[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2638 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2638

  To encourage health care facilities, group health plans, and health 
   insurance issuers to reduce administrative costs, and to improve 
   access, convenience, quality, and safety, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 18, 2002

  Mr. Kennedy introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To encourage health care facilities, group health plans, and health 
   insurance issuers to reduce administrative costs, and to improve 
   access, convenience, quality, and safety, and for other purposes.

    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 ``Efficiency in Health Care (eHealth) 
Act of 2002''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Claim.--The term ``claim'' means any request for 
        coverage (including authorization of coverage), for 
        eligibility, or for payment in whole or in part, for an item or 
        service under a group health plan or health insurance coverage.
            (2) Cost sharing.--The term ``cost-sharing'' means any 
        deductibles, coinsurance, copayment amounts, and liability for 
        balance billing, for which the participant, beneficiary, or 
        enrollee will be responsible.
            (3) Enrollee.--The term ``enrollee'' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            (4) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 733(a) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1191b(a)).
            (5) Health care provider.--The term ``health care 
        provider'' means a physician or other health care professional, 
        as well as an institutional or other facility or agency that 
        provides health care services and that is licensed, accredited, 
        or certified to provide health care items and services under 
        applicable State law.
            (6) Health insurance issuer.--The term ``health insurance 
        issuer'' has the meaning given such term in section 733(b) of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1191b(b)).
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

    TITLE I--INCENTIVES AND REQUIREMENTS FOR HEALTH CARE FACILITIES

SEC. 101. GRANTS TO HEALTH CARE FACILITIES.

    (a) Grants Authorized.--The Secretary is authorized to award grants 
to health care facilities that submit applications under subsection 
(b).
    (b) Application.--
            (1) In general.--Each health care facility desiring a grant 
        under this section shall submit an application to the Secretary 
        at such time, in such manner, and containing such information 
        as the Secretary may reasonably require.
            (2) Assurances.-- Each application submitted under 
        paragraph (1) shall include an assurance that the health care 
        facility will use funds provided under subsection (a) to 
        enhance compliance with the requirement of subsection (c).
            (3) Preference.--In awarding grants under subsection (a), 
        the Secretary shall give preference to applications submitted 
        by health care facilities that--
                    (A) are located in rural areas;
                    (B) provide care for large numbers of uninsured 
                individuals; or
                    (C) in the determination of the Secretary have 
                special needs for awards.
    (c) Requirement.--
            (1) In general.--A health care facility shall have in 
        effect an electronic system for the purpose of providing the 
        information described in paragraph (2) to a participant, 
        beneficiary, or enrollee of a group health plan or health 
        insurance coverage.
            (2) Required information.--The information provided under 
        paragraph (1) shall include, with regard to bills for services 
        or products provided by or at the health care facility, 
        information on--
                    (A) whether such bills were submitted to the 
                applicable group health plan or health insurance issuer 
                and if so, the date of submission;
                    (B) whether such bills were paid by the plan or 
                issuer, and if so, the date of payment; and
                    (C) whether payments were denied by the plan or 
                issuer, and if so, the date of denial and the reason 
                for such denial.
    (d) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        carry out this section $250,000,000 for fiscal year 2003 and 
        such sums as may be necessary for each of fiscal years 2004 
        through 2007.
            (2) Availability.--Any amount appropriated under the 
        authority of paragraph (1) shall remain available until 
        expended.

SEC. 102. REQUIREMENTS FOR PROVIDERS.

    (a) Health Care Facilities Annually Admitting 20,000 or More 
Individuals.--Beginning in the fiscal year that begins 5 years after 
the date of enactment of this Act, and in each fiscal year thereafter, 
a health care facility that admitted 20,000 or more individuals in the 
prior fiscal year shall not receive payments from Federal health plans 
for such fiscal year unless the health care facility complies with the 
requirements described in section 101(c), as determined by the 
Secretary.
    (b) Other Health Care Facilities.--Beginning in the fiscal year 
that begins 10 years after the date of enactment of this Act, and in 
each fiscal year thereafter, no health care facility shall receive 
payments from Federal health plans for such fiscal year unless the 
health care facility complies with the requirements described in 
section 101(c), as determined by the Secretary.

SEC. 103. REGULATIONS.

    The Secretary shall issue such regulations as may be necessary or 
appropriate to carry out this title.

    TITLE II--INCREASING THE EFFICIENCY AND EFFECTIVENESS OF CLAIMS 
                               PROCESSING

SEC. 201. AUTOMATED INTEGRATED SYSTEM.

    Not later than 7 years after the date of enactment of this Act, 
each group health plan and health insurance issuer offering health 
insurance coverage shall have in effect an automated, integrated system 
that allows for efficient and effective adjudication of claims and the 
detection of fraud and abuse in accordance with this title.

SEC. 202. ADJUDICATION OF CLAIMS.

    (a) In General.--Not later than 7 years after the date of enactment 
of this Act, each group health plan and health insurance issuer 
offering health insurance coverage shall use the system described in 
section 201 to provide for the prompt and accurate adjudication of 
claims upon receipt of such claims.
    (b) Elements of Adjudication.--The adjudication described in 
subsection (a) shall include determinations concerning payments and 
coverage for items or services under the terms and conditions of the 
plan or coverage involved, including any cost-sharing amount that the 
participant, beneficiary, or enrollee is required to pay with respect 
to such claim.
    (c) Timeframe.--The plan or issuer shall complete the adjudication 
of claims under this section immediately after the plan or issuer 
receives--
            (1) the claim; and
            (2) any additional information requested by the plan or 
        issuer that is necessary to make a determination relating to 
        the claim.
    (d) Accuracy.--In adjudicating claims under this section the plan 
or issuer shall ensure that--
            (1) such claims are adjudicated with an accuracy of at 
        least 99 percent;
            (2) the plan or issuer has the ability to accept claims 
        submitted via the Internet; and
            (3) the plan or issuer has the ability to issue denials 
        where necessary instantaneously via the Internet, and to 
        provide an opportunity for challenge to and resolution of such 
        denials (except in cases of dispute over medical necessity) via 
        the Internet.

SEC. 203. DETECTION SYSTEM.

    Not later than 2 years after the date of enactment of this Act, 
each group health plan and health insurance issuer offering health 
insurance coverage shall use the system described in section 201 to 
detect fraud and abuse in real-time as part of the adjudication of 
claims under section 202.

SEC. 204. REGULATIONS.

    The Secretary shall issue such regulations as may be necessary or 
appropriate to carry out this title.

     TITLE III--MAKING HEALTH CARE MORE RESPONSIVE TO THE CONSUMER

SEC. 301. MAKING HEALTH CARE MORE RESPONSIVE TO THE CONSUMER.

    Not later than 7 years after the date of enactment of this Act, 
each group health plan and health insurance issuer offering health 
insurance coverage shall have in effect a system to provide the 
services described in this title.

SEC. 302. STATEMENT OF ACCOUNT FOR PATIENTS.

    (a) In General.--Each group health plan and health insurance issuer 
shall provide a participant, beneficiary, or enrollee with a statement 
of account that--
            (1) includes information, with respect to the participant, 
        beneficiary, or enrollee, on--
                    (A) claims received, claims denied, and the reasons 
                for any denials;
                    (B) status of coverage; and
                    (C) deductible information; and
            (2) is issued quarterly.
    (b) Internet Access.--The plan or issuer may comply with this 
section by making the quarterly statements available on the Internet 24 
hours a day, 7 days a week, through a secure website.

SEC. 303. STATEMENT OF ACCOUNT FOR EMPLOYERS AND PURCHASES.

    Each group health plan and health insurance issuer shall provide to 
employers and other purchasers of health insurance products a statement 
of account that--
            (1) includes--
                    (A) current information on coverage status; and
                    (B) reports of customer satisfaction that are 
                updated annually; and
            (2) is available 24 hours a day, 7 days a week, through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number.

SEC. 304. INTERNET ENROLLMENT.

    (a) In General.--Each group health plan and health insurance issuer 
shall provide to employers and other purchasers of health insurance 
products an option to enroll for coverage under such health insurance 
products on the Internet through a secure website.
    (b) Eligibility Requirements.--The Internet website described in 
subsection (a) shall include information on eligibility requirements 
for coverage.

SEC. 305. CONSUMER EXPLANATION OF BENEFITS.

    (a) In General.--Each group health plan and health insurance issuer 
shall provide, to a participant, beneficiary, or enrollee--
            (1) an explanation of benefits at the point of service or 
        not later than 48 hours after the time that service is 
        provided; and
            (2) a description of the coverage and cost of each services 
        provided to the participant, beneficiary, or enrollee under the 
        plan or coverage.
    (b) Language.--Any explanation of benefits under this section shall 
be provided in a printed form and written in a manner calculated to be 
understood by the average participant, beneficiary, or enrollee.

SEC. 306. REFERRALS AND AUTHORIZATIONS.

    (a) In General.--Each group health plan and health insurance issuer 
shall establish an automated system for making and checking referrals 
and pre-authorizations where such referrals and pre-authorizations are 
required under the plan or coverage.
    (b) Access.--The system described in subsection (a) shall permit 
access by physicians and by participants, beneficiaries, and enrollees 
to information on the completion of referrals and pre-authorizations 
and whether health care services and products have been authorized, 
through--
            (1) the Internet through a secure website; or
            (2) a toll-free telephone number.

SEC. 307. PRESCRIPTIONS.

    To the extent that a group health plan or health insurance coverage 
offered by a health insurance issuer, provides coverage for benefits 
with respect to prescription drugs, each plan and issuer shall 
establish a system for automated prescription posting and ordering 
that--
            (1) is accessible to physicians and to participants, 
        beneficiaries, and enrollees;
            (2) is accessible through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number; and
            (3) does not require the use of paper for posting or 
        ordering prescriptions.

SEC. 308. PATIENT CLAIM HISTORY.

    Each group health plan and health insurance issuer shall establish 
a system--
            (1) by which a health care provider may, with patient 
        authorization, have access to the patient's statement of 
        account, as described in section 302; and
            (2) that is accessible through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number.

SEC. 309. STATEMENT TO HEALTH CARE PROVIDERS.

    Each group health plan and health insurance issuer shall establish 
a system under which the plan or issuer shall notify a health care 
provider who has provided items or services to a participant, 
beneficiary, or enrollee of the amount that such plan or issuer has 
paid on a claim with respect to such items or services. Such notice 
shall be provided to the health care provider within 48 hours of the 
receipt by the plan or issuer of a claim with respect to the items or 
services involved.

SEC. 310. REGULATIONS.

    The Secretary shall issue such regulations as may be necessary or 
appropriate to carry out this title.

      TITLE IV--MODERNIZING FINANCIAL TRANSACTIONS IN HEALTH CARE

SEC. 401. MODERNIZING FINANCIAL TRANSACTIONS IN HEALTH CARE.

    Not later than 7 years after the date of enactment of this Act, 
each group health plan and health insurance issuer offering health 
insurance coverage shall have in effect a system to provide the 
financial transaction services described in this title.

SEC. 402. ELECTRONIC TRANSFER OF PAYMENTS.

    Each group health plan and health insurance issuer shall establish 
a system that permits health care providers to receive claim payments 
through electronic transfer of funds.

SEC. 403. AUTOMATIC PAYMENTS.

    Each group health plan and health insurance issuer shall establish 
a system that permits participants, beneficiaries, and enrollees to 
make payments for deductibles through electronic transfer of funds from 
bank accounts or pre-tax savings accounts.

SEC. 404. CONTROL SYSTEMS.

    Each group health plan and health insurance issuer shall establish 
a system that provides automated, integrated audit controls to monitor 
any duplicate payments or overpayments within the adjudication system.

                   TITLE V--ENHANCING PATIENT SAFETY

SEC. 501. PURPOSE.

    It is the purpose of this title to reduce medication errors by 
facilitating and requiring the installation and use of computerized 
physician order entry systems by health care facilities.

SEC. 502. INFRASTRUCTURE FOR SAFE PRESCRIPTIONS.

    Title VI of the Public Health Service Act (42 U.S.C. 291 et seq.) 
is amended by adding at the end thereof the following:

            ``Part E--Infrastructure for Safe Prescriptions

``SEC. 651. GRANTS FOR COMPUTERIZED PHYSICIAN ORDER ENTRY SYSTEMS.

    ``(a) In General.--The Secretary may award grants to eligible 
entities to enable such entities to develop, install, or train 
personnel in the use of, computerized physician order entry systems.
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) be a nonprofit hospital, health care clinic, 
        community health center, skilled nursing facility, or other 
        nonprofit entity determined to be eligible by the Secretary;
            ``(2) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including a description of the 
        computerized medication prescribing system that the entity 
        intends to implement using amounts received under the grant; 
        and
            ``(3) provide assurances that are satisfactory to the 
        Secretary that the computerized physician order entry system, 
        for which amounts are to be expended under the grant, conforms 
        to the technical standards established by the Secretary for 
        such systems under section 652.
    ``(c) Matching Requirement.--The Secretary may not make a grant to 
an entity under subsection (a) unless that entity agrees that, with 
respect to the costs to be incurred by the entity in carrying out the 
activities for which the grant is being awarded, the entity will make 
available (directly or through donations from public or private 
entities) non-Federal contributions toward such costs in an amount 
equal to $1 for each $1 of Federal funds provided under the grant.

``SEC. 652. REQUIREMENTS FOR COMPUTERIZED PHYSICIAN ORDER ENTRY 
              SYSTEMS.

    ``(a) Initial Requirement.--Beginning in the fiscal year that 
begins 5 years after the date of enactment of this Act, and in each 
fiscal year thereafter, a health care facility that admitted 20,000 or 
more individuals in the prior fiscal year shall not receive payments 
from Federal health plans unless the health care facility has in effect 
a computerized physician order entry system that meets the requirements 
of section 651.
    ``(b) Subsequent Requirement.--Beginning in the fiscal year that 
begins 10 years after the date of enactment of this Act, and in each 
fiscal year thereafter, no health care facility shall receive payments 
from Federal health plans unless that health care facility has in 
effect a computerized physician order entry system that meets the 
requirements of section 651.

``SEC. 653. GUIDELINES FOR COMPUTERIZED PHYSICIAN ORDER ENTRY SYSTEMS.

    ``(a) Development.--The Secretary, acting through the Administrator 
of the Agency for Healthcare Research and Quality, shall establish 
technical standards for computerized physician order entry systems.
    ``(b) Working Group.--In carrying out subsection (a), the Secretary 
shall convene a working group of individuals with expertise in computer 
technology, the prescribing of medication, and other appropriate 
fields, to provide the Secretary with advice for purposes of assisting 
the Secretary in the establishment of technical standards under such 
subsection. The working group shall be subject to the Federal Advisory 
Committee Act.
    ``(c) Focus of Technical Standards.--The standards developed under 
subsection (a) shall focus on--
            ``(1) the interoperability of a computerized physician 
        order entry system with such other systems in common use;
            ``(2) the protection of the confidentiality of individually 
        identifiable health information contained within such system 
        from unauthorized access or dissemination;
            ``(3) procedures for issuing warnings when prescribing 
        errors may be imminent;
            ``(4) procedures for ensuring that recommendations or 
        warnings issued by such systems reflect good medical practice; 
        and
            ``(5) other matters determined appropriate by the 
        Secretary.
    ``(d) Revisions.--The Secretary, acting through the Administrator 
of the Agency for Healthcare Research and Quality, shall establish a 
working group to continually update and revise the technical standards 
developed under subsection (a).
    ``(e) Publication.--Not later than 1 year after the date of 
enactment of this part, the Secretary shall publish the technical 
standards developed under this section in the Federal Register. The 
Secretary shall publish and make available any revisions to such 
guidelines within 30 days of the date on which such revisions are 
proposed under subsection (d).

``SEC. 654. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part, 
$100,000,000 for fiscal year 2003, and such sums as may be necessary 
for each fiscal year thereafter.''.

    TITLE VI--APPLICATION TO PUBLIC HEALTH SERVICE ACT AND EMPLOYEE 
                 RETIREMENT INCOME SECURITY ACT OF 1974

SEC. 601. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
              COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following new 
section:

``SEC. 2707. HEALTH CARE MODERNIZATION STANDARDS.

    ``Each group health plan shall comply with health care 
modernization requirements under titles II and III of the Efficiency in 
Health Care (eHealth) Act, and each health insurance issuer shall 
comply with health care modernization requirements under such titles 
with respect to group health insurance coverage it offers, and such 
requirements shall be deemed to be incorporated into this 
subsection.''.
    (b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42 
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section 
2707)'' after ``requirements of such subparts''.

SEC. 602. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE UNDER THE 
              PUBLIC HEALTH SERVICE ACT.

    Part B of title XXVII of the Public Health Service Act is amended 
by inserting after section 2752 the following new section:

``SEC. 2753. HEALTH CARE MODERNIZATION STANDARDS.

    ``Each health insurance issuer shall comply with health care 
modernization requirements under titles II, III, and IV of the 
Efficiency in Health Care (eHealth) Act with respect to individual 
health insurance coverage it offers, and such requirements shall be 
deemed to be incorporated into this subsection.''.

SEC. 603. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
              COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY 
              ACT OF 1974.

    Subpart B of part 7 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by adding at the end 
the following new section:

``SEC. 714. HEALTH CARE MODERNIZATION STANDARDS.

    ``A group health plan (and a health insurance issuer offering group 
health insurance coverage in connection with such a plan) shall comply 
with the requirements of titles II, III, and IV of the Efficiency in 
Health Care (eHealth) Act (as in effect as of the date of the enactment 
of such Act), and such requirements shall be deemed to be incorporated 
into this subsection.''.
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