rural, frontier, or a combination thereof, in nature.
            ``(2) Entities.--For purposes of this section, the term 
        `State' means a State, a State designated entity, or a multi-
        State collaborative (as defined by the Secretary).
            ``(3) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to applications submitted by 
        States that propose to carry out a pilot program or support the 
        adoption of electronic health care transactions and operating 
        rules.
    ``(b) Application.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (a) a State shall submit to the Secretary an 
        application in such a manner and containing such information as 
        the Secretary may reasonably require, including the information 
        described in paragraph (2).
            ``(2) Required information.--In addition to any additional 
        information required by the Secretary under this subsection, an 
        application shall include a description of--
                    ``(A) the size and composition of the commission to 
                be established under the grant, including the 
                stakeholders represented and the degree to which the 
                commission reflects important geographic and population 
                characteristics of the State;
                    ``(B) the relationship of the commission to the 
                State official responsible for coordinating and 
                implementing the recommendations resulting from the 
                commission, and the role and responsibilities of the 
                State with respect to the commission, including any 
                participation, review, oversight, implementation or 
                other related functions;
                    ``(C) the history and experience of the State in 
                addressing health care administrative costs, and any 
                experience similar to the purpose of the commission to 
                improve health care administrative processes and the 
                exchange of health care administrative data;
                    ``(D) the resources and expertise that will be made 
                available to the commission by commission members or 
                other possible sources, and how Federal funds will be 
                used to leverage and complement these resources;
                    ``(E) the governance structure and procedures that 
                the commission will follow to make, implement, and 
                pilot recommendations;
                    ``(F) the proposed objectives relating to the 
                simplification of administrative transactions and 
                operating rules, increased standardization, and the 
                efficiency and effectiveness of the transmission of 
                health information;
                    ``(G) potential cost savings and other improvements 
                in meeting the objectives described in subparagraph 
                (F); and
                    ``(H) the method or methods by which the 
                recommendations described in subsection (c) will be 
                reviewed, tested, adopted, implemented, and updated as 
                needed.
    ``(c) Multi-Stakeholder Commission.--
            ``(1) In general.--Not later than 90 days after the date on 
        which a grant is awarded to a State under this section, the 
        State official described in subsection (b)(2)(B), the State 
        insurance commissioner, or other appropriate State official 
        shall convene a multi-stakeholder commission, in accordance 
        with this subsection.
            ``(2) Membership.--The commission convened under paragraph 
        (1) shall include representatives from health plans, health 
        care providers, health vendors, relevant State agencies, health 
        care standard development organizations, and operating rule 
        entities, relevant professional and trade associations, 
        patients, and other entities determined appropriate by the 
        State.
            ``(3) Recommendations.--Not later than one year after the 
        date on which a grant is awarded to a State under this section, 
        the commission shall make recommendations and plans, consistent 
        with the application submitted by the State under subsection 
        (b), and intended to meet the objectives defined in the 
        application. Such recommendations shall comply with, and build 
        upon, all relevant Federal requirements and regulations, and 
        may include--
                    ``(A) common, uniform specifications, best 
                practices, and conventions, for the efficient, 
                effective exchange of administrative transactions 
                adopted pursuant to the Health Insurance Portability 
                and Accountability Act of 1996 (Public Law 104-191);
                    ``(B) the development of streamlined business 
                processes for the exchange and use of health care 
                administrative data; and
                    ``(C) specifications, incentives, requirements, 
                tools, mechanisms, and resources to improve--
                            ``(i) the access, exchange, and use of 
                        health care administrative information through 
                        electronic means;
                            ``(ii) the implementation of utilization 
                        management protocols; and
                            ``(iii) compliance with Federal and State 
                        laws.
    ``(d) Use of Funds for Implementation.--A State may use amounts 
received under a grant under this section for one or more of the 
following:
            ``(1) The development, implementation, and best use of 
        shared data infrastructure that supports the electronic 
        transmission of administrative data.
            ``(2) The development and provision of training and 
        educational materials, forums, and activities as well as 
        technical assistance to effectively implement, use, and benefit 
        from electronic health care transactions and operating rules.
            ``(3) To accelerate the early adoption and implementation 
        of administrative transactions and operating rules designated 
        by the Secretary and that have been adopted pursuant to the 
        Health Insurance Portability and Accountability Act of 1996 
        (Public Law 104-191), including transactions and operating 
        rules described in section 1173(a)(2) of the Social Security 
        Act.
            ``(4) To accelerate the early adoption and implementation 
        of additional or updated administrative transactions, operating 
        rules, and related data exchange standards that are being 
        considered for adoption under the Health Insurance Portability 
        and Accountability Act of 1996 or are adopted pursuant to such 
        Act, or as designated by the Secretary, including the 
        electronic claim attachment.
            ``(5) To conduct pilot projects to test approaches to 
        implement and use the electronic health care transactions and 
        operating rules in practice under a variety of different 
        settings. With respect to the electronic attachment 
        transaction, priority shall be given to pilot projects that 
        test and evaluate methods and mechanisms to most effectively 
        incorporate patient health data from electronic health records 
        and other electronic sources with the electronic attachment 
        transaction.
            ``(6) To assess barriers to the adoption, implementation, 
        and effective use of electronic health care transactions and 
        operating rules, as well as to explore, identify, and plan 
        options, approaches, and resources to address barriers and make 
        improvements.
            ``(7) The facilitation of public and private initiatives to 
        reduce administrative costs and accelerate the adoption, 
        implementation, and effective use of electronic health care 
        transactions and operating rules for State programs.
            ``(8) Developing, testing, implementing, and assessing 
        additional data exchange specifications, operating rules, 
        incentives, requirements, tools, mechanisms, and resources to 
        accelerate the adoption and effective use of the transactions 
        and operating rules.
            ``(9) Ongoing needs assessments and planning related to the 
        development and implementation of administrative simplification 
        initiatives.
    ``(e) Coordinating Entity.--
            ``(1) Functions.--Not later than 6 months after the date of 
        enactment of this section, the Secretary shall designate a 
        coordinating entity under this subsection for the purpose of--
                    ``(A) providing technical assistance to States 
                relating to the simplification of administrative 
                transactions and operating rules, increased 
                standardization, and the efficiency and effectiveness 
                of the transmission of health care information;
                    ``(B) evaluating pilot projects and other efforts 
                conducted under this section for impact and best 
                practices to inform broader national use;
                    ``(C) using consistent evaluation methodologies to 
                compare return on investment across efforts conducted 
                under this section;
                    ``(D) compiling, synthesizing, disseminating, and 
                adopting lessons learned to promote the adoption of 
                electronic health care transactions and operating rules 
                across the health care system; and
                    ``(E) making recommendations to the Secretary and 
                the National Committee on Vital and Health Statistics 
                regarding the national adoption of efforts conducted 
                under this section.
            ``(2) Eligibility.--The entity designated under paragraph 
        (1) shall be a qualified nonprofit entity that--
                    ``(A) focuses its mission on administrative 
                simplification;
                    ``(B) has demonstrated experience using a multi-
                stakeholder and consensus-based process for the 
                development of common, uniform specifications, 
                operating rules, best practices, and conventions, for 
                the efficient, effective exchange of administrative 
                transactions that includes representation by or 
                participation from health plans, health care providers, 
                vendors, States, relevant Federal agencies, and other 
                health care standard development organizations;
                    ``(C) has demonstrated experience providing 
                technical assistance to health plans, health care 
                providers, vendors, and States relating to the 
                simplification of administrative transactions and 
                operating rules, increased standardization, and the 
                efficiency and effectiveness of the transmission of 
                health care information;
                    ``(D) has demonstrated experience evaluating and 
                measuring the adoption and return on investment of 
                administrative transactions and operating rules;
                    ``(E) has demonstrated experience gathering, 
                synthesizing, and adopting common, uniform 
                specifications, operating rules, best practices, and 
                conventions for national use based on lessons learned 
                to promote the adoption of electronic health care 
                transactions and operating rules across the health care 
                system;
                    ``(F) has a public set of guiding principles that 
                ensure processes are open and transparent, and supports 
                nondiscrimination and conflict of interest policies 
                that demonstrate a commitment to open, fair, and 
                nondiscriminatory practices;
                    ``(G) builds on the transaction standards issued 
                under Health Insurance Portability and Accountability 
                Act of 1996; and
                    ``(H) allows for public review and updates of 
                common, uniform specifications, operating rules, best 
                practices, and conventions to support administrative 
                simplification.
    ``(f) Period and Amount.--A grant awarded to a State under this 
section shall be for a period of 5 years and shall not exceed 
$50,000,000 for such 5-year period. A grant awarded to the coordinating 
entity designated by the Secretary under subsection (e) shall be for a 
period of 5 years and shall not exceed $15,000,000 for such 5-year 
period.
    ``(g) Reports.--
            ``(1) States.--Not later than 1 year after receiving a 
        grant under this section, and biennially thereafter, a State 
        shall submit to the Secretary a report on the outcomes 
        experienced by the State under the grant.
            ``(2) Coordinating entity.--Not later than 1 year after 
        receiving a grant under this section, and at least biennially 
        thereafter, the coordinating entity shall submit to the 
        Secretary and the National Committee on Vital and Health 
        Statistics a report of evaluations conducted under the grant 
        under this section and recommendations regarding the national 
        adoption of efforts conducted under this section.
            ``(3) Secretary.--Not later than 6 months after the date on 
        which the States and coordinating entity submit the report 
        required under paragraphs (1) and (2), the Secretary, in 
        consultation with National Committee on Vital and Health 
        Statistics, shall submit to the Committee on Health, Education, 
        Labor, and Pensions of the Senate and the Committee on Energy 
        and Commerce of the House of Representatives, a report on the 
        outcomes achieved under the grants under this section.
            ``(4) GAO.--Not later than 6 months after the date on which 
        the Secretary submits the final report under paragraph (3), the 
        Comptroller General of the United States shall conduct a study, 
        and submit to the Committee on Health, Education, Labor, and 
        Pensions of the Senate and the Committee on Energy and Commerce 
        of the House of Representatives, a report on the outcomes of 
        the activities carried out under this section which shall 
        contain a list of best practices and recommendations to States 
        concerning administrative simplification.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $250,000,000 for the 5-fiscal-
year period beginning with fiscal year 2020.''.
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