[Senate Report 109-111]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 178
109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-111

======================================================================
 
                   WIRED FOR HEALTH CARE QUALITY ACT

                                _______
                                

                 July 27, 2005.--Ordered to be printed

                                _______
                                

Mr. Enzi, from the Committee on Health, Education, Labor, and Pensions, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1418]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 1418) to enhance the adoption 
of a nationwide interoperable health information technology 
system and to improve the quality and reduce the costs of 
health care in the United States, having considered the same, 
reports favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill (as amended) do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation..............................2
III. Legislative history and committee action.........................3
 IV. Explanation of bill and committee views..........................4
  V. Cost estimate...................................................13
 VI. Application of law to the legislative branch....................16
VII. Regulatory impact statement.....................................16
VIII.Section-by-section analysis.....................................16

 IX. Changes in existing law.........................................18

                         I. Purpose and Summary

    The purpose of S. 1418, the ``Wired for Health Care Quality 
Act'' is to enhance the adoption of a nationwide interoperable 
health information technology system and to improve the quality 
and reduce the cost of health care in the United States.
    The bill amends the Public Health Service Act by adding a 
new title, ``Health Information Technology and Quality.'' Most 
importantly, the bill protects the privacy and security of 
health information. The bill also permanently establishes the 
Office of the National Coordinator within the Office of the 
Secretary for Health and Human Services. The bill also 
formalizes the role of private entities in the standards-
setting process by directing the Secretary to establish and 
chair the public-private American Health Information 
Collaborative. The bill authorizes three grant programs to 
facilitate the widespread adoption of interoperable health 
information technology. The legislation also authorizes 
competitive grants to carry out demonstration projects to 
develop academic curricula integrating qualified health 
information technology systems in the clinical education of 
health professionals. In order to improve health care quality, 
the bill tasks the Secretary with developing a quality 
measurement system in collaboration with other key Federal 
agencies. The bill also calls for two studies, one examining 
the variation among State laws that relate to the licensure, 
registration, and certification of medical professionals, and 
the other examining methods to create efficient reimbursement 
incentives for improving health care quality. Finally, the bill 
establishes a Health Information Technology Resource Center 
within the Agency for Health Care Research and Quality to 
provide technical assistance and develop best practices to 
support and accelerate efforts to adopt, implement, and 
effectively use interoperable health information technology.

                II. Background and Need for Legislation

    The Institute of Medicine estimates that medical errors 
kill 45,000 to 98,000 Americans each year in hospitals. 
Additionally, a Rand study stated that adult Americans receive 
recommended care only 55 percent of the time. Nearly 30 percent 
of health care spending is for treatments that may not improve 
health status, may be redundant, or may be inappropriate for 
the patient's condition according to Dartmouth University 
researchers.
    Some of the most serious challenges facing healthcare 
today--medical errors, inconsistent quality, and rising costs--
can be addressed through the effective application of available 
health information technology linking all elements of the 
health care system and using the system to report performance 
against quality measures. Information sharing networks have the 
potential to enable decision support any where at any time, 
thus improving the quality of health care and reducing costs.
    In April 2004, the President signed an Executive Order 
announcing his commitment to the promotion of health 
information technology to lower costs, reduce medical errors, 
improve quality of care, and provide better information for 
patients and physicians. In particular, the President called 
for widespread adoption of electronic health records and for 
health information to follow patients throughout their care in 
a seamless and secure manner.
    This committee agrees that if we move from a paper-based 
health care system to secure electronic health records, we will 
reduce mistakes and save lives, time and money. This 
legislation will bring the government and the private sector 
together to make healthcare better, safer and more efficient by 
accelerating the widespread adoption of interoperable health 
information technology and quality measurement across our 
healthcare system.
    Interoperability is a shared goal across the health care 
industry by payers, providers, vendors, and consumers. The 
national strategy for achieving interoperability of digital 
health information calls for Federal agencies--who pay more 
than one-third of all health care costs--to collaborate with 
private entities in developing and adopting an architecture, 
standards, certification process, and a method of governance 
for ongoing implementation of health IT. Once the market has 
structure, patients, providers, medical professionals, and 
vendors will be better able to innovate, create efficiencies, 
and improve care.
    The legislation formalizes involvement of private entities 
in the-standards and policy-setting process by directing the 
Secretary to establish and chair the public-private American 
Health Information Collaborative, which shall be composed of 
representatives of the public and private sectors.
    The committee aims to facilitate the development and 
national implementation of an interoperable health IT 
infrastructure that ensures patients' individually identifiable 
health information is secure and protected; improves health 
care quality, reduces medical errors, and advances the delivery 
of appropriate, evidence-based medical care; reduces health 
care costs resulting from inefficiency, medical errors, 
inappropriate care, and incomplete information; ensures 
appropriate information to guide medical decisions is available 
at the time and place of care; promotes a more effective 
marketplace, greater competition, and increased choice through 
the wider availability of accurate information on health care 
costs, quality, and outcomes; improves the coordination of care 
and information among hospitals, laboratories, physician 
offices, and other ambulatory care providers through an 
effective infrastructure for the secure and authorized exchange 
of health care information; 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; and promotes 
prevention of chronic diseases.
    For the last 2 years, HHS has supported its health 
information technology initiatives without specific lines of 
authorization. The committee believes it is critical to give 
HHS specificauthorization but also provide the Secretary with 
flexibility to determine what is effective and to allocate that money 
accordingly.
    The committee agrees that an investment in health 
information technology now will decrease healthcare costs over 
the long-term. This legislation targets Federal funding to 
those who need the most help updating and advancing health 
information technology.

             III. Legislative History and Committee Action

    On July 18, 2005, Senators Enzi, Kennedy, Frist, Clinton, 
Alexander, Dodd, Burr, Harkin, Isakson, Milkulski, DeWine, 
Jeffords, Roberts, Bingaman, Murray, Bond, Hagel, Martinez, 
Talent, Nelson (FL), and Obama introduced S. 1418, the ``Wired 
for Health Care Quality Act.'' On July 20, 2005, the committee 
held an executive session to consider S. 1418. After accepting 
a substitute amendment offered by Senator Enzi by unanimous 
voice vote, the committee approved S. 1418, as amended, by 
unanimous voice vote.

              IV. Explanation of Bill and Committee Views

    In April 2004, by Executive Order, President George W. Bush 
established the Office of the National Coordinator for Health 
Information Technology, operating from the Office of the 
Secretary at the Department of Health and Human Services. The 
Office is charged with developing a blueprint for a nationwide 
interoperable health information technology infrastructure and 
coordinating health information technology policies and 
programs across the Federal Government.
    This bill will permanently establish the Office in the 
Department. The duties of the Office include serving as a 
member of the public-private American Health Information 
Collaborative, serving as the primary advisor to the Secretary 
and the President on the health information technology policies 
and programs of the Federal Government, ensuring the adoption 
of standards for the electronic exchange of health information, 
and interacting with public and private stakeholders. In 
carrying out the activities of the Office, the National 
Coordinator shall work to ensure the security of patient health 
information and the electronic exchange of health information.
    The Office will report to Congress on actions taken by the 
Federal Government and private entities to facilitate the 
electronic exchange of health information and describe barriers 
to the adoption of, and make recommendations to achieve full 
implementation of, a nationwide electronic health information 
system. The bill allows the Office to accept the detail of 
Federal employees from other Federal agencies to assist in 
their activities.
    The bill also specifies that an additional purpose of the 
Office is to coordinate and develop a nationwide interoperable 
health information technology infrastructure that promotes the 
prevention of chronic disease. The committee believes the 
United States cannot address rising health care costs without 
preventing chronic disease. According to the Centers for 
Disease Control, the medical care costs of people with chronic 
diseases account for more than 75 percent of the Nation's $1.4 
trillion medical care costs. In addition, chronic disease 
accounts for 70 percent of all death in the United States. The 
committee believes adoption and promotion of health information 
technology can lead to innovative interventions to prevent 
disease and reduce health care costs.
    The legislation authorizes $5 million for each of fiscal 
years 2006 and 2007 for personnel compensation for the Office.
    The Secretary has begun undertaking the activities outlined 
in this section of the legislation. It is the committee's 
intent not to require the duplication of Federal efforts with 
respect to the establishment of the Office.
    The committee believes that the inclusion of decision 
support in an interoperable health information technology 
system is critical to reducing medical errors and improving the 
quality of care patients receive. For that reason, the 
committee included the incorporation of decision support in the 
definition of qualified health information technology. The 
definition clearly states that qualified health information 
technology means a computerized system and it is the intent of 
the committee that decision support be included in that system, 
but the committee recognizes that each potential component 
(hardware or software) of a comprehensive interoperable health 
information technology system may not include a decision 
support feature. It is not the intention of the committee to 
restrict these components from participation in an 
interoperable qualified health information technology system, 
but rather to require that decision support be integrated 
within the system and available to any user.
    The legislation formalizes involvement of private entities 
in the standards-setting process by directing the Secretary to 
establish and chair the public-private American Health 
Information Collaborative, which the bill specifies be composed 
of representatives of the public and private sectors.
    It is the purpose of the Collaborative to advise the 
Secretary and recommend specific actions to achieve a 
nationwide interoperable health information technology 
infrastructure, and to serve as a forum for the participation 
of a broad range of stakeholders to provide input on achieving 
the interoperability of health information technology.
    It is the intent of the committee to ensure that the 
Collaborative serve a dual purpose of recommending standards 
for the electronic exchange of health information and ongoing 
modifications to these standards and recommending uniform 
national policies facilitating the widespread adoption of 
interoperable health information. Given the unusually sensitive 
nature of health information and the complexity of the 
technical standards and policies needed to guide its use, it is 
imperative that a single entity be responsible for decisions 
related to both domains so they can be closely integrated. The 
Collaborative's policy recommendations are essential to the 
success of widespread adoption of interoperable health 
information technology. While the Collaborative will be the 
authority regarding matters in both domains, it may establish 
working groups within the Collaborative.
    The Collaborative shall, among other things, advance and 
develop recommendations for the following issues: Protection of 
health information through appropriate privacy and 
securitypractices; measures to prevent unauthorized access to health 
information; methods to facilitate secure patient access to health 
information; the ongoing harmonization of industry-wide health 
information technology standards; recommendations for a nationwide 
health information technology infrastructure; the identification and 
prioritization of specific use cases for which health information 
technology is valuable, beneficial, and feasible; recommendations for 
the establishment of an entity to ensure the continuation of the 
functions of the Collaborative; and other policies determined 
appropriate by the Collaborative.
    The committee finds great value for patients in viewing 
their own health records. In developing uniform, interoperable 
standards for health information, the Collaborative should 
examine standards for patient review and secure access of their 
health information. This would enhance the ability of patients 
to manage their own health care. It would reduce duplication of 
services and allow patients to be better health care consumers. 
Patients can play an important role in reducing medical errors, 
preventing over utilization of services, and improving quality.
    The Collaborative shall strive for maximum cost-
effectiveness by building on existing standards and policy 
work, establishing efficient processes and minimizing the 
negative economic impact of any new requirements it defines. As 
a general principle, the Collaborative should seek existing 
solutions and minimal modifications, creating new solutions 
only as a last resort. Even so, some change will be required to 
ensure interoperability. The extent of such change must be 
determined using a defined process. To do so effectively 
requires close and continuous interaction with standards 
development organizations and other potential sources of 
relevant models for its own work.
    The process to identify and specify these standards and 
policies must engage all affected stakeholders, as the 
credibility and compliance with the decisions of the 
Collaborative will ultimately depend on whether those who are 
affected by standards and policies were able to participate in 
the decision-making process. It is the intent of the committee 
to ensure a balance among all stakeholders, so that no member 
organization unduly influences recommendations from the 
Collaborative.
    The Collaborative shall be composed of the Secretary (who 
shall serve as the chairperson), the Secretary of Defense, the 
Secretary of Veterans Affairs, the Secretary of Commerce, the 
National Coordinator for Health Information Technology, and 
representatives of other relevant agencies, as determined 
appropriate by the Secretary. Representatives from each of the 
following categories shall be appointed by the Secretary from 
nominations submitted by the public: consumer and patient 
organizations, experts in health information privacy and 
security, health care providers, health insurance plans or 
other third-party payers, standards development organizations, 
information technology vendors, purchasers and employers, and 
State or local government agencies or Indian tribes or tribal 
organizations.
    In appointing members, the Secretary shall select 
individuals with expertise in health information privacy, 
health information security, health care quality and patient 
safety, data exchange and health information technology 
standards. Each representative should be a key decision-maker 
in his or her field and should have broad support from peers 
and related professional organizations.
    Members shall serve 2-year terms, and those who are not 
considered full-time Federal employees will be paid a daily 
rate plus per diem. Private-sector members who serve as special 
government employees will be subject to financial disclosure 
and conflict of interest requirements. Some private-sector 
members may serve as industry representatives and will not be 
special government employees.
    Because the legislation specifies that the Federal Advisory 
Committee Act (FACA) shall apply to the Collaborative (except 
that the term provided shall be 5 years), the Collaborative 
governance and administration will be transparent and 
accountable. The bill deems recommended by the Collaborative 
the standards adopted by the Consolidated Health Informatics 
Initiative. The bill also directs the Collaborative, on an 
ongoing basis, to recommend new standards for the electronic 
exchange of health information and modifications to existing 
standards, identify deficiencies and omissions in existing 
standards, and identify duplication and overlap in existing 
standards.
    The bill directs the Secretary to provide for the adoption 
by the Federal Government of any standard or standards 
recommended by the Collaborative within 60 days after the 
issuance of such recommendation. The bill specifies the 
Secretary of Health and Human Services, the Secretary of 
Veterans Affairs, and the Secretary of Defense, in 
collaboration with representatives of other relevant Federal 
agencies, jointly review such recommendations.
    The committee believes that when private entities contract 
with the government to provide healthcare services, as in the 
Federal Employee Health Benefits Plan or Medicare Advantage 
Plans, those entities should be able to exchange interoperable 
information with the Federal Government. To accomplish this 
under their contracts, private entities must adopt the same 
standards as the Federal Government. However, this requirement 
only applies to the external exchange of information. The 
committee does not intend for private entities to have to adopt 
the government's standards for their internal business 
processes, even if those processes ultimately support the 
exchange of information under the contract.
    Not later than 1 year after the adoption by the Federal 
Government of a recommended standard, no Federal agency shall 
expend Federal funds for the purchase of any form of health 
information technology system for clinical care or for the 
electronic retrieval, storage, or exchange of health 
information that is not consistent with applicable standards 
adopted by the Federal Government. The committee believes it is 
critical that the Federal Government comply with the data 
standards recommended by the Collaborative in order to create a 
nationwide interoperable health information technology 
infrastructure.
    The legislation requires the Secretary of HHS to implement 
procedures to enable the Department to accept the electronic 
submission of data. Participation in the electronic submission 
of reports utilizing standards is voluntary for private 
entities, but the Department shall permit such submission. The 
provision is intended to provide private entities the option of 
submitting data electronically so that reporting becomes simply 
another function of an interoperable health information 
technology system.
    The bill requires the Secretary annually to submit a report 
to Congress that describes actions taken to achieve a 
nationwide system for the exchange of health information, 
describes barriers to the adoption of such a nationwide system, 
contains recommendations to achieve full implementation of a 
nationwide system, and contains a plan for the establishment of 
an entity to ensure the continuation of the functions of the 
Collaborative.
    The legislation authorizes $4 million for each of fiscal 
years 2006 and 2007 for operating the Collaborative.
    The Secretary has begun undertaking the activities outlined 
in this section of the legislation. It is the committee's 
intent not to require the duplication of Federal efforts with 
respect to the establishment of the Collaborative.
    The adoption of standards is an important component of 
establishing consistent and common content and communication 
between health information technology systems. However, 
consistent and common use of adopted standards is another vital 
piece of establishing a nationwide interoperable health 
information system. This bill directs the Secretary or his 
designee, based upon the recommendation of the Collaborative, 
to establish criteria for the implementation and certification 
of standards adopted by the Federal Government. Additionally, 
the bill authorizes the Secretary to recognize a private entity 
to assist with the development of criteria for the 
implementation of the standards and certification of products 
for compliance with the standards.
    The committee believes there are significant barriers to 
widespread adoption of interoperable health information 
technology. One of the primary barriers is the current lack of 
agreed-upon standards and common implementation guides and a 
certification process. This committee believes this bill 
addresses those factors in a way that appropriately 
incorporates involvement of both the public and private 
sectors.
    The committee recognizes that the other major barrier to 
widespread adoption of health information technology in the 
U.S. health care system is the high cost of such technology. 
The typical cost of purchasing a robust health information 
technology system for a solo or group practitioner is estimated 
to be thousands of dollars per provider. In addition to this, 
there are typically ongoing system maintenance and management 
costs that must be borne. In the hospital setting, costs vary 
widely. Nonetheless, purchasing a robust health information 
technology system, conducting training of personnel, 
integrating a new health information technology system into 
legacy computerized systems, and purchasing technical support 
services can cost millions of dollars for community hospital of 
average size.
    Most experts estimate that the widespread adoption of 
health information technology will result in a substantial cost 
savings over time in our health care system. While providers 
must bear the full cost of acquiring these systems, a large 
part of these economic savings will accrue to health insurers 
and large integrated health care systems, rather than to 
physicians in office practices or smaller community hospitals.
    Many physicians and community hospitals, community health 
centers and other provider organizations operate with small 
financial margins and have difficulty affording modern health 
information technology systems for use in these clinical 
settings.
    Because of the current cost and segmented reimbursement, 
rates of adoption of modern health information technology in 
the United States are very low. Less than 20 percent of 
physicians in office practice and of hospitals currently use 
simple electronic health records.
    In order to address the health information technology 
``adoption gap'' in the United States, S. 1418 authorizes three 
grant programs that will carefully target financial support to 
health care providers and consortia for the purpose of 
facilitating the adoption of interoperable health information 
technology. The bill leaves to the discretion of the Secretary 
the allocation of the authorization among the three programs.
    In addition, the greatest improvements in quality of health 
care and cost savings will be realized when all elements of the 
health care system are electronically connected and speak a 
common technical language--that is they are interoperable. For 
this reason, each grant program requires that each grant 
recipient acquire only qualified health information technology 
systems that are capable of supporting common technical 
standards and full interoperability and reporting performance 
on quality measures adopted by the Federal Government under 
this legislation.
    The first grant program will award grants, on a competitive 
basis, to health care providers to facilitate the purchase and 
enhance the utilization of qualified health information 
technology systems to improve the quality and efficiency of 
health care. Awards will be made by the Secretary of the 
Department of Health and Human Services. Grant recipients must 
provide matching funds equal to $1 for each $3 of Federal funds 
provided under the grant.
    The bill defines health care providers as hospitals, 
skilled nursing facilities, home health entities, health care 
clinics, federally qualified health centers, group practices, 
pharmacists, pharmacies, laboratories, physicians, health 
facilities operated by or pursuant to a contract with the 
Indian Health Service, rural health clinics, and other entities 
determined appropriate by the Secretary.
    Because the committee recognizes the importance of 
targeting scarce Federal resources where they are most needed, 
this grant program will give preference to providers that may 
be least likely to have the capital to acquire health 
information technology in the absence of a grant--those that 
are located in rural, frontier and other underserved areas. The 
committee also recognizes that while there are immediate 
improvements in quality of care and error reduction with the 
use of health information technology such as electronic health 
records, the full benefits of implementing such systems will 
only be realized when individual provider's systems are all 
interconnected and patient information will be available when 
and where it is needed. Thus, this grant program will also give 
preference to providers that will link, to the extent 
practicable, their health information system to local or 
regional health information systems.
    In order to maximize the utility of health information 
technology systems acquired under this grant program in 
improving and measuring quality of care, grant recipients will 
be required toreport their performance on a set of quality-of-
care measures to be adopted by the Federal Government under this bill.
    The second program will award grants on a competitive basis 
to States for the establishment of State programs that will 
offer loans to health care providers to facilitate the purchase 
and enhance the utilization of qualified health information 
technology. To be eligible to receive such a grant, States must 
establish a State loan fund and submit an application to the 
Secretary of the Department of Health and Human Services with a 
strategic plan that criteria for awarding loans to eligible 
entities. State loan programs will be required to stipulate 
that preference in awarding loans will be given to providers 
who will link, to the extent practicable, their health 
information system to local or regional health information 
systems. States will be required to match $1 dollar for every 
$1 of Federal funds provided under the grant. The Secretary may 
give preference to States that adopt value-based purchasing 
programs to improve health care quality.
    To maximize the likelihood that scarce Federal resources 
will be spent on projects with the greatest likelihood of 
success, recipients of loans will also be required to consult 
with the Health Information Technology Resource Center--
established in this bill--that will provide technical 
assistance and develop best practices to support and accelerate 
efforts to adopt, implement, and use effectively interoperable 
health information technology.
    To maximize the utility of health information technology 
systems acquired under this loan program in improving and 
measuring quality of care, loan recipients will be required to 
report their performance on a set of quality-of-care measures 
to be adopted by the Federal Government under this bill.
    States may use grant funds to make loans directly to 
providers or may use funds to securitize additional loans or 
bonds, thereby augmenting the total amount of capital available 
in the program to loan to providers. In addition, State 
programs may accept voluntary contributions from private 
entities that may have a strong interest in expanding adoption 
of health information technology among health care providers in 
their State or local area. An incentive for private entities to 
contribute voluntarily to the loan program in their State is 
that programs may publicize the names of private entities that 
make contributions. The committee sees a positive marketing 
value associated with this public recognition of responsible 
corporate citizenship.
    The third program allows the Secretary to award competitive 
grants to implement regional or local health information 
technology plans that improve healthcare quality and efficiency 
through the use of interoperable health information technology 
compliant with technology standards and the quality measurement 
system. To receive a grant, eligible entities must be comprised 
of a consortium of community stakeholders that demonstrate 
financial need, adopt policies that demonstrate a commitment to 
open and fair participation, and demonstrate a commitment to 
improving the quality of healthcare through the use of 
interoperable health information technology.
    The committee finds that the development and implementation 
of regional or local health information technology plans is a 
critical strategy in the Nation's efforts to build a nationwide 
interoperable health information technology infrastructure. 
Community exchange of health information through regional or 
local health information technology plans compliant with 
standards will maximize the benefits that patients experience 
from system-wide use of health IT and minimize costly 
technology links and retrofitting that would be necessary if 
healthcare stakeholders adopt health IT independent of an 
interoperable regional or local health information technology 
plan.
    However, the committee recognizes that there may be 
instances in which inclusion of all required stakeholders 
outlined may not be possible and the legislation provides the 
Secretary some flexibility in such cases. However, the 
committee believes that only applications that demonstrate the 
strongest commitment to a community-wide collaboration through 
the most extensive partnering feasible be provided funding.
    The legislation provides for one non-renewable local or 
regional health information technology plan grant per entity. 
The Federal Government must lead the effort to develop and 
implement a nationwide interoperable health information 
technology infrastructure through the adoption, certification, 
and implementation of standards in conjunction with, and 
inextricably linked to, the adoption and reporting of quality 
measures integrated into the technology infrastructure. While 
it is the intent of the committee that Federal resources 
provided through these non-renewable grants be used to jump-
start local or regional health information technology plans 
that can demonstrate sustainability beyond the grant period, it 
is not the intention of the committee that these non-renewable 
grants be limited to a single year or that the Secretary's 
authority to negotiate the timeframe or grant amount be 
restricted.
    The legislation authorizes $116 million in fiscal year 2006 
and $141 million for fiscal year 2007 for the three grant 
sections. The bill leaves to the discretion of the Secretary 
the allocation of the authorization among the three programs. 
The committee is dedicated to fiscal responsibility.
    Another barrier to widespread adoption of interoperable 
health information is cultural. The committee recognizes that 
many physicians and hospitals are hesitant to move from paper-
based systems to electronic systems. Some physicians have been 
writing prescriptions by hand for many years and may resist 
changing to electronic prescribing for instance.
    This committee believes that one way to address this 
cultural barrier to the widespread adoption of health 
information technology is to support teaching hospitals and 
continuing education programs that integrate health information 
technology in the clinical education of health care 
professionals. The committee believes that exposing students 
and residents to effective everyday uses of health IT will lead 
to a greater adoption by these students and residents when they 
graduate and begin practicing on their own. The bill authorizes 
the Secretary to award demonstration grants to health 
professions centers and academic health centers to integrate 
health IT into clinical education in community settings. To be 
eligible, grantees must submit a strategic plan and provide 
matching funds of at least $1 for every $2 of Federal funding. 
The Secretary is required to evaluate the program and 
disseminate the results, and to report annually to Congress. 
The legislation authorizes 5 million dollars for fiscal year 
2007 for this section.
    State laws and regulatory bodies determine the requirements 
for licensure of health professionals that seek to practice 
within their jurisdiction. The committee strongly believes that 
the licensureof health professionals should remain within the 
jurisdiction of States. Thirty-four [34] states have laws or 
regulations in place which speak to the treatment of patients remotely, 
usually through telemedicine. Yet most existing licensure requirements 
do not speak to the full range of issues presented through telemedicine 
and similar technologies. Therefore, this bill directs the Secretary to 
conduct a review of the licensure requirements of States and the 
related issues that licensure bodies confront as a nationwide 
interoperable electronic health information system is developed.
    The bill also reauthorizes Telemedicine Incentive Grants 
through 2010. These grants were established to encourage state 
licensure bodies to address remote treatment issues.
    This legislation directs the Secretary of Health and Human 
Services, in consultation with the Secretary of Defense, 
Secretary of Veterans Affairs, and the heads of other relevant 
Federal agencies to develop or adopt a quality measurement 
system that includes measures to assess the effectiveness, 
timeliness, patient self-management, patient centeredness, 
efficiency, and safety of care received by patients, as 
recommended by the Institute of Medicine. In developing the 
quality measurement system, the legislation requires the 
Secretary to give priority to measures with the greatest impact 
for improving quality and efficiency, measures that may be 
rapidly implemented, and measures that help consumers and 
patients make informed decisions about their care.
    The Rand Institute reports that patients receive care that 
is appropriate to their condition only 55 percent of the time 
and best clinical practices take, on average, 17 years to reach 
the bedside. The committee finds that the development and 
adoption of a quality measurement system and its integration 
with the interoperable health information technology system 
under this legislation is a critical step in eradicating these 
deficiencies and improving the quality of health care that all 
Americans receive.
    In developing and updating the quality measurement system, 
the Secretary shall enter an arrangement with a private entity 
to receive advice and recommendations with regard to the 
development and updating of the quality measurement system. The 
committee intends the development and updating of the quality 
measurement system to recognize those established measurement 
sets that have gone through a multi-stakeholder, open and 
accountable process and are currently in use by both the 
Secretary and the private sector, including the Health Plan 
Employer Data and Information Set and the Consumer Assessment 
of Health Plans. It is the intention of the committee to avoid 
the duplication of these established measures and expects that 
the Secretary will adopt these measure sets and additions to 
them.
    The committee intends the widespread adoption and use of 
measures adopted through the development and updating of the 
quality measurement system. To that end, the legislation allows 
the Secretary to establish collaborative agreements with 
private entities to encourage the use of the measures adopted 
by the Secretary and to foster uniformity between measures 
utilized by the Federal Government and private entities to 
minimize administrative burden on healthcare providers.
    The legislation also requires reporting of quality measures 
by entities receiving grants and loans and allows the Secretary 
to aggregate, analyze and disseminate quality data for the 
purposes of providing information to consumers, professionals, 
officials and researchers.
    Because the committee believes that protecting the privacy 
and security of health information is the most important aspect 
of creating an interoperable health information infrastructure, 
the bill clarifies that the Health Insurance Portability and 
Accountability Act of 1996 privacy and security laws and 
regulations that apply to health information also apply to 
health information stored or transmitted in electronic format.
    The bill also directs the Secretary to study reimbursement 
incentives for improving the quality of care at Federally 
qualified health centers and other sites where reimbursement is 
paid primarily on a cost basis, rather than through a 
prospective payment system.
    The bill also amends the Public Health Service Act and 
directs the Secretary, acting through the Director of the 
Agency for Health Care Research and Quality, to develop a 
Health Information Technology Resource Center to provide 
technical assistance and develop best practices to support and 
accelerate the efforts of States and health care providers to 
adopt, implement, and use effectively health information 
technology that complies with the standards and quality 
measurement system adopted by the Federal Government. The 
committee believes it is important to provide a forum for the 
exchange of knowledge and experience, accelerate the transfer 
of lessons learned from existing public and private sector 
initiatives, and assemble, analyze, and widely disseminate 
evidence and experience related to the adoption, 
implementation, and effective use of interoperable health 
information technology. The legislation requires the Secretary 
to establish a health IT technical assistance toll-free 
telephone number or Internet site.
    The Secretary has begun undertaking the activities outlined 
in this section of the legislation. It is the committee's 
intent not to require the duplication of Federal efforts with 
respect to the establishment of the Center.
    The committee believes this legislation integrates 
technology and quality to create a seamless, efficient health 
care system for the 21st century.
    This legislation will help facilitate the widespread 
adoption of electronic health records to ultimately result in 
fewer mistakes, lower costs, better care, and greater patient 
participation in their health and well being.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 26, 2005.
Hon. Mike B. Enzi,
Chairman, Committee on Health, Education, Labor, and Pensions,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1418, the Wired for 
Health Care Quality Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 1418--Wired for Health Care Quality Act

    Summary: CBO estimates that implementing S. 1418 would cost 
$40 million in 2006 and $652 million over the 2006-2010 period, 
assuming appropriation of the necessary amounts. Enacting the 
bill would have no effect on direct spending or revenues.
    On April 27, 2004, the President issued Executive Order 
13335, which established within the Office of the Secretary of 
Health and Human Services (HHS) the position of National Health 
Information Technology Coordinator. The Secretary subsequently 
established the Office of the National Coordinator of Health 
Information Technology (ONCHIT) and the American Health 
Information Community (AHIC) to support the adoption of health 
information technology. S. 1418 would amend the Public Health 
Service Act (PHSA) to codify the establishment and 
responsibilities of those entities. In addition, the bill would 
authorize appropriation of funding for grants to facilitate the 
widespread adoption of certain health information technology. 
S. 1418 would authorize the appropriation of $125 million in 
2006, $155 million in 2007, and such sums as necessary for 2008 
through 2010 for those activities.
    S. 1418 also would require the Agency for Healthcare 
Research and Quality (AHRQ) to establish a Center for Best 
Practices to provide technical assistance to support the 
adoption of health information technology, and it would extend 
through 2010 authorization for a program to provide 
telemedicine grants.
    S. 1418 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs to State, local or tribal governments as a result of 
participating in the grant programs would be incurred 
voluntarily.
    Estimated cost to the Federal Government: The estimated 
cost of S. 1418 is shown in the following table. The costs of 
this legislation fall within budget function 550 (health).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2005    2006    2007    2008    2009    2010
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending under Current Law:
    Estimated Budget Authority\1\...............................      20       0       0       0       0       0
    Estimated Outlays...........................................       4      14       2       0       0       0
Proposed Changes:
    Estimated Authorization Level...............................       0     133     163     166     169     172
    Estimated Outlays...........................................       0      40     125     156     164     167
Spending under S. 1418:
    Estimated Authorization Level\1\............................      20     133     163     166     169     172
    Estimated Outlays...........................................       4      54     127     156     164     167
----------------------------------------------------------------------------------------------------------------
\1\ The 2005 level is CBO's estimate of the funding for the activities of the Office of the National Coordinator
  of Health Information Technology and the American Health Information Community, including funds reprogrammed
  by the Secretary of Health and Human Services from other activities.

    Basis of estimate: S. 1418 would amend the Public Health 
Service act to add title 29-- which would deal with health 
information technology and quality--and to create a Center for 
Best Practices and extend authorization for a program to 
provide telemedicine grants. For this estimate, CBO assumes 
that S. 1418 will be enacted near the end of fiscal year 2005, 
that the necessary amounts will be appropriated each year, and 
that outlays will follow historical patterns for similar 
activities of the Department of Health and Human Services. CBO 
estimates that implementing those provisions would cost $40 
million in 2006 and $652 over the 2006-2010 period.

Health information technology and quality

    The National Coordinator of Health Information Technology 
serves as the senior advisor to the Secretary of HHS and the 
President on all health information technology programs and 
initiatives, and is responsible for:
           Developing and maintaining a strategic plan 
        to guide the nationwide implementation of electronic 
        health records in both the public and private health 
        care sectors;
           Coordinating spending by federal agencies 
        for health information technology programs and 
        initiatives; and
           Coordinating outreach activities to private 
        industry and serving as the catalyst for change in the 
        health care industry.
    In June 2005, the Secretary announced the creation of the 
American Health Information Community a public-private 
collaboration to provide a forum for public and private 
interests to recommend specific actions that will accelerate 
the widespread adoption of electronic records and other health 
information technology. Based on information provided by the 
Department of Health and Human Services, CBO estimates that $20 
million is available in 2005 for the activities of ONCHIT and 
AHIC ($3 million from funds appropriated to the Secretary and 
$17 million from funds reprogrammed from other activities).
    S. 1418 would add title 29 to the Public Health Service Act 
to codify the establishment and responsibilities of ONCHIT and 
AHIC. (It would change the name of the latter organization to 
the American Health Information Collaborative). The bill would 
establish several grant programs to promote the adoption of 
health information technology.
    For activities under title 29, S. 1418 would authorize the 
appropriation of $125 million in 2006, $155 million in 2007, 
and such sums as necessary in 2008 through 2010. Of the amounts 
specified in 2006 and 2007, $5 million would be for ONCHIT in 
each year; $4 million a year would be for AHIC; and the 
remaining $116 million in 2006 and $146 million in 2007 would 
be for the grant programs.
    The bill would establish three grant programs--for health 
care providers, states, and to implement regional or local 
plans for the exchange of health information--to facilitate the 
adoption of health information technology and a fourth grant 
program to develop academic curricula integrating health 
information technology systems into the clinical education of 
health professionals.
    The bill would limit eligibility for the grants to health 
care providers to providers that demonstrate significant 
financial need. Those providers would be required to provide $1 
of matching funds for every $3 of Federal grant funds, and they 
could use the funds to purchase and enhance the utilization of 
health information technology and for training personnel in the 
use of the technology.
    States would be eligible for grants that would fund the 
establishment of State programs for loans to health care 
providers to facilitate the purchase and use of health 
information technology. States would have to provide $1 of 
matching funds for every $1 of Federal grant funds.
    The grants to implement regional or local plans for the 
exchange of health information would require $1 of matching 
funds for every $2 of Federal grant funds. The President's 
budget request for fiscal year 2006 included $50 million for a 
similar program. That program, which is in the request-for-
proposal stage, would provide funding and oversight through 
contracts, rather than grants.

Other provisions

    In addition to adding title 29 to the Public Health Service 
Act, S. 1418 would amend that act to establish a Center for 
Best Practices to provide technical assistance to support the 
adoption of health information technology, and it would extend 
through 2010 authorization for a program to provide 
telemedicine grants. The Center would be administered by AHRQ, 
and the telemedicine grants would be administered by the Health 
Resources and Services Administration (HRSA). Based on 
information provided by the Department of Health and Human 
Services, CBO estimates that implementing those provisions 
would require additional appropriations in 2006 through 2010 of 
$3 million a year for the Center and $5 million a year for 
HRSA.
    Intergovernmental and private-sector impact: S. 1418 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would not require any action on the 
part of State, local, or tribal governments, but it would 
provide grant money to public health entities that wish to 
implement health record transfer systems. Therefore, CBO 
assumes that any costs to those entities as a result of 
participating in the grant programs would be incurred 
voluntarily.
    Estimate prepared by: Federal Costs: Tom Bradley. Impact on 
State, Local, and Tribal Governments: Leo Lex and Ian Rudge. 
Impact on the Private Sector: Peter Richmond.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    The committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                    VII. Regulatory Impact Statement

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the committee has 
determined that the bill will not have a significant regulatory 
impact.

                   VIII. Section-by-Section Analysis


Section 1. Short title

    Wired for Health Care Quality Act

Section 2. Improving health care quality, safety, and efficiency

    Amends the Public Health Service Act by adding at the end: 
``Title XXIX--Health Information Technology and Quality''
            Section 2901. Definitions
    ``Healthcare Provider,'' ``Health Information,'' ``Health 
Insurance Plan,'' ``Laboratory,'' ``Pharmacist,'' ``Qualified 
Health Information Technology,'' and ``State''
            Section 2902. Office of the National Coordinator for Health 
                    Information Technology
    Establishes the Office of the National Coordinator within 
the Office of the Secretary for Health and Human Services
            Section 2903. American Health Information Collaborative
    The Secretary of HHS shall establish and serve as the 
Chairman of the FACA compliant, public-private American Health 
Information Collaborative. The Collaborative shall be comprised 
of members representing the Federal Government and private 
entities. The Collaborative shall--
    Serve as a forum for the participation of a broad range of 
stakeholders to provide input on achieving interoperability of 
health information technology;
    Recommend to the Secretary uniform national standard and 
policies for adoption by the Federal Government and voluntary 
adoption by private entities to support the widespread adoption 
of health information technology; and
    Review existing standards (including content, 
communication, and security standards), identify deficiencies, 
omissions, duplication and overlap in existing standards and 
recommend new standards and necessary modifications for the 
electronic exchange of health information for adoption by the 
Federal Government and voluntary adoption by private entities 
to support the widespread adoption of health information 
technology.
    Upon receipt of recommendations from the Collaborative, the 
Secretary of Health and Human Services, the Secretary of 
Veterans Affairs, and the Secretary of Defense, in 
collaboration with representatives of other relevant Federal 
agencies, shall jointly review and the Secretary shall provide 
for the adoption by the Federal Government of any standard or 
standards contained in such recommendation. One year after 
enactment, no Federal agency shall expend Federal fundsfor the 
purchase of health information technology that is not compliant with 
the applicable standards adopted by the Federal Government.
            Section 2904. Implementation and certification of standards
    The Secretary, based on recommendations of the 
Collaborative shall develop criteria to--
    Ensure uniform and consistent implementation of any 
standards for the electronic exchange of health information; 
and
    Ensure and certify that hardware, software, and support 
services that claim to be in compliance with any standard have 
established and maintain such compliance.
    The Secretary may recognize a private entity to assist in 
the implementation and certification of the standards adopted 
by the Federal Government, and the Secretary may accept 
recommendations on the development of criteria from a Federal 
agency or a private entity.
            Section 2905. Grants to facilitate the widespread adoption 
                    of interoperable health information technology
    The Secretary may award competitive, matching grants to 
eligible entities to facilitate the widespread adoption of 
health information technology;
    The Secretary may award competitive, matching grants to 
states interested in establishing state programs for loans to 
healthcare providers for purchasing qualified health 
information technology. To qualify for this federal ``seed 
money'' for their own loan programs, States must match each 
dollar of federal funds with a dollar of state contributions. 
States must ensure that providers receiving such loans are 
purchasing information technology that is consistent with 
standards adopted by the Federal Government; and
    There is authorized to be appropriated $125 million in FY 
2006 and $155 million in FY 2007 and such sums as necessary 
from FY 2008 through 2010.
            Section 2906. Demonstration program to integrate 
                    information technology into clinical education
    The Secretary may award competitive grants to carry out 
demonstration projects to develop academic curricula 
integrating qualified health information technology systems in 
the clinical education of health professionals.
            Section 2907. Licensure and the electronic exchange of 
                    health information
    Instructs the Secretary to study state laws for the 
licensure, registration, and certification of medical 
professionals and, within one year, issue a report with 
recommendations for the harmonization of such laws. 
Reauthorizes, through FY2010, grants to state licensing boards 
to develop policies that reduce the statutory and regulatory 
barriers to telemedicine (PHS Act Section 330L).
            Section 2908. Quality measurement system
    The bill directs the Secretary to develop and periodically 
update a quality measurement system for assessing the quality 
of care patients receive. The legislation also requires the 
Secretary, in implementing such system, to take into account 
the recommendations of public-private entities that involve 
health care representatives and others interested in the 
quality of care. The bill requires the Secretary, by July 1, 
2006, to have in place an arrangement with a private nonprofit 
entity to provide advice and recommendations on developing and 
updating the quality measurement system, and specifies the 
membership of such entity.
            Section 2909. Ensuring privacy and security
    The HIPAA and Social Security statutes and regulations 
regarding privacy, confidentiality, and security of health 
information shall apply to everything in this act.
            Section 2910. Study of reimbursement incentives
    The Secretary shall carry out, or contract with a private 
entity to carry out, a study that examines methods to create 
efficient reimbursement incentives for improving healthcare 
quality in community Federally qualified health centers, rural 
health clinics, and free clinics.
            Section 3. Health information technology resource center
    Amends the Public Health Service Act and establishes a 
Health Information Technology Resource Center to provide 
technical assistance and develop best practices to support and 
accelerate efforts to adopt, implement, and effectively use 
interoperable health information technology.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *



SEC. 330L. TELEMEDICINE; INCENTIVE GRANTS REGARDING COORDINATION AMONG 
                    STATES.

    (a) In General.-- * * *
    (b) 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 [2002 through 2006] 2006 through 2010.

           *       *       *       *       *       *       *


SEC. 914. INFORMATION SYSTEMS FOR HEALTH CARE IMPROVEMENT.

    (a) In General.-- * * *

           *       *       *       *       *       *       *

    (c) Facilitating Public Access to Information.-- * * *

           *       *       *       *       *       *       *

    (d) Health Information Technology Resource Center.--
          (a) In general.--The Secretary, acting through the 
        Director, shall develop a Health Information Technology 
        Resource Center to provide technical assistance and 
        develop best practices to support and accelerate 
        efforts to adopt, implement, and effectively use 
        interoperable health information technology in 
        compliance with section 2903 and 2908.
          (2) health information technology resource center.--
                  (A) In general.--The Center shall support 
                activities to meet goals, including--
                          (i) providing for the widespread 
                        adoption of interoperable health 
                        information technology;
                          (ii) providing for the establishment 
                        of regional and local health 
                        information networks to facilitate the 
                        development of interoperability across 
                        health care settings and improve the 
                        quality of health care;
                          (iii) the development of solutions to 
                        barriers to the exchange of electronic 
                        health information; or
                          (iv) other activities identified by 
                        the States, local or regional health 
                        information networks, or health care 
                        stakeholders as a focus for developing 
                        and sharing best practices.
                  (B) Purposes.--The purpose of the Center is 
                to--
                          (i) provide a forum for the exchange 
                        of knowledge and experience;
                          (ii) accelerate the transfer of 
                        lessons learned from existing public 
                        and private sector initiatives, 
                        including those currently receiving 
                        Federal financial support; and
                          (iii) assemble, analyze, and widely 
                        disseminate evidence and experience 
                        related to the adoption, 
                        implementation, and effective use of 
                        interoperable health information 
                        technology.
                  (C) Support for activities.--To provide 
                support for the activities of the Center, the 
                Director shall modify the requirements, if 
                necessary, that apply to the National Resource 
                Center for Health Information Technology to 
                provide the necessary infrastructure to support 
                the duties and activities of the Center and 
                facilitate information exchange across the 
                public and private sectors.
          (3) Technical assistance telephone number or 
        website.--The Secretary shall establish a toll-free 
        telephone number or Internet website to provide health 
        care providers and patients with a single point of 
        contact to--
                  (A) learn about Federal grants and technical 
                assistance services related to interoperable 
                health information technology;
                  (B) learn about qualified health information 
                technology and the quality measurement system 
                adopted by the Federal Government under 
                sections 2903 and 2908;
                  (C) learn about regional and local health 
                information networks for assistance with health 
                information technology; and
                  (D) disseminate additional information 
                determined by the Secretary.
          (4) Rule of construction.--Nothing in this subsection 
        shall be construed to require the duplication of 
        Federal efforts with respect to the establishment of 
        the Center, regardless of whether such efforts were 
        carried out prior to or after the enactment of this 
        subsection.

           *       *       *       *       *       *       *


 TITLE XXVIII--NATIONAL PREPAREDNESS FOR BIOTERRORISM AND OTHER PUBLIC 
                           HEALTH EMERGENCIES

Subtitle A--National Preparedness and Response Planning, Coordinating, 
                             and Reporting

SEC. 2801. NATIONAL PREPAREDNESS PLAN.

    (a) In general.--
          (1) Preparedness and response regarding public health 
        emergencies.-- * * *

           *       *       *       *       *       *       *


            Subtitle B--Emergency Preparedness and Response

SEC. 2811. COORDINATION OF PREPAREDNESS FOR AND RESPONSE TO 
                    BIOTERRORISM AND OTHER PUBLIC HEALTH EMERGENCIES.

    (a) Assistant Secretary for Public Health Emergency 
Preparedness.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *


         TITLE XXIX--HEALTH INFORMATION TECHNOLOGY AND QUALITY

SEC. 2901. DEFINITIONS.

    In this title:
          (1) Health care provider.--The term ``health care 
        provider'' means a hospital, skilled nursing facility, 
        home health entity, health care clinic, federally 
        qualified health center, group practice (as defined in 
        section 1877(h)(4) of the Social Security Act), a 
        pharmacist, a pharmacy, a laboratory, a physician (as 
        defined in section 1861(r) of the Social Security Act), 
        a health facility operated by or pursuant to a contract 
        with the Indian Health Service, a rural health clinic, 
        and any other category of facility or clinician 
        determined appropriate by the Secretary.
          (2) Health information.--The term ``health 
        information'' has the meaning given such term in 
        section 1171(4) of the Social Security Act.
          (3) Health insurance plan.--The term ``health 
        insurance plan'' means--
                  (A) a health insurance issuer (as defined in 
                section 2791(b)(2));
                  (B) a group health plan (as defined in 
                section 2791(a)(1)); and
                  (C) a health maintenance organization (as 
                defined in section 2791(b)(3)).
          (4) Laboratory.--The term ``laboratory'' has the 
        meaning given that term in section 353.
          (5) Pharmacist.--The term ``pharmacist'' has the 
        meaning given that term in section 804 of the Federal 
        Food, Drug, and Cosmetic Act.
          (6) Qualified health information technology.--The 
        term ``qualified health information technology'' means 
        a computerized system (including hardware and software) 
        that--
                  (A) protects the privacy and security of 
                health information;
                  (B) maintains and provides permitted access 
                to health information in an electronic format;
                  (C) incorporates decision support to reduce 
                medical errors and enhance health care quality;
                  (D) complies with the standards adopted by 
                the Federal Government under section 2903; and
                  (E) allows for the reporting of quality 
                measures under section 2908.
          (7) State.--The term ``State'' means each of the 
        several States, the District of Columbia, Puerto Rico, 
        the Virgin Islands, Guam, American Samoa, and the 
        Northern Mariana Islands.

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 
coordinate and oversee programs and activities to develop a 
nationwide interoperable health information technology 
infrastructure that--
          (1) ensures that patients' health information is 
        secure and protected;
          (2) improves health care quality, reduces medical 
        errors, and advances the delivery of patient-centered 
        medical care;
          (3) reduces health care costs resulting from 
        inefficiency, medical errors, inappropriate care, and 
        incomplete information;
          (4) ensures that appropriate information to help 
        guide medical decisions is available at the time and 
        place of care;
          (5) promotes a more effective marketplace, greater 
        competition, and increased choice through the wider 
        availability of accurate information on health care 
        costs, quality, and outcomes;
          (6) 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 health care 
        information;
          (7) 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;
          (8) facilitates health research; and
          (9) promotes prevention of chronic diseases.
    (c) Duties of the National Coordinator.--The National 
Coordinator shall--
          (1) serve as a member of the public-private American 
        Health Information Collaborative established under 
        section 2903;
          (2) serve as the principal advisor to the Secretary 
        concerning the development, application, and use of 
        health information technology, and coordinate and 
        oversee the health information technology programs of 
        the Department;
          (3) facilitate the adoption of a nationwide, 
        interoperable system for the electronic exchange of 
        health information;
          (4) ensure the adoption and implementation of 
        standards for the electronic exchange of health 
        information to reduce cost and improve health care 
        quality;
          (5) 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;
          (6) to the extent permitted by law, coordinate 
        outreach and consultation by the relevant executive 
        branch agencies (including Federal commissions) with 
        public and private parties of interest, including 
        consumers, payers, employers, hospitals and other 
        health care providers, physicians, community health 
        centers, laboratories, vendors and other stakeholders;
          (7) advise the President regarding specific Federal 
        health information technology programs; and
          (8) submit the reports described under section 
        2903(i) (excluding paragraph (4) of such section).
    (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 detail of personnel under 
        paragraph (1) 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) Rule of Construction.--Nothing in this section shall be 
construed to require the duplication of Federal efforts with 
respect to the establishment of the Office, regardless of 
whether such efforts were carried out prior to or after the 
enactment of this title.
    (f) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, $5,000,000 for 
fiscal year 2006, $5,000,000 for fiscal year 2007, and such 
sums as may be necessary for each of fiscal years 2008 through 
2010.

SEC. 2903. AMERICAN HEALTH INFORMATION COLLABORATIVE.

    (a) Purpose.--The Secretary shall establish the public-
private American Health Information Collaborative (referred to 
in this section as the ``Collaborative'') to--
          (1) advise the Secretary and recommend specific 
        actions to achieve a nationwide interoperable health 
        information technology infrastructure;
          (2) serve as a forum for the participation of a broad 
        range of stakeholders to provide input on achieving the 
        interoperability of health information technology; and
          (3) recommend standards (including content, 
        communication, and security standards) for the 
        electronic exchange of health information (including 
        for the reporting of quality data under section 2908) 
        for adoption by the Federal Government and voluntary 
        adoption by private entities.
    (b) Composition.--
          (1) In general.--The Collaborative shall be composed 
        of--
                  (A) the Secretary, who shall serve as the 
                chairperson of the Collaborative;
                  (B) the Secretary of Defense, or his or her 
                designee;
                  (C) the Secretary of Veterans Affairs, or his 
                or her designee;
                  (D) the Secretary of Commerce, or his or her 
                designee;
                  (E) the National Coordinator for Health 
                Information Technology;
                  (F) representatives of other relevant Federal 
                agencies, as determined appropriate by the 
                Secretary; and
                  (G) representatives from each of the 
                following categories to be appointed by the 
                Secretary from nominations submitted by the 
                public--
                          (i) consumer and patient 
                        organizations;
                          (ii) experts in health information 
                        privacy and security;
                          (iii) health care providers;
                          (iv) health insurance plans or other 
                        third party payors;
                          (v) standards development 
                        organizations;
                          (vi) information technology vendors;
                          (vii) purchasers or employers; and
                          (viii) State or local government 
                        agencies or Indian tribe or tribal 
                        organizations.
          (2) Considerations.--In appointing members under 
        paragraph (1)(G), the Secretary shall select 
        individuals with expertise in--
                  (A) health information privacy;
                  (B) health information security;
                  (C) health care quality and patient safety, 
                including those individuals with experience in 
                utilizing health information technology to 
                improve health care quality and patient safety;
                  (D) data exchange; and
                  (E) developing health information technology 
                standards and new health information 
                technology.
          (3) Participation.--Membership and procedures of the 
        Collaborative shall ensure a balance among various 
        sectors of the healthcare system so that no single 
        sector unduly influences the recommendations of the 
        Collaborative.
          (4) Terms.--Members appointed under paragraph (1)(G) 
        shall serve for 2 year terms, except that any member 
        appointed to fill a vacancy for an unexpired term shall 
        be appointed for the remainder of such term. A member 
        may serve for not to exceed 180 days after the 
        expiration of such member's term or until a successor 
        has been appointed.
    (c) Recommendations and Policies.-- Not later than 1 year 
after the date of enactment of this title, and annually 
thereafter, the Collaborative shall recommend to the Secretary 
uniform national policies for adoption by the Federal 
Government and voluntary adoption by private entities to 
support the widespread adoption of health information 
technology, including--
          (1) protection of health information through privacy 
        and security practices;
          (2) measures to prevent unauthorized access to health 
        information;
          (3) methods to facilitate secure patient access to 
        health information;
          (4) fostering the public understanding of health 
        information technology;
          (5) the ongoing harmonization of industry-wide health 
        information technology standards;
          (6) recommendations for a nationwide interoperable 
        health information technology infrastructure;
          (7) the identification and prioritization of specific 
        use cases for which health information technology is 
        valuable, beneficial, and feasible;
          (8) recommendations for the establishment of an 
        entity to ensure the continuation of the functions of 
        the Collaborative; and
          (9) other policies (including recommendations for 
        incorporating health information technology into the 
        provision of care and the organization of the health 
        care workplace) determined to be necessary by the 
        Collaborative.
    (d) Standards.--
          (1) Existing standards.--The standards adopted by the 
        Consolidated Health Informatics Initiative shall be 
        deemed to have been recommended by the Collaborative 
        under this section.
          (2) First year review.--Not later than 1 year after 
        the date of enactment of this title, the Collaborative 
        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 paragraph (2)(A);
                  (B) identify deficiencies and omissions in 
                such existing standards; and
                  (C) identify duplication and overlap in such 
                existing standards;

        and recommend new standards and modifications to such 
        existing standards as necessary.
          (3) Ongoing review.--Beginning 1 year after the date 
        of enactment of this title, and annually thereafter, 
        the Collaborative 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 paragraph (2)(A);
                  (B) identify deficiencies and omissions in 
                such existing standards; and
                  (C) identify duplication and overlap in such 
                existing standards;

        and recommend new standards and modifications to such 
        existing standards as necessary.
          (4) Limitation.--The standards and timeframe for 
        adoption described in this section shall be consistent 
        with any standards developed pursuant to the Health 
        Insurance Portability and Accountability Act of 1996.
    (e) Federal Action.--Not later than 60 days after the 
issuance of a recommendation from the Collaborative under 
subsection (d)(2), the Secretary of Health and Human Services, 
the Secretary of Veterans Affairs, and the Secretary of 
Defense, in collaboration with representatives of other 
relevant Federal agencies, as determined appropriate by the 
Secretary, shall jointly review such recommendations. The 
Secretary shall provide for the adoption by the Federal 
Government of any standard or standards contained in such 
recommendation.
    (f) Coordination of Federal Spending.--Not later than 1 
year after the adoption by the Federal Government of a 
recommendation as provided for in subsection (e), and in 
compliance with chapter 113 of title 40, United States Code, no 
Federal agency shall expend Federal funds for the purchase of 
any form of health information technology or health information 
technology system for clinical care or for the electronic 
retrieval, storage, or exchange of health information that is 
not consistent with applicable standards adopted by the Federal 
Government under subsection (e).
    (g) Coordination of Federal Data Collection.--Not later 
than 3 years after the adoption by the Federal Government of a 
recommendation as provided for in subsection (e), all Federal 
agencies collecting health data for the purposes of quality 
reporting, surveillance, epidemiology, adverse event reporting, 
research, or for other purposes determined appropriate by the 
Secretary, shall comply with standards adopted under subsection 
(e).
    (h) Voluntary Adoption.--
          (1) In general.--Any standards adopted by the Federal 
        Government under subsection (e) shall be voluntary with 
        respect to private entities.
          (2) Rule of construction.--Nothing in this section 
        shall be construed to require that a private entity 
        that enters into a contract with the Federal Government 
        adopt the standards adopted by the Federal Government 
        under section 2903 with respect to activities not 
        related to the contract.
          (3) Limitation.--Private entities that enter into a 
        contract with the Federal Government shall adopt the 
        standards adopted by the Federal Government under 
        section 2903 for the purpose of activities under such 
        Federal contract.
    (i) Reports.--The Secretary shall submit to the Committee 
on Health, Education, Labor, and Pensions and the Committee on 
Finance of the Senate and the Committee on Energy and Commerce 
and the Committee on Ways and Means of the House of 
Representatives, on an annual basis, a report that--
          (1) describes the specific actions that have been 
        taken by the Federal Government and private entities to 
        facilitate the adoption of an interoperable 
nationwidesystem for the electronic exchange of health information;
          (2) describes barriers to the adoption of such a 
        nationwide system;
          (3) contains recommendations to achieve full 
        implementation of such a nationwide system; and
          (4) contains a plan and progress toward the 
        establishment of an entity to ensure the continuation 
        of the functions of the Collaborative.
    (j) Application of FACA.--The Federal Advisory Committee 
Act (5 U.S.C. App.) shall apply to the Collaborative, except 
that the term provided for under section 14(a)(2) shall be 5 
years.
    (k) Rule of Construction.--Nothing in this section shall be 
construed to require the duplication of Federal efforts with 
respect to the establishment of the Collaborative, regardless 
of whether such efforts were carried out prior to or after the 
enactment of this title.
    (l) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, $4,000,000 for 
fiscal year 2006, $4,000,000 for fiscal year 2007, and such 
sums as may be necessary for each of fiscal years 2008 through 
2010.

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

    (a) Implementation.--
          (1) In general.--The Secretary, based upon the 
        recommendations of the Collaborative, 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 using the criteria developed 
        by the Secretary under this section.
    (b) Certification.--
          (1) In general.--The Secretary, based upon the 
        recommendations of the Collaborative, shall develop 
        criteria to ensure and certify that hardware and 
        software that claim to be in compliance with any 
        standard for the electronic exchange of health 
        information adopted under this title have established 
        and maintained such compliance in technical conformance 
        with such standards.
          (2) Certification assistance.--The Secretary may 
        recognize a private entity or entities to assist in the 
        certification described under paragraph (1) using the 
        criteria developed by the Secretary under this section.
    (c) Delegation Authority.--The Secretary, through 
consultation with the Collaborative, may accept recommendations 
on the development of the criteria under subsections (a) and 
(b) from a Federal agency or private entity.

SEC. 2905. GRANTS TO FACILITATE THE WIDESPREAD ADOPTION OF 
                    INTEROPERABLE HEALTH INFORMATION TECHNOLOGY.

    (a) Competitive Grants To Facilitate the Widespread 
Adoption of Health Information Technology.--
          (1) In general.--The Secretary may award competitive 
        grants to eligible entities to facilitate the purchase 
        and enhance the utilization of qualified health 
        information technology systems to improve the quality 
        and efficiency of health care.
          (2) Eligibility.--To be eligible to receive a grant 
        under paragraph (1) an entity shall--
                  (A) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require;
                  (B) submit to the Secretary a strategic plan 
                for the implementation of data sharing and 
                interoperability measures;
                  (C) be a--
                          (i) not for profit hospital;
                          (ii) individual or group practice; or
                          (iii) another health care provider 
                        not described in clause (i) or (ii);
                  (D) adopt the standards adopted by the 
                Federal Government under section 2903;
                  (E) implement the measurement system adopted 
                under section 2908 and report to the Secretary 
                on such measures;
                  (F) demonstrate significant financial need; 
                and
                  (G) provide matching funds in accordance with 
                paragraph (4).
          (3) Use of funds.--Amounts received under a grant 
        under this subsection shall be used to facilitate the 
        purchase and enhance the utilization of qualified 
        health information technology systems.
          (4) Matching requirement.--To be eligible for a grant 
        under this subsection an entity shall contribute non-
        Federal contributions to the costs of carryingout the 
activities for which the grant is awarded in an amount equal to $1 for 
each $3 of Federal funds provided under the grant.
          (5) Preference in awarding grants.--In awarding 
        grants under this subsection the Secretary shall give 
        preference to--
                  (A) eligible entities that are located in 
                rural, frontier, and other underserved areas as 
                determined by the Secretary;
                  (B) eligible entities that will link, to the 
                extent practicable, the qualified health 
                information system to local or regional health 
                information plan or plans; and
                  (C) with respect to an entity described in 
                subsection (a)(2)(C)(iii), a nonprofit health 
                care provider.
    (b) Competitive Grants to States for the Development of 
State Loan Programs To Facilitate the Widespread Adoption of 
Health Information Technology.--
          (1) In general.--The Secretary may award competitive 
        grants to States for the establishment of State 
        programs for loans to health care providers to 
        facilitate the purchase and enhance the utilization of 
        qualified health information technology.
          (2) Establishment of fund.--To be eligible to receive 
        a competitive grant under this subsection, a State 
        shall establish a qualified health information 
        technology loan fund (referred to in this subsection as 
        a ``State loan fund'') and comply with the other 
        requirements contained in this section. A grant to a 
        State under this subsection shall be deposited in the 
        State loan fund established by the State. No funds 
        authorized by other provisions of this title to be used 
        for other purposes specified in this title shall be 
        deposited in any State loan fund.
          (3) Eligibility.--To be eligible to receive a grant 
        under paragraph (1) a State shall--
                  (A) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require;
                  (B) submit to the Secretary a strategic plan 
                in accordance with paragraph (4);
                  (C) establish a qualified health information 
                technology loan fund in accordance with 
                paragraph (2);
                  (D) require that health care providers 
                receiving such loans--
                          (i) link, to the extent practicable, 
                        the qualified health information system 
                        to a local or regional health 
                        information network; and
                          (ii) consult with the Health 
                        Information Technology Resource Center 
                        established in section 914(d) to access 
                        the knowledge and experience of 
                        existing initiatives regarding the 
                        successful implementation and effective 
                        use of health information technology;
                  (E) require that health care providers 
                receiving such loans adopt the standards 
                adopted by the Federal Government under section 
                2903;
                  (F) require that health care providers 
                receiving such loans implement the measurement 
                system adopted under section 2908 and report to 
                the Secretary on such measures; and
                  (G) provide matching funds in accordance with 
                paragraph (8).
          (4) Strategic plan.--
                  (A) In general.--A State that receives a 
                grant under this subsection shall annually 
                prepare a strategic plan that identifies the 
                intended uses of amounts available to the State 
                loan fund of the State.
                  (B) Contents.--A strategic plan under 
                subparagraph (A) shall include--
                          (i) a list of the projects to be 
                        assisted through the State loan fund in 
                        the first fiscal year that begins after 
                        the date on which the plan is 
                        submitted;
                          (ii) a description of the criteria 
                        and methods established for the 
                        distribution of funds from the State 
                        loan fund; and
                          (iii) a description of the financial 
                        status of the State loan fund and the 
                        short-term and long-term goals of the 
                        State loan fund.
          (5) Use of funds.--
                  (A) In general.--Amounts deposited in a State 
                loan fund, including loan repayments and 
                interest earned on such amounts, shall be used 
                only for awarding loans or loan guarantees, or 
                as a source of reserve and security for 
                leveraged loans, the proceeds of which are 
                deposited in the State loan fund established 
                under paragraph (1). Loans under this section 
                may be used by a health care provider to 
                facilitate the purchase and enhance the 
                utilization of qualified healthinformation 
technology and training of personnel in the use of such technology.
                  (B) Limitation.--Amounts received by a State 
                under this subsection may not be used--
                          (i) for the purchase or other 
                        acquisition of any health information 
                        technology system that is not a 
                        qualified health information technology 
                        system;
                          (ii) to conduct activities for which 
                        Federal funds are expended under this 
                        title, or the amendments made by the 
                        Wired for Health Care Quality Act; or
                          (iii) for any purpose other than 
                        making loans to eligible entities under 
                        this section.
          (6) Types of assistance.--Except as otherwise limited 
        by applicable State law, amounts deposited into a State 
        loan fund under this subsection may only be used for 
        the following:
                  (A) To award loans that comply with the 
                following:
                          (i) The interest rate for each loan 
                        shall be less than or equal to the 
                        market interest rate.
                          (ii) The principal and interest 
                        payments on each loan shall commence 
                        not later than 1 year after the loan 
                        was awarded, and each loan shall be 
                        fully amortized not later than 10 years 
                        after the date of the loan.
                          (iii) The State loan fund shall be 
                        credited with all payments of principal 
                        and interest on each loan awarded from 
                        the fund.
                  (B) To guarantee, or purchase insurance for, 
                a local obligation (all of the proceeds of 
                which finance a project eligible for assistance 
                under this subsection) if the guarantee or 
                purchase would improve credit market access or 
                reduce the interest rate applicable to the 
                obligation involved.
                  (C) As a source of revenue or security for 
                the payment of principal and interest on 
                revenue or general obligation bonds issued by 
                the State if the proceeds of the sale of the 
                bonds will be deposited into the State loan 
                fund.
                  (D) To earn interest on the amounts deposited 
                into the State loan fund.
          (7) Administration of state loan funds.--
                  (A) Combined financial administration.--A 
                State may (as a convenience and to avoid 
                unnecessary administrative costs) combine, in 
                accordance with State law, the financial 
                administration of a State loan fund established 
                under this subsection with the financial 
                administration of any other revolving fund 
                established by the State if otherwise not 
                prohibited by the law under which the State 
                loan fund was established.
                  (B) Cost of administering fund.--Each State 
                may annually use not to exceed 4 percent of the 
                funds provided to the State under a grant under 
                this subsection to pay the reasonable costs of 
                the administration of the programs under this 
                section, including the recovery of reasonable 
                costs expended to establish a State loan fund 
                which are incurred after the date of enactment 
                of this title.
                  (C) Guidance and regulations.--The Secretary 
                shall publish guidance and promulgate 
                regulations as may be necessary to carry out 
                the provisions of this subsection, including--
                          ``(i) provisions to ensure that each 
                        State commits and expends funds 
                        allotted to the State under this 
                        subsection as efficiently as possible 
                        in accordance with this title and 
                        applicable State laws; and
                          ``(ii) guidance to prevent waste, 
                        fraud, and abuse.
                  ``(D) Private sector contributions.--
                          ``(i) In general.--A State loan fund 
                        established under this subsection may 
                        accept contributions from private 
                        sector entities, except that such 
                        entities may not specify the recipient 
                        or recipients of any loan issued under 
                        this subsection.
                          ``(ii) Availability of information.--
                        A State shall make publicly available 
                        the identity of, and amount contributed 
                        by, any private sector entity under 
                        clause (i) and may issue letters of 
                        commendation or make other awards (that 
                        have no financial value) to any such 
                        entity.
          ``(8) Matching requirements.--
                  ``(A) In general.--The Secretary may not make 
                a grant under paragraph (1) to a State unless 
                the State agrees to make available (directly or 
                through donations from public or private 
                entities) non-Federal contributions in 
cashtoward the costs of the State program to be implemented under the 
grant in an amount equal to not less than $1 for each $1 of Federal 
funds provided under the grant.
                  (B) Determination of amount of non-federal 
                contribution.--In determining the amount of 
                non-Federal contributions that a State has 
                provided pursuant to subparagraph (A), the 
                Secretary may not include any amounts provided 
                to the State by the Federal Government.
          (9) Preference in awarding grants.--The Secretary may 
        give a preference in awarding grants under this 
        subsection to States that adopt value-based purchasing 
        programs to improve health care quality.
          (10) Reports.--The Secretary shall annually submit to 
        the Committee on Health, Education, Labor, and Pensions 
        and the Committee on Finance of the Senate, and the 
        Committee on Energy and Commerce and the Committee on 
        Ways and Means of the House of Representatives, a 
        report summarizing the reports received by the 
        Secretary from each State that receives a grant under 
        this subsection.
  (c) Competitive Grants for the Implementation of Regional or 
Local Health Information Technology Plans.--
          (1) In general.--The Secretary may award competitive 
        grants to eligible entities to implement regional or 
        local health information plans to improve health care 
        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 2908.
          (2) Eligibility.--To be eligible to receive a grant 
        under paragraph (1) an entity shall--
                  (A) demonstrate financial need to the 
                Secretary;
                  (B) demonstrate that one of its principal 
                missions or purposes is to use information 
                technology to improve health care quality and 
                efficiency;
                  (C) 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--
                          (i) physicians (as defined in section 
                        1861(r) of the Social Security Act), 
                        including physicians that provide 
                        services to low income and underserved 
                        populations;
                          (ii) hospitals (including hospitals 
                        that provide services to low income and 
                        underserved populations);
                          (iii) pharmacists or pharmacies;
                          (iv) health insurance plans;
                          (v) 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);
                          (vi) rural health clinics (as defined 
                        in section 1861(aa) of the Social 
                        Security Act);
                          (vii) patient or consumer 
                        organizations;
                          (viii) employers; and
                          (ix) any other health care providers 
                        or other entities, as determined 
                        appropriate by the Secretary;
                  (D) demonstrate the participation, to the 
                extent practicable, of stakeholders in the 
                electronic exchange of health information 
                within the local or regional plan pursuant to 
                paragraph (2)(C);
                  (E) 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;
                  (F) adopt the standards adopted by the 
                Secretary under section 2903;
                  (G) require that health care providers 
                receiving such grants implement the measurement 
                system adopted under section 2908 and report to 
                the Secretary on such measures;
                  (H) facilitate the electronic exchange of 
                health information within the local or regional 
                area and among local and regional areas;
                  (I) prepare and submit to the Secretary an 
                application in accordance with paragraph (3); 
                and
                  (J) agree to provide matching funds in 
                accordance with paragraph (5).
          (3) Application.--
                  (A) In general.--To be eligible to receive a 
                grant under paragraph (1), an entity shall 
                submit to the Secretary an application at such 
                time, in such manner, and containing such 
                information as the Secretary may require.
                  (B) Required information.--At a minimum, an 
                application submitted under this paragraph 
                shall include--
                          (i) clearly identified short-term and 
                        long-term objectives of the regional or 
                        local health information plan;
                          (ii) 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;
                          (iii) a strategy that includes 
                        initiatives to improve health care 
                        quality and efficiency, including the 
                        use and reporting of health care 
                        quality measures adopted under section 
                        2908;
                          (iv) 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;
                          (v) a plan to ensure the privacy and 
                        security of personal health information 
                        that is consistent with Federal and 
                        State law;
                          (vi) a governance plan that defines 
                        the manner in which the stakeholders 
                        shall jointly make policy and 
                        operational decisions on an ongoing 
                        basis; and
                          (vii) 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; and
                          (viii) if the case of an applicant 
                        entity that is unable to demonstrate 
                        the participation of all stakeholders 
                        pursuant to paragraph (2)(C), the 
                        justification from the entity for any 
                        such nonparticipation.
          (4) Use of funds.--Amounts received under a grant 
        under paragraph (1) shall be used to establish and 
        implement a regional or local health information plan 
        in accordance with this subsection.
          (5) Matching requirement.--
                  (A) In general.--The Secretary may not make a 
                grant under this subsection 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).
                  (B) Determination of amount contributed.--
                Non-Federal contributions required under 
                subparagraph (A) 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.
    (d) Reports.--Not later than 1 year after the date on which 
the first grant is awarded under this section, and annually 
thereafter during the grant period, an entity that receives a 
grant under this section shall submit to the Secretary 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 
        health care quality and safety;
          (3) a description of any reduction in duplicative or 
        unnecessary care as a result of the project involved;
          (4) a description of the efforts of recipients under 
        this section to facilitate secure patient access to 
        health information; and
          (5) other information as required by the Secretary.
    (e) Requirement To Achieve Quality Improvement.--The 
Secretary shall annually evaluate the activities conducted 
under this section and shall, in awarding grants, implement the 
lessons learned from such evaluation in a manner so that awards 
made subsequent to each such evaluation are made in a manner 
that, in the determination of the Secretary, will result in the 
greatest improvement in quality measurement systems under 
section 2908.
    (f) Limitation.--An eligible entity may only receive one 
non-renewable grant under subjection (a), one non-renewable 
grant under subsection (b), and one non-renewable grand under 
subsection (c).
    (g) Authorization of Appropriations.--
          (1) In general.--For the purpose of carrying out this 
        section, there is authorized to be appropriated 
        $116,000,000 for fiscal year 2006, $141,000,000 for 
        fiscal year 2007, and such sums as may be necessary for 
        each of fiscal years 2008 through 2010.
          (2) Availability.--Amounts appropriated under 
        paragraph (1) shall remain available through fiscal 
        year 2010.

SEC. 2906. DEMONSTRATION PROGRAM TO INTEGRATE INFORMATION TECHNOLOGY 
                    INTO CLINICAL EDUCATION.

    (a) In General.--The Secretary may award grants under this 
section to carry out demonstration projects to develop academic 
curricula integrating qualified health information technology 
systems in the clinical education of health professionals. Such 
awards shall be made on a competitive basis and pursuant to 
peer review.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
          (1) submit to the Secretary an application at such 
        time, in such manner, and containing such information 
        as the Secretary may require;
          (2) submit to the Secretary a strategic plan for 
        integrating qualified health information technology 
inthe clinical education of health professionals and for ensuring the 
consistent utilization of decision support software to reduce medical 
errors and enhance health care quality;
          (3) be--
                  (A) a health professions school;
                  (B) a school of nursing; or
                  (C) an institution with a graduate medical 
                education program;
          (4) provide for the collection of data regarding the 
        effectiveness of the demonstration project to be funded 
        under the grant in improving the safety of patients, 
        the efficiency of health care delivery, and in 
        increasing the likelihood that graduates of the grantee 
        will adopt and incorporate health information 
        technology, and implement the quality measurement 
        system adopted under section 2908, in the delivery of 
        health care services; and
          (5) provide matching funds in accordance with 
        subsection (c).
    (c) Use of Funds.--
          (1) In general.--With respect to a grant under 
        subsection (a), an eligible entity shall--
                  (A) use grant funds in collaboration with 2 
                or more disciplines; and
                  (B) use grant funds to integrate qualified 
                health information technology into community-
                based clinical education.
          (2) Limitation.--An eligible entity shall not use 
        amounts received under a grant under subsection (a) to 
        purchase hardware, software, or services.
    (d) Matching Funds.--
          (1) In general.--The Secretary may award a grant to 
        an entity under this section only if the entity agrees 
        to make available non-Federal contributions toward the 
        costs of the program to be funded under the grant in an 
        amount that is not less than $1 for each $2 of Federal 
        funds provided under the grant.
          (2) Determination of amount contributed.--Non-Federal 
        contributions under paragraph (1) may be in cash or in 
        kind, fairly evaluated, including equipment 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 contributions.
    (e) Evaluation.--The Secretary shall take such action as 
may be necessary to evaluate the projects funded under this 
section and publish, make available, and disseminate the 
results of such evaluations on as wide a basis as is 
practicable.
    (f) Reports.--Not later than 1 year after the date of 
enactment of this title, and annually thereafter, the Secretary 
shall submit to the Committee on Health, Education, Labor, and 
Pensions and the Committee on Finance of the Senate, and the 
Committee on Energy and Commerce and the Committee on Ways and 
Means of the House of Representatives a report that--
          (1) describes the specific projects established under 
        this section; and
          (2) contains recommendations for Congress based on 
        the evaluation conducted under subsection (e).
    (g) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section, $5,000,000 for 
fiscal year 2007, and such sums as may be necessary for each of 
fiscal years 2008 through 2010.
    (h) Sunset.--This section shall not apply after September 
30, 2010.

SEC. 2907. LICENSURE AND THE ELECTRONIC EXCHANGE OF HEALTH INFORMATION.

    (a) In General.--The Secretary shall carry out, or contract 
with a private entity to carry out, a study that examines--
          (1) the variation among State laws that relate to the 
        licensure, registration, and certification of medical 
        professionals; and
          (2) how such variation among State laws impacts the 
        secure electronic exchange of health information--
                  (A) among the States; and
                  (B) between the States and the Federal 
                Government.
    (b) Report and Recommendations.--Not later than 1 year 
after the date of enactment of this title, the Secretary shall 
publish a report that--
          (1) describes the results of the study carried out 
        under subsection (a); and
          (2) makes recommendations to States regarding the 
        harmonization of State laws based on the results of 
        such study.

SEC. 2908. QUALITY MEASUREMENT SYSTEMS.

    (a) In General.--The Secretary, in consultation with the 
Secretary of Veterans Affairs, the Secretary of Defense, and 
representatives of other relevant Federal agencies, as 
determined appropriate by the Secretary, shall develop or adopt 
a quality measurement system, including measures to assess that 
effectiveness, timeliness, patient self-management,patient 
centeredness, efficiency, and safety, for the purpose of measuring the 
quality of care patients receive.
    (b) Requirements.--The Secretaries shall ensure that the 
quality measurement system developed under subsection (a) 
comply with the following:
          (1) Measures.--
                  (A) In general.--Subject to subparagraph (B), 
                the Secretaries shall select measures of 
                quality to be used by the Secretaries under the 
                systems.
                  (B) Requirements.--In selecting the measures 
                to be used under each system pursuant to 
                subparagraph (A), the Secretaries shall, to the 
                extent feasible, ensure that--
                          (i) such measures are evidence based, 
                        reliable and valid;
                          (ii) such measures include measures 
                        of process, structure, patient 
                        experience, efficiency, and equity; and
                          (iii) such measures include measures 
                        of overuse, underuse, and misuse of 
                        health care items and services.
          (2) Priorities.--In developing the system under 
        subsection (a), the Secretaries shall ensure that 
        priority is given 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 health care 
                decisions made by consumers and patients.
          (3) Weights of measures.--The Secretaries shall 
        assign weights to the measures used by the Secretaries 
        under each system established under subsection (a).
          (4) Risk adjustment.--The Secretaries shall establish 
        procedures to account for differences in patient health 
        status, patient characteristics, and geographic 
        location. To the extent practicable, such procedures 
        shall recognize existing procedures.
          (5) Maintenance.--The Secretaries shall, as 
        determined appropriate, but in no case more often than 
        once during each 12-month period, update the quality 
        measurement systems developed under subsection (a), 
        including through--
                  (A) the addition of more accurate and precise 
                measures under the systems and the retirement 
                of existing outdated measures under the 
                systems; and
                  (B) the refinement of the weights assigned to 
                measures under the systems.
    (c) Required Considerations in Developing and Updating the 
Systems.--In developing and updating the quality measurement 
systems under this section, the Secretaries shall--
          (1) consult with, and take into account the 
        recommendations of, the entity that the Secretaries has 
        an arrangement with under subsection (e);
          (2) consult with representatives of health care 
        providers, consumers, employers, and other individuals 
        and groups that are interested in the quality of health 
        care; and
          (3) take into account--
                  (A) any demonstration or pilot program 
                conducted by the Secretaries relating to 
                measuring and rewarding quality and efficiency 
                of care;
                  (B) any existing activities conducted by the 
                Secretaries relating to measuring and rewarding 
                quality and efficiency;
                  (C) any existing activities conducted by 
                private entities including health insurance 
                plans and payors; and
                  (D) the report by the Institute of Medicine 
                of the National Academy of Sciences under 
                section 238(b) of the Medicare Prescription 
                Drug, Improvement, and Modernization Act of 
                2003.
    (d) Required Considerations in Implementing the Systems.--
In implementing the quality measurement systems under this 
section, the Secretaries shall take into account the 
recommendations of public-private entities--
          (1) that are established to examine issues of data 
        collection and reporting, including the feasibility of 
        collecting and reporting data on measures; and
          (2) that involve representatives of health care 
        providers, consumers, employers, and other individuals 
        and groups that are interested in quality of care.
    (e) Arrangement With an Entity To Provide Advice and 
Recommendations.--
          (1) Arrangement.--On and after July 1, 2006, the 
        Secretaries shall have in place an arrangement with an 
        entity that meets the requirements described in 
        paragraph (2) under which such entityprovides the 
Secretary with advice on, and recommendations with respect to, the 
development and updating of the quality measurement systems under this 
section, including the assigning of weights to the measures under 
subsection (b)(2).
          (2) Requirements described.--The requirements 
        described in this paragraph are the following:
                  (A) The entity is a private nonprofit entity 
                governed by an executive director and a board.
                  (B) The members of the entity include 
                representatives of--
                          (i) health insurance plans and 
                        providers with experience in the care 
                        of individuals with multiple complex 
                        chronic conditions or groups 
                        representing such health insurance 
                        plans and providers;
                          (ii) groups representing patients and 
                        consumers;
                          (iii) purchasers and employers or 
                        groups representing purchasers or 
                        employers;
                          (iv) organizations that focus on 
                        quality improvement as well as the 
                        measurement and reporting of quality 
                        measures;
                          (v) State government health programs;
                          (vi) individuals or entities skilled 
                        in the conduct and interpretation of 
                        biomedical, health services, and health 
                        economics research and with expertise 
                        in outcomes and effectiveness research 
                        and technology assessment; and
                          (vii) individuals or entities 
                        involved in the development and 
                        establishment of standards and 
                        certification for health information 
                        technology systems and clinical data.
                  (C) The membership of the entity is 
                representative of individuals with experience 
                with urban health care issues and individuals 
                with experience with rural and frontier health 
                care issues.
                  (D) If the entity requires a fee for 
                membership, the entity shall provide assurances 
                to the Secretary that such fees are not a 
                substantial barrier to participation in the 
                entity's activities related to the arrangement 
                with the Secretary.
                  (E) The entity--
                          (i) permits any member described in 
                        subparagraph (B) to vote on matters of 
                        the entity related to the arrangement 
                        with the Secretary under paragraph (1); 
                        and
                          (ii) ensures that member voting 
                        provides a balance among disparate 
                        stakeholders, so that no member 
                        organization described in subparagraph 
                        (B) unduly influences the outcome.
                  (F) With respect to matters related to the 
                arrangement with the Secretary under paragraph 
                (1), the entity conducts its business in an 
                open and transparent manner and provides the 
                opportunity for public comment.
                  (G) The entity operates as a voluntary 
                consensus standards setting organization as 
                defined for purposes of section 12(d) of the 
                National Technology Transfer and Advancement 
                Act of 1995 (Public Law 104-113) and Office of 
                Management and Budget Revised Circular A-119 
                (published in the Federal Register on February 
                10, 1998).
    (f) Use of Quality Measurement System.--
          (1) In general.--For purposes of activities conducted 
        or supported by the Secretary under thisAct, the 
Secretary shall, to the extent practicable, adopt and utilize the 
measurement system developed under this section.
          (2) Collaborative agreements.--With respect to 
        activities conducted or supported by the Secretary 
        under this Act, the Secretary may establish 
        collaborative agreements with private entities, 
        including group health plans and health insurance 
        issuers, providers, purchasers, consumer organizations, 
        and entities receiving a grant under section 2905, to--
                  (A) encourage the use of the health care 
                quality measures adopted by the Secretary under 
                this section; and
                  (B) foster uniformity between the health care 
                quality measures utilized by private entities.
          (3) Reporting.--The Secretary shall implement 
        procedures to enable the Department of Health and Human 
        Services to accept the electronic submission of data 
        for purposes of quality measurement using the quality 
        measurement system adopted under this section and using 
        the standards adopted by the Federal Government under 
        section 2903.
  (g) Dissemination of Information.--Beginning on January 1, 
2008, in order to make comparative quality information 
available to health care consumers, health professionals, 
public health officials, researchers, and other appropriate 
individuals and entities, the Secretary shall provide for the 
aggregation and analysis of quality measures collected under 
section 2905 and the dissemination of recommendations and best 
practices derived in part from such analysis.
  (h) Technical Assistance.--The Secretary shall provide 
technical assistance to public and private entities to enable 
such entities to--
          (1) implement and use evidence-based guidelines with 
        the greatest potential to improve health care quality, 
        efficiency, and patient safety; and
          (2) establish mechanisms for the rapid dissemination 
        of information regarding evidence-based guidelines with 
        the greatest potential to improve health care quality, 
        efficiency, and patient safety.

SEC. 2909. ENSURING PRIVACY AND SECURITY.

    Nothing in this title shall be construed to affect the 
scope of substance of--
          (1) section 264 of the Health Insurance Portability 
        and Accountability Act of 1996;
          (2) sections 1171 through 1179 of the Social Security 
        Act; and
          (3) any regulation issued pursuant to any such 
        section;

and such sections shall remain in effect.

SEC. 2910. STUDY OF REIMBURSEMENT INCENTIVES.

    The Secretary shall carry out, or contract with a private 
entity to carry out, a study that examines methods to create 
efficient reimbursement incentives for improving health care 
quality in Federally qualified health centers, rural health 
clinics, and free clinics.

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