[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1374 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1374

    To provide health care professionals with immediate relief from 
increased medical malpractice insurance costs and to deal with the root 
      causes of the current medical malpractice insurance crisis.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              July 8, 2003

 Mr. Durbin (for himself and Mr. Graham of South Carolina) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
    To provide health care professionals with immediate relief from 
increased medical malpractice insurance costs and to deal with the root 
      causes of the current medical malpractice insurance crisis.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Better HEALTH Act 
of 2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
  TITLE I--ENHANCING PATIENT ACCESS TO CARE THROUGH DIRECT ASSISTANCE

Sec. 101. Grants and contracts regarding health care professional 
                            shortages.
Sec. 102. Health care professional assignments to trauma centers 
                            through National Health Service Corps.
TITLE II--INCENTIVES FOR PARTICIPATION IN MEDICARE, MEDICAID, AND SCHIP 
         AND FINANCIAL ASSISTANCE FOR HEALTH CARE PROFESSIONALS

Sec. 201. Incentives for participation in medicare, medicaid, and 
                            SCHIP.
Sec. 202. Credit for qualified expenditures for medical professional 
                            malpractice insurance.
Sec. 203. Exclusion for loan payments under National Health Service 
                            Corps loan repayment program.
        TITLE III--LIMITING FRIVOLOUS MEDICAL MALPRACTICE SUITS

Sec. 301. Health care specialist affidavit.
Sec. 302. Sanctions for frivolous actions any pleadings.
Sec. 303. Applicability.
Sec. 304. Definitions.
             TITLE IV--MEDICAL MALPRACTICE INSURANCE REFORM

Sec. 401. Short title.
Sec. 402. Prohibition on anti-competitive activities.
Sec. 403. Application to activities of State commissions of insurance 
                            and other State insurance regulatory 
                            bodies. 
Sec. 404. Study on medical malpractice reinsurance.
    TITLE V--INDEPENDENT ADVISORY COMMISSION ON MEDICAL MALPRACTICE 
                               INSURANCE

Sec. 501. Establishment.
Sec. 502. Duties.
Sec. 503. Report.
Sec. 504. Membership.
Sec. 505. Director and staff; experts and consultants.
Sec. 506. Powers.
Sec. 507. Authorization of appropriations.
  TITLE VI--REDUCING MEDICAL MALPRACTICE BY PREVENTING MEDICAL ERRORS

Sec. 601. Short title.
Sec. 602. Purpose.
Sec. 603. Patient safety improvements.
Sec. 604. Required use of product identification technology.

  TITLE I--ENHANCING PATIENT ACCESS TO CARE THROUGH DIRECT ASSISTANCE

SEC. 101. GRANTS AND CONTRACTS REGARDING HEALTH CARE PROFESSIONAL 
              SHORTAGES.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended by adding at the end the following:

``SEC. 330L. HEALTH CARE PROFESSIONAL SHORTAGES RESULTING FROM COSTS OF 
              MEDICAL MALPRACTICE INSURANCE.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may make awards of 
grants or contracts in accordance with this section for geographic 
areas that, as determined by the Secretary, have a shortage of one or 
more types of health care professionals as a result of the 
professional's making the decision to cease or curtail providing health 
care services in the geographic areas because of the costs of 
maintaining medical malpractice insurance.
    ``(b) Recipients of Awards; Expenditure.--In accordance with such 
criteria as the Secretary may establish:
            ``(1) Awards under subsection (a) may be made to health 
        care professionals who agree to provide health care services 
        (or to continue providing health care services, as the case may 
        be) in geographic areas described in such subsection for the 
        period during which payments under the awards are made to the 
        health care professionals.
            ``(2) Health care professionals who receive such awards may 
        expend the awards to assist the professionals with the costs of 
        maintaining medical malpractice insurance for providing health 
        care services in the geographic area for which the award is 
        made.
    ``(c) Definition.--For purposes of this section, the term `health 
care professionals' means health care professionals, and organizations 
that provide health care services (including hospitals, clinics, and 
group practices), that meet applicable legal requirements to provide 
the health care services involved.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $10,000,000 for fiscal year 
2004, and such sums as may be necessary for each subsequent fiscal 
year.''.

SEC. 102. HEALTH CARE PROFESSIONAL ASSIGNMENTS TO TRAUMA CENTERS 
              THROUGH NATIONAL HEALTH SERVICE CORPS.

    Section 338H of the Public Health Service Act (42 U.S.C. 254q) is 
amended by adding at the end the following:
    ``(d) Trauma Centers; Separate Authorization Regarding Shortages 
Resulting From Costs of Medical Malpractice Insurance.--
            ``(1) In general.--For the purpose of assigning Corps 
        surgeons, obstetricians/gynecologists, and other health care 
        professionals to trauma centers in health care professional 
        shortage areas described in paragraph (2), there are authorized 
        to be appropriated $10,000,000 for fiscal year 2004, and such 
        sums as may be necessary for each of the fiscal years 2005 
        through 2007. Such authorization is in addition to any other 
        authorization of appropriations that is available for such 
        purpose.
            ``(2) Description of areas.--A health professional shortage 
        area referred to in paragraph (1) is such an area in which, as 
        determined by the Secretary, a medical facility in the area has 
        lost its designation as a trauma center or as a particular 
        level of trauma center, or is at significant risk of losing 
        such a designation, as a result of one or more surgeons, 
        obstetricians/gynecologists, or other health care professionals 
        making the decision to cease or curtail practicing at the 
        facility because of the costs of maintaining medical 
        malpractice insurance. For purposes of paragraph (1) the term 
        `trauma center' includes such a medical facility, the Secretary 
        may adjust the criteria for designation as a health 
        professional shortage area to the extent necessary to make 
        funds appropriated under paragraph (1) available with respect 
        to any medical facility to ensure that the facility does not 
        lose any such designation as a result of such decisions by 
        health care professionals.''.

TITLE II--INCENTIVES FOR PARTICIPATION IN MEDICARE, MEDICAID, AND SCHIP 
         AND FINANCIAL ASSISTANCE FOR HEALTH CARE PROFESSIONALS

SEC. 201. INCENTIVES FOR PARTICIPATION IN MEDICARE, MEDICAID, AND 
              SCHIP.

    (a) In General.--Punitive damages may not be awarded in a medical 
malpractice action against a qualified health professional, except upon 
proof of an intentional act, such as voluntary intoxication or 
impairment by a physician, sexual abuse or misconduct, assault and 
battery, or falsification of records.
    (b) Construction.--Subsection (a) shall not be construed to 
establish a cause of action for punitive damages and shall not preempt 
or supersede any other Federal or State law with respect to punitive 
damages.
    (c) Definitions.--In this section:
            (1) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by the laws or 
        regulations of the State to be licensed or certified by the 
        State to provide such services in the State.
            (2) Medical malpractice action.--The term ``medical 
        malpractice action'' means an action in any Federal or State 
        court or against a qualified health care professional that--
                    (A) arises under the law of the State involved;
                    (B) alleges the failure of such health care 
                professional to adhere to the relevant professional 
                standard of care for the service and specialty 
                involved;
                    (C) alleges death or injury proximately caused by 
                such failure; and
                    (D) seeks monetary damages, whether compensatory or 
                punitive, as relief for such death or injury.
            (3) Qualified health care professional.--The term 
        ``qualified health care professional'' means a health care 
        professional--
                    (A) who is licensed in the State in which such 
                professional practices; and
                    (B) 25 percent or more of the patients of whom 
                receive benefits under title XVIII, XIX, and XXI of the 
                Social Security Act (42 U.S.C. 1395, 1396, and 1397aa 
                et seq.).

SEC. 202. CREDIT FOR QUALIFIED EXPENDITURES FOR MEDICAL PROFESSIONAL 
              MALPRACTICE INSURANCE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business tax credits) 
is amended by adding at the end the following:

``SEC. 45G. CREDIT FOR EXPENDITURES FOR MEDICAL PROFESSIONAL 
              MALPRACTICE INSURANCE.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
taxpayer which is an eligible person, the medical malpractice insurance 
expenditure tax credit determined under this section for a covered year 
shall equal the applicable percentage of the qualified medical 
malpractice insurance expenditures incurred by an eligible person 
during the covered year.
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage is--
            ``(1) in the case of an eligible person described in 
        subsection (c)(2)(A), 20 percent,
            ``(2) in the case of an eligible person described in 
        subsection (c)(2)(B), 10 percent, and
            ``(3) in the case of an eligible person described in 
        subsection (c)(2)(C), 15 percent.
    ``(c) Definitions.--In this section:
            ``(1) Covered year.--The term `covered year' means taxable 
        years beginning in 2004 and 2005.
            ``(2) Eligible person.--The term `eligible person' means--
                    ``(A) any physician (as defined in section 
                213(d)(4)) who practices in any surgical specialty or 
                subspecialty, emergency medicine, obstetrics, 
                anesthesiology or who does intervention work which is 
                reflected in medical malpractice insurance 
                expenditures,
                    ``(B) any physician (as so defined) who practices 
                in general medicine, allergy, dermatology, or 
                pathology, and
                    ``(C) any hospital or clinic,
        which meets applicable legal requirements to provide the health 
        care services involved.
            ``(3) Qualified medical malpractice insurance 
        expenditure.--The term `qualified medical malpractice insurance 
        expenditure' means so much of any professional insurance 
        premium, surcharge, payment or other cost or expense required 
        as a condition of State licensure which is incurred by an 
        eligible person in a covered year for the sole purpose of 
        providing or furnishing general medical malpractice liability 
        insurance for such eligible person as does not exceed twice the 
        Statewide average of such costs for similarly situated eligible 
        persons.
    ``(d) Special Rules.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        credit determined under this section shall be claimed by the 
        eligible person incurring the qualified medical malpractice 
        insurance expenditure.
            ``(2) Certification.--Each State, through its board of 
        medical licensure and State board (or agency) regulating 
        insurance, annually shall provide such information to the 
        Secretary of Health and Human Services as is necessary to 
        permit the Secretary to calculate average costs for purposes of 
        subsection (c)(3) and to certify such average costs (rounded to 
        the nearest whole dollar) to the Secretary of the Treasury on 
        or before the 15th day of November of each year.
    ``(e) Effective Date.--This section shall apply to qualified 
medical malpractice expenditures incurred after December 31, 2002.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (14), 
by striking the period at the end of paragraph (15) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(16) the medical malpractice insurance expenditure tax 
        credit determined under section 45G(a).''.
    (c) Limitation on Carryback.--Section 39(d) of the Internal Revenue 
Code of 1986 (relating to transition rules) is amended by adding at the 
end the following new paragraph:
            ``(11) No carryback of medical malpractice insurance 
        expenditure tax credit before effective date.--No portion of 
        the unused business credit for any taxable year which is 
        attributable to the credit determined under section 45G may be 
        carried back to any taxable year beginning before 2004.''.
    (d) Denial of Double Benefit.--Section 280C of the Internal Revenue 
Code of 1986 (relating to certain expenses for which credits are 
allowable) is amended by adding at the end the following new 
subsection:
    ``(d) Credit for Medical Malpractice Liability Insurance 
Premiums.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified medical malpractice insurance 
        expenditures otherwise allowable as a deduction for the taxable 
        year which is equal to the amount of the credit allowable for 
        the taxable year under section 45G (determined without regard 
        to section 38(c)).
            ``(2) Controlled groups.--In the case of a corporation 
        which is a member of a controlled group of corporations (within 
        the meaning of section 41(f)(5)) or a trade or business which 
        is treated as being under common control with other trades or 
        business (within the meaning of section 41(f)(1)(B)), this 
        subsection shall be applied under rules prescribed by the 
        Secretary similar to the rules applicable under subparagraphs 
        (A) and (B) of section 41(f)(1).''.
    (e) Grants to Non-Profit Hospitals and Clinics.--
            (1) In general.--The Secretary of Health and Human 
        Services, acting through the Administrator of the Health 
        Resources and Services Administration, shall award grants to 
        eligible non-profit hospitals and clinics to assist such 
        hospitals and clinics in defraying qualified medical 
        malpractice insurance expenditures.
            (2) Eligible non-profit hospital or clinic.--To be eligible 
        to receive a grant under paragraph (1) an entity shall--
                    (A) be a non-profit hospital or clinic;
                    (B) be unable to claim the tax credit described in 
                section 45G of the Internal Revenue Code of 1986 for 
                the year for which an application is submitted under 
                subparagraph (C); and
                    (C) prepare and submit to the Secretary of Health 
                and Human Services an application at such time, in such 
                manner, and containing such information as the 
                Secretary may require.
            (3) Amount of grant.--The amount of a grant to a non-profit 
        hospital or clinic under paragraph (1) shall equal 15 percent 
        of the amount of the qualified medical malpractice insurance 
        expenditures of the hospital or clinic for the year involved.
            (4) Qualified medical malpractice insurance expenditure.--
        In this subsection, the term ``qualified medical malpractice 
        insurance expenditure'' means so much of any professional 
        insurance premium, surcharge, payment or other cost or expense 
        required as a condition of State licensure which is incurred by 
        a non-profit hospital or clinic in a year for the sole purpose 
        of providing or furnishing general medical malpractice 
        liability insurance for such hospital or clinic as does not 
        exceed twice the Statewide average of such costs for similarly 
        situated hospitals or clinics.
    (5) Authorization of appropriations.--There are authorized to be 
appropriated to carry out this subsection, such sums as may be 
necessary for each of fiscal years 2004 and 2005.
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 45G. Credit for expenditures for 
                                        medical professional 
                                        malpractice insurance.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to expenditures incurred after December 31, 2002.

SEC. 203. EXCLUSION FOR LOAN PAYMENTS UNDER NATIONAL HEALTH SERVICE 
              CORPS LOAN REPAYMENT PROGRAM.

    (a) In General.--Section 117 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Loan Payments Under National Health Service Corps Loan 
Repayment Program.--Gross income shall not include any amount received 
under section 338B(g) of the Public Health Service Act.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to amounts received by an individual in taxable years beginning 
after December 31, 2002.

        TITLE III--LIMITING FRIVOLOUS MEDICAL MALPRACTICE SUITS

SEC. 301. HEALTH CARE SPECIALIST AFFIDAVIT.

    (a) Requiring Submission With Complaint.--No medical malpractice 
liability action may be brought by any individual unless, at the time 
the individual brings the action (except as provided in subsection 
(b)(1)), it is accompanied by the affidavit of a qualified specialist 
that includes the specialist's statement of belief that, based on a 
review of the available medical record and other relevant material, 
there is a reasonable and meritorious cause for the filing of the 
action against the defendant.
    (b) Extension in Certain Instances.--
            (1) In general.--Subject to paragraph (2), subsection (a) 
        shall not apply with respect to an individual who brings a 
        medical malpractice liability action without submitting an 
        affidavit described in such subsection if, as of the time the 
        individual brings the action, the individual has been unable to 
        obtain adequate medical records or other information necessary 
        to prepare the affidavit.
            (2) Deadline for submission where extension applies.--In 
        the case of an individual who brings an action for which 
        paragraph (1) applies, the action shall be dismissed unless the 
        individual (or the individual's attorney) submits the affidavit 
        described in subsection (a) not later than 90 days after 
        obtaining the information described in such subparagraph.
    (c) Qualified Specialist Defined.--In subsection (a), the term 
``qualified specialist'' means, with respect to a medical malpractice 
liability action, a health care professional who is reasonably believed 
by the individual bringing the action (or the individuals attorney)--
            (1) to be knowledgeable in the relevant issues involved in 
        the action;
            (2) to practice (or to have practiced) or to teach (or to 
        have taught) in the same area of health care or medicine that 
        is at issue in the action; and
            (3) in the case of an action against a physician, to be 
        board certified in a specialty relating to that area of 
        medicine.
    (d) Confidentiality of Specialist.--Upon a showing of good cause by 
a defendant, the court may ascertain the identity of a specialist 
referred to in subsection (a) while preserving confidentiality.

SEC. 302. SANCTIONS FOR FRIVOLOUS ACTIONS ANY PLEADINGS.

    (a) Signature Required.--Every pleading, written motion, and other 
paper in any medical malpractice liability action shall be signed by at 
least 1 attorney of record in the attorney's individual name, or, if 
the party is not represented by an attorney, shall be signed by the 
party. Each paper shall state the signer's address and telephone 
number, if any. An unsigned paper shall be stricken unless omission of 
the signature is corrected promptly after being called to the attention 
of the attorney or party.
    (b) Certificate of Merit.--By presenting to the court (whether by 
signing, filing, submitting, or later advocating) a pleading, written 
motion, or other paper, an attorney or unrepresented party is 
certifying that to the best of the person's knowledge, information and 
belief, formed after an inquiry reasonable under the circumstances--
            (1) it is not being presented for any improper purpose, 
        such as to harass or to cause unnecessary delay or needless 
        increase in the cost of litigation;
            (2) the claims, defenses, and other legal contentions 
        therein are warranted by existing law or by a non frivolous 
        argument for the extension, modification, or reversal of 
        existing law or the establishment of new law; and
            (3) the allegations and other factual contentions have 
        evidentiary support or, if specifically so identified, are 
        reasonable based on a lack of information or belief.
    (c) Mandatory Sanctions.--
            (1) First violation.--If, after notice and a reasonable 
        opportunity to respond, a court, upon motion or upon its own 
        initiative, determines that subsection (b) has been violated, 
        the court shall find each attorney or party in violation in 
        contempt of court and shall require the payment of costs and 
        attorneys fees. The court may also impose additional 
        appropriate sanctions, such as striking the pleadings, 
        dismissing the suit, and sanctions plus interest, upon the 
        person in violation, or upon both such person and such person's 
        attorney or client (as the case may be).
            (2) Second violation.--If, after notice and a reasonable 
        opportunity to respond, a court, upon motion or upon its own 
        initiative, determines that subsection (b) has been violated 
        and that the attorney or party with respect to which the 
        determination was made has committed one previous violation of 
        subsection (b) before this or any other court, the court shall 
        find each such attorney or party in contempt of court and shall 
        require the payment of costs and attorneys fees, and require 
        such person in violation (or both such person and such person's 
        attorney or client (as the case may be)) to pay a monetary 
        fine. The court may also impose additional appropriate 
        sanctions, such as striking the pleadings, dismissing the suit 
        and sanctions plus interest, upon such person in violation, or 
        upon both such person and such person's attorney or client (as 
        the case may be).
            (3) Third violations.--If, after notice and a reasonable 
        opportunity to respond, a court, upon motion or upon its own 
        initiative, determines that subsection (b) has been violated 
        and that the attorney or party with respect to which the 
        determination was made has committed more than one previous 
        violation of subsection (b) before this or any other court, the 
        court shall find each such attorney or party in contempt of 
        court, refer each such attorney to one or more appropriate 
        State bar associations for disciplinary proceedings, require 
        the payment of costs and attorneys fees, and require such 
        person in violation (or both such person and such person's 
        attorney, or client (as the case may be)) to pay a monetary 
        fine. The court may also impose additional appropriate 
        sanctions, such as striking the pleadings, dismissing the suit, 
        and sanctions plus interest, upon such person in violation, or 
        upon both such person and such person's attorney or client (as 
        the case may be).

SEC. 303. APPLICABILITY.

    (a) In General.--This title shall apply with respect to any medical 
malpractice liability action brought on or after the date of enactment 
of this Act in any State or Federal court, except that this title shall 
not apply to a claim or action for damages arising from a vaccine-
related injury or death to the extent that title XXI of the Public 
Health Service Act applies to the claim or action.
    (b) Effect of Sovereign Immunity and Choice of Law or Venue.--
Nothing in this title shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.
    (c) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this title shall be construed to establish any 
jurisdiction in the district courts of the United States over medical 
malpractice liability actions on the basis of section 1331 or 1337 of 
title 28, United States Code.

SEC. 304. DEFINITIONS.

    In this title:
            (1) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by the laws or 
        regulations of the State to be licensed or certified by the 
        State to provide such services in the State.
            (2) Injury.--The term ``injury'' means any illness, 
        disease, or other harm that is the subject of a medical 
        malpractice liability action or a medical malpractice claim.
            (3) Medical malpractice claim.--The term ``medical 
        malpractice claim'' means a claim against a health care 
        provider, a health care professional, or a blood or tissue bank 
        licensed or registered by the Food and Drug Administration in 
        which a claimant alleges that injury was caused by the 
        provision of (or the failure to provide) health care services, 
        except that such term does not include--
                    (A) any claim based on an allegation of an 
                intentional tort; or
                    (B) any claim based on an allegation that a product 
                is defective or unreasonably dangerous.
            (4) Medical malpractice liability action.--The term 
        ``medical malpractice liability action'' means a civil action 
        brought in a State or Federal court against a health care 
        provider, a health care professional, or a blood or tissue bank 
        licensed or registered by the Food and Drug Administration in 
        which the plaintiff alleges a medical malpractice claim.
            (5) State.--The term ``State'' includes the District of 
        Columbia and any commonwealth, territory, or possession of the 
        United States.

             TITLE IV--MEDICAL MALPRACTICE INSURANCE REFORM

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Medical Malpractice Insurance 
Antitrust Act of 2003''.

SEC. 402. PROHIBITION ON ANTI-COMPETITIVE ACTIVITIES.

    Notwithstanding any other provision of law, nothing in the Act of 
March 9, 1945 (15 U.S.C. 1011 et seq., commonly known as the 
``McCarran-Ferguson Act'') shall be construed to permit commercial 
insurers to engage in any form of price fixing, bid rigging, or market 
allocations in connection with the conduct of the business of providing 
medical malpractice insurance.

SEC. 403. APPLICATION TO ACTIVITIES OF STATE COMMISSIONS OF INSURANCE 
              AND OTHER STATE INSURANCE REGULATORY BODIES.

    This title does not apply to the information gathering and rate 
setting activities of any State commissions of insurance, or any other 
State regulatory body with authority to set insurance rates.

SEC. 404. STUDY ON MEDICAL MALPRACTICE REINSURANCE.

    (a) In General.--The Secretary of the Treasury shall conduct a 
study of the feasibility and efficacy of establishing a Federal 
reinsurance fund for the payment of certain noneconomic damages in 
medical malpractice action. Such study shall address--
            (1) the advantages, if any, that a federally-administered 
        reinsurance fund would offer over private reinsurance;
            (2) the level at which such fund should assume the 
        liability for payment of noneconomic damages in medical 
        malpractice actions;
            (3) the administration of such payments of noneconomic 
        damages by the fund;
            (4) whether such a fund should be financed through the 
        assessment of user fees on malpractice insurance issuers, and 
        if so, the amount of such fee, and how to calculate such fee 
        for each malpractice insurance issuer;
            (5) whether individual malpractice insurance issuers should 
        be permitted to negotiate their own terms (relating to fees and 
        payments) with such fund; and
            (6) whether such fund could use capital from the Federal 
        Judgment Fund for the first year in which the fund is 
        operating, and what the terms would be relating to the 
        repayment of such capital.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of the Treasury shall submit to the appropriate 
committees of Congress a report concerning the results of the study 
conducted under subsection (a).

    TITLE V--INDEPENDENT ADVISORY COMMISSION ON MEDICAL MALPRACTICE 
                               INSURANCE

SEC. 501. ESTABLISHMENT.

    (a) Findings.--The Congress finds as follows:
            (1) The sudden rise in medical malpractice insurance 
        premiums in regions of the United States can threaten patient 
        access to health care professionals.
            (2) Improving patient access to physicians and other health 
        care professionals is a national priority.
    (b) Establishment.--There is established a national commission to 
be known as the ``Independent Advisory Commission on Medical 
Malpractice Insurance'' (in this title referred to as the 
``Commission'').

SEC. 502. DUTIES.

    (a) In General.--The Commission shall evaluate the causes and scope 
of the recent and dramatic increases in medical malpractice insurance 
premiums, including the correlation, if any, to changes in State tort 
law regarding medical malpractice, and formulate additional proposals 
to reduce such medical malpractice insurance premiums and make 
recommendations to avoid any dramatic increases in medical malpractice 
insurance premiums in the future.
    (b) Considerations.--In formulating proposals under this section, 
the Commission shall, at a minimum, consider the following:
            (1) Alternatives to the current medical malpractice 
        liability system that would ensure adequate compensation for 
        patients, preserve access to health care professionals, and 
        improve health care safety and quality.
            (2) Modifications of, and alternatives to, the existing 
        State and Federal regulations and oversight that affect, or 
        could affect, medical malpractice lines of insurance.
            (3) State and Federal reforms that would more evenly 
        distribute the risk of medical malpractice across various 
        categories of professionals.
            (4) The effect of Federal medical malpractice reinsurance 
        program administered by the Department of Health and Human 
        Services on medical malpractice insurance availability and 
        affordability.
            (5) The effect on medical malpractice insurance 
        availability and affordability of a Federal medical malpractice 
        insurance program, administered by the Department of Health and 
        Human Services, to provide medical malpractice insurance based 
        on customary coverage terms and liability amounts in States 
        where such insurance is unavailable or is unavailable at 
        reasonable and customary terms, on medical malpractice 
        insurance availability and affordability.
            (6) Programs that would reduce medical errors and increase 
        patient safety, including new innovations in technology and 
        management.
            (7) The effect on medical malpractice insurance 
        availability and affordability of State policies under which--
                    (A) any health care professional licensed by the 
                State has standing in any State administrative 
                proceeding to challenge a proposed rate increase in 
                medical malpractice insurance; and
                    (B) a provider of medical malpractice insurance in 
                the State may not implement a rate increase in such 
                insurance unless the provider, at minimum, first 
                submits to the appropriate State agency a description 
                of the rate increase and a substantial justification 
                for the rate increase.

SEC. 503. REPORT.

    (a) In General.--The Commission shall transmit to Congress--
            (1) an initial report not later than 180 days after the 
        date of the initial meeting of the Commission; and
            (2) a report not less than each year thereafter until the 
        Commission terminates.
    (b) Contents.--Each report transmitted under this section shall 
contain a detailed statement of the findings and conclusions of the 
Commission, including proposals for addressing the current dramatic 
increases in medical malpractice insurance rates and recommendations 
for avoiding any such dramatic increases in the future.
    (c) Voting and Reporting Requirements.--With respect to each 
proposal or recommendation contained in the report submitted under 
subsection (a), each member of the Commission shall vote on the 
proposal or recommendation, and the Commission shall include, by 
member, the results of that vote in the report.

SEC. 504. MEMBERSHIP.

    (a) Number and Appointment.--The Commission shall be composed of 15 
members appointed by the Comptroller General of the United States.
    (b) Membership.--
            (1) In general.--The membership of the Commission shall 
        include individuals with national recognition for their 
        expertise in health finance and economics, actuarial science, 
        medical malpractice insurance, insurance regulation, health 
        care law, health care policy, health care access, allopathic 
        and osteopathic physicians, other health care professionals of 
        health care services, patient advocacy, and other related 
fields, who provide a mix of different professionals, broad geographic 
representations, and a balance between urban and rural representatives.
            (2) Inclusion.--The membership of the Commission shall 
        include the following:
                    (A) Two individuals with expertise in health 
                finance and economics, including one with expertise in 
                consumer protections in the area of health finance and 
                economics.
                    (B) Two individuals with expertise in medical 
                malpractice insurance, representing both commercial 
                insurance carriers and physician-sponsored insurance 
                carriers.
                    (C) An individual with expertise in State insurance 
                regulation and State insurance markets.
                    (D) An individual representing physicians.
                    (E) An individual with expertise in issues 
                affecting hospitals, nursing homes, nurses, and other 
                health care professionals.
                    (F) Two individuals representing patient interests.
                    (G) Two individuals with expertise in health care 
                law or health care policy.
                    (H) An individual with expertise in representing 
                patients in medical malpractice claims.
            (3) Majority.--The total number of individuals who are 
        directly involved with the provision or management of medical 
        malpractice insurance, representing health care professionals, 
        or representing professionals in malpractice lawsuits, shall 
        not constitute a majority of the membership of the Commission.
            (4) Ethical disclosure.--The Comptroller General of the 
        United States shall establish a system for public disclosure by 
        members of the Commission of financial or other potential 
        conflicts of interest relating to such members.
    (c) Terms.--
            (1) In general.--The terms of the members of the Commission 
        shall be for 3 years except that the Comptroller General of the 
        United States shall designate staggered terms for the members 
        first appointed.
            (2) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office. A vacancy in the Commission shall be filled in the 
        manner in which the original appointment was made.
            (3) Compensation.--Members of the Commission shall be 
        compensated in accordance with section 1805(c)(4) of the Social 
        Security Act.
            (4) Chairperson; vice chairperson.--The Comptroller General 
        of the United States shall designate at the time of appointment 
        a member of the Commission as Chairperson and a member as Vice 
        Chairperson. In the case of vacancy of the Chairpersonship or 
        Vice Chairpersonship, the Comptroller General may designate 
        another member for the remainder of that member's term.
            (5) Meetings.--
                    (A) In general.--The Commission shall meet at the 
                call of the Chairperson.
                    (B) Initial meeting.--The Commission shall hold an 
                initial meeting not later than the date that is 1 year 
after the date of the enactment of this title, or the date that is 3 
months after the appointment of all the members of the Commission, 
whichever occurs earlier.

SEC. 505. DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS.

    Subject to such review as the Comptroller General of the United 
States deems necessary to assure the efficient administration of the 
Commission, the Commission may--
            (1) employ and fix the compensation of an Executive 
        Director (subject to the approval of the Comptroller General) 
        and such other personnel as may be necessary to carry out its 
        duties (without regard to the provisions of title 5, United 
        States Code, governing appointments in the competitive 
        service);
            (2) seek such assistance and support as may be required in 
        the performance of its duties from appropriate Federal 
        departments and agencies;
            (3) enter into contracts or make other arrangements, as may 
        be necessary for the conduct of the work of the Commission 
        (without regard to section 3709 of the Revised Statutes (41 
        U.S.C. 5));
            (4) make advance, progress, and other payments which relate 
        to the work of the Commission;
            (5) provide transportation and subsistence for persons 
        serving without compensation; and
            (6) prescribe such rules and regulations as it deems 
        necessary with respect to the internal organization and 
        operation of the Commission.

SEC. 506. POWERS.

    (a) Obtaining Official Data.--The Commission may secure directly 
from any department or agency of the United States information 
necessary to enable it to carry out this section. Upon request of the 
Chairperson, the head of that department or agency shall furnish that 
information to the Commission on an agreed upon schedule.
    (b) Data Collection.--In order to carry out its functions, the 
Commission shall--
            (1) utilize existing information, both published and 
        unpublished, where possible, collected and assessed either by 
        its own staff or under other arrangements made in accordance 
        with this section;
            (2) carry out, or award grants or contracts for, original 
        research and experimentation, where existing information is 
        inadequate; and
            (3) adopt procedures allowing any interested party to 
        submit information for the Commission's use in making reports 
        and recommendations.
    (c) Access of General Accounting Office to Information.--The 
Comptroller General of the United States shall have unrestricted access 
to all deliberations, records, and nonproprietary data of the 
Commission, immediately upon request.
    (d) Periodic Audit.--The Commission shall be subject to periodic 
audit by the Comptroller General of the United States.

SEC. 507. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated such sums 
as may be necessary to carry out this title for each of fiscal years 
2004 through 2008.
    (b) Requests for Appropriations.--The Commission shall submit 
requests for appropriations in the same manner as the Comptroller 
General of the United States submits requests for appropriations, but 
amounts appropriated for the Commission shall be separate from amounts 
appropriated for the Comptroller General.

  TITLE VI--REDUCING MEDICAL MALPRACTICE BY PREVENTING MEDICAL ERRORS

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Patient Safety Improvement and 
Medical Injury Reduction Act''.

SEC. 602. PURPOSE.

    It is the purpose of this title to improve patient safety by 
promoting the voluntary reporting of patient safety events and medical 
errors and other measures.

SEC. 603. PATIENT SAFETY IMPROVEMENTS.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.) 
is amended--
            (1) in section 912(c), by inserting ``, in accordance with 
        part C,'' after ``The Director shall'';
            (2) by redesignating part C as part E;
            (3) by redesignating sections 921 through 928, as sections 
        941 through 948, respectively;
            (4) in section 948(1) (as so redesignated), by striking 
        ``921'' and inserting ``941''; and
            (5) by inserting after part B the following:

                  ``PART C--PATIENT SAFETY IMPROVEMENT

``SEC. 921. DEFINITIONS.

    ``In this part:
            ``(1) Center.--The term `Center' means the Center for 
        Quality Improvement and Patient Safety established under 
        section 922(a).
            ``(2) Health care professional.--The term `health care 
        professional' means an individual or entity licensed or 
        otherwise authorized under State law to provide health care 
        services, including--
                    ``(A) a hospital, nursing facility, comprehensive 
                outpatient rehabilitation facility, home health agency, 
                and hospice program;
                    ``(B) a physician, physician assistant, nurse 
                practitioner, clinical nurse specialist, certified 
                nurse midwife, psychologist, certified social worker, 
                registered dietitian or nutrition professional, 
                physical or occupational therapist, or other individual 
                health care practitioner;
                    ``(C) a pharmacist; and
                    ``(D) a renal dialysis facility, ambulatory 
                surgical center, pharmacy, physician or health care 
                practitioner's office, long-term care facility, 
                behavioral health residential treatment facility, 
                clinical laboratory, or community health center.
            ``(3) Identifiable information.--The term `identifiable 
        information' means information that is presented in a form and 
        manner that allows the identification of any health care 
        professional, patient, or reporter of patient safety 
        information. With respect to patients, such information 
        includes any individually identifiable health information as 
        that term is defined in the regulations promulgated pursuant to 
        section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996 (Public Law 104-191; 110 Stat. 
        2033).
            ``(4) National patient safety database.--The term `National 
        Patient Safety Database' means the database of nonidentifiable 
        information concerning patient safety that is coordinated by, 
        and developed in collaboration with, the Director under section 
        922(c)(3)(B).
            ``(5) National patient safety research demonstration 
        system.--The term `National Patient Safety Research 
        Demonstration System' means a system under which the Director 
        will enter into voluntary agreements with a geographically and 
        institutionally diverse group of eligible entities to collect 
        data for the purpose of conducting research on patient safety 
        under section 922(c)(3)(C).
            ``(6) Nonidentifiable information.--The term 
        `nonidentifiable information' means information that is 
        presented in a form and manner that prevents the identification 
        of any health care professional, patient, or reporter of 
        patient safety information. With respect to patients, such 
        information must be de-identified consistent with the 
        regulations promulgated pursuant to section 264(c) of the 
        Health Insurance Portability and Accountability Act of 1996 
        (Public Law 104-191; 110 Stat. 2033).
            ``(7) Patient safety information.--The term `patient safety 
        information' means any reports, records, memoranda, analyses, 
        deliberative work, statements, or root cause analyses that are 
        collected or developed to improve patient safety or health care 
        quality and that--
                    ``(A) are developed by a health care professional 
                for the purpose of reporting to a patient safety 
                organization and that are reported on a timely basis to 
                such an organization; or
                    ``(B) are collected or developed by a patient 
                safety organization or by the National Patient Safety 
                Database or National Patient Safety Research 
                Demonstration System, regardless of whether the 
                information is transmitted to the health care 
                professional that reported the original information.
            ``(8) Patient safety organization.--The term `patient 
        safety organization' means a private or public organization, or 
        component thereof, that is certified, through a process to be 
        determined by the Director under section 925, to perform each 
        of the following activities:
                    ``(A) The conduct, as the organization or 
                component's primary activity, of activities to improve 
                patient safety and the quality of health care delivery.
                    ``(B) The collection and analysis of patient safety 
                information that is submitted by health care 
                professionals.
                    ``(C) The development and dissemination of 
                evidence-based information to health care professionals 
                with respect to improving patient safety (such as 
                recommendations, protocols, or information regarding 
                best practices).
                    ``(D) The utilization of patient safety information 
                to carry out activities limited to those described 
                under this paragraph and for the purposes of 
                encouraging a culture of safety and of providing direct 
                feedback and assistance to health care professionals to 
                effectively minimize patient risk.
                    ``(E) The maintenance of appropriate 
                confidentiality with respect to identifiable 
                information.
                    ``(F) The provision of appropriate security 
                measures with respect to patient safety information.
                    ``(G) The submission of nonidentifiable information 
                to the Agency consistent with standards established by 
                the Director under section 924 for the National Patient 
                Safety Database.

``SEC. 922. PRIVILEGE.

    ``(a) In General.--Notwithstanding any other provision of law, 
patient safety information shall be privileged and confidential in 
accordance with this section.
    ``(b) Scope of Privilege.--Subject to the succeeding provisions of 
this section, such information shall not be--
            ``(1) subject to a civil or administrative subpoena;
            ``(2) subject to discovery in connection with a civil or 
        administrative proceeding;
            ``(3) disclosed pursuant to section 552 of title 5, United 
        States Code (commonly known as the Freedom of Information Act) 
        or any other similar Federal or State law; or
            ``(4) admitted as evidence or otherwise disclosed in any 
        Federal or State civil or administrative proceeding.
    ``(c) Exceptions to Privilege.--The privilege provided for under 
this section shall not apply to--
            ``(1) records of a patient's medical diagnosis and 
        treatment, patient or hospital records, other primary health 
        care information or other documents, records, or data that 
        exist separately from the process of collecting or developing 
        information for the purposes of this part;
            ``(2) information merely by reason of its inclusion, 
        report, or the fact of its submission, to a patient safety 
        organization, the National Patient Safety Database, or the 
        National Patient Safety Research Demonstration System; and
            ``(3) information available from sources other than a 
        report or submission made under this part, which may be 
        discovered or admitted in a Federal or State civil or 
        administrative proceeding, if discoverable or admissible under 
        applicable Federal or State law.
    ``(d) Disclosures.--Nothing in this section shall be construed to 
prohibit any of the following disclosures:
            ``(1) The disclosure of nonidentifiable information by a 
        health care professional, patient safety organization, or the 
        Director.
            ``(2) The disclosure of identifiable information by a 
        health care professional or patient safety organization, if 
        such disclosure--
                    ``(A) is authorized by the professional for the 
                purposes of improving quality and safety;
                    ``(B) is to an entity or person subject to the 
                requirements of section 264(c) of the Health Insurance 
                Portability and Accountability Act of 1996 (Public Law 
                104-191; 110 Stat. 2033), or any regulation promulgated 
                under such section; and
                    ``(C) is not in conflict with such section or any 
                regulation promulgated under such section.
            ``(3) The disclosure of patient safety information by a 
        professional or patient safety organization to the Food and 
        Drug Administration.
    ``(e) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to limit or extend other privileges that are 
        available under Federal or State laws, including peer review 
        and confidentiality protections.
            ``(2) Construction regarding use of patient safety 
        information.--
                    ``(A) Internal use permitted to improve patient 
                safety, quality, and efficiency.--Nothing in this part 
                shall be construed to limit a health care professional 
                from using patient safety information within the 
                professional to improve patient safety, health care 
                quality, or administrative efficiency of the 
                professional.
                    ``(B) Treatment.--Information that is collected as 
                patient safety information is not disqualified from 
                being treated as patient safety information because of 
                its use for the purposes described in subparagraph (A) 
                and such use shall not constitute a waiver of any 
                privilege or protection established under this section 
                or under State law.
            ``(3) State mandatory reporting requirements.--Nothing in 
        this part shall be construed as preempting or otherwise 
        affecting any mandatory reporting requirement for health care 
        professionals under State law.
    ``(f) Application of Privacy Regulations.--For purposes of applying 
the regulations promulgated pursuant to section 264(c) of the Health 
Insurance Portability and Accountability Act of 1996 (Public Law 104-
191; 110 Stat. 2033)--
            ``(1) patient safety organizations that collect or receive 
        identifiable information shall be treated as covered entities; 
        and
            ``(2) activities of such organizations described in section 
        923(b)(2)(A) in relation to a health care professional are 
        deemed to be health care operations of the professional.
Nothing in this section shall be construed to alter or affect the 
implementation of such regulation or such section 264(c).
    ``(g) Waivers.--
            ``(1) In general.--Nothing in this part shall be construed 
        as precluding a health care professional from waiving the 
        privilege established under this section.
            ``(2) Limitation.--The disclosure of patient safety 
        information pursuant to this part shall not constitute a waiver 
        of any other Federal or State privilege.
    ``(h) Continuation of Privilege.--Patient safety information of an 
organization that is certified as a patient safety organization shall 
continue to be privileged and confidential, in accordance with this 
section, if the organization's certification is terminated or revoked 
or if the organization otherwise ceases to qualify as a patient safety 
organization until the information is otherwise disposed of in 
accordance with section 925(g).
    ``(i) Penalty.--
            ``(1) Prohibition.--Except as provided in this part, and 
        subject to paragraph (2), it shall be unlawful for any person 
        to disclose patient safety information in violation of this 
        section.
            ``(2) Relation to hipaa.--The penalty under this subsection 
        for a disclosure described in paragraph (1) shall not apply if 
        the person making such disclosure is subject to a penalty under 
        section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996 (Public Law 104-191; 110 Stat. 
        2033), or any regulation promulgated under such section, for 
        such disclosure.
            ``(3) Amount.--Any person who violates paragraph (1) shall 
        be subject to a civil monetary penalty of not more than $25,000 
        for each such violation involved. Such penalty shall be imposed 
        and collected in the same manner as civil money penalties are 
        imposed and collected under subsection (a) of section 1128A of 
        the Social Security Act.
    ``(j) Survey and Report.--
            ``(1) Survey.--The Comptroller General of the United States 
        shall conduct a survey of State laws that relate to patient 
        safety information peer review systems, including laws that 
        establish an evidentiary privilege applicable to information 
        developed in such systems, and shall review the manner in which 
        such laws have been interpreted by the courts and the 
        effectiveness of such laws in promoting patient safety.
            ``(2) Report.--Not later than 9 months after the date of 
        enactment of this part, the Comptroller General shall prepare 
        and submit to Congress a report concerning the results of the 
        survey conducted under paragraph (1).

``SEC. 923. REPORTER PROTECTION.

    ``(a) In General.--A health care professional may not take an 
adverse employment action, as described in subsection (b), against an 
individual based upon the fact that the individual in good faith 
reported--
            ``(1) to the professional with the intention of having it 
        reported to a patient safety organization, or
            ``(2) directly to a patient safety organization,
information that would constitute patient safety information if the 
professional were to have submitted it on a timely basis to a patient 
safety organization in accordance with this part.
    ``(b) Adverse Employment Action.--For purposes of this section, an 
`adverse employment action' includes--
            ``(1) the failure to promote an individual or provide any 
        other employment-related benefit for which the individual would 
        otherwise be eligible;
            ``(2) an evaluation or decision made in relation to 
        accreditation, certification, credentialing or licensing of the 
        individual; and
            ``(3) a personnel action that is adverse to the individual 
        concerned.
    ``(c) Remedies.--The provisions of the first sentence of section 
1128A(a) of the Social Security Act shall apply with respect to a 
health care professional's violation of subsection (a) in the same 
manner as they apply to an act referred to in section 1128A(a)(7) of 
such Act.
    ``(d) Penalty.--Any person who violated the provisions of this 
section shall be subject to a fine of not more than $25,000, 
imprisonment for not more than 6 months, or both, per disclosure and 
payment of the costs of prosecution.

``SEC. 924. CENTER FOR QUALITY IMPROVEMENT AND PATIENT SAFETY.

    ``(a) In General.--The Director shall establish a center to be 
known as the Center for Quality Improvement and Patient Safety to carry 
out the duties described in subsection (b).
    ``(b) Duties.--
            ``(1) In general.--The Center shall carry out the following 
        duties:
                    ``(A) Conduct and support research, demonstrations, 
                and evaluations of the quality of health care and the 
                promotion of patient safety, and the measurement of 
                health care quality.
                    ``(B) Develop, evaluate, and disseminate methods 
                for identifying and promoting effective patient safety 
                programs.
                    ``(C) Provide for the certification and 
                recertification of patient safety organizations in 
                accordance with section 925.
                    ``(D) Establish a National Patient Safety Database 
                to collect, support, and coordinate the analysis of 
                nonidentifiable information submitted to the Database 
                in accordance with subsection (d).
                    ``(E) Establish a National Patient Safety Research 
                Demonstration System under which the Director will 
                enter into voluntary agreements with a geographically 
                and institutionally diverse group of eligible entities 
                to collect data for the purpose of conducting research 
                on patient safety.
                    ``(F) Facilitate the development of consensus, 
                including through annual meetings, among health care 
                professionals, patients, and other interested parties 
                concerning patient safety and recommendations to 
                improve patient safety.
                    ``(G) Provide technical assistance and support to 
                States that have (or are developing) medical errors 
                reporting systems, assist States in developing 
                standardized methods for data collection, and collect 
                data from State reporting systems for inclusion in the 
                National Patient Safety Database.
            ``(2) Consultation.--In carrying out the duties under 
        paragraph (1) (including the establishment of the Database), 
        the Director shall consult with and develop partnerships, as 
        appropriate, with health care organizations, health care 
        professionals, public and private sector entities, patient 
        safety organizations, health care consumers, and other relevant 
        experts to improve patient safety.
    ``(c) Implementation and Consultation.--In carrying out this 
section, the Director shall--
            ``(1) facilitate the development of patient safety goals 
        and track the progress made in meeting those goals; and
            ``(2) ensure that information submitted by a patient safety 
        organization to the National Patient Safety Database, as 
        provided for under subsection (d), is comparable and useful for 
        research and analysis and that the research findings and 
        patient safety alerts that result from such analyses are 
        presented in clear and consistent formats that enhance the 
        usefulness of such alerts.
    ``(d) National Patient Safety Database.--
            ``(1) In general.--The Director shall--
                    ``(A) establish a National Patient Safety Database 
                to collect nonidentifiable information concerning 
                patient safety that is reported on a voluntary basis 
                which shall be used to analyze national, regional, and 
                State trends and patterns in patient safety and medical 
                errors; and
                    ``(B) establish common formats for the voluntary 
                reporting of information under subparagraph (A), 
                including the establishment of necessary data elements, 
                common and consistent definitions, and a standardized 
                computer interface for the processing of such data.
        To the extent practicable, formats established under 
        subparagraph (A) shall be consistent with the administrative 
        simplification provisions of part C of title XI of the Social 
        Security Act.
            ``(2) Database.--In carrying out this subsection, the 
        Director--
                    ``(A) shall establish and modify as necessary 
                criteria to determine the organizations that may 
                voluntarily contribute to, and the data that comprises, 
                the National Patient Safety Database;
                    ``(B) shall ensure that the National Patient Safety 
                Database is only used by qualified entities or 
                individuals for purposes of research, education, and 
                enhancing patient safety as determined appropriate by 
                the Director in accordance with criteria applied by the 
                Director;
                    ``(C) may enter into contracts for the 
                administration of the Database with private and public 
                entities with experience in the administration of 
                similar databases;
                    ``(D) shall ensure that the methodologies for the 
                collection of nonidentifiable patient safety 
                information for the National Patient Safety Database 
                include the methodologies developed or recommended by 
                the Patient Safety Task Force of the Department of 
                Health and Human Services; and
                    ``(E) may, to the extent practicable, facilitate 
                the direct link of information between health care 
                professionals and patient safety organizations and 
                between patient safety organizations and the National 
                Patient Safety Database.
            ``(3) National patient safety research demonstration 
        system.--
                    ``(A) Establishment.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of this part, the 
                        Director shall establish a National Patient 
                        Safety Research Demonstration System under 
                        which the Director will enter into voluntary 
                        agreements with a geographically and 
                        institutionally diverse group of eligible 
                        entities to collect information for the purpose 
                        of conducting research on patient safety. The 
                        Director may contract with other organizations 
                        to carry out this paragraph.
                            ``(ii) Purpose.--The purpose of the 
                        demonstration system established under clause 
                        (i) is to conduct targeted research on patient 
                        safety and to test promising systems and 
                        methods of improving patient safety.
                            ``(iii) Number and types of 
                        organizations.--In carrying out clause (i), the 
                        Director shall determine the number and types 
                        of health care organizations with which to 
                        enter into agreements, as well as the types of 
                        patient safety events the particular health 
                        care organizations with which the Director 
                        enters into an agreement should identify and 
                        the types of analyses that such organizations 
                        should perform.
                    ``(B) Eligibility.--To be eligible to enter into an 
                agreement under subparagraph (A) an entity shall--
                            ``(i) be a health care organization; and
                            ``(ii) prepare and submit to the Director 
                        an application at such time, in such manner, 
                        and containing such information as the Director 
                        may require.
                    ``(C) Submission of reports.--
                            ``(i) In general.--A health care 
                        organization that enters into a voluntary 
                        agreement under subparagraph (A) shall, with 
                        respect to such organization, submit reports of 
                        patient safety events, or reports of specific 
                        types of patient safety events if so prescribed 
                        by the agreement, and shall submit, if 
prescribed by the agreement, root cause analyses concerning such events 
(using standards developed by the Director), and corrective action 
plans to the Director.
                            ``(ii) Processing of information.--The 
                        Director shall process the reports submitted 
                        under clause (i) in the same manner as reports 
                        are processed through the National Patient 
                        Safety Database.
                            ``(iii) Provision of recommendations.--The 
                        Director shall provide feedback concerning 
                        patient safety event reports directly to the 
                        health care organizations that are 
                        participating in the demonstration system under 
                        this paragraph.
                    ``(D) Technical assistance.--The Director shall 
                provide health care organizations participating in the 
                demonstration system under this paragraph with 
                technical support and may provide technology support, 
                including computer software and hardware, through the 
                patient safety improvement grants under section 932 and 
                section 934.
                    ``(E) Evaluation.--Upon the expiration of the 5-
                year period beginning on the date on which the 
                demonstration system is established under this 
                paragraph, the Director shall prepare 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 that includes--
                            ``(i) information on the types of data 
                        collected through the demonstration system;
                            ``(ii) research conducted with data 
                        collected through the demonstration system; and
                            ``(iii) the identification of promising 
                        systems and methods of reducing patient safety 
                        events.
                    ``(F) Rule of construction.--Nothing in this 
                paragraph shall be construed to preempt Federal or 
                State mandatory reporting or sentinel surveillance 
                systems in effect on the date of enactment of this 
                part, or Federal or State mandatory reporting or 
                sentinel surveillance systems developed after such date 
                of enactment.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each fiscal year to 
carry out this section.

``SEC. 925. PATIENT SAFETY ORGANIZATIONS.

    ``(a) Certification and Recertification.--
            ``(1) In general.--The initial certification and 
        recertification of a patient safety organization under section 
        924 shall be made under a process that is approved by the 
        Director and is consistent with criteria published by the 
        Director.
            ``(2) Revocation.--Such a certification or recertification 
        of a patient safety organization may be revoked by the Director 
        upon a showing of cause (including the disclosure of 
        information in violation of section 922).
            ``(3) Termination.--Such a certification provided for a 
        patient safety organization shall terminate (subject to 
        recertification) on the earlier of--
                    ``(A) the date that is 3 years after the date on 
                which such certification was provided; or
                    ``(B) the date on which the Director revokes the 
                certification.
    ``(b) Organization Requirements.--A patient safety organization 
shall meet the following criteria as conditions for certification:
            ``(1) The mission of the organization shall be to conduct 
        activities to improve patient safety and the quality of health 
        care delivery.
            ``(2) The organization shall collect and analyze patient 
        safety information that is voluntarily reported by more than 
        one health care professional on a local, regional, State, or 
        national basis.
            ``(3) The organization shall have appropriately qualified 
        staff, including licensed or certified medical professionals.
            ``(4) The organization is managed, controlled, and operated 
        independently from health care professionals that report 
        patient safety information to it under this part, and the 
        organization--
                    ``(A) does not have a material familial or 
                financial relationship (except for fees charged to 
                health care professionals) with any health care 
                professional from whom it receives patient safety 
                information;
                    ``(B) does not otherwise have a conflict of 
                interest with such a health care professional (as 
                determined under regulations); and
                    ``(C) is not a health insurer or other entity that 
                offers a group health plan or health insurance 
                coverage, or a component of such an entity.
            ``(5) The organization seeks to collect data from health 
        care professionals in a standardized manner that permits valid 
        comparisons of similar cases among similar health care 
        professionals.
            ``(6) The organization meets such other requirements as the 
        Director may by regulation require.
    ``(c) Limitation on Use of Patient Safety Information by Patient 
Safety Organizations.--A patient safety organization may not use 
patient safety information reported by a health care professional in 
accordance with this part to take regulatory or enforcement actions it 
otherwise performs (or is responsible for performing) in relation to 
such professional.
    ``(d) Technical Assistance.--The Director may provide technical 
assistance to patient safety organizations in providing recommendations 
and advice to health care professionals reporting patient safety 
information under this part. Such assistance shall include advice with 
respect to methodology, communication, dissemination of information, 
data collection, security, and confidentiality concerns.
    ``(e) Component Organizations.--If a patient safety organization is 
a component of a larger organization, the patient safety organization 
shall--
            ``(1) maintain patient safety information within the 
        component, separately from the rest of the larger organization, 
        and establish appropriate security measures to maintain the 
        confidentiality of the patient safety information;
            ``(2) not disclose patient safety information to the larger 
        organization; and
            ``(3) not create a conflict of interest with the larger 
        organization.
    ``(f) Construction.--Nothing in this part shall be construed to 
limit or discourage the reporting of information relating to patient 
safety within a health care professional.
    ``(g) Treatment of Information.--If an organization no longer 
qualifies as a patient safety organization under this section, with 
respect to any patient safety information that such organization 
received from a health care professional, the organization shall comply 
with one of the following:
            ``(1) With the approval of the professional and another 
        patient safety organization, the organization shall transfer 
        such information to such other organization.
            ``(2) If practicable, the organization shall return the 
        information to the professional.
            ``(3) The organization shall destroy the patient safety 
        information.

              ``PART D--PATIENT SAFETY IMPROVEMENT GRANTS

``SEC. 931. GRANTS FOR COMMUNITY PARTNERSHIPS FOR HEALTH CARE 
              IMPROVEMENT.

    ``(a) In General.--The Secretary shall award grants to eligible 
entities to enable such entities to establish, enhance or improve 
community partnerships for health care improvement among professionals 
within a community for the purpose of improving the quality of medical 
care, including the prescribing, dispensing, and use of prescription 
drugs, within such community.
    ``(b) Eligible Entities.--To be eligible to receive a grant under 
subsection (a) an entity shall--
            ``(1) be a--
                    ``(A) hospital;
                    ``(B) health care clinic;
                    ``(C) skilled nursing facility;
                    ``(D) non-profit entity, or component thereof, 
                established for the purpose of establishing, enhancing 
                or improving a community partnership for health care 
                improvement; or
                    ``(E) consortium of any of the entities described 
                in subparagraphs (A) through (D); and
            ``(2) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may reasonably require, including assurances 
        satisfactory to the Secretary that the community partnership 
        for health care improvement in connection with which the entity 
        is submitting the application does, at the time of application, 
        or will, within a reasonable amount of time from the date of 
        application, include the substantive participation of a broad 
        range of entities (that may include professionals, payers, 
        patients, and governmental entities) involved in the delivery 
        of health care within the community.
    ``(c) Limitations.--In carrying out subsection (a), the Secretary 
shall not--
            ``(1) award any single entity more than $2,000,000 in any 
        single fiscal year; or
            ``(2) award grants under this section to any single entity 
        for more than 3 fiscal years.
    ``(d) Definition.--In this section, the term `community partnership 
for health care improvement' means a formal cooperative arrangement 
including health care facilities and nonprofit organizations within a 
community that--
            ``(1) is entered into for the purpose of significantly 
        reducing the incidence of patient safety events or 
        significantly improving the quality of health care, including 
        the appropriate use of prescription drugs, at health care 
        facilities participating in such partnership using one or more 
        quantifiable indicators of such improvement;
            ``(2) collects quantifiable data on the incidence of 
        patient safety events or on the quality of health care in 
        connection with one or more specific medical procedures 
        conducted at the health care facilities participating in such 
        partnerships;
            ``(3) makes available to the health care facilities 
        participating in such partnership the data described in 
        paragraph (2); and
            ``(4) promotes cooperation and communication among 
        professionals employed by the health care facilities 
        participating in such partnership for the purposes described in 
        paragraph (1).
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 
2004, and such sums as may be necessary for each subsequent fiscal 
year.

``SEC. 932. TECHNICAL STANDARDS FOR HEALTH CARE INFORMATION TECHNOLOGY 
              SYSTEMS.

    ``(a) In General.--By not later than 2 years after the date of the 
enactment of this part, the Secretary shall develop or adopt (and shall 
periodically review and update) voluntary, national standards--
            ``(1) that promote the interoperability of health care 
        information technology systems across all health care settings; 
        and
            ``(2) for computerized physician order entry systems, 
        including standards relating to--
                    ``(A) data formats or other methods of encoding 
                medical information that facilitate transfer of data 
                among such systems;
                    ``(B) the protection of the confidentiality of 
                individually identifiable health information contained 
                within such systems from unauthorized access or 
                disclosure;
                    ``(C) procedures for issuing warnings when 
                prescribing errors may be imminent;
                    ``(D) procedures for ensuring that recommendations 
                or warnings issued by such systems reflect good medical 
                practice; and
                    ``(E) other matters determined appropriate by the 
                Secretary.
    ``(b) Cost and Increased Efficiency.--In promulgating regulations 
to carry out this section, the Secretary shall take into account the 
cost that meeting the standards under subsection (a) would have on 
providing health care in the United States and the increased 
efficiencies in providing such care achieved under the standards.
    ``(c) Consultation and Coordination.--The Secretary shall develop 
and update the standards under subsection (a) in consultation with (and 
with coordination between)--
            ``(1) the National Committee for Vital and Health 
        Statistics;
            ``(2) the Medical Information Technology Advisory Board 
        (established under section 933); and
            ``(3) the Secretary of Veterans Affairs and the Secretary 
        of Defense.
    ``(d) Dissemination.--The Secretary shall provide for the 
dissemination of the standards developed and updated under this 
section.
    ``(e) Limitation.--Effective beginning on the date that is 4 years 
after the date of enactment of this part, the Secretary may not 
purchase any health care information technology system unless such 
system conforms to the standards developed or adopted under subsection 
(a), to the extent that such standards have been developed or adopted.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each fiscal year to 
carry out this section.

``SEC. 933. MEDICAL INFORMATION TECHNOLOGY ADVISORY BOARD.

    ``(a) Establishment.--
            ``(1) In general.--Not later than 3 months after the date 
        of the enactment of this part, the Secretary shall appoint an 
        advisory board to be known as the `Medical Information 
        Technology Advisory Board' (in this section referred to as the 
        `MITAB').
            ``(2) Chairperson.--The Secretary shall designate one 
        member of the MITAB to serve as the chairperson. The 
        chairperson shall be an individual affiliated with an 
        organization having expertise creating American National 
        Standards Institute (ANSI) accepted standards in health care 
        information technology and a member of the National Committee 
        for Vital and Health Statistics.
    ``(b) Composition.--
            ``(1) In general.--The MITAB shall consist of not more than 
        17 members that include--
                    ``(A) experts from the fields of medical 
                information, information technology, medical continuous 
                quality improvement, medical records security and 
                privacy, individual and institutional health care 
                clinical professionals, health researchers, and health 
                care purchasers;
                    ``(B) one or more staff experts from each of the 
                following: the Centers for Medicare & Medicaid 
                Services, the Agency for Healthcare Research and 
                Quality, and the Institute of Medicine of the National 
                Academy of Sciences;
                    ``(C) representatives of private organizations with 
                expertise in medical informatics;
                    ``(D) a representative of a teaching hospital;
                    ``(E) one or more representatives of the health 
                care information technology industry; and
                    ``(F) a representative of an organization 
                representing health care consumers.
            ``(2) Terms of appointment.--The term of any appointment 
        under paragraph (1) to the MITAB shall be for 2 years. Such an 
        appointment may be renewed for one additional term.
            ``(3) Meetings.--The MITAB shall meet at the call of its 
        chairperson or a majority of its members.
            ``(4) Vacancies.--A vacancy on the MITAB shall be filled in 
        the same manner in which the original appointment was made not 
        later than 30 days after the MITAB is given notice of the 
        vacancy and shall not affect the power of the remaining members 
        to execute the duties of the MITAB.
            ``(5) Compensation.--Members of the MITAB shall receive no 
        additional pay, allowances, or benefits by reason of their 
        service on the MITAB.
            ``(6) Expenses.--Each member of the MITAB shall receive 
        travel expenses and per diem in lieu of subsistence in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
    ``(c) Duties.--
            ``(1) In general.--The MITAB shall on an ongoing basis 
        advise, and make recommendations to, the Secretary regarding 
        medical information technology, including the following:
                    ``(A) The best current practices in medical 
                information technology.
                    ``(B) Methods for the adoption (not later than 2 
                years after the date of the enactment of this part) of 
                a uniform health care information system interface 
                between and among old and new computer systems.
                    ``(C) Recommendations for health care vocabulary, 
                messaging, and other technology standards (including a 
                common lexicon for computer technology) necessary to 
                achieve the interoperability of health care information 
                systems for the purposes described in subparagraph (E).
                    ``(D) Methods of implementing--
                            ``(i) health care information technology 
                        interoperability standardization; and
                            ``(ii) records security.
                    ``(E) Methods to promote information exchange among 
                health care professionals so that long-term 
                compatibility among information systems is maximized, 
                in order to do one or more of the following:
                            ``(i) To maximize positive outcomes in 
                        clinical care--
                                    ``(I) by providing decision support 
                                for diagnosis and care; and
                                    ``(II) by assisting in the 
                                emergency treatment of a patient 
                                presenting at a facility where there is 
                                no medical record for the patient.
                            ``(ii) To contribute to (and be consistent 
                        with) the development of the patient assessment 
                        instrument provided for under section 545 of 
                        the Medicare, Medicaid, and SCHIP Benefits 
                        Improvement and Protection Act of 2000, and to 
                        assist in minimizing the need for new and 
                        different records as patients move from 
                        professional to professional.
                            ``(iii) To reduce or eliminate the need for 
                        redundant records, paperwork, and the 
                        repetitive taking of patient histories and 
                        administering of tests.
                            ``(iv) To minimize medical errors, such as 
                        administration of contraindicated drugs.
                            ``(v) To provide a compatible information 
                        technology architecture that facilitates future 
                        quality and cost-saving needs and that avoids 
                        the financing and development of information 
                        technology systems that are not readily 
                        compatible.
            ``(2) Reports.--
                    ``(A) Initial report.--Not later than 18 months 
                after the date of the enactment of this part, the MITAB 
                shall submit to Congress and the Secretary an initial 
                report concerning the matters described in paragraph 
                (1). The report shall include--
                            ``(i) the practices described in paragraph 
                        (1)(A), including the status of health care 
                        information technology standards being 
                        developed by private sector and public-private 
                        groups;
                            ``(ii) recommendations for accelerating the 
                        development of common health care terminology 
                        standards;
                            ``(iii) recommendations for completing 
                        development of health care information system 
                        messaging standards; and
                            ``(iv) progress toward meeting the deadline 
                        described in paragraph (1)(B) for adoption of 
                        methods described in such paragraph.
                    ``(B) Subsequent reports.--During each of the 2 
                years after the year in which the report is submitted 
                under subparagraph (A), the MITAB shall submit to 
                Congress and the Secretary an annual report relating to 
                additional recommendations, best practices, results of 
                information technology improvements, analyses of 
                private sector efforts to implement the 
                interoperability standards established in section 1184 
                of the Social Security Act, and such other matters as 
                may help ensure the most rapid dissemination of best 
                practices in health care information technology.
    ``(d) Staff and Support Services.--
            ``(1) Executive director.--
                    ``(A) Appointment.--The Chairperson shall appoint 
                an executive director of the MITAB.
                    ``(B) Compensation.--The executive director shall 
                be paid the rate of basic pay for level V of the 
                Executive Schedule.
            ``(2) Staff.--With the approval of the MITAB, the executive 
        director may appoint such personnel as the executive director 
        considers appropriate.
            ``(3) Applicability of civil service laws.--The staff of 
        the MITAB shall be appointed without regard to the provisions 
        of title 5, United States Code, governing appointments in the 
        competitive service, and shall be paid without regard to the 
        provisions of chapter 51 and subchapter III of chapter 53 of 
        such title (relating to classification and General Schedule pay 
        rates).
            ``(4) Experts and consultants.--With the approval of the 
        MITAB, the executive director may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code.
    ``(e) Powers.--
            ``(1) Hearings and other activities.--For the purpose of 
        carrying out its duties, the MITAB may hold such hearings and 
        undertake such other activities as the MITAB determines to be 
        necessary to carry out its duties.
            ``(2) Detail of federal employees.--Upon the request of the 
        MITAB, the head of any Federal agency is authorized to detail, 
        without reimbursement, any of the personnel of such agency to 
        the MITAB to assist the MITAB in carrying out its duties. Any 
        such detail shall not interrupt or otherwise affect the civil 
        service status or privileges of the Federal employee.
            ``(3) Technical assistance.--Upon the request of the MITAB, 
        the head of a Federal agency shall provide such technical 
        assistance to the MITAB as the MITAB determines to be necessary 
        to carry out its duties.
            ``(4) Obtaining information.--The MITAB may secure directly 
        from any Federal agency information necessary to enable it to 
        carry out its duties, if the information may be disclosed under 
        section 552 of title 5, United States Code. Upon request of the 
        Chairperson of the MITAB, the head of such agency shall furnish 
        such information to the MITAB.
    ``(f) Termination.--The MITAB shall terminate 30 days after the 
date of submission of its final report under subsection (c)(2)(B).
    ``(g) Testing.--The Secretary, in consultation with the MITAB, 
shall test the efficacy, usability, and scalability, of standards 
within a variety of clinical settings that may include a rural hospital 
or community health center, a community hospital, a children's 
hospital, and an urban academic center.
    ``(h) Applicability of FACA.--The provisions of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall apply to the MITAB.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Health and Human Services such sums as 
are necessary to carry out this section.

``SEC. 934. 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 any computerized physician order entry systems, 
        for which amounts are to be expended under an award made under 
        subsection (a), conform to the technical standards established 
        by the Secretary for such systems under section 932(a)(2).
    ``(c) Matching Requirement.--
            ``(1) In general.--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 $2 of Federal funds provided under the grant.
            ``(2) Determination of amount contributed.--Non-Federal 
        contributions required in paragraph (1) may be in cash or in 
        kind, fairly evaluated, including equipment or services. 
        Amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government, may not be included in determining the amount of 
        such non-Federal contributions.
    ``(d) Study.--
            ``(1) In general.--The Secretary, acting through The 
        Director of the Agency for Healthcare Research and Quality, 
        shall support a study to assess existing scientific evidence 
        regarding the effectiveness and cost-effectiveness of the use 
        of electronic prescription programs intended to improve the 
        efficiency of prescription ordering and the safe and effective 
        use of prescription drugs. The study shall address the 
        following:
                    ``(A) The ability of such programs to reduce 
                medical errors and improve the quality and safety of 
                patient care.
                    ``(B) The impact of the use of such programs on 
                physicians, pharmacists, and patients, including such 
                factors as direct and indirect costs, changes in 
                productivity, and satisfaction.
                    ``(C) The effectiveness of strategies for 
                overcoming barriers to the use of electronic 
                prescription programs.
            ``(2) Report.--The Secretary shall ensure that, not later 
        than 18 months after the date of enactment of this part, a 
        report containing the findings of the study under paragraph (1) 
        is submitted to the appropriate committees of the Congress.
            ``(3) Dissemination of findings.--The Secretary shall 
        disseminate the findings of the study under paragraph (1) to 
        appropriate public and private entities.
    ``(e) Definitions.--In this section and section 932:
            ``(1) Computerized physician order entry system.--The term 
        `computerized physician order entry system' means an 
        information technology system that--
                    ``(A) shall--
                            ``(i) permit a qualified practitioner who 
                        wishes to enter a medication order for a 
                        patient to enter such order via a computer that 
                        is linked to a database capable of accessing 
                        the medical record of the patient who is 
                        intended to receive such medication;
                            ``(ii) incorporate prescribing error 
                        prevention software so that a warning 
                        (including documentation regarding the cause of 
                        such warning) is generated by such system if a 
                        medication order is entered that is likely to 
                        lead to an adverse drug event; and
                            ``(iii) require documented acknowledgment 
                        that a qualified practitioner entering a 
                        medication order that has generated the warning 
                        described in clause (ii) has read the 
                        appropriate documentation regarding the cause 
                        of such warning prior to overriding such 
                        warning; and
                    ``(B) may allow for the electronic submission of 
                prescriptions to pharmacies or pharmacy benefit 
                managers and the processing of such submissions by 
                pharmacies.
            ``(2) Qualified practitioner.--The term `qualified 
        practitioner' means a practitioner licensed to administer 
        prescription drugs.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $100,000,000 for fiscal year 
2004, and such sums as may be necessary for each of fiscal years 2005 
through 2008.

``SEC. 935. GRANTS FOR INFORMATICS SYSTEMS.

    ``(a) In General.--The Secretary may establish a program to make 
grants to eligible entities for the purpose of assisting such entities 
in offsetting the costs related to purchasing, leasing, licensing, 
developing, and implementing standardized clinical health care 
informatics systems, other than computerized prescriber order entry 
systems, that are designed to improve patient safety and reduce adverse 
events and health care complications resulting from medication errors.
    ``(b) Costs Defined.--In this section, the term `costs' includes 
total expenditures incurred for--
            ``(1) purchasing, leasing, licensing, and installing 
        computer software and hardware;
            ``(2) making improvements to existing computer software and 
        hardware;
            ``(3) purchasing or leasing communications capabilities 
        necessary for clinical data access, storage, and exchange; and
            ``(4) providing education and training to eligible entity 
        staff on computer patient safety information systems.
    ``(c) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be a hospital, health care clinic, community health 
        center, skilled nursing facility, patient safety organization, 
        or other entity determined to be eligible by the Secretary; and
            ``(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 type 
        of informatics system that the entity intends to implement 
        using amounts received under the grant.
    ``(d) Types of Imformatics Systems.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this part, the Secretary shall identify the 
        informatics systems, other than computerized physician order 
        entry systems, and other information technology or 
        telecommunications systems demonstrated to improve patient 
        safety and reduce adverse events and health care complications 
        resulting from medication errors, that may be adopted and 
        applied by eligible entities through funds under this section.
            ``(2) Systems.--The systems described in paragraph (1) may 
        include bar coding, software to collect and analyze medication 
        errors, clinical decision-support systems, software to detect 
        inappropriately prescribed drugs or doses, drug utilization 
        review programs, and disease management systems.
    ``(e) Matching Requirement.--
            ``(1) In general.--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.
            ``(2) Determination of amount contributed.--Non-Federal 
        contributions required in paragraph (1) may be in cash or in 
        kind, fairly evaluated, including equipment or services. 
        Amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government, may not be included in determining the amount of 
        such non-Federal contributions.
    ``(f) Additional Information.--An eligible entity receiving a grant 
under this section shall furnish the Secretary with such information as 
the Secretary may require to--
            ``(1) evaluate the project for which the grant is made, 
        including how the project has improved patient safety and has 
        reduced patient safety events and health care complications 
        resulting from medication errors; and
            ``(2) ensure that funding provided under the grant is 
        expended for the purposes for which it is made.
    ``(g) Reports.--
            ``(1) Interim reports.--
                    ``(A) In general.--The Secretary shall submit, at 
                least annually, a report to the Committee on Health, 
                Education, Labor, and Pensions of the Senate and the 
                Committee on Energy and Commerce of the House of 
                Representatives on the grant program established under 
                this section.
                    ``(B) Contents.--A report submitted pursuant to 
                subparagraph (A) shall include information on--
                            ``(i) the number of grants made;
                            ``(ii) the nature of the projects for which 
                        funding is provided under the grant program;
                            ``(iii) the geographic distribution of 
                        grant recipients; and
                            ``(iv) such other matters as the Secretary 
                        determines appropriate.
            ``(2) Final report.--Not later than 5 years after the date 
        of enactment of this part, the Secretary shall submit a final 
        report to the committees referred to in paragraph (1)(A) on the 
        grant program.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 
2004, and such sums as may be necessary for each subsequent fiscal 
year.''.

``SEC. 936. GRANTS FOR PATIENT SAFETY RESEARCH.

    ``(a) In General.--The Secretary may conduct research and award 
grants to promote research on patient safety.
    ``(b) Process.--The Secretary shall establish a formal process to 
gather information on priorities, methodologies and approaches for 
medical errors, including medication errors, and patient safety 
research. In gathering such information, the Secretary shall ensure 
that input is obtained from a wide range of individuals and 
organizations who will use and can benefit from the availability of 
such information.
    ``(c) Coordination.--The Secretary shall ensure that activities are 
carried out under subsection (a) in cooperation and coordination with 
existing research initiatives, programs, and activities.
    ``(d) Other Industries.--In carrying out this section, the 
Secretary shall consider the experiences of other industries in 
reducing errors within such industries and the processes that such 
industries employ to reduce errors.
    ``(e) Issues.--The issues to be addressed with respect to the 
research to be conducted and supported under this subsection may 
include--
            ``(1) the types and causes of errors in the provision of 
        health care, both in the United States and internationally, 
        such as those identified by the reporting system developed by 
        the Linnaeus Collaboration and the United States Pharmacopeia;
            ``(2) the identification and comparison of trends in errors 
        in geographically and demographically diverse health care 
        facilities;
            ``(3) training requirements for health care professionals 
        to ensure that such professionals provide quality health care 
        generally, in specific settings, and for specific practices;
            ``(4) the development of effective communication methods 
        and tools between disciplines to improve patient safety;
            ``(5) the use of interdisciplinary teams to improve patient 
        safety;
            ``(6) the barriers to medical error reduction strategies;
            ``(7) the use of standardized processes in providing 
        medication, including the application of these processes in 
        demographically diverse health care facilities;
            ``(8) the application of a national standardized taxonomy 
        for medication errors;
            ``(9) the effect of educational programs on the consistent 
        application of standardized definitions, terminology, and 
        formats; and
            ``(10) other areas determined appropriate by the Secretary.
    ``(f) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) be a patient safety organization, health care 
        professional, health care professional association, research 
        organization, university, or other entity determined to be 
        eligible by the Secretary; and
            ``(2) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 
2004, and such sums as may be necessary for each subsequent fiscal 
year.''.

SEC. 604. REQUIRED USE OF PRODUCT IDENTIFICATION TECHNOLOGY.

    The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is 
amended--
            (1) in section 502, by adding at the end the following:
    ``(u) If it is a drug or biological product, unless it includes a 
unique product identifier for the drug or biological product as 
required by regulations under section 510(o).''; and
            (2) in section 510, by adding at the end the following:
    ``(o)(1) The Secretary shall issue, and may periodically revise, 
regulations requiring the manufacturer of any drug or biological 
product, or the packager or labeler of a drug or biological product, to 
include a unique product identifier on the packaging of the drug or 
biological product.
    ``(2) For purposes of this subsection, the term `unique product 
identifier' means an identification that--
            ``(A) is affixed by the manufacturer, labeler, or packager 
        to each drug or biological product described in paragraph (1);
            ``(B) uniquely identifies the item and meets the standards 
        required by this section; and
            ``(C) can be read by a scanning device or other technology 
        acceptable to the Secretary.
    ``(3) A unique product identifier required by regulations issued or 
revised under paragraph (1) shall be based on--
            ``(A) the National Drug Code maintained by the Food and 
        Drug Administration;
            ``(B) commercially accepted standards established by 
        organizations that are accredited by the American National 
        Standards Institute, such as the Health Industry Business 
        Communication Council or the Uniform Code Council; or
            ``(C) other identification formats that the Secretary deems 
        appropriate.
    ``(4) The Secretary may, at the Secretary's discretion, waive the 
requirements of this subsection, or add additional provisions that are 
necessary to safeguard the public health.''.
                                 <all>