[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 747 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 747

  To amend title XI of the Social Security Act to achieve a national 
 health information infrastructure, and to amend the Internal Revenue 
   Code of 1986 to establish a refundable credit for expenditures of 
        health care providers implementing such infrastructure.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 10, 2005

 Mr. Gonzalez (for himself, Mr. McHugh, Ms. Jackson-Lee of Texas, Mr. 
 Towns, Mr. Lipinski, Mr. Hinojosa, Mr. Crowley, Mrs. Christensen, Mr. 
   Moore of Kansas, and Mr. Miller of North Carolina) 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 amend title XI of the Social Security Act to achieve a national 
 health information infrastructure, and to amend the Internal Revenue 
   Code of 1986 to establish a refundable credit for expenditures of 
        health care providers implementing such infrastructure.

    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 ``National Health Information Incentive 
Act of 2005''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds as follows:
            (1) A March 2001 Institute of Medicine (``IOM'') study 
        concludes that in order to improve quality, the nation must 
        have a national commitment to building an information 
        infrastructure to support healthcare delivery, consumer health, 
        quality measurement and improvement, public accountability, 
        clinical and health services research, and clinical education.
            (2) A November 2001 National Committee on Vital Health 
        Statistics study lauds the importance of a national health 
        information infrastructure to improve patient safety, improve 
        healthcare quality, improve bioterrorism detection, better 
        inform and empower healthcare consumers regarding their own 
        personal health information, and to better understand 
        healthcare costs.
            (3) An October 2002 IOM report calls on the federal 
        government to take steps to encourage and facilitate 
        development in the information technology infrastructure that 
        is critical to healthcare quality and safety enhancement.
            (4) A General Accounting Office October 2003 report found 
        that the benefits of an electronic healthcare 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.
            (5) Other studies and surveys show that cultivating a 
        national healthcare information infrastructure and improving 
        patient care will depend crucially on adoption of uniform 
        medical data standards and interoperability.
            (6) Acquisition costs, physician and staff time required to 
        transition from paper-based offices to electronic health 
        systems, and the lack of industry standards on interoperability 
        are the principle barriers to creating a national health 
        information infrastructure.
            (7) The success of a national health information 
        infrastructure depends on the widespread use and acceptance of 
        electronic health records in physician offices.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To facilitate the development of standards and to 
        create incentives that encourage physicians and other health 
        professionals to adopt interoperable electronic health records, 
        electronic prescribing systems, evidence-based clinical support 
        tools, patient registries, and other health information 
        technology as a key component of a national health care 
        information infrastructure in the United States to ensure the 
        rapid flow of secure, private and digitized information 
        relevant to all facets of patient care.
            (2) To do so in a voluntary manner that does not become an 
        unfunded mandate on small physician practices.
            (3) To do so in a manner that does not compromise the 
        health care provider's ability to make patient care decisions 
        based solely on his or her clinical expertise and experience, 
        and what the provider concludes is the best for a particular 
        patient based upon scientific evidence and knowledge of the 
        patient's medical history.

SEC. 3. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION 
              TECHNOLOGY.

    (a) Establishment.--There is established within the executive 
office of the President an Office of the National Coordinator for 
Health Information Technology (referred to in this section as the 
``Office''). The Office shall be headed by a Director appointed by the 
President. The Director of the Office shall report directly to the 
President.
    (b) Resources.--The President shall make available to the Office 
the resources, both financial and otherwise, necessary to enable the 
Director of the Office to carry out the purposes of, and perform the 
duties and responsibilities of, the Office.

SEC. 4. STANDARDS FOR BUILDING THE NATIONAL HEALTH INFORMATION 
              INFRASTRUCTURE.

    Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is 
amended by adding at the end the following part:

   ``PART D--STANDARDS FOR BUILDING THE NATIONAL HEALTH INFORMATION 
                             INFRASTRUCTURE

``SEC. 1181. STANDARDS FOR BUILDING THE NATIONAL HEALTH INFORMATION 
              INFRASTRUCTURE.

    ``(a) Standards.--
            ``(1) Development and adoption.--
                    ``(A) In general.--The Secretary, through the 
                Office of the National Coordinator for Health 
                Information Technology and in collaboration with the 
                Committee on Systematic Interoperability, shall develop 
                or adopt standards for transactions and data elements 
                for such transactions (in this section referred to as 
                `standards') to enable the creation of a national 
                health care information infrastructure.
                    ``(B) Role of standard setting organizations.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), any standard adopted under this 
                        section shall be a standard that has been 
                        developed, adopted, or modified by a standard 
                        setting organization.
                            ``(ii) Standard setting organization.--For 
                        purposes of this section, the term `standard 
                        setting organization' means an organization 
                        accredited by the American National Standards 
                        Institute that develops standards for 
                        information transactions, data elements, or any 
                        other standard that is necessary to, or will 
                        facilitate, the implementation of this part.
                    ``(C) Consultation.--In developing and adopting 
                standards, the Secretary shall consult with national 
                organizations representing physicians in clinical 
                practice, hospitals, pharmacists, pharmacies, 
                pharmaceutical manufacturers, patients, standard 
                setting organizations, pharmacy benefit managers, 
                beneficiary information exchange networks, technology 
                experts, and representatives of the Departments of 
                Veterans Affairs and Defense and other interested 
                parties.
                    ``(D) Assistance to the secretary.--In complying 
                with the requirements under this section, the Secretary 
                shall rely on the recommendations of the National 
                Committee on Vital and Health Statistics established 
                under section 306(k) of the Public Health Service Act 
                (42 U.S.C. 242k(k)), and shall consult with appropriate 
                Federal and State agencies and national organizations. 
                The Secretary shall publish in the Federal Register any 
                recommendations of the National Committee on Vital and 
                Health Statistics regarding the adoption of a standard 
                under this section.
            ``(2) Objective.--Any standards developed or adopted under 
        this section shall be consistent with the objectives of 
        improving--
                    ``(A) patient safety; and
                    ``(B) the quality of care provided to patients.
            ``(3) Requirements.--Any standards developed or adopted 
        under this section shall comply with the following:
                    ``(A) Undue burden.--The standards shall be 
                designed so that, to the extent practicable, the 
                standards do not impose an undue administrative or 
                financial burden on the practice of medicine, or any 
                other health care profession, particularly on small 
                physician practices and practices in rural areas.
                    ``(B) Compatibility with administrative 
                simplification and privacy laws.--The standards shall 
                be--
                            ``(i) consistent with the Federal 
                        regulations (concerning the privacy and 
                        security of individually identifiable 
                        information) promulgated under section 264(c) 
                        of the Health Insurance Portability and 
                        Accountability Act of 1996, and any State 
                        privacy laws preserved under the Federal 
                        regulations promulgated under section 1178; and
                            ``(ii) compatible with the standards under 
                        section 3.
    ``(b) Timetable for Adoption of Standards.--
            ``(1) In general.--The Secretary shall adopt trial 
        standards under this section two years after the date of the 
        enactment of this part, or at a subsequent date determined by 
        the Secretary, as may be required to complete development of 
        the trial standards.
            ``(2) Pilot program to test trial standards.--
                    ``(A) Pilot program.--In accordance with the 
                development and adoption of standards, the Secretary 
                shall conduct a pilot program to test the effectiveness 
                and impact of trial standards for transaction and data 
                elements as defined in subsection (a)(1)(A).
                    ``(B) Location of program.--The pilot program shall 
                be conducted through various health care facilities, 
                including small physician practices, throughout the 
                country that capture both rural and urban settings.
                    ``(C) Duration of the program.--The pilot program 
                shall be conducted during the two-year period beginning 
                on the date of adoption of the standards.
                    ``(D) Designation and selection of program sites.--
                In designing the pilot program and in selecting 
                locations and sites for the pilot test, the Secretary 
                shall consult with national organizations representing 
                affected parties, as defined in subsection (a)(1)(C), 
                and appropriate standard setting organizations, as 
                defined in subsection (a)(1)(B).
                    ``(E) Report of findings.--The Secretary, 
                consistent and accordance with subsections (a)(1)(B) 
                and (a)(1)(C), shall submit to Congress a report on the 
                pilot program no earlier than one year following the 
                completion of the pilot program. The Secretary shall 
                include in the report the following:
                            ``(i) The Secretary's assessment of the 
                        impact and effectiveness of the trial 
                        standards, as applied to a variety of clinical 
                        and geographic setting as described under this 
                        section.
                            ``(ii) The Secretary's assessment of the 
                        effect of the pilot program and trial standards 
                        on patient safety, including the effect on 
                        delivery and the quality of health care, and on 
                        the typical costs incurred by providers in 
                        acquiring necessary technology systems, and the 
                        necessary training to comply with the trial 
                        standards.
                            ``(iii) The Secretary's assessment of the 
                        clinical usefulness of health information 
                        technologies that meet the trial standards, 
                        including the amount of time required of 
                        physicians, other health professionals and 
                        other office staff in sending, receiving, 
                        updating, maintaining, and recording clinical 
                        information using such technologies.
                            ``(iv) In consultation with appropriate 
                        standard setting organizations, as defined in 
                        subsection (a)(1)(B), and with national 
                        organizations representing affected parties, as 
                        defined in subsection (a)(1)(C), the findings 
                        and conclusions of the Secretary with respect 
                        to the pilot program and notice of adoption of 
                        a modified standard.
                            ``(v) Any recommendations of the Secretary 
                        for continuation of the pilot program for 
                        further study or testing to other clinical or 
                        geographic service areas prior to full 
                        implementation.
            ``(3) Additions and modifications to standards.--The 
        Secretary shall, in consultation with appropriate 
        representatives of interested parties, as defined in subsection 
        (a)(1)(C) of this section, and with standard setting 
        organizations, as defined in subsection (a)(1)(B), review the 
        standards developed or adopted under this section and adopt 
        modifications to the standards (including additions to the 
        standards), as determined appropriate. Any addition or 
        modification to such standards shall be completed in a manner 
        which minimizes the disruption and cost of compliance.
    ``(c) Compliance With Standards.--
            ``(1) Requirement for all individuals and entities that 
        utilize health information technology.--
                    ``(A) In general.--Individuals or entities that 
                voluntarily utilize electronic health records, and 
                other health information technology defined by the 
                Secretary as being a key component of a national health 
                care information infrastructure shall comply with the 
                standards adopted or modified under this section.
                    ``(B) Relation to state laws.--Consistent with 
                subsection (a)(3)(B), the standards adopted or modified 
                under this section shall supersede any State law or 
                regulations pertaining to the electronic transmission 
                of patient history, eligibility, benefit and any other 
                information.
            ``(2) Timetable for compliance.--
                    ``(A) Initial compliance.--
                            ``(i) In general.--Not later than 24 months 
                        after the date on which a modified standard is 
                        adopted under this section, each individual or 
                        entity to whom the standard applies shall 
                        comply with the standard.
                            ``(ii) Special rules for small health 
                        plans.--In the case of a `small health plan', 
                        as defined by the Secretary for purposes of 
                        section 1175(b)(1)(B), clause (i) shall be 
                        applied by substituting, `36 months' for `24 
                        months'.
                            ``(iii) Special rule for small provider of 
                        services.--In the case of a small provider of 
                        services, clause (i) shall be applied by 
                        substituting `36 months' for `24 months'.
                            ``(iv) Exception.--In consultation with 
                        national organizations representing affected 
                        parties, as defined in subsection (a)(1)(C), 
                        the Secretary may delay initial compliance 
                        until such time as the Secretary deems 
                        appropriate to assure maximum compliance.
    ``(d) No Requirement to Obtain Specific Technologies or Products.--
Nothing in this part shall be construed to require an individual or 
entity to obtain specific technologies or products to utilize a 
national health care information infrastructure.
    ``(e) Preservation of Health Care Provider or Other Entity to Make 
Unbiased Patient Care Decisions.--Interoperable health care technology 
shall be designed to facilitate access to unbiased and evidence-based 
decision support tools. All patient care decisions shall be based 
solely on the provider's clinical expertise and experience, without 
outside influence.
    ``(f) Small Health Care Providers.--For purposes of this part, a 
health care provider or practice is considered `small' if it is small 
under the provisions of section 1862(h).

``SEC. 1182. FINANCIAL INCENTIVE TO SMALL HEALTH CARE PROVIDERS AND 
              ENTITIES TO IMPLEMENT A NATIONAL HEALTH INFORMATION 
              INFRASTRUCTURE.

    ``(a) In General.--The Secretary shall include additional Medicare 
payment incentives to assure small health care providers have the 
capability to move toward a national health care information 
infrastructure by acquiring electronic health record systems and other 
health information technologies that meet the standards adopted or 
modified under section 1181.
    ``(b) Conditions for Qualification.--As a condition of qualifying 
for financial incentives described in this section, the Secretary, in 
consultation with national organizations representing affected parties, 
as defined in section 1181(a)(1)(C), and appropriate standards setting 
organizations, as defined in section 1181(a)(1)(B), shall grant the use 
of financial incentives to assure that such technologies are consistent 
with the goals of creation of a national health information 
infrastructure, such as--
            ``(1) voluntary participation in studies or demonstration 
        projects to evaluate the use of such systems to measure and 
        report quality data based on accepted clinical performance 
        measures; and
            ``(2) voluntary participation in studies to demonstrate the 
        impact of such technologies on improving patient care, reducing 
        costs and increasing efficiencies.
    ``(c) Additional Medicare Payment to Small Health Care Providers 
and Entities for Expenditures Relating to the Implementation of a 
National Health Information Infrastructure.--
            ``(1) In general.--The Secretary shall provide for 
        additional payment to small health care providers, including 
        physicians and others in clinical practice, for the purpose of 
        assisting such entities to implement, design, test, acquire, 
        and adopt electronic health records and other health 
        information technologies defined by the Secretary as a key 
        component of a national health care information infrastructure 
        that comply with the standards adopted or modified under 
        section 1181.
            ``(2) Types of reimbursement incentives.--In developing the 
        reimbursement incentives described in paragraph (1), the 
        Secretary shall consider inclusion of one or more of the 
        following types of incentives:
                    ``(A) Adds-ons to payments for evaluation and 
                management services.
                    ``(B) Care management fees for physicians who use 
                information technology to manage care of patients with 
                chronic illnesses.
                    ``(C) Payments for structured e-mail consults 
                resulting in a separately identifiable medical service 
                from other evaluation and management services.
                    ``(D) Any other method deemed appropriate by the 
                Secretary to encourage participation.
            ``(3) Amount of reimbursement.--The amount of reimbursement 
        made to small health care providers and entities to implement a 
        national health care information infrastructure shall be in a 
        manner determined by the Secretary, in accordance with section 
        1181(b)(2)(ii), that takes into account the costs of 
        implementation, training, and complying with standards.
            ``(4) Exemption from budget neutrality under the physician 
        fee schedule.--Any increased expenditures pursuant to this 
        section shall be treated as additional allowed expenditures for 
        purposes of computing any update under section 1848(d).

``SEC. 1183. OPTIONAL FINANCIAL INCENTIVES TO SMALL HEALTH CARE 
              PROVIDERS AND ENTITIES TO IMPLEMENT A NATIONAL HEALTH 
              INFORMATION INFRASTRUCTURE.

    ``(a) In General.--The Secretary may utilize any, all, or a 
combination of financial incentives thereof, to assure small health 
care providers have the capability to move toward a national health 
care information infrastructure by acquiring electronic health record 
systems and other health information technologies that meet the 
standards adopted or modified under section 1181.
    ``(b) Conditions for Qualification.--As a condition of qualifying 
for financial incentives described in this section, the Secretary, in 
consultation with national organizations representing affected parties, 
as defined in section 1181(a)(1)(C), and appropriate standards setting 
organizations, as defined in section 1181(a)(1)(B), shall grant the use 
of financial incentives to assure that such technologies are consistent 
with the goals of creation of a national health information 
infrastructure, such as--
            ``(1) voluntary participation in studies or demonstration 
        projects to evaluate the use of such systems to measure and 
        report quality data based on accepted clinical performance 
        measures; and
            ``(2) voluntary participation in studies to demonstrate the 
        impact of such technologies on improving patient care, reducing 
        costs and increasing efficiencies.
    ``(c) Grants to Small Health Care Providers and Entities for 
Expenditures Relating to the Implementation of a National Health 
Information Infrastructure.--
            ``(1) In general.--The Secretary is authorized to make 
        grants to small health care providers, including physicians and 
        others in clinical practice, for the purpose of assisting such 
        entities to implement, design, test, acquire, and adopt 
        electronic health records and other health information 
        technologies identified by the Secretary as a key component of 
        a national health care information infrastructure that comply 
        with the standards adopted or modified under section 1181.
            ``(2) Amount of grant.--The grant amount made to small 
        health care providers and entities to implement a national 
        health care information infrastructure shall be in a manner 
        determined by the Secretary, in accordance with section 
        1181(b)(2)(ii), that takes into account the costs of 
        implementation, training, and complying with standards.
            ``(3) Application.--No grant may be made under this 
        subsection except pursuant to a grant application that is 
        submitted in a time, manner, and form approved by the 
        Secretary.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection such 
        sums as may be necessary for each fiscal year.
    ``(d) Revolving Loans to Small Health Care Providers and Entities 
for Expenditures Relating to the Implementation of a National Health 
Information Infrastructure.--
            ``(1) In general.--The Secretary is authorized to make and 
        guarantee loans to small health care providers, including 
        physicians and others in clinical practice, for the purpose of 
        assisting such entities to implement, design, test, acquire, 
        and adopt electronic health records and other health 
        information technologies identified by the Secretary as a key 
        component of a national health care information infrastructure 
        that comply with the standards adopted or modified under 
        section 1181.
            ``(2) Amount of loan.--The loan amount made to small health 
        care providers and entities to implement a national health care 
        information infrastructure shall be in a manner determined by 
        the Secretary, in accordance with section 1181(b)(2)(ii), that 
        takes into account the costs of implementation, training, and 
        complying with standards.
            ``(3) Application.--No loan may be made under this 
        subsection except pursuant to a loan application that is 
        submitted in a time, manner, and form approved by the 
        Secretary.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection such 
        sums as may be necessary for each fiscal year.''.

SEC. 5. REFUNDABLE CREDIT FOR HEALTH CARE INFORMATION INFRASTRUCTURE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. HEALTH CARE INFORMATION INFRASTRUCTURE.

    ``(a) In General.--In the case of a qualified health care provider, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to 10 percent of the 
amounts paid or incurred during the taxable year by the taxpayer for 
establishing a qualified health information technology system.
    ``(b) Qualified Health Information Technology System.--For purposes 
of this section, the term `qualified health information technology 
system' means a system which has been individually approved by the 
Secretary of Health and Human Services for purposes of this section and 
which consists of electronic health record systems and other health 
information technologies that meet the standards and conditions of 
qualification adopted or modified under sections 1181 and 1183 of the 
Social Security Act.
    ``(c) Qualified Health Care Provider.--For purposes of this 
section, the term `qualified health care provider' means any person in 
the trade or business of providing health care.
    ``(d) Termination.--This section shall not apply to amounts paid or 
incurred during taxable years beginning after December 31, 2014.''.
    (b) Denial of Double Benefit.--Section 280C of such Code is amended 
by adding at the end the following new subsection:
    ``(e) Credit for Health Care Information Infrastructure.--No 
deduction shall be allowed for that portion of the expenses (otherwise 
allowable as a deduction) taken into account in determining the credit 
under section 36 for the taxable year which is equal to the amount of 
the credit determined for such taxable year under section 36(a).''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``section 
        35''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the item relating to section 36 and 
        inserting the following new items:

``Sec. 36. Health care information infrastructure.
``Sec. 37. Overpayment of taxes.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred during taxable years beginning after 
December 31, 2005.
                                 <all>