[Congressional Record Volume 151, Number 80 (Thursday, June 16, 2005)]
[Senate]
[Pages S6752-S6758]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FRIST (for himself, Mrs. Clinton, Mr. Martinez, Mr. 
        Bingaman, Mr. Talent, Ms. Mikulski, Mr. Thune, and Mr. Obama):
  S. 1262. A bill to reduce healthcare costs, improve efficiency, and 
improve healthcare quality through the development of a nation-wide 
interoperable health information technology system, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Mr. FRIST. Mr. President, this morning I am pleased to be joined on 
the floor by my distinguished colleague from the State of New York. 
Together we share an important goal to improve health care quality and 
reduce costs through the use of health information technology tools.
  I had the wonderful opportunity of spending 20 years as a physician 
and as a heart surgeon before coming to this body. Like most 
physicians, I wanted to and, in fact, did use the very latest, most 
advanced technology, anything that could possibly, in my practice, make 
my patients live a healthier life, a better life, a more comfortable 
life.
  But amidst the artificial heart assist devices, the lasers that are 
used to remove lesions in the windpipe or the trachea, CT scan 
machines, x-rays, digital x-rays, digital thermometers, doctors today, 
unfortunately, for the most part, keep patient records the very same 
way I did 10 years ago and, indeed, almost exactly as my dad did 60 
years ago as he practiced medicine, and that is handwritten on paper in 
manila folders, typically stored in the basements of clinics or 
doctors' offices or hospitals.
  It is amazing because we design hospitals, structures on computers 
today, we conduct medical research with computers, we use computers in 
nearly every aspect of the clinical setting, the delivery of medicine. 
From very compact bedside monitors to these massive MRI scanners we 
have today, computers power almost everything we use, everything we do 
in terms of diagnosis in medicine, in health care.
  But--and this is what we have come to the floor to address--when it 
comes to health information, when it comes to electronic medical 
records, we are in the stone age and not the information age.
  Imagine a traveler far away from home who gets in an automobile 
accident and is taken unconscious or confused to a hospital. Paramedics 
rush them to a hospital, and at the very moment that individual arrives 
at the door of that emergency room, the emergency room physician meets 
them, but emptyhanded, with no notification of allergies or past 
medical history or preexisting illnesses, all of which is potentially 
lifesaving information. That is inexcusable in this day and age.
  My colleague from New York knows this all too well.
  Mrs. CLINTON. Mr. President, I wish to express my appreciation to 
Senator Frist for his leadership on this issue because we certainly do 
need to bring our health care system out of the information dark ages. 
I am pleased to be introducing this legislation today with the majority 
leader. It is a priority for both of us, and I look forward to 
continuing our partnership to move this legislation through the 
legislative process.
  For several years, I have been promoting the adoption of health 
information technology as a means to improve our health care system and 
bring it into the 21st century. I introduced health quality and 
information technology legislation in 2003 to jump-start the 
conversation on health IT. I am very pleased that I have had the 
opportunity now to work with the majority leader for more than a year 
on realizing what we believe would work, that would enable patients, 
physicians, nurses, hospitals--all--to have access electronically in a 
privacy-protected way to health information.
  We have a lot of challenges facing us in health care. We have a long 
way to go to achieve the goal of expanding access to quality, 
affordable health care for all Americans. But creating a health 
information technology infrastructure needs to be a key part of 
achieving our health care goals because we are facing an escalating 
health care crisis.
  Information technology has radically changed business and other 
aspects of our lives. It is time to use it to bring our health sector 
into the information age.
  Currently, the health industry spends 2 to 3 percent of its revenues 
on information technology, compared to roughly 12 percent in industries 
such as finance or banking. That is why you can go to an ATM virtually 
anywhere in the world and access money from your bank account.
  But despite evidence that greater investments could yield returns, we 
have not put in place the necessary infrastructure to facilitate the 
necessary investment in an interoperable health information technology 
and quality infrastructure.
  Mr. FRIST. Mr. President, this needs to change and it must change. We 
must establish an interoperable privacy-protected electronic medical 
record for every American who wants one. Working together, our Nation 
can confront these challenges, and we can build an interoperable 
national health information technology system. We know it will save 
lives. We know it will save money. It will improve quality and it will 
lead to huge measurable progress in the medical field, in the health 
field.
  We face enormous problems as a result of the underinvestment in 
health information technology. No industry as important to our economy 
as health spends as little on information technology. Our Nation has 
nearly 900,000 doctors and over 2.8 million nurses. Americans visit a 
doctor 900 million times per year. We have nearly 6,000 hospitals all 
over the country. Our health care system is enormous, yes, but it is 
dangerously fragmented. Even a small efficiency improvement can greatly 
reduce cost and improve quality, and there is plenty of room for 
improvement.
  Mrs. CLINTON. Mr. President, I could not agree more. The majority 
leader comes to this debate with a lifetime of experience and 
expertise. Researchers at Dartmouth University found that we waste as 
much as one-third of the $1.8 trillion we spend on health care on care 
that is not necessary.
  Doctors write over 2 billion prescriptions each year by hand. With 
all respect to my doctors, some are unclear or even illegible. 
Handwritten prescriptions filled incorrectly result in as many as 7,000 
deaths each year because we do not have access to a fail-safe system so 
that providing the prescription electronically, which also would 
trigger a response if it was interacting with another drug the patient 
was taking, is not yet available.
  With that data, it is difficult, sometimes even impossible, to track 
the quality of care patients receive. We cannot reward good providers 
or work to improve those who provide inferior care.
  Widening health care disparities really are a growing problem in our 
society. It is especially important because every moment that a doctor 
or a nurse spends with a patient is precious. For every hour that they 
spend with a patient, they spend one-half hour filling out those forms 
by hand. So we can save time, we can save money, and we can make it 
clear that this information will be easily electronically transportable 
where it is needed.
  Mr. FRIST. The problem is enormous and the problem is real. So what 
are we going to do about it? Senator Clinton and I propose three 
concrete steps to remedy these problems and establish a fully 
interoperable information technology system. First, we must establish 
standards for electronic medical records. Sharing data effectively 
requires more than just that fiber optic

[[Page S6753]]

cable, more than those Internet connections. It requires standards and 
laws that make it possible to exchange medical information in a 
privacy-protected way throughout our Nation.
  The Government should not impose these standards on the private 
sector, but it has a duty, and indeed it has an obligation, to lead the 
way. Medicare, Medicaid, SCHIP, the Indian Health Service, and other 
Federal programs should lead the way and establish electronic health 
records for all of their clients.
  The Veterans' Administration already leads the way with interoperable 
systems, but we need to get the VA to be able to talk to the Department 
of Defense.
  Mrs. CLINTON. That is absolutely the case, especially as we 
tragically know so many young people who have been injured in Iraq or 
Afghanistan move from the DOD to the VA. We have to have a better 
system so that they can know what needs to be done for these brave 
young men and women.
  Secondly, we believe our legislation should work to reduce barriers 
and facilitate the electronic exchange of health information among 
providers in a secure and private way to improve health care quality 
and meet community needs. When communities come together, as is 
beginning to happen all over the country, the Federal Government should 
help them implement an interoperable health IT system.
  Interoperable sounds like a confusing word, but it means they can 
talk to each other, they can operate in the same overall system and do 
it in a way that complies with national standards. To speed up this 
process, we propose spending a total of $600 million--$125 million a 
year, over 5 years--to begin the work of rolling out interoperable 
electronic medical records systems around the Nation.
  Finally, we must use the data we collect to focus intensely on 
improving the quality of health care. Our medical system, which is, and 
deserves to be, the envy of the world, still suffers from enormous and 
unpardonable disparities in the quality of care. Health IT will be a 
tool to help our dedicated health care professionals improve care, and 
efficiently, so that they spend more time at the bedside, more time at 
the office visit, and less on paperwork.
  Through this legislation, we will begin to collect consistent data on 
the quality of health care delivered in America. As the largest health 
care payer in the country, the Federal Government has a responsibility 
to begin that process of collecting data on its own health care 
programs and share it with the public. Then, with this data, we can 
begin to move to a health care system that actually rewards providers 
who give their patients superior care.
  Mr. FRIST. Mr. President, as we talk about these systems and 
standards and words such as interoperability, which, as the Senator 
from New York said, does mean being able to connect it all together, 
people who are listening must ask: Well, how in the world do these 
electronic health records and the appropriate use of that data bring 
concrete benefits to them as individuals and to their families?
  First, it will reduce waste and inefficiency in the system. It only 
makes sense that fragmented systems, with no interconnectivity at all, 
have inherent inefficiencies and waste. That is moved aside. That has a 
very direct impact on lower costs, making health care more affordable 
and thus available for people broadly.
  It improves quality. Right now we know that medical errors occur. Too 
many medical errors occur in our health care system today. By the 
application of technology, we can move those medical errors aside. They 
will not occur and that improves quality.
  They will empower patients. It gives that individual who is listening 
right now the knowledge and power to be able to participate in a 
consumer-driven system where choices can be made, where the focus is on 
the patient, that is provider friendly, that is driven by information 
and choice and empowerment to make that choice.
  They will protect patient privacy and promote the secure exchange of 
life-saving health information. It is spelled out in the legislation. 
It is going to be privacy protected.
  For the first time, they will seamlessly integrate this advancement 
in health information technology with quality measures, with quality 
advancements, harmonizing and integrating them in a way that simply has 
not been done in the past.
  This proposal brings together people, as we can see, from across the 
political spectrum, and it will unlock the potential of medical 
information technology for all Americans.
  Mrs. CLINTON. I am delighted to be working on this very important 
national initiative with the majority leader because we are at a 
pivotal moment. Pockets of innovation and investment are developing all 
over the country. In my State, places like Rochester, NY, and in the 
majority leader's State, the Tri-Cities region of Tennessee, health 
care providers, employers and community groups are beginning the 
process of building a health information technology network. That is a 
positive first step, but it could be either a last step or a misstep 
because to truly achieve the promise of health information technology, 
we must ensure that these efforts do not become silos. In other words, 
there is one system for every hospital, one system for every clinical 
practice. They cannot talk to each other. So a person goes to one 
doctor. Their doctor is in New York, but they travel to Tennessee to 
visit friends, they are in an accident, and nobody knows how to get the 
information that will give them the best possible treatment.
  So if we do this right, this comprehensive legislation will create a 
health information technology framework that improves quality, protects 
patient privacy and ensures interoperability through the adoption of 
health IT standards and quality measures.
  We are marrying technology and quality to create a seamless, 
efficient health care system for the 21st century. I thank the majority 
leader, who has brought so much interest and expertise to this, for 
being a leader and making this happen in the next 18 months.
  Mr. FRIST. I thank my colleague in this endeavor. As mentioned 
earlier, we began working on the information technology aspects of 
health care about a year ago and published our first op-ed together 
about July of last year.
  In closing, this is not going to be an easy process. I look back at 
the technology in my past in medicine for 20 years, but then also in my 
dad's practice; he practiced medicine for 55 years. I remember he had 
one of the very earliest electrocardiogram, EKG, machines in the State 
of Tennessee. At that time--because there were so few machines and so 
few cardiologists--he would take referrals from all over the State of 
Tennessee. The machine itself was bigger than the desk before me, at 
the time.
  What would happen then is, if there was a machine in a little rural 
community 100 miles away from Nashville, the machine there would take a 
piece of paper, they would run it through, they would send it by mail. 
It would take 2 days to get to Nashville. Dad would read it and send it 
back. Four days later, that doctor would be able to read that EKG.
  Then, when I was about 9 or 10 years of age--because their bedroom 
was right around the corner from mine--I remember so well when he 
installed a telephone to put another big box there to have the first in 
Tennessee again of a machine--and it was amazing at the time--one could 
transmit these EKGs electronically over the telephone wire and have it 
interpreted at the bedside. He would keep it there because people, of 
course, have heart attacks in the middle of the night. Then it would 
take probably about 30 or 40 minutes to get the result back.
  Of course, today we are at a point where with a little tiny machine, 
an EKG machine, we can get an instantaneous readout not just of the 
paper and of the EKG but the result actually read by the box.
  I have been able to see huge progress in my own life and watching my 
dad's practice and my practice. Now we need to see all of that sort of 
progress condensed, applied not just to the technology but to the 
collection of information, the promotion of electronic health records, 
and the appropriate sharing of that information which is privacy 
protected. That is the sort of progress we are going to see. We are 
going to see it come alive on the Senate floor and with the House and 
work

[[Page S6754]]

in concert with the President of the United States to make sure that 
the great advantages, in terms of lowering costs, getting rid of 
inefficiencies, and promoting quality will be realized.
  The bill that we will shortly introduce does present a comprehensive 
approach of medical information and the use of medical information as 
we address our health care challenges. It provides that important 
backbone and critical building block for a better, a stronger, and a 
more responsive health care system for all Americans.
  Again, I thank my distinguished colleague from New York. We urge all 
of our colleagues to look at this bill and support this bill. With this 
legislation, there is no doubt in my mind that we will, yes, help save 
money and help save time, but most importantly we will save lives.
  I ask unanimous consent that the text of the bill we will shortly 
send to the desk be printed in the Record.
  Mr. OBAMA. Mr. President, I am proud to join Senators Frist and 
Clinton in introducing the Health Technology to Enhance Quality Act of 
2005.
  Our national health care system is in crisis. Forty-five million 
Americans are uninsured, and this number continues to rise. Health care 
costs are increasing at almost double digit rates. Millions of 
Americans are suffering, and dying, from diseases such as diabetes or 
AIDS that could have been prevented or delayed for many years. And the 
chance of Americans receiving the right care, at the right time and for 
the right reason is no greater than the flip of a coin.
  These health care issues are varied and complex, as are the 
solutions. But, as one of my constituents advised, it is time for us in 
the Congress to put on our hard hats, pick up our tool belts and get to 
work fixing our broken health care system.
  One place to start is by bringing the health care system into the 
21st century. In our lifetimes, we have seen some of the greatest 
advances in the history of technology and the sharing of information. 
Yet, in our health care system, too much care is still provided with a 
pen and paper. Too much information about patients is not shared 
between doctors or readily available to them in the first place. And 
providers too often do not have the information to know what care has 
worked most effectively and efficiently to make patients healthy.
  Mistakes are easily made--medical errors alone kill up to 98,000 
people a year, more people than the number who die from AIDS each year.
  But embracing 21st century technology is not just about reducing 
errors and improving the quality of medical care. It is also about 
cost.
  We spend nearly $1.5 trillion a year on health care in America. But a 
quarter of that money--one out of every four dollars--is spent on non-
medical costs--most of it on bills and paperwork. Every transaction you 
make at a bank now costs them less than a penny. Yet, because we have 
not updated technology in the rest of the health care industry, a 
single transaction still costs up to $25--not one dime of which goes 
toward improving the quality of our health care.
  The Health Technology to Enhance Quality Act of 2005 is going to help 
bring the health care system into the 21st century. This bill will lead 
to the development and implementation of health information technology 
standards to ensure interoperability of health information systems. The 
legislation codifies the Office of National Coordinator for Information 
Technology and establishes standards for the electronic exchange of 
health information. The bill also provides grant funding to support 
development of health information technology infrastructure as well as 
measurement of the quality of care provided to patients.
  This legislation will help our health care system take a huge step 
forward. A vote for the Health TEQ Act is a vote for health care that 
is safe, effective, and affordable. I urge my colleagues to join us in 
passing this bill quickly.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1262

       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 ``Health Technology to Enhance 
     Quality Act of 2005'' or the ``Health TEQ Act of 2005''.

     TITLE I--HEALTH INFORMATION TECHNOLOGY STANDARDS ADOPTION AND 
                       INFRASTRUCTURE DEVELOPMENT

     SEC. 101. ESTABLISHMENT OF NATIONAL COORDINATOR; 
                   RECOMMENDATION, ADOPTION, AND IMPLEMENTATION OF 
                   HEALTH INFORMATION ELECTRONIC EXCHANGE 
                   STANDARDS.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end the following:

              ``TITLE XXIX--HEALTH INFORMATION TECHNOLOGY

     ``SEC. 2901. DEFINITIONS.

       ``For purposes of this title:
       ``(1) Group health plan.--The term `group health plan' has 
     the meaning giving that term in section 2791.
       ``(2) Healthcare provider.--The term `healthcare provider' 
     means a hospital, skilled nursing facility, home health 
     entity, healthcare clinic, community health center, group 
     practice (as defined in section 1877(h)(4) of the Social 
     Security Act), a physician (as defined in section 1861(r)(1) 
     of the Social Security Act), a pharmacist, a pharmacy, a 
     laboratory, and any other category of facility or clinician 
     determined appropriate by the Secretary.
       ``(3) Health information.--The term `health information' 
     means any information, recorded in any form or medium, that 
     relates to the past, present, or future physical or mental 
     health or condition of an individual, the provision of 
     healthcare to an individual, or the past, present, or future 
     payment for the provision of healthcare to an individual.
       ``(4) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given that term in section 2791.
       ``(5) Laboratory.--The term `laboratory' has the meaning 
     given that term in section 353.
       ``(6) Pharmacist.--The term `pharmacist' has the meaning 
     given that term in section 804 of the Federal Food, Drug, and 
     Cosmetic Act.

     ``SEC. 2902. OFFICE OF THE NATIONAL COORDINATOR OF HEALTH 
                   INFORMATION TECHNOLOGY.

       ``(a) Office of National Health Information Technology.--
     There is established within the Office of the Secretary an 
     Office of the National Coordinator of Health Information 
     Technology (referred to in this section as the `Office'). The 
     Office shall be headed by a National Coordinator who shall be 
     appointed by the President in consultation with the Secretary 
     and shall report directly to the Secretary.
       ``(b) Purpose.--It shall be the purpose of the Office to 
     carry out programs and activities to develop a nationwide 
     interoperable health information technology infrastructure 
     that--
       ``(1) improves healthcare quality, reduces medical errors, 
     and advances the delivery of patient-centered medical care;
       ``(2) reduces healthcare costs resulting from inefficiency, 
     medical errors, inappropriate care, and incomplete 
     information;
       ``(3) ensures that appropriate information to help guide 
     medical decisions is available at the time and place of care;
       ``(4) promotes a more effective marketplace, greater 
     competition, and increased choice through the wider 
     availability of accurate information on healthcare costs, 
     quality, and outcomes;
       ``(5) improves the coordination of care and information 
     among hospitals, laboratories, physician offices, and other 
     entities through an effective infrastructure for the secure 
     and authorized exchange of healthcare information;
       ``(6) improves public health reporting and facilitates the 
     early identification and rapid response to public health 
     threats and emergencies, including bioterror events and 
     infectious disease outbreaks;
       ``(7) facilitates health research; and
       ``(8) ensures that patients' health information is secure 
     and protected.
       ``(c) Duties of National Coordinator.--
       ``(1) In general.--The National Coordinator shall--
       ``(A) facilitate the adoption of a national system for the 
     electronic exchange of health information;
       ``(B) serve as the principal advisor to the Secretary on 
     the development, application, and use of health information 
     technology, and coordinate and oversee the health information 
     technology programs of the Department;
       ``(C) ensure the adoption and implementation of standards 
     for the electronic exchange of health information, including 
     coordinating the activities of the Standards Working Group 
     under section 2903;
       ``(D) carry out activities related to the electronic 
     exchange of health information that reduce cost and improve 
     healthcare quality;
       ``(E) ensure that health information technology policy and 
     programs of the Department are coordinated with those of 
     relevant executive branch agencies (including Federal 
     commissions) with a goal of avoiding duplication of efforts 
     and of helping to ensure that each agency undertakes health 
     information technology activities primarily within the areas 
     of its greatest expertise and technical capability;
       ``(F) to the extent permitted by law, coordinate outreach 
     and consultation by the relevant executive branch agencies 
     (including Federal commissions) with public and

[[Page S6755]]

     private parties of interest, including consumers, payers, 
     employers, hospitals and other healthcare providers, 
     physicians, community health centers, laboratories, vendors 
     and other stakeholders;
       ``(G) advise the President regarding specific Federal 
     health information technology programs; and
       ``(H) submit the reports described under paragraph (2).
       ``(2) Reports to congress.--The National Coordinator shall 
     submit to Congress, on an annual basis, a report that 
     describes--
       ``(A) specific steps that have been taken to facilitate the 
     adoption of a nationwide system for the electronic exchange 
     of health information;
       ``(B) barriers to the adoption of such a nationwide system; 
     and
       ``(C) recommendations to achieve full implementation of 
     such a nationwide system.
       ``(d) Detail of Federal Employees.--
       ``(1) In general.--Upon the request of the National 
     Coordinator, the head of any Federal agency is authorized to 
     detail, with or without reimbursement from the Office, any of 
     the personnel of such agency to the Office to assist it in 
     carrying out its duties under this section.
       ``(2) Effect of detail.--Any such detail shall--
       ``(A) not interrupt or otherwise affect the civil service 
     status or privileges of the Federal employee; and
       ``(B) be in addition to any other staff of the Department 
     employed by the National Coordinator.
       ``(3) Acceptance of Detailees.--Notwithstanding any other 
     provision of law, the Office may accept detailed personnel 
     from other Federal agencies without regard to whether the 
     agency described under paragraph (1) is reimbursed.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out the activities of the Office under this section 
     for each of fiscal years 2006 through 2010.

     ``SEC. 2903. COLLABORATIVE PROCESS FOR THE RECOMMENDATION, 
                   ADOPTION, AND IMPLEMENTATION OF HEALTH 
                   INFORMATION STANDARDS.

       ``(a) Establishment of Working Group.--Not later than 60 
     days after the date of enactment of this title, the National 
     Coordinator, in consultation with the Director of the 
     National Institute of Standards and Technology (referred to 
     in this section as the `Director'), shall establish a 
     permanent Electronic Health Information Standards Development 
     Working Group (referred to in this title as the `Standards 
     Working Group').
       ``(b) Composition.--The Standards Working Group shall be 
     composed of--
       ``(1) the National Coordinator, who shall serve as the 
     chairperson of the Standards Working Group;
       ``(2) the Director;
       ``(3) representatives of the relevant Federal agencies and 
     departments, as selected by the Secretary in consultation 
     with the National Coordinator, including representatives of 
     the Department of Veterans Affairs, the Department of 
     Defense, the Office of Management and Budget, the Department 
     of Homeland Security, and the Environmental Protection 
     Agency;
       ``(4) private entities accredited by the American National 
     Standards Institute, as selected by the National Coordinator;
       ``(5) representatives, as selected by the National 
     Coordinator--
       ``(A) of group health plans or other health insurance 
     issuers;
       ``(B) of healthcare provider organizations;
       ``(C) with expertise in health information security;
       ``(D) with expertise in health information privacy;
       ``(E) with experience in healthcare quality and patient 
     safety, including those with experience in utilizing health 
     information technology to improve healthcare quality and 
     patient safety;
       ``(F) of consumer and patient organizations;
       ``(G) of employers;
       ``(H) with experience in data exchange; and
       ``(I) with experience in developing health information 
     technology standards and new health information technology; 
     and
       ``(6) other representatives as determined appropriate by 
     the National Coordinator in consultation with the Secretary.
       ``(c) Standards Deemed Adopted.--On the date of enactment 
     of this title, the Secretary and the Standards Working Group 
     shall deem as adopted, for use by the Secretary and private 
     entities, the standards adopted by the Consolidated Health 
     Informatics Initiative prior to such date of enactment.
       ``(d) Duties.--
       ``(1) First year review.--Not later than 1 year after the 
     date of enactment of this title, the Standards Working Group 
     shall--
       ``(A) review existing standards (including content, 
     communication, and security standards) for the electronic 
     exchange of health information, including such standards 
     deemed adopted under subsection (c);
       ``(B) identify deficiencies and omissions in such existing 
     standards;
       ``(C) identity duplications and omissions in existing 
     standards, and recommend modifications to such standards as 
     necessary; and
       ``(D) submit a report to the Secretary recommending for 
     adoption by such Secretary and private entities--
       ``(i) modifications to the standards deemed adopted under 
     subsection (c); and
       ``(ii) any additional standards reviewed pursuant to this 
     paragraph.
       ``(2) Ongoing review.--Beginning 1 year after the date of 
     enactment of this title, and on an ongoing basis thereafter, 
     the Standards Working Group shall--
       ``(A) review existing standards (including content, 
     communication, and security standards) for the electronic 
     exchange of health information, including such standards 
     adopted by the Secretary under subsections (c) and (e);
       ``(B) identify deficiencies and omissions in such existing 
     standards;
       ``(C) identity duplications and omissions in existing 
     standards, and recommend modifications to such standards as 
     necessary; and
       ``(D) submit reports to the Secretary recommending for 
     adoption by such Secretary and private entities--
       ``(i) modifications to any existing standards; and
       ``(ii) any additional standards reviewed pursuant to this 
     paragraph.
       ``(3) Limitation.--The standards described under this 
     subsection shall not include any standards developed pursuant 
     the Health Insurance Portability and Accountability Act of 
     1996.
       ``(e) Adoption by Secretary.--Not later than 1 year after 
     the receipt of a report from the Standards Working Group 
     under paragraph (1)(D) or (2)(D) of subsection (d), the 
     Secretary shall review and provide for the adoption by the 
     Federal Government of any modification or standard 
     recommended in such report.
       ``(f) Voluntary Adoption.--Any standards adopted by the 
     Secretary under this section shall be voluntary for private 
     entities.
       ``(g) Application of FACA.--
       ``(1) In general.--The Federal Advisory Committee Act (5 
     U.S.C. App.) shall apply to the Standards Working Group 
     established under this section.
       ``(2) Limitation.--Notwithstanding paragraph (1), the 2-
     year termination date under section 14 of the Federal 
     Advisory Committee Act shall not apply to the Standards 
     Working Group.

     ``SEC. 2904. IMPLEMENTATION AND CERTIFICATION OF HEALTH 
                   INFORMATION STANDARDS.

       ``(a) Implementation.--
       ``(1) In general.--The Secretary, in consultation with the 
     National Coordinator and the Director of the National 
     Institute of Standards and Technology, shall develop criteria 
     to ensure uniform and consistent implementation of any 
     standards for the electronic exchange of health information 
     voluntarily adopted by private entities in technical 
     conformance with such standards adopted under this title.
       ``(2) Implementation assistance.--The Secretary may 
     recognize a private entity or entities to assist private 
     entities in the implementation of the standards adopted under 
     this title.
       ``(b) Certification.--
       ``(1) In general.--The Secretary, in consultation with the 
     National Coordinator and the Director of the National 
     Institute of Standards and Technology shall develop criteria 
     to ensure and certify that hardware, software, and support 
     services that claim to be in compliance with any standard for 
     the electronic exchange of health information adopted under 
     this title have established and maintain such compliance in 
     technical conformance with such standard.
       ``(2) Certification assistance.--The Secretary may 
     recognize a private entity or entities to assist in the 
     certification described under paragraph (1).
       ``(c) Delegation authority.--The Secretary may delegate the 
     development of the criteria under subsection (a) and (b) to a 
     private entity.

     ``SEC. 2905. AUTHORITY FOR COORDINATION AND SPENDING.

       ``(a) In General.--The Secretary acting through the 
     National Coordinator--
       ``(1) shall direct and coordinate--
       ``(A) Federal spending related to the development, 
     adoption, and implementation of standards for the electronic 
     exchange of health information; and
       ``(B) the adoption of the recommendations submitted to such 
     Secretary by the Standards Working Group established under 
     section 2903; and
       ``(2) may utilize the entities recognized under section 
     2904 to assist in implementation and certification related to 
     the implementation by the Federal Government of the standards 
     adopted by the Secretary under this title.
       ``(b) Limitation.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, no Federal agency shall expend Federal funds for the 
     purchase of hardware, software, or support services for the 
     purpose of implementing a standard related to the electronic 
     exchange of health information that is not a standard adopted 
     by the Secretary under section 2903.
       ``(2) Effective date.--The limitation under paragraph (1) 
     shall take effect not later than 1 year after the adoption by 
     the Secretary of such standards under section 2903.''.

     SEC. 102. ENCOURAGING SECURE EXCHANGE OF HEALTH INFORMATION.

       (a) Study and Grant Programs Related to State Health 
     Information Laws and Practices.--
       (1) Study of state health information laws and practices.--
       (A) In general.--The Secretary of Health and Human Services 
     (referred to in this Act as the ``Secretary'') shall carry 
     out, or contract with a private entity to carry out, a study 
     that examines--

[[Page S6756]]

       (i) the variation among State laws and practices that 
     relate to the privacy, confidentiality, and security of 
     health information;
       (ii) how such variation among State laws and practices may 
     impact the electronic exchange of health information (as 
     defined in section 2901 of the Public Health Service Act) (as 
     added by section 101)--

       (I) among the States;
       (II) between the States and the Federal Government; and
       (III) among private entities; and

       (iii) how such laws and practices may be harmonized to 
     permit the secure electronic exchange of health information.
       (B) Report and recommendations.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary shall 
     submit to Congress a report that--
       (i) describes the results of the study carried out under 
     subparagraph (A); and
       (ii) makes recommendations based on the results of such 
     study.
       (2) Secure exchange of health information; incentive 
     grants.--Title XXIX of the Public Health Service Act (as 
     added by section 101) is amended by adding at the end the 
     following:

     ``SEC. 2906. SECURE EXCHANGE OF HEALTH INFORMATION; INCENTIVE 
                   GRANTS.

       ``(a) In General.--The Secretary may make grants to States 
     to carry out programs under which such States cooperate with 
     other States to develop and implement State policies that 
     will facilitate the secure electronic exchange of health 
     information utilizing the standards adopted under section 
     2903--
       ``(1) among the States;
       ``(2) between the States and the Federal Government; and
       ``(3) among private entities.
       ``(b) Priority.--In awarding grants under subsection (a), 
     the Secretary shall give priority to States that provide 
     assurance that any funding awarded under such a grant shall 
     be used to harmonize privacy laws and practices between the 
     States, the States and the Federal Government, and among 
     private entities related to the privacy, confidentiality, and 
     security of health information.
       ``(c) Dissemination of Information.--The Secretary shall 
     disseminate information regarding the efficacy of efforts of 
     a recipient of a grant under this section.
       ``(d) Technical Assistance.--The Secretary may provide 
     technical assistance to recipients of a grant under this 
     section.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out subsection (a), there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2006 through 2010.''.
       (b) Study and Grant Programs Related to State Licensure 
     Laws.--
       (1) Study of state licensure laws.--
       (A) In general.--The Secretary shall carry out, or contract 
     with a private entity to carry out, a study that examines--
       (i) the variation among State laws that relate to the 
     licensure, registration, and certification of medical 
     professionals; and
       (ii) how such variation among State laws impacts the secure 
     electronic exchange of health information (as defined in 
     section 2901 of the Public Health Service Act) (as added by 
     section 101)--

       (I) among the States; and
       (II) between the States and the Federal Government.

       (B) Report and recommendations.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary shall 
     publish a report that--
       (i) describes the results of the study carried out under 
     subparagraph (A); and
       (ii) makes recommendations to States regarding the 
     harmonization of State laws based on the results of such 
     study.
       (2) Reauthorization of incentive grants regarding 
     telemedicine.--Section 330L(b) of the Public Health Service 
     Act (42 U.S.C. 254c-18(b)) is amended by striking ``2002 
     through 2006'' and inserting ``2006 through 2010''.
       (3) HIPAA application to electronic health information.--
     Title XXIX of the Public Health Service Act (as added by 
     section 101 and amended by subsection (a)) is further amended 
     by adding at the end the following:

     ``SEC. 2907. APPLICABILITY OF PRIVACY AND SECURITY 
                   REGULATIONS.

       ``The regulations promulgated by the Secretary under part C 
     of title XI of the Social Security Act and sections 261, 262, 
     263, and 264 of the Health Insurance Portability and 
     Accountability Act of 1996 with respect to the privacy, 
     confidentiality, and security of health information shall--
       ``(1) apply to any health information stored or transmitted 
     in an electronic format as of the date of enactment of this 
     title; and
       ``(2) apply to the implementation of standards, programs, 
     and activities under this title.''.
       (c) Study and report.--
       (1) Study.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall carry out, or 
     contract with a private entity to carry out, a study that 
     examines the integration of the standards adopted under the 
     amendments made by this Act with the standards adopted under 
     the Health Insurance Portability and Accountability Act of 
     1996 (Public Law 104-191).
       (2) Plan; report.--
       (A) Plan.--Not later than 3 years after the date of 
     enactment of this Act, the Secretary shall, based on the 
     results of the study carried out under paragraph (1), develop 
     a plan for the integration of the standards described under 
     such paragraph and submit a report to Congress describing 
     such plan.
       (B) Periodic Reports.--The Secretary shall submit periodic 
     reports to Congress that describe the progress of the 
     integration described under subparagraph (A).

TITLE II--FACILITATING THE ADOPTION AND IMPLEMENTATION OF INTEROPERABLE 
                     ELECTRONIC HEALTH INFORMATION

     SEC. 201. GRANTS FOR THE IMPLEMENTATION OF REGIONAL OR LOCAL 
                   HEALTH INFORMATION TECHNOLOGY PLANS.

       Title XXIX of the Public Health Service Act (as amended by 
     section 102) is further amended by adding at the end the 
     following:

     ``SEC. 2908. GRANTS FOR THE IMPLEMENTATION OF REGIONAL OR 
                   LOCAL HEALTH INFORMATION TECHNOLOGY PLANS.

       ``(a) In General.--The Secretary, in consultation with the 
     National Coordinator, may award competitive grants to 
     eligible entities to implement regional or local health 
     information plans to improve healthcare quality and 
     efficiency through the electronic exchange of health 
     information pursuant to the standards, protocols, and other 
     requirements adopted by the Secretary under sections 2903 and 
     2910.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     subsection (a) an entity shall--
       ``(1) demonstrate financial need to the Secretary;
       ``(2) demonstrate that one of its principal missions or 
     purposes is to use information technology to improve 
     healthcare quality and efficiency;
       ``(3) adopt bylaws, memoranda of understanding, or other 
     charter documents that demonstrate that the governance 
     structure and decisionmaking processes of such entity allow 
     for participation on an ongoing basis by multiple 
     stakeholders within a community, including--
       ``(A) physicians (as defined in section 1861(r)(1) of the 
     Social Security Act), including physicians that provide 
     services to low income and underserved populations;
       ``(B) hospitals (including hospitals that provide services 
     to low income and underserved populations);
       ``(C) group health plans or other health insurance issuers;
       ``(D) health centers (as defined in section 330(b)) and 
     Federally qualified health centers (as defined in section 
     1861(aa)(4) of the Social Security Act);
       ``(E) rural health clinics (as defined in section 1861(aa) 
     of the Social Security Act);
       ``(F) consumer organizations;
       ``(G) employers; and
       ``(H) any other healthcare providers or other entities, as 
     determined appropriate by the Secretary;
       ``(4) adopt nondiscrimination and conflict of interest 
     policies that demonstrate a commitment to open, fair, and 
     nondiscriminatory participation in the health information 
     plan by all stakeholders;
       ``(5) adopt the national health information technology 
     standards adopted by the Secretary under section 2903;
       ``(6) facilitate the electronic exchange of health 
     information within the local or regional area and among local 
     and regional areas;
       ``(7) prepare and submit to the Secretary an application in 
     accordance with subsection (c); and
       ``(8) agree to provide matching funds in accordance with 
     subsection (e).
       ``(c) Application.--
       ``(1) In general.--To be eligible to receive a grant under 
     subsection (a), an entity shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(2) Required information.--At a minimum, an application 
     submitted under this subsection shall include--
       ``(A) clearly identified short-term and long-term 
     objectives of the regional or local health information plan;
       ``(B) a technology plan that complies with the standards 
     adopted under section 2903 and that includes a descriptive 
     and reasoned estimate of costs of the hardware, software, 
     training, and consulting services necessary to implement the 
     regional or local health information plan;
       ``(C) a strategy that includes initiatives to improve 
     healthcare quality and efficiency, including the use of 
     healthcare quality measures adopted under section 2910;
       ``(D) a plan that describes provisions to encourage the 
     implementation of the electronic exchange of health 
     information by all physicians, including single physician 
     practices and small physician groups participating in the 
     health information plan;
       ``(E) a plan to ensure the privacy and security of personal 
     health information that is consistent with Federal and State 
     law;
       ``(F) a governance plan that defines the manner in which 
     the stakeholders shall jointly make policy and operational 
     decisions on an ongoing basis; and
       ``(G) a financial or business plan that describes--
       ``(i) the sustainability of the plan;
       ``(ii) the financial costs and benefits of the plan; and
       ``(iii) the entities to which such costs and benefits will 
     accrue.
       ``(d) Use of Funds.--Amounts received under a grant under 
     subsection (a) shall be used to establish and implement a 
     regional

[[Page S6757]]

     or local health information plan in accordance with this 
     section.
       ``(e) Matching Requirement.--
       ``(1) In general.--The Secretary may not make a grant under 
     this section to an entity unless the entity agrees that, with 
     respect to the costs to be incurred by the entity in carrying 
     out the infrastructure program for which the grant was 
     awarded, the entity will make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions toward such costs in an amount equal to not 
     less than 50 percent of such costs ($1 for each $2 of Federal 
     funds provided under the grant).
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required under paragraph (1) may be in cash or 
     in kind, fairly evaluated, including equipment, technology, 
     or services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.
       ``(f) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section, $125,000,000 for each of fiscal 
     years 2006 through 2010.
       ``(2) Availability.--Amounts appropriated under paragraph 
     (1) shall remain available for obligation until expended.

     ``SEC. 2909. REPORTS.

       ``Not later than 1 year after the date on which the first 
     grant is awarded under section 2908, and annually thereafter 
     during the grant period, an entity that receives a grant 
     under such section shall submit to the Secretary, acting 
     through the National Coordinator, a report on the activities 
     carried out under the grant involved. Each such report shall 
     include--
       ``(1) a description of the financial costs and benefits of 
     the project involved and of the entities to which such costs 
     and benefits accrue;
       ``(2) an analysis of the impact of the project on 
     healthcare quality and safety;
       ``(3) a description of any reduction in duplicative or 
     unnecessary care as a result of the project involved; and
       ``(4) other information as required by the Secretary.''.

     SEC. 202. EXCEPTION FOR THE PROVISION OF PERMITTED SUPPORT.

       (a) Exemption From Criminal Penalties.--Section 1128B(b) of 
     the Social Security Act (42 U.S.C. 1320a-7b(b)(3)) is 
     amended--
       (1) in paragraph (3)--
       (A) in subparagraph (G), by striking ``and'' at the end;
       (B) in subparagraph (H), as added by section 237(d) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173; 117 Stat. 2213)--
       (i) by moving such subparagraph 2 ems to the left; and
       (ii) by striking the period at the end and inserting a 
     semicolon;
       (C) by redesignating subparagraph (H), as added by section 
     431(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2287), as subparagraph (I);
       (D) in subparagraph (I), as so redesignated--
       (i) by moving such subparagraph 2 ems to the left; and
       (ii) by striking the period at the end and inserting ``; 
     and''; and
       (E) by adding at the end the following new:
       ``(J) subject to paragraph (4), the provision, with or 
     without charge, of any permitted support (as defined in 
     paragraph (4)(A) and subject to the conditions in paragraph 
     (4)(B)) to an entity or individual for developing, 
     implementing, operating, or facilitating the electronic 
     exchange of health information (as defined in section 2901 of 
     the Public Health Service Act), so long as such support is 
     primarily designed to promote the electronic exchange of 
     health information.''; and
       (2) by adding at the end the following:
       ``(4) Permitted support.--
       ``(A) Definition of permitted support.--In this section, 
     the term `permitted support' means the provision of, or 
     funding used exclusively to provide or pay for, any 
     equipment, item, information, right, license, intellectual 
     property, software, or service, regardless of whether any 
     such support may have utility or value to the recipient for 
     any purpose beyond the exchange of health information (as 
     defined in section 2901 of the Public Health Service Act).
       ``(B) Conditions on permitted support.--Paragraph (3)(J) 
     shall not apply unless the following conditions are met:
       ``(i) The provision of permitted support is not conditioned 
     on the recipient of such support making any referral to, or 
     generating any business for, any entity or individual for 
     which any Federal health care program provides reimbursement.
       ``(ii) The permitted support complies with the standards 
     for the electronic exchange of health information adopted by 
     the Secretary under section 2903 of the Public Health Service 
     Act.
       ``(iii) The entity or network receiving permitted support 
     is able to document that such support is used by the entity 
     or the network for the electronic exchange of health 
     information in accordance with the standards adopted by the 
     Secretary under section 2903 of the Public Health Service 
     Act.''.
       (b) Exemption From Limitation on Certain Physician 
     Referrals.--Section 1877(e) of the Social Security Act (42 
     U.S.C. 1395nn(e)) is amended by adding at the end the 
     following:
       ``(9) Permitted support.--The provision of permitted 
     support (as described in section 1128B(b)(3)(J)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to permitted support provided on or after the 
     date of enactment of this Act.

     SEC. 203. GROUP PURCHASING.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall establish a safe 
     harbor for group purchasing of hardware, software, and 
     support services for the electronic exchange of health 
     information in compliance with section 2903 of the Public 
     Health Service Act (as added by section 101).
       (b) Conditions.--In establishing the safe harbor under 
     subsection (a), the Secretary shall establish conditions on 
     such safe harbor consistent with the purposes of--
       (1) improving healthcare quality;
       (2) reducing medical errors;
       (3) reducing healthcare costs;
       (4) improving the coordination of care;
       (5) streamlining administrative processes; and
       (6) promoting transparency and competition.

     SEC. 204. PERMISSIBLE ARRANGEMENTS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act and notwithstanding any other provision 
     of law, the Secretary shall establish guidelines in 
     compliance with section 2903 of the Public Health Service Act 
     that permit certain arrangements between group health plans 
     and health insurance issuers (as defined in section 2791 of 
     the Public Health Service Act (42 U.S.C. 300gg-91)) and 
     between healthcare providers (as defined in section 2901 of 
     such Act, as added by section 101) in accordance with 
     subsection (b).
       (b) Conditions.--In establishing the guidelines under 
     subsection (a), the Secretary shall establish conditions on 
     such arrangements consistent with the purposes of--
       (1) improving healthcare quality;
       (2) reducing medical errors;
       (3) reducing healthcare costs;
       (4) improving the coordination of care;
       (5) streamlining administrative processes; and
       (6) promoting transparency and competition.

  TITLE III--ADOPTION, IMPLEMENTATION, AND USE OF HEALTHCARE QUALITY 
                                MEASURES

     SEC. 301. STANDARDIZED MEASURES.

       Title XXIX of the Public Health Service Act (as amended by 
     section 201) is further amended by adding at the end the 
     following:

     ``SEC. 2910. COLLABORATIVE PROCESS FOR THE DEVELOPMENT, 
                   RECOMMENDATION, AND ADOPTION OF STANDARDIZED 
                   MEASURES OF QUALITY HEALTHCARE.

       ``(a) In General.--
       ``(1) Collaboration.--The Secretary, the Secretary of 
     Defense, the Secretary of Veterans Affairs, and any other 
     heads of relevant Federal agencies as determined appropriate 
     by the President, (referred to in this section as the 
     `Secretaries') shall adopt, on an ongoing basis, uniform 
     healthcare quality measures to assess the effectiveness, 
     timeliness, patient self-management, patient-centeredness, 
     efficiency, and safety of care delivered by healthcare 
     providers across Federal healthcare programs, including those 
     in titles XVIII, XIX, and XXI of the Social Security Act.
       ``(2) Review of measures adopted.--The Secretaries shall 
     conduct an ongoing review of the measures adopted under 
     paragraph (1).
       ``(3) Existing activities--Notwithstanding any other 
     provision of law, the measures and reporting activities 
     described in this subsection shall replace, to the extent 
     practicable and appropriate, any duplicative or redundant 
     existing measurement and reporting activities currently 
     utilized by Federal healthcare programs, including those in 
     titles XVIII, XIX, and XXI of the Social Security Act.
       ``(b) Priority Measures.--
       ``(1) In general.--In determining the measures to be 
     adopted under subsection (a), and the timing of any such 
     adoption, the Secretaries shall give priority to--
       ``(A) measures with the greatest potential impact for 
     improving the quality and efficiency of care provided under 
     Federal programs;
       ``(B) measures that may be rapidly implemented by group 
     health plans, health insurance issuers, physicians, 
     hospitals, nursing homes, long-term care providers, and other 
     providers; and
       ``(C) measures which may inform healthcare decisions made 
     by consumers and patients.
       ``(2) National Quality Forum Measures; Quality of care 
     indicators.--To the extent determined feasible and 
     appropriate by the Secretaries, the Secretaries shall adopt--
       ``(A) measures endorsed by the National Quality Forum, 
     subject to compliance with the amendments made by the 
     National Technology Transfer and Advancement Act of 1995; and
       ``(B) indicators relating to the quality of care data 
     submitted to the Secretary by hospitals under section 
     1886(b)(3)(B)(vii)(II) of the Social Security Act.
       ``(c) Collaboration With Private Entities.--
       ``(1) In general.--The Secretaries may establish 
     collaborative agreements with private entities, including 
     group health plans

[[Page S6758]]

     and health insurance issuers, providers, purchasers, consumer 
     organizations, and entities receiving a grant under section 
     2908, to--
       ``(A) encourage the use of the healthcare quality measures 
     adopted by the Secretary under this section; and
       ``(B) foster uniformity between the healthcare quality 
     measures utilized in Federal programs and private entities.
       ``(2) Use of measures.--The measures adopted by the 
     Secretaries under this section may apply in one or more 
     disease areas and across delivery settings, in order to 
     improve the quality of care provided or delivered by private 
     entities.
       ``(d) Comparative Quality Reports.--Beginning on January 1, 
     2008, in order to make comparative quality information 
     available to healthcare consumers, health professionals, 
     public health officials, researchers, and other appropriate 
     individuals and entities, the Secretaries and other relevant 
     agencies shall provide for the aggregation, analysis, and 
     dissemination of quality measures collected under this 
     section. Nothing in this section shall be construed as 
     modifying the privacy standards under the Health Insurance 
     Portability and Accountability Act of 1996 (Public Law 104-
     191).
       ``(e) Evaluations.--
       ``(1) Ongoing evaluations of use.--The Secretary shall 
     ensure the ongoing evaluation of the use of the healthcare 
     quality measures adopted under this section.
       ``(2) Evaluation and Report.--
       ``(A) Evaluation.--The Secretary shall, directly or 
     indirectly through a contract with another entity, conduct an 
     evaluation of the collaborative efforts of the Secretaries to 
     adopt uniform healthcare quality measures and reporting 
     requirements for federally supported healthcare delivery 
     programs as required under this section.
       ``(B) Report.--Not later than 2 years after the date of 
     enactment of this title, the Secretary shall submit a report 
     to the appropriate committees of Congress concerning the 
     results of the evaluation under subparagraph (A).''.

     SEC. 302. VALUE BASED PURCHASING PROGRAMS; SENSE OF THE 
                   SENATE.

       (a) Medicare Value Based Purchasing Pilot Program.--
       (1) In general.--The Secretary shall establish under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) a 
     value based purchasing pilot program based on the reporting 
     of quality measures pursuant to those adopted in section 2910 
     of the Public Health Service Act (as added by section 301) 
     and the overall improvement of healthcare quality through the 
     use of the electronic exchange of health information by 
     entities (including Federally qualified health centers, as 
     defined in section 1861(aa)(4) of the Social Security Act (42 
     U.S.C. 1395x(aa)(4))) pursuant to the standards adopted under 
     section 2903 of the Public Health Service Act (as added by 
     section 101). Such pilot program should be based on 
     experience gained through previous demonstration projects 
     conducted by the Secretary, including demonstration projects 
     conducted under sections 1866A and 1866C of the Social 
     Security Act (42 U.S.C. 1395cc-1; 1395cc-3), section 649 of 
     the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2322), and other relevant work conducted by private entities.
       (2) Expansion.--After conducting the pilot program under 
     paragraph (1) for not less than 2 years, the Secretary may 
     transition and implement such program on a national basis.
       (3) Funding.--
       (A) In general.--Payments for the costs of carrying out the 
     provisions of this subsection shall be made from the Federal 
     Hospital Insurance Trust Fund under section 1817 of the 
     Social Security Act (42 U.S.C. 1395i) and the Federal 
     Supplementary Insurance Trust Fund under section 1841 of such 
     Act (42 U.S.C. 1395t) (in this subsection referred to as the 
     ``Trust Funds''), as determined appropriate by the Secretary.
       (B) Limitation to ensure budget neutrality.--The Secretary 
     shall ensure that the total amount of expenditures from the 
     Trust Funds in a year does not exceed the total amount of 
     expenditures from the Trust Funds that would have been made 
     in such year if this subsection had not been enacted.
       (C) Monitoring and reports.--
       (i) Ongoing monitoring by the secretary to ensure funding 
     limitation is not violated.--The Secretary shall continually 
     monitor expenditures made from the Trust Funds by reason of 
     the provisions of this subsection to ensure that the 
     limitation described in subparagraph (B) is not violated.
       (ii) Reports.--Not later than April 1 of each year 
     (beginning in the year following the year in which the pilot 
     program under paragraph (1) is implemented), the Secretary 
     shall submit a report to Congress and the Comptroller General 
     of the United States that includes--

       (I) a detailed description of--

       (aa) the total amount expended from the Trust Funds 
     (including all amounts expended as a result of the provisions 
     of this subsection) during the previous year compared to the 
     total amount that would have been expended from the Trust 
     Funds during such year if this subsection had not been 
     enacted;
       (bb) the projections of the total amount that will be 
     expended from the Trust Funds (including all amounts that 
     will be expended as a result of the provisions of this 
     subsection) during the year in which the report is submitted 
     compared to the total amount that would have been expended 
     from the Trust Funds during the year if this subsection had 
     not been enacted; and
       (cc) specify the steps (if any) that the Secretary will 
     take pursuant to subparagraph (D) to ensure that the 
     limitation described in subparagraph (B) will not be 
     violated; and

       (II) a certification from the Chief Actuary of the Centers 
     for Medicare & Medicaid Services that the descriptions under 
     items (aa), (bb), and (cc) of subclause (I) are reasonable, 
     accurate, and based on generally accepted actuarial 
     principles and methodologies, including that the steps 
     described in subclause (I)(cc) will be adequate to avoid 
     violating the limitation described in subparagraph (B).

       (D) Application of Limitation.--If the Secretary determines 
     that the provisions of this subsection will result in the 
     limitation described in subparagraph (B) being violated in 
     any year, the Secretary shall take appropriate steps to 
     reduce spending that is occurring by reason of such 
     provisions, including through reducing the scope, site, and 
     duration of the pilot project.
       (E) Authority.--The Secretary shall make necessary spending 
     adjustments under the medicare program to recoup amounts so 
     that the limitation described in subparagraph (B) is not 
     violated in any year.
       (b) Sense of the Senate Regarding Physician Payments Under 
     Medicare.--It is the sense of the Senate that modifications 
     to the medicare fee schedule for physicians' services under 
     section 1848 of the Social Security Act (42 U.S.C. 1394w-4) 
     should include provisions based on the reporting of quality 
     measures pursuant to those adopted in section 2910 of the 
     Public Health Service Act (as added by section 301) and the 
     overall improvement of healthcare quality through the use of 
     the electronic exchange of health information pursuant to the 
     standards adopted under section 2903 of such Act (as added by 
     section 101).
       (c) Medicaid Value Based Purchasing Programs.--
       (1) In general.--The Secretary shall authorize waivers 
     under section 1115 of the Social Security Act (42 U.S.C. 
     1315) for States to establish value based purchasing programs 
     for State medicaid programs established under title XIX of 
     such Act (42 U.S.C. 1396 et seq.). Such programs shall be 
     based on the reporting of quality measures pursuant to those 
     adopted in section 2910 of the Public Health Service Act (as 
     added by section 301) and the overall improvement of 
     healthcare quality through the use of the electronic exchange 
     of health information pursuant to the standards adopted under 
     section 2903 of the Public Health Service Act (as added by 
     section 101).
       (2) Waiver.--In authorizing such waivers, the Secretary 
     shall waive any provisions of title XI or XIX of the Social 
     Security Act that would otherwise prevent a State from 
     establishing a value based purchasing program in accordance 
     with paragraph (1).
       (d) Quality Information Sharing.--
       (1) Review of medicare claims data.--
       (A) Procedures.--In order to improve the quality and 
     efficiency of items and services furnished to medicare 
     beneficiaires under title XVIII of the Social Security Act, 
     the Secretary shall establish procedures to review claims 
     data submitted under such title with respect to items and 
     services furnished or ordered by physicians.
       (B) Use of most recent medicare claims data.--In conducting 
     the review under subparagraph (A), the Secretary shall use 
     the most recent claims data that is available to the 
     Secretary.
       (2) Sharing of data.--Beginning in 2006, the Secretary 
     shall periodically provide physicians with comparative 
     information on the utilization of items and services under 
     such title XVIII based upon the review of claims data under 
     paragraph (1).

     SEC. 303. QUALITY IMPROVEMENT ORGANIZATION ASSISTANCE.

       (a) In General.--Section 1154(a) of the Social Security Act 
     (42 U.S.C. 1320c-3(a)) is amended by adding at the end the 
     following:
       ``(18) The organization shall assist, at such time and in 
     such manner as the Secretary may require, healthcare 
     providers (as defined in section 2901 of the Public Health 
     Service Act) in implementing the electronic exchange of 
     health information (as defined in such section 2901).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contracts entered into on or after the date of 
     enactment of this Act.
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