[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2234 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2234

To authorize the Secretary of Health and Human Services to make health 
         information technology grants, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 2005

Mr. Murphy (for himself and Mr. Kennedy of Rhode Island) introduced the 
   following bill; which was referred to the Committee on Energy and 
  Commerce, and in addition to the Committee on Ways and Means, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To authorize the Secretary of Health and Human Services to make health 
         information technology grants, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``21st Century Health Information Act 
of 2005''.

SEC. 2. FINDINGS; PURPOSE.

    (a) Findings.--
            (1) According to the Institute for Safe Medication 
        Practices, pharmacists make over 150 million calls to 
        physicians for clarification of illegible prescriptions each 
        year and electronic prescribing can reduce follow-up calls 
        between pharmacists and doctors by over 50 percent.
            (2) A study by the Journal of the American Medical 
        Association found that laboratory and radiology results, 
        letters, and medical histories were missing during 13.6 percent 
        of 1,614 patient visits. In 44 percent of these cases, doctors 
        felt that the missing information had the potential to 
        adversely affect a patient's well-being.
            (3) A study by the Rand Corporation found that patients 
        only receive recommended care about 55 percent of the time.
            (4) A study of emerging infectious diseases finds that 
        preventable health care acquired infections cost $4.5 billion 
        per year and contributed to more than 88,000 deaths -- one 
        death every 6 minutes.
            (5) The Centers for Disease Control and Prevention reports 
        that United States patients are prescribed improper medications 
        in about 1 out of every 12 physician visits. An estimated 16.7 
        million physician visits for the elderly result in prescription 
        errors per year.
            (6) A March 2001 Institute of Medicine (IOM) study called 
        ``Crossing the Quality Chasm: A New Health System for the 21st 
        Century'' concludes that in order to improve quality, the 
        Nation must have a national commitment to building an 
        information infrastructure to support health care delivery, 
        consumer health, quality measurement and improvement, public 
        accountability, clinical and health services research, and 
        clinical education.
            (7) An October 2003 Government Accountability Office report 
        found that the benefits of an electronic health care 
        information system included improved quality of care, reduced 
        costs associated with medication errors, more accurate and 
        complete medical documentation, more accurate capture of codes 
        and charges, and improved communication among providers 
        enabling them to respond more quickly to patients' needs.
            (8) In January 2004, the President stated that ``by 
        computerizing health records, we can avoid dangerous medical 
        mistakes, reduce costs, and improve care'' and outlined a plan 
        to ensure that most Americans have electronic health records 
        within the next 10 years.
    (b) Purpose.--The Secretary of Health and Human Services shall 
implement this Act for the purpose of developing interoperable regional 
health information networks and promoting the adoption of health 
information technology products.

SEC. 3. HEALTH INFORMATION TECHNOLOGY GRANTS.

    (a) Grant Authorization.--
            (1) In general.--The Secretary may make not more than 20 
        grants to regional health information organizations to enable 
        each grantee to develop and implement over a 3-year period a 
        regional health information technology plan that provides for--
                    (A) a health information network that will serve a 
                geographic area that--
                            (i) is located in 1 or more States; and
                            (ii) does not include any area to be served 
                        by the health information network of any other 
                        grantee under this section;
                    (B) a plan to finance acquisition and 
                implementation of technology by health care providers 
                as needed to allow participation by the providers in 
                the network; and
                    (C) a plan to use the network to improve patient 
                safety, quality, and efficiency within the health care 
                system.
            (2) Use of funds.--The Secretary may not make a grant to a 
        regional health information organization under this section 
        unless the organization agrees to use the grant--
                    (A) to develop and implement a regional health 
                information technology plan described in paragraph (3) 
                for submission to the Secretary under paragraph (4); 
                and
                    (B) to begin implementation of the plan not later 
                than the beginning of the second year of the grant.
            (3) Regional health information technology plan.--
                    (A) In general.--A regional health information 
                technology plan shall provide for--
                            (i) the establishment and implementation in 
                        a specified geographic area of a regional 
                        health information network that--
                                    (I) allows the seamless, secure, 
                                electronic sharing of health 
                                information among health care 
                                providers, health plans, and other 
                                authorized users;
                                    (II) provides consumers with 
                                secure, electronic access to their own 
                                health information;
                                    (III) meets data standards for 
                                interoperability adopted by the 
                                Secretary, including any standards 
                                providing for interoperability among 
                                regional health information networks;
                                    (IV) provides for interoperability 
                                with any health information technology 
                                product certified by the certification 
                                entity described in section 4(a);
                                    (V) meets the privacy requirements 
                                of subsection (b);
                                    (VI) gives patients the option of 
                                allowing only designated health care 
                                providers to access their individually 
                                identifiable information concerning 
                                diagnosis and treatment of sexually 
                                transmitted diseases, addiction, and 
                                mental illnesses;
                                    (VII) provides such public health 
                                reporting capability as the Secretary 
                                requires;
                                    (VIII) allows for such reporting 
                                of, and access to, health information 
                                for purposes of research (other than 
                                individually identifiable patient 
                                health information) as the Secretary 
                                requires; and
                                    (IX) allows for the reporting of 
                                provider-specific health information 
                                (other than individually identifiable 
                                patient health information) required 
                                for the calculation of any voluntary 
                                consensus standard endorsed by the 
                                National Quality Forum;
                            (ii) the financing and technical assistance 
                        required to allow health care providers, 
                        especially small physician groups, to acquire 
                        and implement electronic medical records or 
                        other technology necessary to participate in 
                        the regional health information network; and
                            (iii) agreements among health care 
                        stakeholders regarding data reporting, 
                        reimbursement practices, or other mechanisms to 
                        use the regional health information network to 
                        improve patient safety, quality, and efficiency 
                        within the health care system.
                    (B) Contents.--A regional health information 
                technology plan shall--
                            (i) be developed with the participation and 
                        widespread support of all health care 
                        stakeholders of the geographic area to be 
                        served by the grantee's health information 
                        network, including but not limited to 
                        hospitals, practicing physicians (including 
                        those from small physician groups), nursing 
                        facilities and skilled nursing facilities, 
                        other health care providers, health plans, 
                        employers, and patient groups;
                            (ii) describe the governance structure of 
                        the health information network;
                            (iii) describe the technologies and 
                        systems, including interoperability data 
                        standards, that will be used to establish a 
                        health information network consistent with 
                        paragraph (A)(i);
                            (iv) explain what information will be able 
                        to be accessed, transferred, or exchanged 
                        through the health information network and what 
                        capabilities the network will have to include 
                        other types of information in the future;
                            (v) describe plans to ensure network 
                        reliability, expected frequency of network 
                        interruptions, and backup procedures in the 
                        event of network interruptions;
                            (vi) describe sources of initial financing 
                        for the development of the health information 
                        network and a financing model for long-term 
                        sustainability of the network;
                            (vii) describe sources of financing the 
                        acquisition, implementation, and maintenance of 
                        technology necessary to allow health care 
                        providers, especially small physician groups, 
                        to participate in the health information 
                        network;
                            (viii) describe how the health information 
                        network will be used to improve health care 
                        quality and the health outcomes of patients;
                            (ix) establish how administrative and 
                        clinical savings resulting from widespread use 
                        of the new health information network will be 
                        accounted for and allocated;
                            (x) explain how the regional health 
                        information organization involved will ensure 
                        widespread participation by health care 
                        providers (especially small physician groups) 
                        in the grantee's health information network and 
                        what support and assistance will be available 
                        to physicians seeking to integrate health 
                        information technologies into their practices;
                            (xi) describe how patients and caregivers 
                        who are not health care providers will be able 
                        to access and utilize the health information 
                        network;
                            (xii) explain how the grantee's health 
                        information network will protect patient 
                        privacy and maintain security; and
                            (xiii) explain how the grantee will ensure 
                        the participation of health care providers 
                        serving minority communities, including 
                        communities in which English is not the primary 
                        language spoken.
            (4) Approval of plan.--
                    (A) Submission by grantees.--Not later than the end 
                of the first year for which a regional health 
                information organization receives a grant under this 
                subsection, the organization shall submit its regional 
                health information technology plan to the Secretary.
                    (B) Submission by other organizations.--A regional 
                health information organization that has not received a 
                grant under this subsection may, at its discretion, 
                submit a regional health information technology plan to 
                the Secretary.
                    (C) Approval.--The Secretary shall approve or 
                disapprove each regional health information technology 
                plan submitted to the Secretary under this paragraph 
                based on whether the plan complies with the 
                requirements of this subsection.
                    (D) Effect of failure to approve.--The Secretary 
                may not make any payment under this subsection to a 
                regional health information organization for the second 
                or third year for which the organization receives a 
                grant unless the Secretary has approved the 
                organization's regional health information technology 
                plan.
                    (E) Geographic exclusivity.--The Secretary may not 
                approve a regional health information technology plan 
                under this paragraph if the plan applies to a 
                geographic area for which the Secretary has already 
                approved a regional health information technology plan 
                under this paragraph, irrespective of whether the 
                approved regional health information technology plan 
                was submitted by a grantee under subparagraph (A) or by 
                an organization under subparagraph (B).
            (5) Selection.--In selecting grant recipients under this 
        section, the Secretary shall take into account--
                    (A) existing technological and organizational 
                infrastructure upon which the health information 
                network can build;
                    (B) the extent of stakeholder participation;
                    (C) health care provider participation commitments;
                    (D) capacity to measure quality and efficiency 
                improvements;
                    (E) replicability;
                    (F) the extent of the opportunity for a plan to 
                improve health care quality and the health outcomes of 
                patients in the region to be served;
                    (G) the extent to which an applicant intends to 
                develop a regional health information technology plan 
                that covers a complete medical market area (as defined 
                by the Secretary);
                    (H) the extent to which an applicant's proposed 
                network will allow the exchange of machine-computable 
                data among providers;
                    (I) geographical diversity of grantees; and
                    (J) such other factors as the Secretary considers 
                relevant.
    (b) Privacy Protections.--
            (1) In general.--Any health information network funded in 
        whole or in part under this section shall--
                    (A) comply with the privacy protections of 
                regulations promulgated pursuant to section 264(c) of 
                the Health Insurance Portability and Accountability Act 
                of 1996 (Public Law 104-191; 110 Stat. 2033); and
                    (B) allow patients to exclude their health 
                information from the health information network.
            (2) Unauthorized disclosure.--In the event of the 
        unauthorized access to or disclosure of individually 
        identifiable patient health information by or through a health 
        information network funded in whole or in part under this 
        section, the operator of such network shall--
                    (A) report the conditions of such unauthorized 
                access or disclosure to the Secretary in such manner as 
                the Secretary requires; and
                    (B) provide notice to any individuals whose patient 
                health information may have been compromised in 
                violation of this subsection as a result of such 
                unauthorized access or disclosure.
    (c) Application.--To seek a grant under this section, an applicant 
shall submit an application to the Secretary in such form, in such 
manner, and containing such information and assurances as the Secretary 
may require.
    (d) Technical Assistance.--
            (1) In general.--The Secretary shall provide to regional 
        health information organizations such technical assistance as 
        the Secretary deems appropriate to carry out this section, 
        including assistance relating to questions of governance, 
        financing, and technological approaches to the creation of 
        health information networks.
            (2) National technical assistance center.--
                    (A) Establishment.--The Director of the Agency for 
                Healthcare Research and Quality shall by contract or 
                grant establish and maintain a national technical 
                assistance center to provide assistance to physicians 
                described in subparagraph (B) to facilitate successful 
                adoption of health information technologies and 
                participation in the development and implementation of 
                regional health information technology plans by such 
                physicians.
                    (B) Physicians.--The national technical assistance 
                center shall provide assistance to physicians in 
                geographical areas served by a health information 
                network that has been accredited or provisionally 
                accredited under subsection (e).
                    (C) Priority.--In providing assistance to 
                physicians under this paragraph, the national technical 
                assistance centers shall--
                            (i) give priority to physicians in small 
                        physician groups; and
                            (ii) as resources allow, provide assistance 
                        to physicians in larger groups.
                    (D) Requirements.--Technical assistance provided 
                under this paragraph shall, at a minimum, include the 
                following:
                            (i) A clearinghouse of best practices, 
                        guidelines, and implementation strategies 
                        directed at the small medical practices that 
                        plan to adopt electronic medical records, 
                        electronic prescribing, and other health 
                        information technologies.
                            (ii) A change management tool kit to enable 
                        physicians and their office staffs to 
                        successfully prepare practice workflows for 
                        adoption of electronic medical records and 
                        electronic prescribing, to receive guidance in 
                        the selection of vendors of health information 
                        technology products and services that are 
                        appropriate within the context of the 
                        individual practice and the community setting, 
                        to implement health information technology 
                        solutions and manage the project at the 
                        practice level, and to address the ongoing need 
                        for upgrades, maintenance, and security of 
                        office-based health information technologies.
                            (iii) The capability to provide 
                        consultations and advice to small medical 
                        practices to facilitate adoption of health 
                        information technologies.
    (e) Accreditation.--
            (1) In general.--Not later than the date that is 1 year 
        after the date of the enactment of this Act, the Secretary 
        shall establish a program of accrediting health information 
        networks that are in compliance with the requirements of 
        subparagraph (A) of subsection (a)(3), subsection (b), and any 
        other requirements of the national health information 
        infrastructure as established by the Secretary.
            (2) Provisional accreditation.--The program under this 
        subsection shall include a process for provisional 
        accreditation of networks that are in the process of being 
        implemented. Approval of a regional health information 
        technology plan by the Secretary under subsection (a)(4) is 
        deemed to constitute initial provisional accreditation of the 
        health information network described in the plan.
    (f) Prohibition.--No funds under this section may be used for the 
establishment of a national database of individually identifiable 
patient health information.
    (g) Report by GAO.--Not later than 4 years after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit a report to the Congress on the progress of the regional 
health information organizations in realizing the purposes of this Act, 
with particular attention to the following:
            (1) The capacity to exchange health information between and 
        among regional health information networks.
            (2) Rates of health information technology usage and 
        provider participation in regional health information networks.
            (3) The security and privacy of regional health information 
        networks.
            (4) The differing approaches of regional health information 
        organizations to implementing the purposes of this Act and 
        common characteristics of successful efforts.
            (5) The impact of health information networks on health 
        care quality, health outcomes of patients, and health care 
        costs.
    (h) Authorization of Appropriations.--
            (1) In general.--To carry out the provisions of this 
        section other than subsection (d)(2), there are authorized to 
        be appropriated for grants under subsection (a), $50,000,000 
        for fiscal year 2006 and such sums as may be necessary for each 
        of fiscal years 2007, 2008, 2009, and 2010.
            (2) Technical assistance.--
                    (A) In general.--Of the amount appropriated to 
                carry out this section for a fiscal year, not more than 
                than 10 percent of such amount or $5,000,000, whichever 
                is lesser, may be used to provide technical assistance 
                under subsection (d)(1).
                    (B) National technical assistance center.--To carry 
                out subsection (d)(2), there is authorized to be 
                appropriated $2,500,000 for each of fiscal years 2006 
                through 2010.

SEC. 4. INTEROPERABILITY.

    (a) Purchase of Health Information Technology Products.--
            (1) Requirement.--No Federal funds may be made available to 
        any entity under this Act for the purchase of a health 
        information technology product, unless--
                    (A) for any period during which there is a 
                certification entity described in paragraph (2)--
                            (i) the product is certified by the entity; 
                        or
                            (ii) if a certification process has not yet 
                        been developed for the product by the entity, 
                        the Federal department or agency involved has 
                        determined that the product incorporates, to 
                        the extent feasible, appropriate 
                        interoperability data standards and compliance 
                        criteria adopted by the entity for another 
                        product; and
                    (B) for any period for which the Secretary (or the 
                Secretary's designee) adopts applicable standards and 
                criteria under paragraph (4), the product complies with 
                such standards and criteria.
            (2) Certification entity.--The certification entity 
        described in this paragraph is--
                    (A) for any period during which the Certification 
                Commission for Healthcare Information Technology is 
                accredited by the American National Standards Institute 
                or approved by the Secretary under paragraph (3), the 
                Certification Commission for Healthcare Information 
                Technology; and
                    (B) for any other period, the private entity, if 
                any, designated by the Secretary under paragraph 
                (4)(A)(ii) or, as applicable, paragraph (4)(B).
            (3) Approval of commission by secretary.--For any period 
        during which the Certification Commission for Healthcare 
        Information Technology is not accredited by the American 
        National Standards Institute, the Secretary of Health and Human 
        Services--
                    (A) shall examine biannually the Commission's 
                certification processes;
                    (B) shall approve the Commission for purposes of 
                this subsection if the Secretary determines that--
                            (i) the Commission's certification 
                        processes--
                                    (I) are open to input from all 
                                affected parties, including providers, 
                                patients, vendors, and regional health 
                                information organizations;
                                    (II) reflect the prevailing opinion 
                                among the affected parties; and
                                    (III) promote quality, safety, and 
                                efficiency in health care; and
                            (ii) the Commission's governance procedures 
                        ensure effective representation of and 
                        accountability to affected stakeholder groups 
                        and transparent decision-making processes;
                    (C) shall disapprove the Commission for purposes of 
                this subsection if the Secretary determines that the 
                Commission's certification processes or governance 
                procedures do not satisfy clause (i) or (ii), 
                respectively, of subparagraph (B); and
                    (D) if the Secretary disapproves the Commission 
                under this paragraph, shall provide specific 
                recommendations to the Commission on changes that may 
                be implemented by the Commission in order to obtain 
                approval under this paragraph.
            (4) Interoperability standards; alternative certification 
        entity.--
                    (A) In general.--For any period during which the 
                Certification Commission for Healthcare Information 
                Technology is not accredited by the American National 
                Standards Institute and the Secretary disapproves such 
                Commission under paragraph (3)(C), the Secretary--
                            (i) shall adopt interoperability standards 
                        and compliance criteria for health information 
                        technology products, including electronic 
                        medical records; or
                            (ii) shall designate a private entity with 
                        certification and governance processes in 
                        accordance with paragraph (3)(B) to adopt such 
                        standards and criteria and to certify such 
                        products.
                    (B) Nine-month deadline.--If the Certification 
                Commission for Healthcare Information Technology is 
                accredited by the American National Standards Institute 
                or approved by the Secretary under paragraph (3)(B) but 
                fails to adopt interoperability standards and 
                compliance criteria for electronic medical records by 
                the date that is 9 months after the date of the 
                enactment of this Act, the Secretary may adopt such 
                standards and criteria, or designate a private entity 
                with certification and governance processes in 
                accordance with paragraph (3)(B) to adopt such 
                standards and criteria and to certify such products.
                    (C) Consultation.--In adopting standards and 
                criteria under subparagraph (A)(i) or (B), the 
                Secretary shall take into consideration the 
                recommendations (if any) of the National Committee on 
                Vital and Health Statistics. In making such 
                recommendations, the National Committee on Vital and 
                Health Statistics shall consult with all affected 
                parties, including health care providers, patients, 
                vendors, health plans, and regional health information 
                organizations.
            (5) Effect of failure to seek accreditation by ansi.--In 
        determining whether to approve the Certification Commission for 
        Healthcare Information Technology under paragraph (3)(B), the 
        Secretary shall not give any negative weight to a decision by 
        the Commission to forgo seeking accreditation by the American 
        National Standards Institute.
    (b) Technical Standards and Compliance Criteria.--The Secretary 
shall adopt such technical standards and compliance criteria for the 
organization and content of health information networks under section 3 
as the Secretary deems appropriate to ensure that health information 
data can be exchanged among such networks and between health 
information networks and Federal agencies. The Secretary may delegate 
the authority to adopt such standards and criteria to a private entity, 
if--
            (1) the entity is accredited by the American National 
        Standards Institute; or
            (2) the Secretary biannually certifies that the entity's 
        processes for adoption of standards and--
                    (A) compliance criteria--
                            (i) are open to input for all affected 
                        parties, including health care providers, 
                        patients, vendors, and health plans regional 
                        health information organizations;
                            (ii) reflect the prevailing opinion among 
                        the affected parties; and
                            (iii) promote quality, safety, and 
                        efficiency in health care;
                    (B) governance procedures ensure effective 
                representation of and accountability to affected 
                stakeholder groups and transparent decision-making 
                processes.

SEC. 5. LOANS.

    (a) In General.--The Secretary may make loans to any regional 
health information organization with a health information network that 
is accredited or provisionally accredited under section 3(e) to finance 
investments in network infrastructure and technology acquisition, 
training, and workflow engineering for physicians.
    (b) Terms and Conditions.--Each loan under this section shall be 
subject to such terms and conditions as the Secretary deems 
appropriate, except that--
            (1) the repayment period of each such loan may not exceed 
        10 years;
            (2) no funds from the loan may be used to acquire a health 
        information technology product for which the Certification 
        Commission for Healthcare Information Technology has 
        established a certification process unless such health 
        information technology product has been so certified;
            (3) any technology investments paid for in whole or in part 
        with funds from the loan must comply with the privacy 
        requirements of section 3(b); and
            (4) the Secretary shall require the regional health 
        information organization involved to provide to the Secretary 
        an annual accounting of loan funds.

SEC. 6. SAFE HARBOR FOR EQUIPMENT AND SERVICES PROVIDED FOR THE 
              DEVELOPMENT OR IMPLEMENTATION OF A HEALTH INFORMATION 
              NETWORK.

    (a) In General.--Paragraph (3) of section 1128B(b) of the Social 
Security Act (42 U.S.C. 1320a-7b(b)) is amended--
            (1) by striking the period at the end of the first 
        subparagraph (H) and inserting a semicolon;
            (2) by redesignating the second subparagraph (H) as 
        subparagraph (I);
            (3) by striking the period at the end of subparagraph (I) 
        (as so redesignated) and inserting ``; and''; and
            (4) by adding at the end the following:
                    ``(J) the provision of any equipment or services 
                that are appropriate for the development or 
                implementation of a regional health information 
                technology plan approved by the Secretary under section 
                3 of the 21st Century Health Information Act of 2005, 
                including the provision of hardware, software, and 
                services necessary to participate in a health 
                information network so long as--
                            ``(i) any patient data and information that 
                        is accessible to recipients of such equipment 
                        and services is also accessible to other 
                        appropriate persons or entities through a 
                        regional health information network accredited 
                        or provisionally accredited under section 3(e) 
                        of the 21st Century Health Information Act of 
                        2005;
                            ``(ii) any such equipment or services 
                        provided are capable of and intended to be used 
                        to access, transfer, and exchange patient data 
                        and information with other participants in a 
                        regional health information network accredited 
                        or provisionally accredited under section 3(e) 
                        of the 21st Century Health Information Act of 
                        2005; and
                            ``(iii) any such equipment or services are 
                        not provided in a manner that takes into 
                        account the volume or value of referrals or 
                        other business generated between the 
                        parties.''.
    (b) Additional Safe Harbor.--(1) Subject to paragraph (2), the 
Secretary shall consider the establishment of a safe harbor under 
subsection (a) of section 1128C of the Social Security Act (42 U.S.C. 
1320a-7c) to permit the provision of equipment or services intended to 
permit the exchange of health care information to improve health care 
quality, reduce medical errors, reduce health care costs, or improve 
the coordination of health care services.
    (2) Insofar as the Secretary develops a safe harbor under paragraph 
(1)_
            (A) such safe harbor may only apply to geographic areas 
        that are not covered by a regional health information network 
        accredited by the Secretary under section 3(e) of the 21st 
        Century Health Information Act of 2005;
            (B) any equipment or services provided pursuant to the safe 
        harbor are not provided in a manner that takes into account the 
        volume or value of referrals or other business generated 
        between the parties involved; and
            (C) any such equipment or services shall comply with data 
        standards for interoperability adopted by the certification 
        entity described in section 4 of the 21st Century Health 
        Information Act of 2005.

SEC. 7. EXCEPTION TO MEDICARE LIMITATIONS ON PHYSICIAN SELF-REFERRAL.

    (a) In General.--Section 1877(e) of the Social Security Act (42 
U.S.C. 1395nn(e)) is amended by adding at the end the following new 
paragraph:
            ``(9) Development or implementation of a health information 
        network.--The provision of any equipment or services that are 
        appropriate for the development or implementation of a regional 
        health information technology plan approved by the Secretary 
        under section 3 of the 21st Century Health Information Act of 
        2005, including the provision of hardware, software, and 
        services necessary to participate in a health information 
        network so long as--
                    ``(A) any patient data and information that is 
                accessible to recipients of such equipment and services 
                is also accessible to other appropriate persons or 
                entities through a regional health information network 
                accredited or provisionally accredited under section 
                3(e) of the 21st Century Health Information Act of 
                2005;
                    ``(B) any such equipment or services provided are 
                capable of and intended to be used to access, transfer, 
                and exchange patient data and information with other 
                participants in a regional health information network 
                accredited or provisionally accredited under section 
                3(e) of the 21st Century Health Information Act of 
                2005; and
                    ``(C) any such equipment or services are not 
                provided in a manner that takes into account the volume 
                or value of referrals or other business generated 
                between the parties.''.
    (b) Advisory Opinion.--(1) Subject to paragraph (2), the Secretary 
shall consider the issuance of an advisory opinion under subsection 
(g)(6) of section 1877 of the Social Security Act (42 U.S.C. 1395nn) to 
permit the provision of equipment or services intended to permit the 
exchange of health care information to improve health care quality, 
reduce medical errors, reduce health care costs, or improve the 
coordination of health care services.
    (2) Insofar as the Secretary develops an advisory opinion under 
paragraph (1)_
            (A) such advisory opinion may only apply to geographic 
        areas that are not covered by a regional health information 
        network accredited by the Secretary under section 3(e) of the 
        21st Century Health Information Act of 2005;
            (B) any equipment or services provided pursuant to the 
        advisory opinion are not provided in a manner that takes into 
        account the volume or value of referrals or other business 
        generated between the parties involved; and
            (C) any such equipment or services shall comply with data 
        standards for interoperability adopted by the certification 
        entity described in section 4 of the 21st Century Health 
        Information Act of 2005.

SEC. 8. ADJUSTMENTS TO MEDICARE PAYMENTS TO PROVIDERS OF SERVICE AND 
              SUPPLIERS PARTICIPATING IN HEALTH INFORMATION NETWORKS.

    (a) In General.--The Secretary shall establish a methodology for 
making adjustments in payment amounts under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.) made to providers of services and 
suppliers who furnish items or services for which payment is made under 
that title who--
            (1) participate in a health information network accredited 
        or provisionally accredited by the Secretary under section 
        3(e); and
            (2) in the course of furnishing items and services for 
        which payment may be made under such title, use health 
        information technology with patient-specific applications that 
        the Secretary determines improve the quality and accuracy of 
        clinical decision-making (such as electronic medical records, 
        electronic prescribing, and computerized physician order entry 
        with clinical decision-support capabilities) .
    (b) Establishment and Modification of Codes.--The methodology under 
subsection (a) shall--
            (1) include the establishment of new codes, modification of 
        existing codes, and adjustment of evaluation and management 
        modifiers to such codes that take into account the costs of 
        acquiring, using, and maintaining health information technology 
        with patient-specific applications; and
            (2) take into account estimated aggregate annual savings in 
        overall payments under such title XVIII attributable to the use 
        of health information technology with patient-specific 
        applications.
    (c) Duration.--The Secretary may reduce or eliminate adjustments 
established made to subsection (a) as payment methodologies under title 
XVIII of the Social Security Act are adjusted to reflect provider 
quality and efficiency.
    (d) Rule of Construction.--In making national coverage 
determinations under section 1862(a) of the Social Security Act (42 
U.S.C. 1395y(a)) with respect to maintaining health information 
technology with patient-specific applications, in determining whether 
the health information technology is reasonable and necessary for the 
diagnosis or treatment of illness or injury or to improve the 
functioning of a malformed body member, the Secretary shall consider 
whether the health information technology improves clinical outcomes or 
cost-effectiveness of treatment.
    (e) Definitions.--In this section:
            (1) Provider of services.--The term ``provider of 
        services'' has the meaning given such term under section 
        1861(u) of the Social Security Act (42 U.S.C. 1395x(u)).
            (2) Supplier.--The term ``supplier'' has the meaning given 
        such term under section 1861(d) of such Act (42 U.S.C. 
        1395x(d)).

SEC. 9. MEDICAID PAYMENTS FOR INFORMATION INFRASTRUCTURE FOR HEALTH 
              INFORMATION NETWORK AND INFORMATION TECHNOLOGY.

    In the case of a State that provides funding under a State plan 
under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) for 
the development and implementation of a regional health information 
technology plan approved by the Secretary under section 3, the 
Secretary shall make matching payments to States under section 1903(a) 
of such Act (42 U.S.C. 1396b(a)) for such funding--
            (1) to the extent such funding supports development of the 
        health information network and is reasonably related to the 
        Medicaid population's share of the applicable region's patient 
        population or to Medicaid's share of the applicable region's 
        health care costs; or
            (2) to the extent such funding directly or indirectly 
        assists community health centers or other Medicaid providers 
        acquire and implement technology in order to participate in the 
        network.

SEC. 10. DEFINITIONS.

    In this Act:
            (1) The term ``community health center'' means a health 
        center eligible for assistance under section 330 of the Public 
        Health Service Act (42 U.S.C. 254b).
            (2) The term ``health care provider'' means an entity 
        involved in consultation, prevention, diagnosis, and treatment, 
        including but not limited to a physician group, physician in 
        individual practice, psychologist or other mental health 
        clinician licensed by the State, hospital, community health 
        center, community mental health center, nursing facility, 
        skilled nursing facility, laboratory, imaging center, or 
        pharmacy.
            (3) The term ``health information network'' means a health 
        information network described in section 3(a)(3)(A)(i).
            (4) The term ``health information technology'' means 
        products, devices, or systems that allow for the electronic 
        collection, storage, exchange, or management of patient 
        information.
            (5) The term ``health plans'' means a group health plan or 
        a health insurance issuer that is offering health insurance 
        coverage.
            (6) The terms ``health insurance coverage'' and ``health 
        insurance issuer'' have the meanings given such terms under 
        paragraphs (1) and (2), respectively, of section 733(b) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1191b(b)).
            (7) The term ``group health plan'' has the meaning given 
        that term in section 733(a)(1) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1191b(a)(1)).
            (8) The term ``physician'' has the meaning given to that 
        term in section 1861(r) of the Social Security Act (42 U.S.C. 
        1395x(r)).
            (9) The term ``regional health information organization'' 
        means an organization or consortium of organizations that--
                    (A) facilitates the drafting and implementation of 
                a regional health information network plan for a given 
                geographic area in 1 or more States;
                    (B) includes representatives of health plans and 
                other third party payers, government health care 
                programs, employers, physicians, hospitals, other 
                health care providers, and health care consumers; and
                    (C) may include representatives of organized labor.
            (10) The term ``small physician group'' means a physician 
        practice group of 10 or fewer physicians.
            (11) The term ``State'' includes the 50 States and the 
        District of Columbia.
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