[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[House]
[Pages 25944-25946]
[From the U.S. Government Publishing Office, www.gpo.gov]



 H.R. 5622: A NEW VERSION OF THE MEDICARE INFRASTRUCTURE INVESTMENT ACT

  The SPEAKER pro tempore (Mr. Thornberry). Under a previous order of 
the House, the gentleman from California (Mr. Horn) is recognized for 5 
minutes.
  Mr. HORN. Mr. Speaker, we all know that Medicare is a vital program 
for nearly 40 million seniors. But we also know serious management 
deficiencies continue to plague this program resulting in the waste or 
misspending of billions of dollars for Medicare.

[[Page 25945]]

  Last year, the Medicare program made improper payments totaling an 
estimated $13.5 billion for claims that were, to quote our auditors in 
the General Accounting Office, ``that it was just not reasonable, not 
necessary and not appropriate.''
  In report after report, the General Accounting Office and other 
government auditors have outlined and detailed the problems in 
Medicare's financial management, and they repeatedly have offered this 
key recommendation: Medicare must develop a fully integrated financial 
management system that is standardized with all of its contractors so 
that timely, accurate, and meaningful information can be developed to 
control this $300 billion-a-year program.
  Mr. Speaker, in May of this year, I introduced legislation that I 
believe would move us toward that goal, the Health Care Advanced and 
Informational Infrastructure Act. A similar bill was introduced in the 
other body by Senator Lugar. Both of us believed that enacting sound 
and effective controls on Medicare programs must be made a high 
priority.
  On July 11, 2000, the Subcommittee on Government Management, 
Information and Technology, which I chair, held a hearing on that bill, 
and witnesses included representatives from the General Accounting 
Office, the Health Care Financing Administration that administers 
Medicare, and the Medicare health providers and those who provide and 
service the computer systems that currently process Medicare claims and 
payments. These witnesses pointed out significant concerns. We 
listened.
  We have now introduced tonight a new bill and a new version H.R. 
5622. That legislation will address the concerns that were raised at 
the hearing while retaining the intent of the original proposal.
  Similar to H.R. 4401, the new bill is designed to force the creation 
of an advanced information infrastructure that will allow the Medicare 
program to instantly process the vast number of straightforward 
transactions that now clog the pipeline and drain scarce health care 
resources.
  This bill is the result of an extensive bipartisan work with both 
majority and minority staff on our subcommittee and the full committee. 
In addition, we have consulted with the Health Care Financing 
Administration's chief information officer as well as the staff in the 
General Accounting Office to ensure that the provisions of the bill 
accomplish the worthy goals of the previous bill without inflicting 
unintended consequences.
  This bill establishes a commission to work with the Secretary of 
Health and Human Services and the chief information officer of the 
Health Care Financing Administration. We want a modern integrated 
computer system. This system is to provide Medicare beneficiaries with 
an immediate point of service verification of insurance coverage and an 
understandable explanation of benefits.
  In addition, the bill would simplify the process for health care 
providers by giving them immediate information about their patients' 
Medicare benefits and a detailed explanation of why a benefit has been 
denied.
  Unlike H.R. 4401, this bill does not call for immediate payments to 
health care providers, which was a significant concern to the General 
Accounting Office and the Health Care Financing Administration. 
According to health care providers who testified at the July hearing, 
Medicare often pays claims more quickly than private insurance 
companies.
  The new bill also eliminates a requirement that the advanced 
informational system include the Federal Employees Health Benefits 
Program. We need to look at that for modeling. It does, however, 
require that the new system be structured so that it might be expanded 
for use by other government health plans; if they choose to do so, that 
is. Indeed, if this system is designed and developed as the bill 
requires, others will surely want to use it.
  In addition, the bill expands the commission to include 
representatives of health care providers, Medicare information 
technology suppliers, and Medicare beneficiaries.
  This bill is careful to avoid mandates that would undermine privacy 
rights. The privacy is of paramount concern and must be safeguarded in 
the design of an advanced network of the financial management systems 
for Medicare.
  When seniors walk into the doctor's office, they deserve to know 
immediately what their Medicare benefits are and what copayments are or 
deductibles they will have to pay. When they leave the office, they 
deserve to have a simple statement explaining what was done and what is 
owed.
  The goal of this bill is to reduce and, where possible, to eliminate 
excessive paperwork currently required by the Medicare program. Greater 
efficiency will free doctors to spend more time treating patients.
  Mr. Speaker, the legislation could save billions of dollars in 
needless Medicare paperwork and inefficiencies and put an end to the 
many time-consuming and confusing complications both for the doctors 
and for the patients.
  Mr. Speaker, Medicare's financial management systems and their annual 
reports of billions misspent would then be something of the past.
  Mr. Speaker, I include a copy of H.R. 5622 for the Record as follows:

                               H.R. 5622

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

     SECTION 1. SHORT TITLE; PURPOSE.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Program Infrastructure Investment Act of 2000''.
       (b) Purpose.--The purpose of this Act is to design a 
     strategy for the implementation of an advanced informational 
     infrastructure for the administration of parts A and B of the 
     medicare program in coordination with the Administrator of 
     the Health Care Financing Administration and the Chief 
     Information Office of the Health Care Financing 
     Administration.

     SEC. 2. ESTABLISHMENT OF THE HEALTH CARE INFRASTRUCTURE 
                   COMMISSION.

       (a) Establishment.--There is established within the 
     Department of Health and Human Services a Health Care 
     Infrastructure Advisory Commission (in this section referred 
     to as the ``Commission'').
       (b) Duties.--The Commission shall carry out the following 
     duties:
       (1) In conjunction with the Administrator and Chief 
     Information Officer of the Health Care Financing 
     Administration, the Commission shall develop a strategy to 
     create an advanced informational infrastructure for the 
     administration of the medicare program under parts A and B of 
     title XVIII of the Social Security Act, including claims 
     processing by medicare carriers and fiscal intermediaries and 
     beneficiary information functions.
       (2) 18 months after the date all of the members of the 
     Commission are appointed under subsection (c)(2), the 
     Commission shall submit to Congress (and publish in the 
     Federal Register) an initial report that describes a 
     strategic plan to implement an advanced information structure 
     for parts A and B of the medicare program, including a cost 
     estimate and schedule for the plan, that--
       (A) complies with all existing Federal financial management 
     and information technology laws;
       (B) provides immediate, point-of-service information on 
     covered items and services under the program to each 
     beneficiary, provider of services, physician, and supplier;
       (C) ensures that strict security measures are integral to 
     and designed into the system that--
       (i) protect the privacy of patients and the confidentiality 
     of personally identifiable health insurance data used or 
     maintained under the system in a manner consistent with 
     privacy regulations promulgated by the Secretary under the 
     Health Insurance Portability and Accountability Act of 1996;
       (ii) guard system integrity in a manner consistent with 
     security regulations promulgated by the Secretary under such 
     Act; and
       (iii) apply to any network service provider used in 
     connection with the system;
       (D) immediately notifies each provider of services, 
     physician, or supplier of any incomplete or invalid claim, 
     including--
       (i) the identification of any missing information;
       (ii) the identification of any coding errors; and
       (iii) information detailing how the provider of services, 
     physician, or supplier may develop a claim under such system;
       (E) allows for proper completion and resubmission of each 
     claim identified as incomplete or invalid under subparagraph 
     (D);
       (F) allows for immediate automatic processing of clean 
     claims and subsequent payment in accordance with the 
     provisions of

[[Page 25946]]

     sections 1816(c)(2)(B)(i) and 1842(c)(2)(B)(i) of the Social 
     Security Act (42 U.S.C. 1395h(c)(2)(B)(i) and 
     1395u(c)(2)(B)(i)) so that a provider of services, physician, 
     or supplier may immediately provide the beneficiary with a 
     written explanation of medical benefits, including an 
     explanation of costs and coverage to any beneficiary under 
     parts A and B at the point of care;
       (G) allows for electronic payment of claims to each 
     provider of services, physician, and supplier, including 
     payment through electronic funds transfer, for each claim for 
     which payment is not made on a periodic interim payment basis 
     under section 1815(e)(2) of such Act (42 U.S.C. 1395g(e)(2)) 
     for items and services furnished under part A;
       (H) complies with all applicable transactions standards 
     adopted by the Secretary under the Health Insurance 
     Portability and Accountability Act of 1996;
       (I) provides for system specifications that are flexible, 
     modular in nature, scalable, and performance-based; and
       (J) is designed to be used, or easily adapted for use, in 
     other health insurance programs administered by a department 
     or agency of the United States.
       (3) Not later than one year after the date the Commission 
     submits the initial report under paragraph (2), the 
     Commission shall submit to Congress (and shall publish in the 
     Federal Register) a final report on the Secretary's progress 
     in developing an advanced informational system.
       (4) Each report required under this subsection--
       (A) shall include those recommendations, findings, and 
     conclusions of the Commission that receive the approval of at 
     least a majority of the members of the Commission; and
       (B) shall include dissenting or additional views of members 
     of the Commission with respect to the subject matter of the 
     report.
       (c) Membership.--
       (1) Composition.--The Commission shall be composed of 13 
     voting members appointed in accordance with paragraph (2) and 
     two ex officio voting members designated under paragraph (3).
       (2) In general.--Not later than 90 days after the date of 
     the enactment of this Act, members of the Commission shall be 
     appointed as follows:
       (A) The Director of the Defense Advanced Research Projects 
     Agency shall appoint one member.
       (B) The Director of the National Science Foundation shall 
     appoint one member.
       (C) The Director of the Office of Science and Technology 
     Policy shall appoint one member.
       (D) The Secretary shall appoint one member who represents 
     each of the following:
       (i) Physicians and other health care practitioners.
       (ii) Hospitals.
       (iii) Skilled nursing facilities.
       (iv) Home health agencies.
       (v) Suppliers of durable medical equipment.
       (vi) Fiscal intermediaries and carriers.
       (E) The Secretary shall appoint two members who represent 
     information technology providers, one who represents medicare 
     information technology providers and one who represent health 
     industry information technology providers.
       (F) The Secretary shall appoint two members who represent 
     medicare beneficiaries.
       (3) Ex officio members.--The following shall serve as ex 
     officio members of the Commission:
       (A) The Secretary, who shall be the chairperson of the 
     Commission.
       (B) The Chief Financial Officer of the Health Care 
     Financing Administration.
       (4) Qualifications.--Each of the members appointed under 
     paragraph (2) shall be knowledgeable in advanced information 
     technology, financial management, or electronic billing 
     procedures associated with health care benefit programs. One 
     of the members appointed under paragraph (2)(F) shall have 
     expertise in health information privacy.
       (d) Meetings.--
       (1) In general.--The Commission shall meet at the call of 
     the chairperson, except that it shall meet--
       (A) not less than four times each year; or
       (B) on the written request of a majority of its members.
       (2) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (e) Compensation.--Each member of the Commission who is a 
     full-time officer or employee of the United States may not 
     receive additional pay, allowances, or benefits by reason of 
     their service on the Commission. Each member of the 
     Commission shall receive travel expenses and per diem in lieu 
     of subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (f) Staff.--
       (1) In general.--The chairperson of the Commission may, 
     without regard to the civil service laws and regulations, 
     appoint an executive director and such other additional 
     personnel as may be necessary to enable the Commission to 
     perform its duties.
       (2) Compensation.--The chairperson of the Commission may 
     fix the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     such title.
       (3) Detail of government employees.--Upon request of the 
     chairperson, the head of any Federal department or agency may 
     detail to the Commission, without reimbursement, basis, any 
     of the personnel of that department or agency to the 
     Commission to assist it in carrying out its duties under this 
     Act. Such detail shall be without interruption or loss of 
     civil service status or privilege.
       (g) Procurement of Temporary and Intermittent Services.--
     The chairperson of the Commission may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.
       (h) Termination.--The Commission shall terminate on the 
     date that is 60 days after the date the Commission submits to 
     Congress the final report under subsection (b)(3).
       (i) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     out of any funds in the Treasury not otherwise appropriated, 
     such sums as may be necessary for the Commission to carry out 
     its duties under this section.
       (2) Availability.--Any sums appropriated under paragraph 
     (1) shall remain available until the termination of the 
     Commission under subsection (h).
       (j) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (2) Administrator.--The term ``Administrator'' means the 
     Administrator of the Health Care Financing Administration.
       (k) Applicability of FACA.--The provisions of the Federal 
     Advisory Committee Act (5 U.S.C. App.) shall apply to the 
     Commission.

     SEC. 3. IMPLEMENTATION OF SYSTEM.

       (a) Annual Reports on Implementation.--Not later than 6 
     months after the Commission publishes in the Federal Register 
     the final report required under section 2(b)(3) and annually 
     thereafter until the date of final implementation under 
     subsection (b), the Secretary shall submit to Congress a 
     report on the progress of the Health Care Financing 
     Administration on implementing a modernized advanced, 
     integrated informational infrastructure for the 
     administration of parts A and B of the medicare program.
       (b) Final Implementation.--Not later than 10 years after 
     the date of the enactment of this Act, the Secretary shall 
     fully implement a modernized advanced, integrated 
     informational infrastructure for the administration of parts 
     A and B of the medicare program.

     SEC. 4. ADMINISTRATIVE SIMPLIFICATION.

       Section 1173(a) of the Social Security Act (42 U.S.C. 
     1320d-2(a)) is amended by adding at the end the following new 
     paragraph:
       ``(4) Interactive transactions.--If the Secretary adopts a 
     batch standard for a transaction under paragraph (1) that 
     involves a health care provider, not later than 24 months 
     after the adoption of the batch standard, the Secretary shall 
     also adopt an interactive standard that is compatible with 
     the batch standard so that the provider may immediately 
     complete the transaction at the point of service.''.

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