[Congressional Record Volume 147, Number 166 (Tuesday, December 4, 2001)]
[House]
[Pages H8772-H8778]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ADMINISTRATIVE SIMPLIFICATION COMPLIANCE ACT
Mr. TAUZIN. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3323) to ensure that covered entities comply with the
standards for electronic health care transactions and code sets adopted
under part C of title XI of the Social Security Act, and for other
purposes, as amended.
The Clerk read as follows:
H.R. 3323
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 ``Administrative
Simplification Compliance Act''.
SEC. 2. EXTENSION OF DEADLINE FOR COVERED ENTITIES SUBMITTING
COMPLIANCE PLANS.
(a) In General.--
(1) Extension.--Subject to paragraph (2), notwithstanding
section 1175(b)(1)(A) of the Social Security Act (42 U.S.C.
1320d-4(b)(1)(A)) and section 162.900 of title 45, Code of
Federal Regulations, a health care provider, health plan
(other than a small health plan), or a health care
clearinghouse shall not be considered to be in noncompliance
with the applicable requirements of subparts I through R of
part 162 of title 45, Code of Federal Regulations, before
October 16, 2003.
(2) Condition.--Paragraph (1) shall apply to a person
described in such paragraph only if, before October 16, 2002,
the person submits to the Secretary of Health and Human
Services a plan of how the person will come into compliance
with the requirements described in such paragraph not later
than October 16, 2003. Such plan shall be a summary of the
following:
(A) An analysis reflecting the extent to which, and the
reasons why, the person is not in compliance.
(B) A budget, schedule, work plan, and implementation
strategy for achieving compliance.
(C) Whether the person plans to use or might use a
contractor or other vendor to assist the person in achieving
compliance.
(D) A timeframe for testing that begins not later than
April 16, 2003.
(3) Electronic submission.--Plans described in paragraph
(2) may be submitted electronically.
(4) Model form.--Not later than March 31, 2002, the
Secretary of Health and Human Services shall promulgate a
model form that persons may use in drafting a plan described
in paragraph (2). The promulgation of such
[[Page H8773]]
form shall be made without regard to chapter 35 of title 44,
United States Code (commonly known as the ``Paperwork
Reduction Act'').
(5) Analysis of plans; reports on solutions.--
(A) Analysis of plans.--
(i) Furnishing of plans.--Subject to subparagraph (D), the
Secretary of Health and Human Services shall furnish the
National Committee on Vital and Health Statistics with a
sample of the plans submitted under paragraph (2) for
analysis by such Committee.
(ii) Analysis.--The National Committee on Vital and Health
Statistics shall analyze the sample of the plans furnished
under clause (i).
(B) Reports on solutions.--The National Committee on Vital
and Health Statistics shall regularly publish, and widely
disseminate to the public, reports containing effective
solutions to compliance problems identified in the plans
analyzed under subparagraph (A). Such reports shall not
relate specifically to any one plan but shall be written for
the purpose of assisting the maximum number of persons to
come into compliance by addressing the most common or
challenging problems encountered by persons submitting such
plans.
(C) Consultation.--In carrying out this paragraph, the
National Committee on Vital and Health Statistics shall
consult with each organization--
(i) described in section 1172(c)(3)(B) of the Social
Security Act (42 U.S.C. 1320d-1(c)(3)(B)); or
(ii) designated by the Secretary of Health and Human
Services under section 162.910(a) of title 45, Code of
Federal Regulations.
(D) Protection of confidential information.--
(i) In general.--The Secretary of Health and Human Services
shall ensure that any material provided under subparagraph
(A) to the National Committee on Vital and Health Statistics
or any organization described in subparagraph (C) is redacted
so as to prevent the disclosure of any--
(I) trade secrets;
(II) commercial or financial information that is privileged
or confidential; and
(III) other information the disclosure of which would
constitute a clearly unwarranted invasion of personal
privacy.
(ii) Construction.--Nothing in clause (i) shall be
construed to affect the application of section 552 of title
5, United States Code (commonly known as the ``Freedom of
Information Act''), including the exceptions from disclosure
provided under subsection (b) of such section.
(6) Enforcement through exclusion from participation in
medicare.--
(A) In general.--In the case of a person described in
paragraph (1) who fails to submit a plan in accordance with
paragraph (2), and who is not in compliance with the
applicable requirements of subparts I through R of part 162
of title 45, Code of Federal Regulations, on or after October
16, 2002, the person may be excluded at the discretion of the
Secretary of Health and Human Services from participation
(including under part C or as a contractor under sections
1816, 1842, and 1893) in title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.).
(B) Procedure.--The provisions of section 1128A of the
Social Security Act (42 U.S.C. 1320a-7a) (other than the
first and second sentences of subsection (a) and subsection
(b)) shall apply to an exclusion under this paragraph in the
same manner as such provisions apply with respect to an
exclusion or proceeding under section 1128A(a) of such Act.
(C) Construction.--The availability of an exclusion under
this paragraph shall not be construed to affect the
imposition of penalties under section 1176 of the Social
Security Act (42 U.S.C. 1320d-5).
(D) Nonapplicability to complying persons.--The exclusion
under subparagraph (A) shall not apply to a person who--
(i) submits a plan in accordance with paragraph (2); or
(ii) who is in compliance with the applicable requirements
of subparts I through R of part 162 of title 45, Code of
Federal Regulations, on or before October 16, 2002.
(b) Special Rules.--
(1) Rules of construction.--Nothing in this section shall
be construed--
(A) as modifying the October 16, 2003, deadline for a small
health plan to comply with the requirements of subparts I
through R of part 162 of title 45, Code of Federal
Regulations; or
(B) as modifying--
(i) the April 14, 2003, deadline for a health care
provider, a health plan (other than a small health plan), or
a health care clearinghouse to comply with the requirements
of subpart E of part 164 of title 45, Code of Federal
Regulations; or
(ii) the April 14, 2004, deadline for a small health plan
to comply with the requirements of such subpart.
(2) Applicability of privacy standards before compliance
deadline for information transaction standards.--
(A) In general.--Notwithstanding any other provision of
law, during the period that begins on April 14, 2003, and
ends on October 16, 2003, a health care provider or, subject
to subparagraph (B), a health care clearinghouse, that
transmits any health information in electronic form in
connection with a transaction described in subparagraph (C)
shall comply with the requirements of subpart E of part 164
of title 45, Code of Federal Regulations, without regard to
whether the transmission meets the standards required by part
162 of such title.
(B) Application to health care clearinghouses.--For
purposes of this paragraph, during the period described in
subparagraph (A), an entity that processes or facilitates the
processing of information in connection with a transaction
described in subparagraph (C) and that otherwise would be
treated as a health care clearinghouse shall be treated as a
health care clearinghouse without regard to whether the
processing or facilitation produces (or is required to
produce) standard data elements or a standard transaction as
required by part 162 of title 45, Code of Federal
Regulations.
(C) Transactions described.--The transactions described in
this subparagraph are the following:
(i) A health care claims or equivalent encounter
information transaction.
(ii) A health care payment and remittance advice
transaction.
(iii) A coordination of benefits transaction.
(iv) A health care claim status transaction.
(v) An enrollment and disenrollment in a health plan
transaction.
(vi) An eligibility for a health plan transaction.
(vii) A health plan premium payments transaction.
(viii) A referral certification and authorization
transaction.
(c) Definitions.--In this section--
(1) the terms ``health care provider'', ``health plan'',
and ``health care clearinghouse'' have the meaning given
those terms in section 1171 of the Social Security Act (42
U.S.C. 1320d) and section 160.103 of title 45, Code of
Federal Regulations;
(2) the terms ``small health plan'' and ``transaction''
have the meaning given those terms in section 160.103 of
title 45, Code of Federal Regulations; and
(3) the terms ``health care claims or equivalent encounter
information transaction'', ``health care payment and
remittance advice transaction'', ``coordination of benefits
transaction'', ``health care claim status transaction'',
``enrollment and disenrollment in a health plan
transaction'', ``eligibility for a health plan transaction'',
``health plan premium payments transaction'', and ``referral
certification and authorization transaction'' have the
meanings given those terms in sections 162.1101, 162.1601,
162.1801, 162.1401, 162.1501, 162.1201, 162.1701, and
162.1301 of title 45, Code of Federal Regulations,
respectively.
SEC. 3. REQUIRING ELECTRONIC SUBMISSION OF MEDICARE CLAIMS.
(a) In General.--Section 1862 of the Social Security Act
(42 U.S.C. 1395y) is amended--
(1) in subsection (a)--
(A) by striking ``or'' at the end of paragraph (20);
(B) by striking the period at the end of paragraph (21) and
inserting ``; or''; and
(C) by inserting after paragraph (21) the following new
paragraph:
``(22) subject to subsection (h), for which a claim is
submitted other than in an electronic form specified by the
Secretary.''; and
(2) by inserting after subsection (g) the following new
subsection:
``(h)(1) The Secretary--
``(A) shall waive the application of subsection (a)(22) in
cases in which--
``(i) there is no method available for the submission of
claims in an electronic form; or
``(ii) the entity submitting the claim is a small provider
of services or supplier; and
``(B) may waive the application of such subsection in such
unusual cases as the Secretary finds appropriate.
``(2) For purposes of this subsection, the term `small
provider of services or supplier' means--
``(A) a provider of services with fewer than 25 full-time
equivalent employees; or
``(B) a physician, practitioner, facility, or supplier
(other than provider of services) with fewer than 10 full-
time equivalent employees.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to claims submitted on or after October 16, 2003.
SEC. 4. CLARIFICATION WITH RESPECT TO APPLICABILITY OF
ADMINISTRATIVE SIMPLIFICATION REQUIREMENTS TO
MEDICARE+CHOICE ORGANIZATIONS.
Section 1171(5)(D) of the Social Security Act (42 U.S.C.
1320d(5)(D)) is amended by striking ``Part A or part B'' and
inserting ``Parts A, B, or C''.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION OF
REGULATIONS.
(a) In General.--Subject to subsection (b), and in addition
to any other amounts that may be authorized to be
appropriated, there are authorized to be appropriated a total
of $44,200,000, for--
(1) technical assistance, education and outreach, and
enforcement activities related to subparts I through R of
part 162 of title 45, Code of Federal Regulations; and
(2) adopting the standards required to be adopted under
section 1173 of the Social Security Act (42 U.S.C. 1320d-2).
(b) Reductions.--
(1) Model form 14 days late.--If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 14 days after the deadline described in such
section, the amount referred to in subsection (a) shall be
reduced by 25 percent.
(2) Model form 30 days late.--If the Secretary fails to
promulgate the model form
[[Page H8774]]
described in section 1(a)(4) by the date that is 30 days
after the deadline described in such section, the amount
referred to in subsection (a) shall be reduced by 50 percent.
(3) Model form 45 days late.--If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 45 days after the deadline described in such
section, the amount referred to in subsection (a) shall be
reduced by 75 percent.
(4) Model form 60 days late.--If the Secretary fails to
promulgate the model form described in section 1(a)(4) by the
date that is 60 days after the deadline described in such
section, the amount referred to in subsection (a) shall be
reduced by 100 percent.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Louisiana (Mr. Tauzin) and the gentleman from Ohio (Mr. Brown) each
will control 20 minutes.
Mr. BROWN of Ohio. Mr. Speaker, I ask unanimous consent that the
gentleman from California (Mr. Stark) be permitted to control 10
minutes of the time on this side.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that the gentlewoman
from Connecticut (Mrs. Johnson) on behalf of the gentleman from
California (Mr. Thomas) be permitted to control 10 minutes of time on
this side.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
General Leave
Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and insert extraneous material on this legislation now being
considered.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
Mr. TAUZIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 3323, the Administrative
Simplification Compliance Act introduced by the gentleman from Ohio
(Mr. Hobson).
A little over 5 years ago, Congress passed the Health Insurance
Portability and Accountability Act, or HIPAA, a far-reaching law that
imposed significant new requirements on health care plans and providers
and created basic consumer protections in a number of areas. One of the
most important provisions of the act, although infrequently discussed
in Congress, relates to administrative simplification. This provision
implements common standards for electronic health care transactions. It
was designed to increase the health care system's efficiency and
effectiveness, to improve law enforcement's ability to prevent fraud
and abuse, and generally to reduce administrative burdens for plans and
providers.
We in Congress strongly support the goals of administrative
simplification. The provision's implementation will eliminate the
confusing patchwork of electronic and paper standards that exist in the
health care marketplace. However, as plans and providers move toward
common electronic standards, we must also recognize that their efforts
will require a significant amount of time and money, and that perhaps
the time frames Congress originally set forth in statute to comply with
these rules should be modified.
On August 17, 2000, the Department of Health and Human Services
published its final rule implementing the standards for electronic
health care transactions. The rule required all plans and providers to
come into compliance with administrative simplification standards by
October 16, 2002. From speaking with many people in the health care
system during the past year, we have concluded that this deadline is
much too ambitious.
That is why we are here today. The Hobson legislation will provide
plans and providers with one additional year to come into compliance
with the administrative simplification standards. His legislation,
which is a compromise product negotiated between the bill's sponsors,
the gentleman from Arizona (Mr. Shadegg), the Committee on Energy and
Commerce, and the Committee on Ways and Means allows covered entities
the extra time they need to ensure that they will continue taking steps
to come into compliance.
I would like to point out that one important change to the
legislation is now in the bill in its reintroduced version. In its
original form, H.R. 3323 imposed a $1 user fee on every paper claim
submitted to the Medicare program. This provision has been replaced
with a requirement that health care entities, with the exception of
small providers, submit their claims to the Medicare program in
electronic format. This requirement refinement significantly improves
the bill and eliminates a tremendous burden for providers and the
government.
Mr. Speaker, this legislation has been vetted extensively with the
stakeholders in the health care system. It deserves everyone's vote and
we should all be grateful for the fine work of the gentleman from Ohio
(Mr. Hobson) in the area.
Mr. Speaker, I reserve the balance of my time.
Mr. BROWN of Ohio. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, in 1996 Congress passed landmark legislation, and most
of us know it as Kennedy/Kassebaum or HIPAA, that answered several
difficult questions: How do we minimize coverage disruptions and
barriers in the private health insurance market? How do we improve the
efficiency of health care financing and delivery in the United States?
The gentlemen from my home State of Ohio (Mr. Sawyer) and (Mr.
Hobson) took on the second question. They championed commonsense
provisions in HIPAA that ensure the transition to fully electronic
transfers between health plans and providers. Electronic claiming is
far superior to the old-fashioned paper version. It saves money, it
saves trees, and it typically saves patients from paying out-of-pocket
for services ultimately covered by insurance.
The deadline for implementing phase 1 of this transition is October
2002, but the reality is some sectors of the health industry and State
governments need extra time to make the technical and the procedural
changes necessary to achieve compliance. Delaying the compliance
deadlines for administrative simplification is not an action any Member
of Congress, Mr. Speaker, should take lightly.
CMS has estimated that the electronic claims processing can save $30
billion over 10 years. Any delay in implementation reduces, obviously,
those associated savings. Health plans and providers throughout the
country have invested time and money to gear up for this transition. To
the extent that their new operations sit idle, they are losing money
too. That said, it would be inappropriate to fault both public and
private sector entities that work in good faith against a deadline they
did not create and found they simply could not meet.
Mr. Speaker, H.R. 3323 accommodates the concerns of those on both
sides of this issue. Under this legislation, health plans and providers
must either meet the current compliance deadline or demonstrate their
plans for achieving compliance by October 2003. This one-time 1-year
extension creates a cushion for organizations bumping up against the
current deadline without permitting an undue or indefinite delay.
Mr. Speaker, I am pleased to support this reasonable compromise. I
again thank the gentlemen from Ohio (Mr. Sawyer) and (Mr. Hobson) for
their good work.
{time} 1630
Mr. TAUZIN. Mr. Speaker, I am very pleased to yield 3 minutes to the
distinguished gentleman from Florida (Mr. Bilirakis), the chairman of
the Subcommittee on Health of the Committee on Energy and Commerce.
Mr. BILIRAKIS. Mr. Speaker, I appreciate the gentleman yielding time
to me.
Mr. Speaker, I rise in support of H.R. 3323, a bill that would ensure
that stakeholders in America's health care system are able to comply
with regulations to standardize electronic health care transactions.
This legislation extends by 1 year the deadline for compliance with
administrative simplification provisions created as part of the Health
Insurance Portability and Accountability Act of 1996, which we fondly
pronounce as HIPAA.
[[Page H8775]]
The legislation also implements an orderly transition process that
will ensure that covered entities will be in a position to implement
the new regulations by October of 2003.
In 1996, Congress passed HIPAA to improve efficiency and
effectiveness in the health care system, to make it easier to detect
fraud and abuse, facilitate access to health and medical information by
researchers, and to reduce administrative costs.
When we passed HIPAA in 1996, it was the largest government action in
health care since the creation of Medicare. Administrative
simplification and standardization of the way medical data is
transmitted electronically is vital to improving the quality of medical
care. The American health care system currently has more than 12
million providers, plans, suppliers, and other participants that
require access to medical data.
Today, there is no single standard by which this data can be
exchanged electronically. Therefore, the full benefit of the
technological revolution has yet to be implemented by the health care
industry. Standardization of electronic data has the potential to
simplify administrative functions, increase processing of medical
claims, and improve the quality of care while substantially reducing
health care costs.
However, flawed implementation of this process will prevent the full
benefit of standardization from being realized. This bill alleviates
this problem by requiring that each stakeholder seeking an extension
submit a report to the Secretary of Health and Human Services on how
they plan to implement electronic standardization. This will allow the
Secretary to have access to the best transition plans that are
proposed, allowing for an exchange of information that will benefit
stakeholders less prepared to implement this process.
H.R. 3323 is a thoughtful and logical approach to ensuring that
health care beneficiaries are able to take the fullest advantage of the
coming revolution in medical care. I thank the gentleman from Arizona
(Mr. Shadegg) for taking the lead on this issue for the Committee on
Energy and Commerce and the gentleman from Ohio (Mr. Hobson) for
introducing the support legislation.
I urge my colleagues to join me in supporting H.R. 3323.
Mr. TAUZIN. Mr. Speaker, I yield the balance of my time to the
gentleman from Ohio (Mr. Hobson), the author of the legislation.
The SPEAKER pro tempore (Mr. Culberson). The gentleman from Ohio (Mr.
Hobson) is recognized for 4 minutes.
Mr. HOBSON. Mr. Speaker, we have before us today a reasonable and
balanced bill that provides the final push for an idea that my
colleague, the gentleman from Ohio (Mr. Sawyer), and myself have been
working on for 7 years: The simplification of paperwork associated with
paying health care costs.
In 1993, my colleague, the gentleman from Ohio, began to develop
legislation that would create a standard framework for electronic
filing of health care claims. Today, we all recognize electronic health
care filing represents significant advantages over paper filings for
every level of health care, from providers to insurance.
However, the patchwork of different computer systems needed to
electronically file claims with different health care payers made the
process a complicated, expensive, and unwieldy situation.
In 1996, our work culminated in the administrative simplification
provisions included in the Health Insurance Portability and
Accountability Act of 1996, which required a common format for
electronic health care claims. This would have the effect of
simplifying the administrative burden associated with health care
transactions, and would, according to the Health Care Financing
Administration at the time, produce $9.9 billion in savings for the
health care community.
By reducing administrative overhead, we also help improve the quality
of health care by freeing up resources now devoted to paperwork and
administration. However, for a variety of reasons, the regulations
implementing the administrative simplification provisions enacted in
1996 were delayed.
Now, 5 years later, two final rules are set to take effect shortly.
The first, regarding medical privacy, is left untouched by the
legislation before this body today, and will take effect as scheduled
in April of 2003. The second, establishing code sets in transactions,
is set to take effect October 16, 2002.
However, the current state of readiness in the health care community
is inconsistent, and significant sectors have argued for additional
time to undertake systems changes necessary to reach compliance. At the
same time, some entities clearly will be ready for the first set of
standards.
Mr. Speaker, the gentleman from Ohio (Mr. Sawyer) and I recognize the
need for additional time for some entities to come into compliance. At
the same time, we must ensure that this time is fully utilized by all
the parties and that those entities that want to move forward can do so
without penalty.
Our legislation provides a solution to the current status by
establishing two tracks for entities covered by the original statute.
For those plans and providers who will be ready to go by October, 2002,
they can proceed under the original timetable. These entities can be
sending and receiving electronic transactions under the new
standardized format in October of next year.
However, our legislation also recognizes some entities may have
underestimated what was needed to be operationally compliant with the
standards of 2002. That is why our bill includes a provision which
allows these plans and providers to file a plan with the Secretary of
the Department of Health and Human Services explaining the steps they
will take to reach compliance.
One other important fact. This bill also ensures that the additional
time provided is fully utilized, from the government's perspective. Our
bill includes an authorization for $44.2 million for the Department of
Health and Human Services which will allow the Department to adequately
prepare for the transition.
This authorization will support activities at the Department
associated with finishing the remaining work on the original standards
providing technical assistance and educational outreach and enforcement
activities.
Finally, our bill requires the filing of electronic claims with
Medicare by extending the deadline to October 16, 2003, with the
exception for small providers and those physically unable to file
electronically. This will help prevent backsliding to paper
transactions and will help focus all entities on reaching the cost-
saving goals of the original statute.
In conclusion, this statute represents a balanced package of measures
that does not simply delay the administrative simplification
provisions, but rather, provides a clear plan and one-time extension to
reach compliance in the marketplace.
I urge my colleagues to support this legislation; and I would like to
thank the staffs of both committees, my staff, Michael Beer, the staff
of the gentleman from Ohio (Mr. Sawyer), and the staff of the Committee
on Commerce.
I would like to thank the leadership and the staff of the Committee
on Ways and Means, and particularly the leadership of the gentleman
from Texas (Mr. Armey) and the Speaker, who encouraged us to bring this
bill forward. We think we have done something good here.
Mr. STARK. Mr. Speaker, will the gentleman yield?
Mr. HOBSON. I yield to the gentleman from California.
Mr. STARK. Mr. Speaker, I appreciate the gentleman's leadership in
this.
I heard the gentleman's statement about the authorization for I think
the $44.2 million for CMS for the Department of Health and Human
Services to carry out their work.
I know, as a distinguished member of the Committee on Appropriations,
that that will come to the gentleman in another form.
I often feel that we have added many chores to the Department of
Health and Human Services without being so concerned as to how they
will perform the activities. I want to commend the gentleman for
thinking ahead and asking for the support for the Department of Health
and Human Services to see that they have the resources to carry out
this work. I would like to join with him to see that we get the
appropriated funds.
[[Page H8776]]
Mr. BROWN of Ohio. Mr. Speaker, I yield 4 minutes to my colleague,
the gentleman from Summit and Portage Counties, Ohio (Mr. Sawyer).
Mr. SAWYER. Mr. Speaker, I thank my friend, the gentleman from Lorain
County, Ohio, for yielding time to me. I particularly want to thank my
colleague, the gentleman from Ohio (Mr. Hobson), for his leadership,
his persistence, and his hard work, and in the last year, his attention
to detail with regard to the administration of this.
I would also like to thank the chairman and ranking members of the
Committee on Energy and Commerce and the Committee on Ways and Means,
and particularly, their counterparts in the leadership of the
subcommittees having to do with health care of both bodies.
Mr. Speaker, I want to thank them for their assistance on this
legislation, for bringing it to the floor. This measure is a bipartisan
compromise which keeps administrative simplification on track and
should be passed by the House. The gentleman from Ohio (Mr. Hobson) and
I first started working on this back in the early 1990s. We met with a
broad spectrum of industry groups on how to streamline the processes of
administrative information and financial transactions.
By standardizing these efforts for electronic transmission, we, along
with the industry, strongly believed that this would reduce paperwork,
limit fraud and abuse where it may or may not exist, and help contain
health care costs.
Every time we stand up here and talk about limiting waste, fraud and
abuse, we do it too often by simply cutting money with the hopes that
under that rubric, dollars lost can somehow go unreplaced. This goes a
great deal further. It outlines a practical, hardheaded way to achieve
the kinds of savings that we are talking about, and have been in this
legislation for the last 5 years.
Back in September of 1993, the gentleman from Ohio (Mr. Hobson) and I
introduced this legislation for the first time. After 3 years of
extensive and detailed consultation, the bill was included in HIPAA.
According to HHS, as we have heard, it is expected to save about $30
billion.
Now, 5 years after enactment of the legislation, the first of a
series of regulations are due to take effect next year. While an awful
lot of health plans, hospital, and stakeholders have invested millions
of dollars to be ready, some plans and some State Medicaid systems
simply will not be in compliance in time.
That concern that this would disrupt transmission of health and
financial information and cause any number of problems for the health
care consumer is what motivates this legislation today. This bipartisan
effort will prevent that from happening while still ensuring that the
regulations are implemented in a timely manner.
For those who will not be ready, the bill holds them accountable by
requiring them to file a plan documenting how they will reach
compliance. If they fail to do so, they may not be able to participate
in Medicare.
The document must include a budget, a work plan, and an
implementation strategy for reaching compliance. This will ensure that
at the end of the deadline all providers, plans, and other health care
groups are ready. The plan must also outline a time frame for
electronic testing, which means that consumers can be assured that
there will be no disruptions in delivery, although the bill does
provide additional time to reach compliance.
Everyone involved in this should know that this is a one-time deal.
We hope Members will not come back again asking for any further delays.
The answer the next time will be, I am certain, a clear and inarguable
no.
This legislation will facilitate a smooth transition to processing
electronic transactions and medical information by authorizing funds
for HHS to issue the next set of regulations, and perhaps, even more
importantly, to provide outreach, education, and technical assistance
to those who seek to comply.
Many doctors' offices will need that kind of help in reaching
compliance. This bill gives HHS the ability to help them.
Almost 10 years ago, we set out to make the health care system more
efficient by encouraging the responsible electronic transfer of data.
This legislation will help us meet that goal. I urge its passage.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I rise in strong support of the Hobson bill. It is
instructive that we passed this directive in 1996. That is 5 years ago.
This was going to save the system $30 billion through greater
efficiency, so it was with great conviction that many of us resisted,
including the gentleman from California (Chairman Thomas) of the
Committee on Ways and Means, resisted a delay, and particularly an
open-ended delay, of the implementation of these administrative
simplification provisions of the Health Insurance Portability and
Accountability Act.
However, in recent weeks it has become very clear that a number of
providers and plans, as well as the State governments, have some
legitimate reasons why they will have a hard time complying by the
October 2002 deadline and have asked for a year's extension.
The gentlemen from Ohio (Mr. Hobson and Mr. Sawyer) have developed a
very responsible compromise which the Committee on Ways and Means
supports, the Committee on Energy and Commerce supports, and really is
a good example of how rational thinking can guide the Nation
effectively.
This bill just creates a smoother glide path to compliance for all
entities. It is not open-ended; it does require everybody who is going
to be responsible to comply to think about what it is going to take to
come into compliance with this very important provision, but one that
is complicated, particularly for small providers or very, very large
providers in this era of rapid change.
It forces those responsible to comply to think about what budget it
will take, what work plan will accomplish the goal, what needs to be
tested, what strategy needs to be adopted to impact and accomplish
compliance with the HIPAA requirements. That is good. That means it
will happen more surely and with better or greater effectiveness.
It not only requires that kind of planning, but it does not
discourage those who can comply sooner.
{time} 1645
I am particularly pleased that the Department of Health and Human
Services under this legislation would be required to issue model
guidance plans. So a lot of small providers can just take this plan,
fill in the blanks and know exactly what they need to do and how they
need to do it.
In addition, I am pleased that the bill requires the Secretary to
disseminate reports from evaluating these plans that provide solutions
to some of the problems that are identified through reviewing the
compliance plans. This creates, in fact, a new partnership between
government and the private sector as we near the compliance date for
the HIPAA requirements, and I think that is going to mean a better
quality of compliance as well as surer compliance with a new date a
year from 2002, March 31.
I am also pleased that the bill does actually require all Medicare
claims to be submitted electronically with the following exceptions: If
there is no method to submit an electronic claim; or if one is a very
small provider, a facility with fewer than 25 full-time employees; or a
physician practice with fewer than 10 full-time employees; or in
unusual circumstances as determined by the Secretary. I also believe
that many of those small providers are going to use electronic means of
submission because they are going to find it much faster, much more
efficient, they will get paid more rapidly, and it will be more
accurate.
But this bill does recognize that small compliers and certain other
situations may require an exception. So I commend my colleagues, the
gentleman from Ohio (Mr. Hobson) and the gentleman from Ohio (Mr.
Sawyer) for moving with and through both the Committee on Ways and
Means and the Committee on Energy and Commerce to bring this to the
floor. It was really their knowledge of this issue, their insight,
their determination that helped us find this very constructive
solution.
Mr. Speaker, I reserve the balance of my time.
[[Page H8777]]
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
(Mr. STARK asked and was given permission to revise and extend his
remarks.)
Mr. STARK. Mr. Speaker, I add my congratulations to the gentleman
from Ohio (Mr. Hobson) and the gentleman from Ohio (Mr. Sawyer) for
working to push this bill to fruition.
Mr. Speaker, I rise in support of H.R. 3323. I remind my colleagues
that the standards that we are talking about today for electronic
claims and referrals are being passed because the health care industry
asked for our help.
Unlike the banking industry or the securities industry and others,
the health care providers could not agree amongst themselves on how to
talk to each other electronically. They asked us to step in and help
establish standards, and now many of the sectors of the health industry
have realized the wisdom of the saying, ``Be careful what you wish for,
you might get it.''
They support the goals of the administrative simplification, but they
now say they underestimated the effort it will take for them to comply,
and they say they need more time. I think some of the sectors,
particularly hospitals, are ready to go and would like to participate
in what they think might be up to $30 billion in savings. And I agree.
I want these simplification plans to be adopted as soon as possible and
with as little delay as we can allow them and still let them officially
go ahead and put these rules into effect.
I would like to make one thing quite clear for the record, and that
is that this bill does not delay the HIPAA privacy regulation, not for
health plans, not for health care providers, not for health care
clearinghouses. There has been some concern that extending the
transaction and codes sets compliance deadline would effectively exempt
some health care providers and health care clearinghouses from the
privacy rule.
This bill should remove any and all ambiguity on that point. Any
health care provider or health care clearinghouse that would be subject
to the privacy rule before we pass this bill will still be subject to
the privacy rule after we pass this bill, and they will need to comply
by April of 2003. The bill does not delay the privacy compliance
deadline or negatively impact the privacy regulation. It is that
simple.
Having said that, again, all the people who have worked so diligently
to bring this compromise and this bill to the floor, indeed, are to be
congratulated. I hope it will save money, help the beneficiaries get
their information more quickly and more efficiently, and help the
providers provide good medical care to more people for less money over
the years to come.
Mr. Speaker, I yield back the balance of my time.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield 1 minute to the
gentlewoman from Washington (Ms. Dunn), a member of the Subcommittee on
Health of the Committee on Ways and Means. She is a hardworking member.
Ms. DUNN. Mr. Speaker, I rise in support of H.R. 3323. That is a bill
to delay the administrative simplification rules for 1 year. I want to
thank the gentleman from California (Chairman Thomas), the chairwoman
of the Subcommittee on Health, the gentlewoman from Connecticut (Mrs.
Johnson), and particularly my colleague, the gentleman from Ohio (Mr.
Hobson) for working very, very hard to put a compromise together that
we could live with. They worked diligently and provided a 1-year delay
without implementing a user fee.
I would like to thank the gentleman from Arizona (Mr. Shadegg) for
working with me earlier this year when we introduced legislation to
provide for a 2-year delay.
While I would have preferred our bill, I recognize that the
compromise we have today balances the need of maintaining oversight and
encouraging all providers to comply with the regulations.
I am very pleased that the user fees were removed from this
legislation. Like many of my colleagues, I was concerned about
requiring some physician to pay a user fee when they will experience a
reduction in Medicare payments next year. This delay is vital to help
those struggling to meet the challenges of compliance. The people I
represent, the doctors, the hospitals and the health plans, support a
delay.
I ask my colleagues to support this legislation. It is good
legislation. Let us get it to the President's desk before the end of
the year.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield such time as he may
consume to the gentleman from Ohio (Mr. Hobson).
Mr. HOBSON. Mr. Speaker, I want to thank my colleague, the gentleman
from Ohio (Mr. Brown) as well as the gentleman from Ohio (Mr. Sawyer)
again, and all the people who worked on this.
I want to explain to people this is a very complicated situation.
This is not easy to do. It is not easy to understand what we are doing.
This is a massive change in how we do things. But when we get done it
will be more cost effective. We will have less fraud. We will have less
abuse because we will have standardized coding. And we will have
electronic transfer. And the frustrations that people have in doctors'
offices about the huge stacks of bills that they are trying to collect
should go away. That is a real step forward.
We hope to save more than the $29.9 billion that we are talking about
in this bill with this type of activity.
The most important thing I want people to understand is sometimes we
get all wrapped up in fights amongst ourselves. We did not in this
legislation. The committees came together, the Members came together,
and we worked out a situation that I think in the long run is maybe a
better bill than we wrote, is a better bill than other people wrote.
The finest solution to this is one that is good for this country, gives
people time but moves the system forward to the final completion that
we all want.
I want to particularly thank everybody, all the staffs, all the
Members who worked so hard to make this work.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman from
Ohio (Mr. Hobson) for his really outstanding and consistent leadership
on this issue.
Mr. MARKEY. Mr. Speaker, I rise in support of the language in the
Administrative Simplification Compliance Act, H.R. 3323 which exempts
from delay the compliance date for the Health Insurance Portability and
Accountability Act (HIPAA) Privacy Rule.
In 1996 Congress made a promise to the American people that by
February 2001 medical privacy protections would be in place. Despite
the efforts of privacy opponents who lobbied this Administration
heavily to postpone the effective date of these protections, the final
privacy rule went forward in April 2001--a victory for patients,
doctors and the quality of our nation's health care. But we're not
quite out of the woods yet--the Administration has indicated that
certain sections of this rule are to be opened for public comment early
next year. It is my hope that this plan will not serve to undermine the
strong privacy protections already in place and that the compliance
date for these protections will not be postponed.
The date of compliance for these first time, fundamental medical
privacy protections is April 2003. While we can all agree that these
protections don't go far enough in providing comprehensive privacy for
medical records they are a good first step.
I praise Representative Hobson, the author of H.R. 3323, for
including language to preserve the compliance date for the HIPAA
privacy protections. Americans have waited far too long for medical
privacy and they deserve it as soon possible.
Mr. SHADEGG. Mr. Speaker, I rise to support H.R. 3323, the
Administrative Simplification Compliance Act. Mr. Speaker, earlier this
year, I introduced legislation, H.R. 1975, that would have greatly
assisted health care providers, physicians, health plans, and the
states in coming into compliance with the Administrative Simplification
provisions that were passed as part of the Health Insurance Portability
and Accountability Act (HIPAA). My bill recognized the difficulty that
health plans, providers, and states face in updating their computer
systems by delaying the HIPAA compliance date to the later of October
16, 2004, or two years after the Secretary finalized all of the
Administrative Simplification regulations. Unfortunately, however,
there was skepticism as to the merit of any extension.
While the intention of the Administrative Simplification requirements
is meritorious--moving from a slothy paper-based health care
transaction system to an efficient electronic-based one--it is clear
that health plans and providers will not be able to meet the deadlines
set forth in regulations that were late in their release. According to
a recent survey conducted by Phoenix Health Systems, ``industry-wide
readiness for the October 16,
[[Page H8778]]
2002 transactions deadline is questionable--even unlikely.
Further evidence of the difficulty of meeting the October 16, 2002
deadline for transactions and code sets found in an October 11, 2001
letter signed by the National Governors Association, National
Conference of State Legislatures, Council of State Governments,
National Association of Counties, National League of Cities, and the
U.S. Conference of Mayors which stated ``State and local governments
will be unable to meet the requirements of HIPAA under the current
implementation schedule. Regardless of whether other covered entities--
such as hospitals, health plans, providers, and clearinghouse--except
to be compliant with HIPAA under the current system, if state and local
governments are not ready, HIPAA will not work.''
The bill on the floor today represents a compromise. The bill does
not contain all of the provisions I would like. It is, however, an
improvement over its original form, which contained an onerous user fee
on Medicare providers, an idea that has been rejected by the House of
Representatives time and time again. In addition, the compliance plans
that covered entities will have to submit--something that will get
entities to focus on how to come into compliance--will be less
burdensome under the new amended bill. I still have concerns about the
bill's effect on small providers, but believe that the exceptions we
have included are sufficient to not punish small physician practices.
Mr. Speaker, I want to thank Mr. Hobson, Mr. Sawyer, Chairman Tauzin,
and Chairman Thomas for their work on this issue.
Mr. DINGELL. Mr. Speaker, H.R. 3323, the ``Administrative
Simplification Compliance Act'' is a responsible compromise.
Congressman Hobson and Sawyer have addressed the concerns of the health
care industry while maintaining the integrity of the administrative
simplification requirements. H.R. 3323 also reflects the bipartisan
input of the committees of jurisdiction, the Committee on Energy and
Commerce and the Committee on Ways and Means.
H.R. 3323 delays the implementation of the administrative
simplification requirements in the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) by one year. It ensures, however,
that those sectors of the health care industry that take advantage of
this delay are using the extra year to ready themselves for compliance.
Most importantly, the bill ensures that the one-year delay of
administrative simplification does not touch the implementation of the
health information privacy requirements in HIPAA, which will go into
effect as scheduled.
H.R. 3323 also requires that Medicare claims be submitted
electronically, with reasonable exceptions. The Medicare program has
paved the way in moving from paper-based claims processing to
electronic processing, and this requirement will help Medicare run more
smoothly.
Ultimately, the administration simplification requirements in HIPAA
will make our health system more efficient. These requirements will
result in billions of dollars in savings, thus freeing up more funds to
focus on expanding health care coverage and promoting higher quality
care. H.R. 3323 reaffirms the importance of these requirements while
giving additional time to prepare for their implementation. I ask my
colleagues to join me in support of this bill.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I have no further requests
for time, and I yield back the balance of my time.
Mr. BROWN of Ohio. Mr. Speaker, I have no further requests for time,
and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Culberson). The question is on the
motion offered by the gentleman from Louisiana (Mr. Tauzin) that the
House suspend the rules and pass the bill, H.R. 3323, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mrs. JOHNSON of Connecticut. Mr. Speaker, on that I demand the yeas
and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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