[House Report 109-601]
[From the U.S. Government Publishing Office]
109th Congress Rept. 109-601
HOUSE OF REPRESENTATIVES
2d Session Part II
======================================================================
HEALTH INFORMATION TECHNOLOGY PROMOTION ACT OF 2006
_______
July 26, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Thomas, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4157]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 4157) to amend the Social Security Act to encourage
the dissemination, security, confidentiality, and usefulness of
health information technology, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
I. Introduction....................................................11
A. Purpose and Summary..........................................11
B. Background...................................................14
C. Legislative History..........................................14
II. Explanation of Provisions.......................................15
III. Votes of the Committee..........................................24
IV. Budget Effects of the Bill......................................27
A. Committee Estimate of Budgetary Effects......................27
B. Budget Authority and Tax Expenditures........................28
C. Cost Estimate Prepared by the Congressional Budget Office....28
V. Other Matters to be Discussed Under the Rules of the House......38
A. Committee Oversight Findings and Recommendations.............38
B. Statement of General Performance Goals and Objectives........39
C. Constitutional Authority Statement...........................39
D. Information Relating to Unfunded Mandates....................39
VI. Changes in Existing Law Made by the Bill, as Reported...........39
VII. Views...........................................................48
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Information
Technology Promotion Act of 2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Office of the National Coordinator for Health Information
Technology.
Sec. 3. Safe harbors for provision of health information technology and
services to health care professionals.
Sec. 4. Commonality and variation in health information laws and
regulations.
Sec. 5. Implementing modern coding system; application under part A of
the Medicare program.
Sec. 6. Procedures to ensure timely updating of standards that enable
electronic exchanges.
Sec. 7. Report on the American Health Information Community.
Sec. 8. Strategic plan for coordinating implementation of health
information technology.
Sec. 9. Promotion of telehealth services.
SEC. 2. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
(a) In General.--Title II of the Public Health Service Act is amended
by adding at the end the following new part:
``PART D--HEALTH INFORMATION TECHNOLOGY
``SEC. 271. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
``(a) Establishment.--There is established within the Department of
Health and Human Services an Office of the National Coordinator for
Health Information Technology that shall be headed by the National
Coordinator for Health Information Technology (referred to in this
section as the `National Coordinator'). The National Coordinator shall
be appointed by the President and shall report directly to the
Secretary. The National Coordinator shall be paid at a rate equal to
the rate of basic pay for level IV of the Executive Schedule.
``(b) Goals of Nationwide Interoperable Health Information Technology
Infrastructure.--The National Coordinator shall perform the duties
under subsection (c) in a manner consistent with the development of a
nationwide interoperable health information technology infrastructure
that--
``(1) improves health care quality, reduces medical errors,
increases the efficiency of care, and advances the delivery of
appropriate, evidence-based health care services;
``(2) promotes wellness, disease prevention, and management
of chronic illnesses by increasing the availability and
transparency of information related to the health care needs of
an individual for such individual;
``(3) ensures that appropriate information necessary to make
medical decisions is available in a usable form at the time and
in the location that the medical service involved is provided;
``(4) produces greater value for health care expenditures by
reducing health care costs that result from inefficiency,
medical errors, inappropriate care, and incomplete information;
``(5) promotes a more effective marketplace, greater
competition, greater systems analysis, increased choice,
enhanced quality, and improved outcomes in health care
services;
``(6) improves the coordination of information and the
provision of such services through an effective infrastructure
for the secure and authorized exchange and use of health care
information; and
``(7) ensures that the confidentiality of individually
identifiable health information of a patient is secure and
protected.
``(c) Duties of National Coordinator.--
``(1) Strategic planner for interoperable health information
technology.--The National Coordinator shall maintain, direct,
and oversee the continuous improvement of a strategic plan to
guide the nationwide implementation of interoperable health
information technology in both the public and private health
care sectors consistent with subsection (b).
``(2) Principal advisor to hhs.--The National Coordinator
shall serve as the principal advisor of the Secretary on the
development, application, and use of health information
technology, and coordinate the health information technology
programs of the Department of Health and Human Services.
``(3) Coordinator of federal government activities.--
``(A) In general.--The National Coordinator shall
serve as the coordinator of Federal Government
activities relating to health information technology.
``(B) Specific coordination functions.--In carrying
out subparagraph (A), the National Coordinator shall
provide for--
``(i) the development and approval of
standards used in the electronic creation,
maintenance, or exchange of health information;
and
``(ii) the certification and inspection of
health information technology products,
exchanges, and architectures to ensure that
such products, exchanges, and architectures
conform to the applicable standards approved
under clause (i).
``(C) Use of private entities.--The National
Coordinator shall, to the maximum extent possible,
contract with or recognize private entities in carrying
out subparagraph (B).
``(D) Uniform application of standards.--A standard
approved under subparagraph (B)(i) for use in the
electronic creation, maintenance, or exchange of health
information shall preempt a standard adopted under
State law, regulation, or rule for such a use.
``(4) Intragovernmental coordinator.--The National
Coordinator shall ensure that health information technology
policies and programs of the Department of Health and Human
Services are coordinated with those of relevant executive
branch agencies and departments with a goal to avoid
duplication of effort and to ensure that each agency or
department conducts programs within the areas of its greatest
expertise and its mission in order to create a national
interoperable health information system capable of meeting
national public health needs effectively and efficiently.
``(5) Advisor to omb.--The National Coordinator shall provide
to the Director of the Office of Management and Budget comments
and advice with respect to specific Federal health information
technology programs.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section
for each of fiscal years 2006 through 2010.''.
(b) Treatment of Executive Order 13335.--Executive Order 13335 shall
not have any force or effect after the date of the enactment of this
Act.
(c) Transition From ONCHIT Under Executive Order.--
(1) In general.--All functions, personnel, assets,
liabilities, administrative actions, and statutory reporting
requirements applicable to the old National Coordinator or the
Office of the old National Coordinator on the date before the
date of the enactment of this Act shall be transferred, and
applied in the same manner and under the same terms and
conditions, to the new National Coordinator and the Office of
the new National Coordinator as of the date of the enactment of
this Act.
(2) Acting national coordinator.--Before the appointment of
the new National Coordinator, the old National Coordinator
shall act as the National Coordinator for Health Information
Technology until the office is filled as provided in section
271(a) of the Public Health Service Act, as added by subsection
(a). The President may appoint the old National Coordinator as
the new National Coordinator.
(3) Definitions.--For purposes of this subsection:
(A) New national coordinator.--The term ``new
National Coordinator'' means the National Coordinator
for Health Information Technology appointed under
section 271(a) of the Public Health Service Act, as
added by subsection (a).
(B) Old national coordinator.--The term ``old
National Coordinator'' means the National Coordinator
for Health Information Technology appointed under
Executive Order 13335.
SEC. 3. SAFE HARBORS FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY AND
SERVICES TO HEALTH CARE PROFESSIONALS.
(a) For Civil Penalties.--Section 1128A(b) of the Social Security Act
(42 U.S.C. 1320a-7a(b)) is amended by adding at the end the following
new paragraph:
``(4)(A) For purposes of this subsection, a payment described in
paragraph (1) does not include any nonmonetary remuneration (in the
form of health information technology and related services) made on or
after the HIT effective date (as defined in subparagraph (B)(ii)) by a
hospital or critical access hospital to a physician if the following
requirements are met:
``(i) The provision of such remuneration is made without a
condition that--
``(I) limits or restricts the use of the health
information technology to services provided by the
physician to individuals receiving services at the
location of the hospital or critical access hospital
providing such technology;
``(II) limits or restricts the use of the health
information technology in conjunction with other health
information technology; or
``(III) takes into account the volume or value of
referrals (or other business generated) by the
physician to the hospital or critical access hospital.
``(ii) Such remuneration is arranged for in a written
agreement that is signed by a representative of the hospital or
critical access hospital and by the physician and that
specifies the remuneration made and states that the provision
of such remuneration is made for the primary purpose of better
coordination of care or improvement of health care quality or
efficiency.
``(B) For purposes of subparagraph (A) and sections 1128B(b)(3)(J)
and 1877(e)(9)--
``(i) the term `health information technology' means
hardware, software, license, intellectual property, equipment,
or other information technology (including new versions,
upgrades, and connectivity) or related services used for the
electronic creation, maintenance, and exchange of clinical
health information; and
``(ii) the term `HIT effective date' means the date that is
180 days after the date of the enactment of this paragraph.''.
(b) For Criminal Penalties.--Section 1128B(b)(3) of such Act (42
U.S.C. 1320a-7b(b)(3)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in the subparagraph (H) as added by section 237(d) of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173; 117 Stat. 2213)--
(A) by moving such subparagraph 2 ems to the left;
and
(B) by striking the period at the end and inserting a
semicolon;
(3) in the subparagraph (H) added by section 431(a) of such
Act (117 Stat. 2287)--
(A) by redesignating such subparagraph as
subparagraph (I);
(B) by moving such subparagraph 2 ems to the left;
and
(C) by striking the period at the end and inserting
``; and''; and
(4) by adding at the end the following new subparagraph:
``(J) any nonmonetary remuneration (in the form of health
information technology, as defined in section
1128A(b)(4)(B)(i), and related services) solicited or received
by a person on or after the HIT effective date (as defined in
section 1128A(b)(4)(B)(ii)) (or offered or paid to a person on
or after such date) if--
``(i) such remuneration is solicited or received (or
offered or paid) without a condition that--
``(I) limits or restricts the use of the
health information technology to services
provided by the person to individuals receiving
services at the location of the entity
providing such technology;
``(II) limits or restricts the use of the
health information technology in conjunction
with other health information technology; or
``(III) takes into account the volume or
value of referrals (or other business
generated) by the person to the entity
providing such technology; and
``(ii) such remuneration is arranged for in a written
agreement that is signed by a representative of the
entity and by the physician and that specifies the
remuneration made and states that the provision of such
remuneration is made for the primary purpose of better
coordination of care or improvement of health care
quality or efficiency.''.
(c) For Limitation on Certain Physician Referrals.--Section 1877(e)
of such Act (42 U.S.C. 1395nn(e)) is amended by adding at the end the
following new paragraph:
``(9) Information technology and services.--Any nonmonetary
remuneration (in the form of health information technology, as
defined in section 1128A(b)(4)(B)(i), and related services)
made on or after the HIT effective date (as defined in section
1128A(b)(4)(B)(ii)) by an entity to a physician if the
following requirements are met:
``(A) The provision of such remuneration is made
without a condition that--
``(i) limits or restricts the use of the
health information technology to services
provided by the physician to individuals
receiving services at the location of the
entity providing such technology;
``(ii) limits or restricts the use of the
health information technology in conjunction
with other health information technology; or
``(iii) takes into account the volume or
value of referrals (or other business
generated) by the physician to the entity
providing such technology.
``(B) Such remuneration is arranged for in a written
agreement that is signed by a representative of the
entity and by the physician and that specifies the
remuneration made and states that the provision of such
remuneration is made for the primary purpose of better
coordination of care or improvement of health care
quality or efficiency.''.
(d) Regulation, Effective Date, and Effect on State Laws.--
(1) Regulations.--Not later than the HIT effective date, the
Secretary of Health and Human Services shall promulgate such
regulations as may be necessary to carry out the provisions of
this section.
(2) HIT effective date defined.--For purposes of this
subsection and subsection (e), the term ``HIT effective date''
has the meaning given such term in section 1128A(b)(4)(B)(ii)
of the Social Security Act, as added by subsection (a).
(3) Preemption of state laws.--No State (as defined in
section 4(c)(3)) shall have in effect a State law that imposes
a criminal or civil penalty for a transaction described in
section 1128A(b)(4), 1128B(b)(3)(J), or 1877(e)(9) of the
Social Security Act, as added by this section, if the
conditions described in the respective section of such Act,
with respect to such transaction, are met.
(e) Study and Report to Assess Effect of Safe Harbors and Exception
on Health System.--
(1) In general.--The Secretary of Health and Human Services
shall conduct a study to determine the impact of each of the
safe harbors and the exception described in paragraph (3). In
particular, the study shall examine the following:
(A) The effectiveness of each safe harbor and
exception in increasing the adoption of health
information technology.
(B) The types of health information technology
provided under each safe harbor and exception.
(C) The extent to which the financial or other
business relationships between providers under each
safe harbor or exception have changed as a result of
the safe harbor or exception in a way that affects the
health care system, affects choices available to
consumers, or affects health care expenditures.
(2) Report.--Not later than three years after the HIT
effective date, the Secretary of Health and Human Services
shall submit to Congress a report on the study under paragraph
(1) and shall include such recommendations for changes in the
safe harbors and exception as the Secretary determines may be
appropriate.
(3) Safe harbors and exception described.--For purposes of
this subsection, the safe harbors and exception described in
this paragraph are--
(A) the safe harbor under section 1128A(b)(4) of the
Social Security Act (42 U.S.C. 1320a-7a(b)(4)), as
added by subsection (a);
(B) the safe harbor under section 1128B(b)(3)(J) of
such Act (42 U.S.C. 1320a-7b(b)(3)(J)), as added by
subsection (b); and
(C) the exception under section 1877(e)(9) of such
Act (42 U.S.C. 1395nn(e)(9)), as added by subsection
(c).
SEC. 4. COMMONALITY AND VARIATION IN HEALTH INFORMATION LAWS AND
REGULATIONS.
(a) Study to Determine Impact of Variation and Commonality in State
Health Information Laws and Regulations.--
(1) In general.--For purposes of promoting the development of
a nationwide interoperable health information technology
infrastructure consistent with section 271(b) of the Public
Health Service Act (as added by section 2(a)), the Secretary of
Health and Human Services shall conduct a study of the impact
of variation in State security and confidentiality laws and
current Federal security and confidentiality standards on the
timely exchanges of health information in order to ensure the
availability of health information necessary to make medical
decisions at the location in which the medical care involved is
provided. Such study shall examine--
(A)(i) the degree of variation and commonality among
the requirements of such laws for States; and
(ii) the degree of variation and commonality between
the requirements of such laws and the current Federal
standards;
(B) insofar as there is variation among and between
such requirements, the strengths and weaknesses of such
requirements; and
(C) the extent to which such variation may adversely
impact the secure, confidential, and timely exchange of
health information among States, the Federal
government, and public and private entities, or may
otherwise impact the reliability of such information.
(2) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary of Health and Human
Services shall submit to Congress a report on the study under
paragraph (1) and shall include in such report the following:
(A) Analysis of need for greater commonality.--A
determination by the Secretary on the extent to which
there is a need for greater commonality of the
requirements of State security and confidentiality laws
and current Federal security and confidentiality
standards to better protect or strengthen the security
and confidentiality of health information in the timely
exchange of health information among States, the
Federal government, and public and private entities.
(B) Recommendations for greater commonality.--Insofar
as the Secretary determines under subparagraph (A) that
there is a need for greater commonality of such
requirements, the extent to which (and how) the current
Federal standards should be changed, and the extent to
which (and how) the State laws should be conformed, in
order to provide the commonality needed to better
protect or strengthen the security and confidentiality
of health information in the timely exchange of health
information.
(b) Implementation of Recommendations If Congress Fails to Act.--
(1) In general.--If the conditions under paragraph (2) are
met, the Secretary shall, by regulation, modify the current
Federal security and confidentiality standards to the extent
that the Secretary determines it necessary in order to achieve
the needed degree of commonality to better protect or
strengthen the security and confidentiality of health
information in the timely exchange of health information. Such
a modification shall be based upon the recommendations
described in subsection (a)(2)(B), and if the Secretary
modifies a current Federal security and confidentiality
standard, the modified standard shall supersede (and the
Secretary shall limit the permissibility of) any State security
and confidentiality law that relates to (but is different from)
such standard.
(2) Conditions.--The conditions under this paragraph are the
following:
(A) Need for greater commonality.--The Secretary
determines under subsection (a)(2)(A) that there is a
need for greater commonality in the requirements of
State security and confidentiality laws and current
Federal security and confidentiality standards to
better protect or strengthen the security and
confidentiality of health information in the timely
exchange of health information among States, the
Federal government, and public and private entities.
(B) Congressional failure to act.--The Congress fails
to enact, within 18 months after the date of receipt of
the report under subsection (a)(2), legislation that
specifically responds to the recommendations described
in subsection (a)(2)(B). Such legislation may include
any action described in paragraph (1) (relating to
modifying Federal security and confidentiality
standards).
(3) Treatment of current laws and standards.--
(A) Continuation of current federal standards and
state laws permitted.--Nothing in this subsection shall
be construed as preventing the Secretary from
continuing to apply the current Federal security and
confidentiality standards and from permitting the
continuance of State security and confidentiality laws
if such standards are not modified.
(B) No preemption of state law unless rule adopted.--
A State security and confidentiality law shall not be
preempted under paragraph (1), except to the extent the
Secretary limits the application of such law under such
paragraph. The Secretary's exercise of such authority
supercedes the provisions of section 1178(a) of the
Social Security Act (42 U.S.C. 1320d-7(a)) and section
264(c)(2) of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2 note).
(c) Definitions.--For purposes of this section:
(1) Current federal security and confidentiality standards.--
The term ``current Federal security and confidentiality
standards'' means the Federal privacy standards established
pursuant to section 264(c) of the Health Insurance Portability
and Accountability Act of 1996 (42 U.S.C. 1320d-2 note) and
security standards established under section 1173(d) of the
Social Security Act.
(2) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
(3) State.--The term ``State'' has the meaning given such
term when used in title XI of the Social Security Act, as
provided under section 1101(a) of such Act (42 U.S.C. 1301(a)).
(4) State security and confidentiality laws.--The term
``State security and confidentiality laws'' means State laws
and regulations relating to the privacy and confidentiality of
health information or to the security of such information.
(d) Conforming Amendments.--
(1) HIPAA.--Section 264(c)(2) of the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2
note) is amended by striking ``A regulation'' and inserting
``Subject to section 4(b) of the Health Information Technology
Promotion Act of 2006, a regulation''.
(2) Title xi.--Section 1178(a) of the Social Security Act (42
U.S.C. 1320d-7(a)) is amended, in the matter preceding
paragraph (1), by inserting ``Subject to section 4(b) of the
Health Information Technology Promotion Act of 2006--'' after
``General Effect.--''.
SEC. 5. IMPLEMENTING MODERN CODING SYSTEM; APPLICATION UNDER PART A OF
THE MEDICARE PROGRAM.
(a) Upgrading ASC X12 and NCPDP Standards.--
(1) In general.--The Secretary of Health and Human Services
shall provide by notice published in the Federal Register for
the following replacements of standards to apply, including for
purposes of part A of title XVIII of such Act:
(A) Accredited standards committee x12 (asc x12)
standard.--The replacement of the Accredited Standards
Committee X12 (ASC X12) version 4010 adopted under
section 1173(a) of such Act (42 U.S.C. 1320d-2(a)) with
the ASC X12 version 5010, as reviewed by the National
Committee on Vital Health Statistics.
(B) National council for prescription drug programs
(ncpdp) telecommunications standards.--The replacement
of the National Council for Prescription Drug Programs
(NCPDP) Telecommunications Standards version 5.1
adopted under section 1173(a) of such Act (42 U.S.C.
1320d-2(a)) with whichever is the latest version (as
determined by the Secretary) of the NCPDP
Telecommunications Standards that has been approved by
such Council and reviewed by the National Committee on
Vital Health Statistics as of April 1, 2008.
(2) Application.--The replacements made by paragraph (1)
shall apply, for purposes of section 1175(b)(2) of the Social
Security Act (42 U.S.C. 1320d-4(b)(2)), to transactions
occurring on or after April 1, 2009.
(3) No judicial review.--The determination of the latest
version under paragraph (1)(B) shall not be subject to judicial
review.
(b) Upgrading ICD Codes.--
(1) In general.--The Secretary of Health and Human Services
shall provide by notice published in the Federal Register for
the replacement of the International Classification of
Diseases, 9th revision, Clinical Modification (ICD-9-CM) under
the regulation promulgated under section 1173(c) of the Social
Security Act (42 U.S.C. 1320d-2(c)), including for purposes of
part A of title XVIII of such Act, with both of the following:
(A) The International Classification of Diseases,
10th revision, Clinical Modification (ICD-10-CM).
(B) The International Classification of Diseases,
10th revision, Procedure Coding System (ICD-10-PCS).
(2) Application .--The replacement made by paragraph (1)
shall apply, for purposes of section 1175(b)(2) of the Social
Security Act (42 U.S.C. 1320d-4(b)(2)), to services furnished
on or after October 1, 2009.
(3) Rules of construction.--Nothing in paragraph (1) shall be
construed--
(A) as affecting the application of classification
methodologies or codes, such as CPT or HCPCS codes,
other than under the International Classification of
Diseases (ICD); or
(B) as superseding the authority of the Secretary of
Health and Human Services to maintain and modify the
coding set for ICD-10-CM and ICD-10-PCS, including
under the amendments made by section 6.
(c) Application of Upgraded Standards Under Part a of the Medicare
Program.--Section 1816 of the Social Security Act (42 U.S.C. 1395h) is
amended by inserting after subsection (a) the following new subsection:
``(b) With respect to--
``(1) transactions under this part occurring on or after
April 1, 2009, all providers of services shall use ASC X12
version 5010 with respect to services provided under this part
in compliance with section 5(a) of the Health Information
Technology Promotion Act of 2006; and
``(2) services furnished on or after October 1, 2009--
``(A) all providers of services shall use ICD-10-CM
codes with respect to services provided under this part
in compliance with section 5(b) of such Act; and
``(B) hospitals shall use ICD-10-PCS codes (as well
as ICD-10-CM codes) with respect to inpatient hospital
services provided under this part in compliance with
such section.''.
SEC. 6. PROCEDURES TO ENSURE TIMELY UPDATING OF STANDARDS THAT ENABLE
ELECTRONIC EXCHANGES.
Section 1174(b) of the Social Security Act (42 U.S.C. 1320d-3(b)) is
amended--
(1) in paragraph (1)--
(A) in the first sentence, by inserting ``and in
accordance with paragraph (3)'' before the period; and
(B) by adding at the end the following new sentence:
``For purposes of this subsection and section
1173(c)(2), the term `modification' includes a new
version or a version upgrade.''; and
(2) by adding at the end the following new paragraph:
``(3) Expedited procedures for adoption of additions and
modifications to standards.--
``(A) In general.--For purposes of paragraph (1), the
Secretary shall provide for an expedited upgrade
program (in this paragraph referred to as the `upgrade
program'), in accordance with this paragraph, to
develop and approve additions and modifications to the
standards adopted under section 1173(a) to improve the
quality of such standards or to extend the
functionality of such standards to meet evolving
requirements in health care.
``(B) Publication of notices.--Under the upgrade
program:
``(i) Voluntary notice of initiation of
process.--Not later than 30 days after the date
the Secretary receives a notice from a standard
setting organization that the organization is
initiating a process to develop an addition or
modification to a standard adopted under
section 1173, the Secretary shall publish a
notice in the Federal Register that--
``(I) identifies the subject matter
of the addition or modification;
``(II) provides a description of how
persons may participate in the
development process; and
``(III) invites public participation
in such process.
``(ii) Voluntary notice of preliminary draft
of additions or modifications to standards.--
Not later than 30 days after the date the
Secretary receives a notice from a standard
setting organization that the organization has
prepared a preliminary draft of an addition or
modification to a standard adopted by section
1173, the Secretary shall publish a notice in
the Federal Register that--
``(I) identifies the subject matter
of (and summarizes) the draft;
``(II) specifies the procedure for
obtaining documentation for the draft;
``(III) provides a description of how
persons may submit comments in writing
and at any public hearing or meeting
held by the organization on the draft;
and
``(IV) invites submission of such
comments and participation in such
hearing or meeting.
``(iii) Notice of proposed addition or
modification to standards.--Not later than 30
days after the date the Secretary receives a
notice from a standard setting organization
that the organization has a proposed addition
or modification to a standard adopted under
section 1173 that the organization intends to
submit under subparagraph (D)(iii), the
Secretary shall publish a notice in the Federal
Register that contains, with respect to the
proposed addition or modification, the
information required in the notice under clause
(ii) with respect to a preliminary draft of an
addition or modification.
``(iv) Construction.--Nothing in this
paragraph shall be construed as requiring a
standard setting organization to request the
notices described in clauses (i) and (ii) with
respect to an addition or modification to a
standard in order to qualify for an expedited
determination under subparagraph (C) with
respect to a proposal submitted to the
Secretary for adoption of such addition or
modification.
``(C) Provision of expedited determination.--Under
the upgrade program and with respect to a proposal by a
standard setting organization for an addition or
modification to a standard adopted under section 1173,
if the Secretary determines that the standard setting
organization developed such addition or modification in
accordance with the requirements of subparagraph (D)
and the National Committee on Vital and Health
Statistics recommends approval of such addition or
modification under subparagraph (E), the Secretary
shall provide for expedited treatment of such proposal
in accordance with subparagraph (F).
``(D) Requirements.--The requirements under this
subparagraph with respect to a proposed addition or
modification to a standard by a standard setting
organization are the following:
``(i) Request for publication of notice.--The
standard setting organization submits to the
Secretary a request for publication in the
Federal Register of a notice described in
subparagraph (B)(iii) for the proposed addition
or modification.
``(ii) Process for receipt and consideration
of public comment.--The standard setting
organization provides for a process through
which, after the publication of the notice
referred to under clause (i), the
organization--
``(I) receives and responds to public
comments submitted on a timely basis on
the proposed addition or modification
before submitting such proposed
addition or modification to the
National Committee on Vital and Health
Statistics under clause (iii); and
``(II) makes publicly available a
written explanation for its response in
the proposed addition or modification
to comments submitted on a timely
basis.
``(iii) Submittal of final proposed addition
or modification to ncvhs.--After completion of
the process under clause (ii), the standard
setting organization submits the proposed
addition or modification to the National
Committee on Vital and Health Statistics for
review and consideration under subparagraph
(E). Such submission shall include information
on the organization's compliance with the
notice and comment requirements (and responses
to those comments) under clause (ii).
``(E) Hearing and recommendations by national
committee on vital and health statistics.--Under the
upgrade program, upon receipt of a proposal submitted
by a standard setting organization under subparagraph
(D)(iii) for the adoption of an addition or
modification to a standard, the National Committee on
Vital and Health Statistics shall provide notice to the
public and a reasonable opportunity for public
testimony at a hearing on such addition or
modification. The Secretary may participate in such
hearing in such capacity (including presiding ex
officio) as the Secretary shall determine appropriate.
Not later than 120 days after the date of receipt of
the proposal, the Committee shall submit to the
Secretary its recommendation to adopt (or not adopt)
the proposed addition or modification.
``(F) Determination by secretary to accept or reject
national committee on vital and health statistics
recommendation.--
``(i) Timely determination.--Under the
upgrade program, if the National Committee on
Vital and Health Statistics submits to the
Secretary a recommendation under subparagraph
(E) to adopt a proposed addition or
modification, not later than 90 days after the
date of receipt of such recommendation the
Secretary shall make a determination to accept
or reject the recommendation and shall publish
notice of such determination in the Federal
Register not later than 30 days after the date
of the determination.
``(ii) Contents of notice.--If the
determination is to reject the recommendation,
such notice shall include the reasons for the
rejection. If the determination is to accept
the recommendation, as part of such notice the
Secretary shall promulgate the modified
standard (including the accepted proposed
addition or modification accepted) as a final
rule under this subsection without any further
notice or public comment period.
``(iii) Limitation on consideration.--The
Secretary shall not consider a proposal under
this subparagraph unless the Secretary
determines that the requirements of
subparagraph (D) (including publication of
notice and opportunity for public comment) have
been met with respect to the proposal.
``(G) Treatment as satisfying requirements for
notice-and-comment.--Any requirements under section 553
of title 5, United States Code, relating to notice and
an opportunity for public comment with respect to a
final rule promulgated under subparagraph (F) shall be
treated as having been met by meeting the requirements
of the notice and opportunity for public comment
provided under provisions of subparagraphs (B)(iii),
(D), and (E).
``(H) No judicial review.--A final rule promulgated
under subparagraph (F) shall not be subject to judicial
review.''.
SEC. 7. REPORT ON THE AMERICAN HEALTH INFORMATION COMMUNITY.
Not later than one year after the date of the enactment of this Act,
the Secretary of Health and Human Services shall submit to Congress a
report on the work conducted by the American Health Information
Community (in this section referred to as ``AHIC''), as established by
the Secretary. Such report shall include the following:
(1) A description of the accomplishments of AHIC, with
respect to the promotion of the development of a nationwide
health information network and the increased adoption of health
information technology.
(2) Information identifying the practices that are used to
protect health information and to guarantee confidentiality and
security of such information.
(3) Information on the progress in--
(A) establishing uniform industry-wide health
information technology standards;
(B) achieving an internet-based nationwide health
information network;
(C) achieving interoperable electronic health record
adoption across health care providers; and
(D) making available technological and other
innovations to ensure the security and confidentiality
of health information in the promotion of health
information technology.
(4) Recommendations for the transition of the AHIC to a
permanent entity, including--
(A) a schedule for such transition;
(B) options for structuring the entity as either a
public-private or private sector entity;
(C) the collaborative role of the Federal Government
in the entity; and
(D) the ongoing responsibilities of the entity, such
as providing the leadership and planning in
establishing standards, certifying health information
technology, and providing long-term governance for
health care transformation through technology.
SEC. 8. STRATEGIC PLAN FOR COORDINATING IMPLEMENTATION OF HEALTH
INFORMATION TECHNOLOGY.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of Health and Human Services, in
consultation with public and private entities involved in the area of
health information technology, shall develop a strategic plan related
to the need for coordination in such area.
(b) Coordination of Specific Implementation Processes.--The strategic
plan under subsection (a) shall address the need for coordination in
the implementation of the following:
(1) Health information technology standards.--Health
information technology standards approved under section
271(c)(3)(B)(i) of the Public Health Service Act, as added by
section 2.
(2) HIPAA transaction standards.--Transaction standards under
section 1173(a) of the Social Security Act (42 U.S.C. 1320d-
2(d)).
(3) Updated icd codes.--The International Statistical
Classification of Diseases and Related Health Problems, 10th
revision, Clinical Modification (ICD-10-CM) and the
International Statistical Classification of Diseases and
Related Health Problems, 10th revision, Procedure Coding System
(ICD-10-PCS) described in section 5.
(c) Coordination Among Specific Federal Entities.--The strategic plan
under subsection (a) shall address any methods to coordinate, with
respect to the electronic exchange of health information, actions taken
by the following entities:
(1) The Office of the National Coordinator for Health
Information Technology.
(2) The American Health Information Community.
(3) The Office of Electronic Standards and Security of the
Centers for Medicare and Medicaid Services.
(4) The National Committee on Vital Health Statistics.
(5) Any other entity involved in the electronic exchange of
health information that the Secretary determines appropriate.
SEC. 9. PROMOTION OF TELEHEALTH SERVICES.
(a) Facilitating the Provision of Telehealth Services Across State
Lines.--
(1) In general.--The Secretary of Health and Human Services
shall, in coordination with representatives of States,
physicians, health care practitioners, and patient advocates,
encourage and facilitate the adoption of State reciprocity
agreements for practitioner licensure in order to expedite the
provision across State lines of telehealth services.
(2) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary shall submit to Congress a
report on the actions taken to carry out paragraph (1).
(3) State defined.--In this subsection, the term ``State''
has the meaning given that term for purposes of title XVIII of
the Social Security Act.
(b) Use of Store and Forward Technology.--
(1) Study.--The Secretary of Health and Human Services,
acting through the Director of the Office for the Advancement
of Telehealth, shall conduct a study on the use of store and
forward technologies (that provide for the asynchronous
transmission of health care information in single or multimedia
formats) in the provision of telehealth services for which
payment may be made under the Medicare program. Such study
shall include an assessment of the feasibility, advisability,
and the costs of expanding the use of such technologies for use
in the diagnosis and treatment of certain conditions.
(2) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary shall submit to Congress a
report on the study conducted under paragraph (1) and shall
include in such report such recommendations for legislation or
administration action as the Secretary determines appropriate.
(c) Expansion of Telehealth Services.--
(1) Study.--The Secretary of Health and Human Services, in
coordination with the Office for the Advancement of Telehealth,
the Agency for Healthcare Research and Quality, and the Centers
for Medicare and Medicaid Services, shall conduct a study to
determine the feasibility, advisability, and the costs of--
(A) including coverage and payment for home health-
related telehealth services as part of home health
services under title XVIII of the Social Security Act;
and
(B) expanding the list of sites described in
paragraph (4)(C)(ii) of section 1834(m) of the Social
Security Act (42 U.S.C. 1395m(m)) to include county
mental health clinics or other publicly funded mental
health facilities for the purpose of payment under such
section for the provision of telehealth services at
such clinics or facilities.
(2) Specifics of study.--Such study shall demonstrate whether
the changes described in subparagraphs (A) and (B) of paragraph
(1) will result in the following:
(A) Enhanced health outcomes for individuals with one
or more chronic conditions.
(B) Health outcomes for individuals furnished
telehealth services or home health-related telehealth
services that are at least comparable to the health
outcomes for individuals furnished similar items and
services by a health care provider at the same location
of the individual or at the home of the individual,
respectively.
(C) Facilitation of communication of more accurate
clinical information between health care providers.
(D) Closer monitoring of individuals by health care
providers.
(E) Overall reduction in expenditures for health care
items and services.
(F) Improved access to health care.
(3) Home health-related telehealth services defined.--For
purposes of this subsection, the term ``home health-related
telehealth services'' means technology-based professional
consultations, patient monitoring, patient training services,
clinical observation, patient assessment, and any other health
services that utilize telecommunications technologies. Such
term does not include a telecommunication that consists solely
of a telephone audio conversation, facsimile, electronic text
mail, or consultation between two health care providers.
(4) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary shall submit to Congress a
report on the study conducted under subparagraph (1) and shall
include in such report such recommendations for legislation or
administration action as the Secretary determines appropriate.
I. INTRODUCTION
A. Purpose and Summary
Broad use of information technology throughout the health
care delivery system is essential to improve the quality and
efficiency of health care delivery. The adoption of health
information technology is increasingly necessary to deliver
state of the art care to individuals with chronic illness to
promote interoperability between private and public providers
and payers. Efficiencies gained by the coordinated development
of health information technology will accelerate and advance
private and public efforts to improve quality of care and
reduce health costs.
The purpose of the Health Information Technology Promotion
Act of 2006 (H.R. 4157) is to create the Office of the National
Coordinator for Health Information Technology to accelerate and
oversee the development of interoperability efforts in the
public and private health care sectors and to coordinate
Federal government activities relating to health information
technology (IT). The bill would enable private sources of
funding to finance physician adoption of health IT by providing
exceptions and safe harbors in the fraud and abuse laws, and
would provide for a study of state and federal security and
confidentiality laws and regulations to ensure the protection
of patient health information as the health system moves to
electronic systems. In addition, the bill would direct the
Secretary to modernize the procedure and diagnosis coding
system, develop procedures to ensure timely updating of
standards that enable electronic exchanges, study the use of
telemedicine and telemonitoring services, and provide a report
on the work conducted by the American Health Information
Community and its role in the future. Finally, the bill would
direct the Secretary to develop a strategic plan for
coordinating implementation of health IT.
Office of the National Coordinator for Health Information
Technology.--This bill would codify the Office of the National
Coordinator for Health IT (ONCHIT) in statute and clearly
delineate its ongoing roles and responsibilities. The duties of
the office would include: maintaining and updating the
strategic plan to guide the nationwide implementation of
interoperable health IT to improve health care quality, reduce
medical errors, increase the efficiency of care, and advance
the delivery of appropriate evidence-based health care
services; and serving as the principal advisor to the Secretary
of Health and Human Services (HHS) on the use of health IT.
Duties of this office would also include serving as the
coordinator of Federal government activities related to the
development and maintenance of standards used in health
information exchange and the certification and inspection of
health IT products to ensure that such products conform to the
standards noted above. Also, duties would include coordinating
health IT policies and programs across Federal agencies and
providing input and advice to the Office of Management and
Budget regarding Federal health IT programs.
Stark/Anti-Kickback Safe Harbors.--This bill would include
statutory exceptions and safe harbors in physician self-
referral (``Stark'' laws) and anti-kickback laws that would
allow hospitals, groups practices, and other entities to
provide physicians with hardware, software, or IT training and
support services that are used for the electronic exchange of
health information.
Further, donors of such technology may not impose
conditions limiting its use by physicians to individuals who
are also patients of the donor entity; nor can donors limit
physicians' use of the technology in conjunction with other IT
systems that physicians might utilize or condition donations
based on the volume or value of referrals or business generated
by the physician. This bill would also require written
agreements regarding any remuneration, and would allow this
exception to preempt state laws governing self-referral and
anti-kickback provisions to ensure that the federal exception
can be implemented. Any gift must be for the purpose of better
coordination of care, to improve quality or improve efficiency.
Privacy/Security Standards.--This bill would require the
Secretary of HHS to conduct a study on the impact of variation
between state security and confidentiality laws and federal
security and confidentiality standards. The Secretary would
report back to Congress within 18 months with recommendations
on the extent to which federal standards should be modified to
provide greater commonality in order to better protect or
strengthen the security and confidentiality when exchanging
health information.
If Congress does not enact legislation 18 months after
receipt of the study, the Secretary has the authority, but is
not required, to modify federal security and confidentiality
standards. Any modification in federal standards would
supersede State law.
Adoption of Modern Coding System.--This bill would require
the Secretary to adopt the updated Health Insurance Portability
and Accountability Act (HIPAA) transaction standard ASC X12
5010 (to replace ASC X12 4010) for transactions occurring on or
after April 1, 2009. The standard applies to claims
transactions.
This bill would also require the Secretary to update the
National Council for Prescription Drug Programs (NCPDP)
telecommunication standards to the latest version approved by
the National Committee on Vital Health Statistics (NCVHS) as of
April 1, 2009.
The Secretary is also required to adopt, per the past
recommendation of the National Committee on Vital Health
Statistics (NCVHS), the ICD-10 coding system for transactions
occurring on or after October 1, 2009. The standard applies to
coding for diagnosis and procedures, but procedures only in
inpatient hospital settings.
Procedures to Ensure Timely Updating of Standards.--This
bill would adopt an accelerated process for updating standards
in order to keep pace with the development of technology. The
Secretary is required to publish a notice in the Federal
Register and to receive and to consider comments on proposed
additions or modifications developed by a HIPAA standard
setting organization and made to the NCVHS and the Designated
Standard Maintenance Organization (DSMO). The NCVHS would then
submit its recommendation to the Secretary within 120 days. The
Secretary would either adopt or reject proposed modifications
or additions to existing standards within 90 days if the NCVHS
recommends the change.
Report on the American Health Information Community.--This
bill would require the Secretary of HHS to report back in one
year on the activities of the American Health Information
Community (AHIC), with recommendations for the ongoing
structure and responsibilities of the entity.
AHIC was formed to provide input and recommendations to HHS
on how to make health records digital and interoperable, and
assure that the privacy and security of those records are
protected.
Strategic Plan for Coordinating Implementation of Health
Information Technology.--This bill would require the Secretary
to develop a strategic plan to coordinate implementation
efforts for health IT standards, HIPAA transaction standards,
and new coding systems. This plan will address how activities
would be coordinated between the Office of the National
Coordinator for Health IT, the American Health Information
Community, the Office of Electronic Standards and Security, and
the National Committee for Vital Health Statistics.
Promotion of Telehealth Services.--This bill would require
the Secretary to encourage and facilitate the adoption of State
licensure agreements in order to provide telehealth services
across state lines. The Secretary would also be required to
study the use of store and forward technology in the provision
of telehealth services under the Medicare program and the
expansion of telehealth services provided in home health
agencies and county mental health clinics or other publicly
funded mental health facilities.
B. Background
It is intended that these provisions would coordinate,
advance and speed the development and use of health IT with the
goals of improving the quality of care delivered, reducing
fraud and abuse and health care costs, and promoting the
coordination of care to promote better health outcomes.
C. Legislative History
During the 108th and 109th Congresses, the Subcommittee
held a series of four hearings on health care information
technology: June 17, 2004; July 22, 2004; July 27, 2005; and
April 6, 2006. Subcommittee Chairman Nancy Johnson and Energy
and Commerce Health Subcommittee Chairman Deal introduced the
``Health Information Technology Promotion Act of 2005'' (H.R.
4157) on October 27, 2005. The bill has been referred to the
Committee on Ways and Means, and to the Committee on Energy and
Commerce, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned.
On June 17, 2004, the Ways and Means Subcommittee on Health
held its first hearing on health care information technology
and heard testimony from the National Health Information
Technology Coordinator Dr. David Brailer and Dr. Robert
Kolodner, Acting Chief Health Informatics Officer, Department
of Veterans Affairs. A second panel consisted of Dr. Charles
Safran, American Medical Informatics Association; Janet
Marchibroda, eHealth Initiative; Dr. Marc Overhage, Indiana
University; and Dr. Andrew Wiesenthal, Kaiser Permanente.
The Subcommittee on Health held its second hearing on July
22, 2004, on electronic prescribing and heard testimony from
Dave McLean, RxHub; Craig Fuller, National Association of Chain
Drug Stores; Dr. Thomas Sullivan, Women's Health Center
Cardiology; and Dr. Jonathan Teich, Harvard University.
The Subcommittee on Health held its third hearing on July
27, 2005, on health care information technology and heard
testimony from the National Health Information Technology
Coordinator, Dr. David Brailer. A second panel consisted of Dr.
Don Detmer, American Medical Informatics Association; Linda
Kloss, American Health Information Management Association; Dr.
Allen Weiss, Naples Community Hospital Healthcare System; Joy
Pritts, Health Policy Institute; and Mary Grealy, Healthcare
Leadership Council.
The Subcommittee on Health held its final hearing in a
series of four hearings on April 6, 2006, and heard testimony
from the National Health Information Technology Coordinator,
Dr. David Brailer; Lewis Morris, Inspector General, Department
of HHS; and Dr. Simon Cohn, National Committee on Vital and
Health Statistics. The second panel consisted of Brent Henry,
Partners HealthCare System; Dr. Kenneth Kizer, Medsphere
Systems Corporation; Joseph Smith, Arkansas Blue Cross Blue
Shield; and Gloryanne Bryant, Catholic Healthcare West.
II. EXPLANATION OF PROVISIONS
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS
Current Law
No provision.
Explanation of Provision
The provision specifies the title of the Act as the Health
Information Technology Promotion Act of 2006. The provision
also includes a brief table of contents, which lists the Act's
nine sections.
Effective Date
No provision.
SECTION 2. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY
Current Law
There are no existing statutory provisions regarding the
current Office of the National Coordinator for Health
Information Technology (ONCHIT) within the Department of Health
and Human Services (HHS). ONCHIT was created by Executive Order
13335, signed by the President on April 27, 2004. The National
Coordinator was instructed to develop, maintain, and direct a
strategic plan to guide the nationwide implementation of
interoperable health IT in the public and private health care
sectors. The National Coordinator was also required, within 90
days, to report to the Secretary on progress towards the
strategic plan. On July 21, 2004, the National Coordinator
delivered that report, titled Strategic Framework: The Decade
of Health Information Technology: Delivering Consumer-centric
and Information-rich Health Care.
On October 6, 2005, ONCHIT awarded: (1) a $3.3 million
contract to the American National Standards Institute to
convene a panel of standards development organizations to
develop a harmonization process for achieving a widely accepted
and useful set of interoperable health IT standards; and (2) a
$2.7 million contract to the Certification Commission for
Health Information Technology, a nonprofit organization created
by three health IT industry associations, to develop a process
for certifying electronic health records and the network
components through which they interoperate.
Explanation of Provision
The bill would establish within HHS an Office of the
National Coordinator for Health Information Technology. The
National Coordinator would be appointed by the President and
report directly to the Secretary. The National Coordinator
would be required to perform duties consistent with the
development of a nationwide interoperable health IT
infrastructure that, among other things, improves health care
quality, promotes wellness, reduces health care costs, improves
health information exchange, and ensures health information
privacy and security. Those duties would include: (1) directing
and overseeing the continuous improvement of a strategic plan
to guide implementation of a nationwide interoperable health IT
infrastructure; (2) acting as the principal advisor to the
Secretary on health IT and coordinating all health IT programs
within the department; (3) coordinating health IT activities
across the federal government and, using private entities to
the maximum extent possible, providing for the development of
health IT standards and the certification of health IT
products; and (4) advising the Director of the Office of
Management and Budget on federal health IT programs.
The bill would authorize, for each of FY 2006 through FY
2010, such sums as may be necessary to carry out the activities
of ONCHIT. Further, the bill would nullify Executive Order
13335. Finally, the bill would provide for the transfer of all
functions, personnel, assets, liabilities, administrative
actions, and statutory reporting requirements applicable to the
existing ONCHIT to the new ONCHIT created under the Act.
Reasons for Change
No statutory position currently exists to coordinate health
information technology initiatives for the federal government.
The current Office of the National Coordinator for Health
Information Technology was created by executive order. Congress
should create a statutory position to ensure ongoing attention
to health IT issues. This provision would codify the existing
Office of the National Coordinator and specify its role in
coordinating public/private partnerships to develop technology
standards without creating a new government infrastructure to
address the issue.
There is also the ongoing effort towards rebuilding the
health care system in Louisiana's Gulf Coast region. The
Committee believes that the Gulf Coast area providers and
payers should increase the use of electronic health records so
that patients can receive quality care anywhere, particularly
in emergency situations. After the hurricanes in 2005 and as a
direct result of the significant loss of paper medical records,
the State of Louisiana initiated a series of activities to
connect patients to lost information. The State received a $3.7
million grant from the ONCHIT to assist in the development of
the Louisiana Health Information Exchange, which has
successfully engaged stakeholders in Louisiana to prepare for
the next hurricane season by creating a repository for
patients' health information. The Committee believes the ONCHIT
should continue to work with Louisiana stakeholders to develop
a health information technology infrastructure that will allow
all participating health care providers to contribute to an
electronic patient record that can be accessed by any
healthcare provider treating that patient.
Effective Date
Upon enactment.
SECTION 3. SAFE HARBORS FOR THE PROVISION OF HEALTH INFORMATION
TECHNOLOGY AND SERVICES TO HEALTH CARE PROFESSIONALS.
Current Law
The federal anti-kickback statute (42 U.S.C. 1320a-7b(b))
prohibits an individual or entity from knowingly or willfully
offering or accepting remuneration of any kind to induce
apatient referral for, or purchase of, an item or service covered by
any federal health care program. Violations of the law are punishable
by up to five years in prison, criminal fines up to $25,000,
administrative civil money penalties up to $50,000, and exclusion from
participation in federal health care programs. HHS issues regulations
designating specific safe harbors for various payment and business
practices that would otherwise be implicated by the anti-kickback
statute and subject to its criminal and civil prosecution.
The Medicare physician self-referral (Stark) law (42 USC
1395nn(e)) prohibits physicians from referring patients to any
entity for certain health services if the physician has a
financial relationship with the entity, and prohibits entities
from billing for any services resulting from such referrals,
unless an exception applies. On March 25, 2004, CMS issued an
interim final rule creating several new Stark exceptions,
including one for health IT items and services furnished by an
entity to physicians to enable them to participate in
``community-wide health information systems.''
The Medicare Modernization Act (MMA; P.L. 108-173, Section
101) instructed the Secretary to establish a safe harbor from
penalties under the anti-kickback statute and an exception to
the Stark law for the provision of health IT and training
services used in electronic prescribing. That would allow, for
example, a hospital to provide such technologies and services
to its medical staff, and Medicare Advantage plans to provide
such technologies and services to pharmacies and prescribing
health care providers. Proposed regulations were issued on
October 5, 2005. While the proposed safe harbor covers health
IT used solely for e-prescribing, as instructed by MMA, the
proposed Stark exception would apply more broadly to health IT
for electronic health records, provided they include electronic
prescribing as one component.
Explanation of Provision
The bill would create a safe harbor from civil monetary
penalties under the anti-kickback statute for health IT and
related services provided by a hospital or critical access
hospital (CAH) to a physician, subject to the following
requirements. The provision of health IT and related services
must be made pursuant to a written agreement specifying that
the primary purpose of the remuneration is for better
coordination of care or improvement of health care quality or
efficiency, and without a condition that: (1) limits or
restricts their use to services provided by the physician to
individuals receiving services at the location of the hospital
or CAH; (2) limits or restricts their use in conjunction with
other health IT; or (3) takes into account the volume or value
of referrals (or other business generated) by the physician to
the hospital or CAH.
The bill also would create a safe harbor from criminal
penalties under the anti-kickback statute for health IT and
related services solicited or received by a physician, subject
to the same set of requirements. The provision of health IT and
related services must be made pursuant to a written agreement
between the physician and the entity providing the technology
specifying that the primary purpose of the remuneration is for
better coordination of care or improvement of health care
quality or efficiency, and without a condition that: (1) limits
or restricts their use to services provided by the physician to
individuals receiving services at the location of the entity
providing such technology; (2) limits or restricts their use in
conjunction with other health IT; or (3) takes into account the
volume or value of referrals (or other business generated) by
the physician to the entity providing such technology.
Finally, the bill would create an exception to the Stark
law for health IT and related services provided by an entity to
a physician, again subject to the same requirements. The
provision of health IT and related services must be made
pursuant to a written agreement between the physician and the
entity providing the technology specifying that the primary
purpose of the remuneration is for better coordination of care
or improvement of health care quality or efficiency, and
without a condition that: (1) limits or restricts their use to
services provided by the physician to individuals receiving
services at the location of the entity providing such
technology; (2) limits or restricts their use in conjunction
with other health IT; or (3) takes into account the volume or
value of referrals (or other business generated) by the
physician to the entity providing such technology.
For the purposes of this section, health IT includes
hardware, software, license, intellectual property, equipment,
or other IT or related services used primarily for the
electronic creation, maintenance, and exchange of clinical
health information.
The bill would require the Secretary, within 180 days of
enactment, to promulgate implementing regulations. It also
would preempt state laws that would otherwise penalize the
provision of health IT and related services as described in
this section. In addition, the bill would instruct the
Secretary, within three years of enactment, to report to
Congress on the impact of each of the safe harbors and the
Stark exception on increasing health IT adoption and on the
business relationships between providers. The Secretary would
be required to include in the report recommendations for
changes in the safe harbors and Stark exception, as may be
appropriate.
Reasons for Change
Currently, donations of health information technology are
subject to the restrictions imposed under the fraud and abuse
laws. The penalties for remuneration in the form of health
information technology in violation of such laws are severe and
include potential exclusion from federal programs. Current law
has precluded the broad diffusion of health information
technology that would improve care coordination, and the
quality and efficiency of health care services. Accordingly,
clear and broad exceptions to current law are necessary to
promote IT diffusion. This provision would enable health care
providers and other entities to donate health information
technology without fear of violation.
Effective Date
The amendments made by this section to the anti-kickback
statute and the Stark law would take effect 180 days after
enactment.
SECTION 4. COMMONALITY AND VARIATION IN HEALTH INFORMATION LAWS AND
REGULATIONS
Current Law
Under the Administrative Simplification provisions of the
Health Insurance Portability and Accountability Act (HIPAA,
P.L. 104-191, 42 USC 1320d), Congress set a three-year deadline
to enact health information privacy legislation. If, as turned
out to be the case, the Congress was unable to enact such
legislation before the deadline, the Secretary was instructed
to promulgate regulations containing standards to protect the
privacy of individually identifiable health information. Under
the HIPAA privacy rule (45 CFR Parts 160, 164), which became
effective for health care providers and most health plans in
April 2003, all applicable state and federal laws must be
complied with unless it is impossible to comply with both and
if the state law is less protective of medical privacy.
HIPAA also instructed the Secretary to develop security
standards to safeguard electronic patient information against
unauthorized access, use, and disclosure. The security
standards (45 CFR Parts 160, 162, 164), which became effective
for health care providers and most health plans in April 2005,
preempt contrary state laws, except for exception
determinations made by the Secretary. On October 6, 2005,
ONCHIT awarded an $11.5 million contract to RTI International
in association with the National Governors Association to
assess variations in business policies and state laws that
affect privacy and security practices that may pose challenges
to the secure electronic exchange of health information, and to
identify practical solutions for addressing such variation.
State solutions and implementation plans are expected to be
finalized in early 2007.
Explanation of Provision
The bill would require the Secretary to study the degree of
variation and commonality among state and federal (HIPAA)
health information privacy and security requirements and
examine how such variation may adversely impact the secure,
confidential, and timely exchange of health information. The
Secretary would have to report to Congress, within 18 months,
on whether there is need for greater commonality among state
and federal requirements and, if so, how federal standards
should be changed to provide the commonality needed to better
protect or strengthen the privacy and security of health
information that is exchanged.
The bill would give Congress 18 months following receipt of
the Secretary's report to enact legislation to implement the
report's recommendations, including modifying the HIPAA privacy
and security standards. If Congress failed to act within that
period, the Secretary could act, by regulation, to modify the
HIPAA privacy and security standards based upon the report's
recommendations. Such modified HIPAA standards would preempt
any related, but contrary state law.
Reasons for Change
There are currently numerous, and often conflicting, State
and federal laws and regulations to protect the security and
confidentiality of patient information. The lack of commonality
makes compliance with laws difficult and limits the ability for
patient information to be appropriately shared to ensure the
best patient care. Congress needs additional information to
determine whether commonality among federal standards and state
laws is necessary. This provision would require the Secretary
of HHS to conduct a study of the State and federal laws and
regulations governing health information exchange and to assess
the strengths and weaknesses of those laws and regulations.
This study will provide an important opportunity for all
interested parties to debate the issues of security and
confidentiality that arise when discussing health IT, without
mandating any future change to the existing regulatory
framework.
Effective Date
Upon enactment.
SECTION 5. IMPLEMENTING MODERN CODING SYSTEM; APPLICATION UNDER PART A
OF THE MEDICARE PROGRAM
Current Law
To support the growth of electronic record keeping and
claims processing in the nation's health care system, HIPAA's
Administrative Simplification provisions instructed the
Secretary to adopt electronic format and data standards for
several routine administrative transactions between health
plans and health care providers (e.g., claims for payment). The
Secretary was to rely on the recommendations of the National
Committee on Vital and Health Statistics (NCVHS), consult with
appropriate federal and state agencies and private
organizations, and publish in the Federal Register any NCVHS
recommendation regarding the adoption of a standard. Final
standards for eight electronic transactions and for code sets
to be used in those transactions (45 CFR Parts 160, 162) were
issued in August 2000. The transactions standards include
several Accredited Standards Committee X12 (ASC X12) version
4010 standards, and the National Council for Prescription Drug
Programs (NCPDP) Telecommunications Standards version 5.1. The
code sets adopted by the Secretary include the International
Statistical Classification of Diseases and Related Health
Problems, 9th revision, Clinical Modification (ICD-9-CM).
HIPAA also instructed the Secretary to review and, not more
frequently than once a year, modify the Administrative
Simplification standards. Again, the Secretary was to rely on
the recommendations of the NCVHS and publish in the Federal
Register any NCVHS recommendation regarding the modification of
a standard. Any such modification must be completed in a manner
that minimizes disruption and the cost of compliance. Regarding
code sets (e.g., ICD codes), any modification must also include
instructions for the conversion or translation of prior encoded
data elements so as to preserve the informational value of the
data.
Explanation of Provision
The bill would require the Secretary to publish in the
Federal Register a notice for the following modification of the
HIPAA Administrative Simplification standards: (1) replacement
of the ASC X12 version 4010 standards with version 5010; and
(2) replacement of the NCPDP Telecommunications Standards
version 5.1 with the latest version reviewed by the NCVHS as of
April 1, 2008. The replacements would apply to electronic
transactions, including those for services provided under
Medicare Part A, occurring on or after April 1, 2009.
Modification of the NCPDP standards would not be subject to
judicial review.
The bill also would require the Secretary to publish in the
Federal Register a notice for the following modification of the
HIPAA code sets: (1) replacement of ICD-9-CM with both the ICD-
10-CM and ICD-10-PCS (Procedure Coding System). The replacement
would apply to services furnished on or after October 1, 2009,
including under Medicare Part A.
Reasons for Change
The current system for coding health information was
developed in the 1970s and it is outdated, inaccurate and
running out of codes. A more modern coding system exists and
has been adopted by virtually all other first world nations.
The new coding system allows providers to more accurately code
diagnosis and procedures used in treating patients to ensure
better health outcomes, increased efficiency, and higher
quality. Updating the coding system is important to realizing
the full benefits of health IT. HHS has full authority to
require the move to an updated coding system, and this change
has been recommended by the National Committee for Vital Health
Statistics, but to date HHS has not acted.
Effective Date
Upon enactment.
SECTION 6. PROCEDURES TO ENSURE TIMELY UPDATING OF STANDARDS THAT
ENABLE ELECTRONIC EXCHANGES
Current Law
As previously noted, HIPAA instructed the Secretary to
review and, not more frequently that once a year, modify the
Administrative Simplification standards. Any such modification
must be completed in a manner that minimizes disruption and the
cost of compliance. Regarding code sets (e.g., ICD codes), any
modification must also include instructions for the conversion
or translation of prior encoded data elements so as to preserve
the informational value of the data.
Explanation of Provision
The bill would amend HIPAA's Administrative Simplification
provisions to help expedite the adoption of additions and
modifications to the electronic transactions standards, as
follows. The Secretary would be required to publish a Federal
Register notice within 30 days of receiving a notice from a
standard setting organization that: (1) it is initiating the
process of developing an addition or modification to an
existing standard; (2) has prepared a preliminary draft of an
addition or modification to an existing standard; or (3) has a
proposed addition or modification that it intends to submit for
review and consideration. In each instance, the published
notice would provide the opportunity for public participation
and comment. In the case of a proposed addition or
modification, the bill would require the standard setting
organization, having responded to public comment, to submit its
proposal to both the Designated Standard Maintenance
Organization (DSMO) and the NCVHS. The DSMO reviews the request
with its constituent members (i.e., X12, NCPDP, HL7, NUBC,
NUCC, and DeCC) concurrent to review by the NCVHS. The NCVHS
would be required within 120 days to conduct a public hearing
and submit its recommendation for adopting or rejecting the
proposed addition or modification to the Secretary. The
Secretary would then have 90 days to accept or reject the
recommendation, and a further 30 days to publish a notice of
such determination in the Federal Register. If the
determination is to accept the NCVHS recommendation, the notice
would include the modified standard as a final rule. The final
rule would not be subject to judicial review.
Reason for Change
The current HIPAA federal process to adopt updated or
modified versions of transaction standards is slow, sometimes
taking months or even years. The current process does not allow
for the quick implementation of updated versions for HIPAA
transactions that have already been adopted. This provision
would allow for a more streamlined process to update or modify
transaction standards, so as these standards continue to evolve
over time, the federal process does not lag behind.
Enactment Date
Upon enactment.
SECTION 7. REPORT ON THE AMERICAN HEALTH INFORMATION COMMUNITY
Current Law
On July 14, 2005, the Secretary announced the formation of
the 17-member American Health Information Community (AHIC), a
public-private body formed pursuant to the Federal Advisory
Committee Act to provide input and recommendations on
facilitating the transition to interoperable electronic health
records in a market-led way. AHIC's charter terminates after
two years, unless the Secretary renews it for a duration of no
more than five years. The Secretary intends for AHIC to be
succeeded within five years by a private-sector health
information community initiative that, among other things,
would set additional needed standards, certify new health
information technology, and provide long-term governance for
health care transformation.
Explanation of Provision
The bill would require the Secretary, within one year of
enactment, to report to Congress on the work conducted by AHIC,
including: (1) its promotion of the development of a nationwide
health information network and the adoption of health IT; and
(2) progress in establishing nationwide health IT standards.
The Secretary also would be required to include recommendations
for the transition of AHIC to a permanent advisory entity.
Reason for Change
AHIC was formed to provide input and recommendations to HHS
on how to make health records digital and interoperable, and
ensure that the privacy and security of those records are
protected. It is important to understand the role AHIC plays in
furthering the adoption of health IT and interoperability to
justify the transition of AHIC to a permanent entity.
Effective Date
Upon enactment.
SECTION 8. STRATEGIC PLAN FOR COORDINATING IMPLEMENTATION OF HEALTH
INFORMATION TECHNOLOGY
Current Law
Pursuant to Executive Order 13335 (as described earlier),
the National Coordinator for health IT, on July 21, 2004,
released a strategic plan to guide the nationwide
implementation of interoperable health IT in the pubic and
private health care sectors.
Explanation of Provision
The bill would require the Secretary, within 180 days of
enactment and in coordination with entities involved in health
IT, to develop a strategic plan for coordinating the
implementation of health IT standards, HIPAA electronic
transaction standards, and ICD-10 codes.
Reasons for Change
HHS currently has numerous initiatives and offices involved
in health information technology. The efforts of these offices
need to be coordinated, and HHS must develop a strategic plan
for moving forward in this area.
Effective Date
Upon enactment.
SECTION 9. PROMOTION OF TELEHEALTH SERVICES
Current Law
Nearly a dozen federal agencies support telehealth
activities. Within HHS, the Health Resources and Services
Administration's Office for the Advancement of Telehealth (OAT)
administers telehealth demonstration and evaluation programs,
provides technical assistance and promotes best practices, and
coordinates telehealth policies and activities across the
federal government and with states and private-sector groups.
Medicare covers telehealth services provided to beneficiaries
at eligible health care facilities. Telehealth services that
are eligible for reimbursement include consultations, office
visits, individual psychotherapy and pharmacologic management
delivered via a telecommunications system. Medicare does not
cover home health services provided via a telecommunications
system. A home health visit is defined in regulation (42 CFR
409.48(c)) as an episode of personal contact with the
beneficiary by staff of the home health agency.
Explanation of Provision
The bill would require the Secretary, in coordination with
state representatives and various stakeholders, to: (1)
encourage and facilitate the adoption of reciprocal
practitioner licensing agreements between states to promote
telehealth; and (2) within 18 months, report to Congress on
specific actions taken. The bill would further require the
Secretary, acting through OAT, to: (1) study the use of store
and forward technologies in telehealth services covered under
Medicare; and (2) within 18 months, report to Congress with
recommendations for legislation. Finally, the bill would
require the Secretary, in coordination with OAT, AHRQ and CMS,
to study the feasibility, advisability, and costs of: (1)
providing coverage for telehealth services as part of home
health services, including an evaluation on the equivalency of
home health-related telehealth services to an in-person visit
for purposes of eligibility and payment under Medicare; and (2)
expanding the health care facilities at which Medicare-covered
telehealth services are provided to include publicly funded
mental health facilities. Within 18 months, the Secretary would
be required to report to Congress with recommendations for
legislation.
Reasons for Change
Telehealth and telemonitoring services might enhance health
outcomes for individuals with one or more chronic conditions,
provide for comparable health outcomes to a face-to-face visit,
facilitate better communication between providers, provide
closer monitoring of patients, reduce overall healthcare costs,
and improve access to care. These studies will help determine
whether telehealth and telemonitoring services meet these
objectives, and if so, would provide recommendations to enhance
the provision or coverage of telehealth services under the
Medicare program.
Effective Date
Upon enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 4157, the ``Health Information Technology
Promotion Act of 2006.''
MOTION TO REPORT THE BILL
The bill, H.R. 4157, as amended, was ordered favorably
reported by a rollcall vote of 23 yeas to 17 nays (with a
quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Stark........ ........ X
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Herger..................... X ........ ......... Mr. Cardin....... ........ X .........
Mr. McCrery.................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........ X .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ X .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ X .........
Mr. English.................... X ........ ......... Mr. Tanner....... ........ X .........
Mr. Hayworth................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Weller..................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. Hulshof.................... X ........ ......... Mr. Pomeroy...... ........ X .........
Mr. Lewis (KY)................. X ........ ......... Ms. Tubbs Jonesa. ........ X .........
Mr. Foley...................... X ........ ......... Mr. Thompson..... ........ X .........
Mr. Brady...................... X ........ ......... Mr. Larson....... ........ X .........
Mr. Reynolds................... X ........ ......... Mr. Emanuel...... ........ X .........
Mr. Ryan....................... X
Mr. Cantor..................... X
Mr. Linder..................... X
Mr. Beauprez................... X
Ms. Hart....................... X
Mr. Chocola.................... X
Mr. Nunes...................... X
----------------------------------------------------------------------------------------------------------------
VOTES ON AMENDMENTS
A rollcall vote was conducted on the following amendments
to the Chairman's Amendment in the Nature of a Substitute.
An amendment by Mr. Stark, which would which would strike
section 3 of the Chairman's amendment was defeated by a
rollcall vote of 17 yeas to 23 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Stark........ X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Herger..................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... X ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... X ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Mr. English.................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Weller..................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. Hulshof.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Lewis (KY)................. ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Foley...................... ........ X ......... Mr. Thompson..... X ........ .........
Mr. Brady...................... ........ X ......... Mr. Larson....... X ........ .........
Mr. Reynolds................... ........ X ......... Mr. Emanuel...... X ........ .........
Mr. Ryan....................... ........ X
Mr. Cantor..................... ........ X
Mr. Linder..................... ........ X
Mr. Beauprez................... ........ X
Ms. Hart....................... ........ X
Mr. Chocola.................... ........ X
Mr. Nunes...................... ........ X
----------------------------------------------------------------------------------------------------------------
An amendment by Mr. Emanuel, which would add a new section
to assure the establishment and promotion of interoperability
standards and certification and inspection processes and
require the Federal Government to comply with standards when
purchasing any new health information technology, was defeated
by a rollcall vote of 17 yeas to 23 nays. The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Stark........ X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Herger..................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... X ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... X ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Mr. English.................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Weller..................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. Hulshof.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Lewis (KY)................. ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Foley...................... ........ X ......... Mr. Thompson..... X ........ .........
Mr. Brady...................... ........ X ......... Mr. Larson....... X ........ .........
Mr. Reynolds................... ........ X ......... Mr. Emanuel...... X ........ .........
Mr. Ryan....................... ........ X
Mr. Cantor..................... ........ X
Mr. Linder..................... ........ X
Mr. Beauprez................... ........ X
Ms. Hart....................... ........ X
Mr. Chocola.................... ........ X
Mr. Nunes...................... ........ X
----------------------------------------------------------------------------------------------------------------
An amendment by Mr. Thompson which would direct the
Secretary of Health and Human Services to establish a mechanism
to fund through Medicare acquisition and support of health IT
used by providers of health services, was defeated by a
rollcall vote of 17 yeas to 23 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Stark........ X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Herger..................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... X ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... X ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Mr. English.................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Weller..................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. Hulshof.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Lewis (KY)................. ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Foley...................... ........ X ......... Mr. Thompson..... X ........ .........
Mr. Brady...................... ........ X ......... Mr. Larson....... X ........ .........
Mr. Reynolds................... ........ X ......... Mr. Emanuel...... X ........ .........
Mr. Ryan....................... ........ X
Mr. Cantor..................... ........ X
Mr. Linder..................... ........ X
Mr. Beauprez................... ........ X
Ms. Hart....................... ........ X
Mr. Chocola.................... ........ X
Mr. Nunes...................... ........ X
----------------------------------------------------------------------------------------------------------------
An amendment by Mr. Stark, which would disallow preemption
of certain state laws related to privacy and allow individuals
to seek damages from entities that improperly use or disclose
identifiable health information, was defeated by a rollcall
vote of 17 yeas to 23 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Stark........ X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Herger..................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... X ........ .........
Mr. Nussle..................... ........ X ......... Mr. McNulty...... X ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Mr. English.................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Weller..................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. Hulshof.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Lewis (KY)................. ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Foley...................... ........ X ......... Mr. Thompson..... X ........ .........
Mr. Brady...................... ........ X ......... Mr. Larson....... X ........ .........
Mr. Reynolds................... ........ X ......... Mr. Emanuel...... X ........ .........
Mr. Ryan....................... ........ X
Mr. Cantor..................... ........ X
Mr. Linder..................... ........ X
Mr. Beauprez................... ........ X
Ms. Hart....................... ........ X
Mr. Chocola.................... ........ X
Mr. Nunes...................... ........ X
----------------------------------------------------------------------------------------------------------------
An amendment by Messrs. Emanuel and Doggett, which would
strike section 4 of the Chairman's amendment in the nature of a
substitute, and replace it with provisions requiring the
Secretary of Health and Human Services to modify privacy
protections through regulations put forward as a result of the
Health Insurance Portability and Accountability Act of 1996,
was defeated by a rollcall vote of 17 yeas to 23 nays. The vote
was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Stark........ X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Herger..................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... X ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... X ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Mr. English.................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Weller..................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. Hulshof.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Lewis (KY)................. ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Foley...................... ........ X ......... Mr. Thompson..... X ........ .........
Mr. Brady...................... ........ X ......... Mr. Larson....... X ........ .........
Mr. Reynolds................... ........ X ......... Mr. Emanuel...... X ........ .........
Mr. Ryan....................... ........ X
Mr. Cantor..................... ........ X
Mr. Linder..................... ........ X
Mr. Beauprez................... ........ X
Ms. Hart....................... ........ X
Mr. Chocola.................... ........ X
Mr. Nunes...................... ........ X
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of this bill, H.R.
4157, as reported: The Committee fundamentally disagrees with
the assessment of the Congressional Budget Office (CBO).
The Committee believes H.R. 4157 will result in
significantly reduced expenditures in both private and public
sector health programs that are not reflected in the CBO
estimate. The Committee believes CBO's assumption regarding
baseline spending does not reflect the slow rate of adoption of
health information technology, nor does it recognize how the
legislation will speed the adoption and use of such technology.
Even after the Committee highlighted numerous articles and
academic studies on the benefits of health information
technology on utilization of services, particularly lab
services, CBO continues to believe the bill will result in
increased utilization. Despite the bill's clear requirement
that entities must enter into written agreements to improve the
quality of care, to reduce medical errors and duplicative
services, to promote quality or to enhance efficiency, CBO
continues to believe volume of services would increase. In
addition, the bill makes it illegal to condition gifts of
donated technology on the value or volume of services. Legal
experts and the Inspector General of the Department of Health
and Human Services look at inappropriate indirect referral
arrangements. CBO, however, believes such indirect arrangements
will occur despite the legal prohibition in the legislation,
and irrespective of the significant penalties under the Stark
and anti-kickback statutes. CBO thus believes the provision
will increase costs. The Committee fundamentally disagrees with
this assessment and believes CBO has not provided any credible
or material evidence to justify its claims.
B. Statement Regarding New Budget Authority and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that
enactment of H.R. 4157 would provide new budget authority for
the newly created Office of the National Coordinator for Health
Information Technology. The Committee states the bill would not
effect tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following report prepared by the CBO
is provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 25, 2006.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4157, the Better
Health Information System Act of 2006.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley.
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure.
H.R. 4157--Health Information Technology Promotion Act of 2006
Summary: H.R. 4157 would amend the Public Health Service
Act (PHSA) to codify the establishment and responsibilities of
the Office of the National Coordinator for Health Information
Technology (ONCHIT). In addition, the bill would modify the
Social Security Act to:
Establish ``safe harbors'' that would permit
gifts of health information technology that might
otherwise be subject to civil monetary penalties,
criminal penalties, or sanctions for violating the
prohibitions against certain types of inducements for
physician referrals; and
Specify procedures for adopting updated
standards for the electronic exchange of health data,
and require that certain updated standards for coding
medical services be implemented in 2009.
The amendments to the PHSA and the deadline for updated
standards for coding medical services would affect spending
subject to appropriation. Assuming appropriation of the
necessary amounts, CBO estimates that implementing the bill
would increase discretionary spending by $658 million over the
2007-2011 period and reduce such spending by $150 million over
the succeeding five years.
Enacting the deadline for updated standards for coding
medical services and the safe-harbor provisions would affect
direct spending. CBO estimates those provisions would increase
direct spending by $180 million over the 2007-2011 period and
by $80 million during the following five years.
CBO estimates that enacting the deadline for updated
standards for coding medical services would reduce federal
revenues by $26 million over the 2007-2011 period, and would
increase federal revenues by $84 million over the succeeding
five years. Social Security payroll taxes, which are off-
budget, account for about one-third of those amounts.
H.R. 4157 would preempt, in some circumstances, certain
state laws that govern the security and confidentiality of
health information as well as laws that establish civil or
criminal penalties for exchanging health information
technology. Because those preemptions would limit the
application of state laws, they would be intergovernmental
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
CBO estimates that the costs of the mandates to states would be
minimal and would not exceed the threshold established in UMRA
($64 million in 2006, adjusted annually for inflation).
Other provisions of the bill, notably new coding
requirements and the safe-harbor provisions--for gifts of
information technology, would affect states' spending, adding
about $200 million to their costs over the 2007-2011 period.
However, those provisions would not be intergovernmental
mandates as defined in UMRA.
The bill would impose private-sector mandates on health
plans, providers, and clearing-houses by requiring them to
adopt updated coding and transaction standards by specified
future dates. CBO estimates that the direct cost of these
provisions would exceed the threshold specified in UMRA for
private-sector mandates ($128 million in 2006, adjusted
annually for inflation) in the first three years following
enactment of the bill.
Estimated cost to the Federal Government: The estimated
cost of H.R. 4157 is shown in the following table. The costs of
this legislation fall within budget functions 550 (health) and
570 (Medicare).
ESTIMATED BUDGETARY EFFECTS OF H.R. 4157
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007-2011 2007-2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
ONCHIT:
Estimated Authorization Level....... 116 119 122 125 0 0 0 0 0 0 482 482
Estimated Outlays................... 58 94 114 121 61 24 5 1 0 0 448 478
Medicare:
Estimated Authorization Level....... 0 200 25 25 -200 -20 0 0 0 0 50 30
Estimated Outlays................... 0 50 75 75 10 -70 -70 -40 0 0 210 30
Total, Changes in Discretionary
Spending:
Estimated Authorization Level....... 116 319 147 150 -200 -20 0 0 0 0 532 512
Estimated Outlays................... 58 144 189 196 71 -46 -65 -39 0 0 658 508
CHANGES IN DIRECT SPENDING
Medicaid, Safe Harbors.................. 10 15 15 15 20 20 20 25 25 25 75 190
Medicare, Safe Harbors.................. 15 15 15 15 15 15 20 20 20 20 75 170
---------------------------------------------------------------------------------------------------------------
Subtotal, Safe Harbors.............. 25 30 30 30 35 35 40 45 45 45 150 360
Medicaid, ICD-10........................ 5 20 25 5 -25 -40 -30 -25 -20 -15 30 -100
Total, Changes in Direct Spending 30 50 55 35 10 -5 10 20 25 30 180 260
(Budget Authority and Outlays).........
CHANGES IN REVENUE
Income and HI Payroll Taxes (on budget). -2 -10 -14 -2 12 19 13 10 7 6 -16 39
Social Security Payroll Taxes (off- -1 -6 -8 -1 6 10 7 5 4 3 -10 19
budget)................................
---------------------------------------------------------------------------------------------------------------
Total, Changes in Revenue........... -3 -16 -22 -3 18 29 20 15 11 9 -26 58
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = Increase or decrease of less than $500,000.
Notes: ICD-I0 = 10th revision of the International Classification of Diseases; HI = Hospital Insurance (Part A of Medicare); ONCHIT = Office of the
National Coordinator for Health Information Technology.
Basis of estimate: H.R. 4157 would amend the Public Health
Service Act to codify the establishment and responsibilities of
the Office of the National Coordinator for Health Information
Technology, establish safe harbors for gifts of health
information technology, and specify procedures and establish
deadlines for adopting updated standards for the electronic
exchange of health data.
HEALTH INFORMATION TECHNOLOGY AND QUALITY
On April 27, 2004, the President issued Executive Order
13335, which established within the Office of the Secretary of
Health and Human Services the position of National Coordinator
of Health Information Technology, The Secretary subsequently
established the Office of the National Coordinator of Health
Information Technology to support the adoption of interoperable
health information technology. Funding for ONCHIT totaled $62
million for 2006: $43 million was appropriated to the office,
and $19 million was reprogrammed from other activities. The
President requested $116 million for ONCHIT for 2007.
The National Coordinator for Health Information Technology
serves as the senior advisor to the President and the Secretary
of Health and Human Services 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 the
private sector on health information technology
matters.
H.R. 4157 would codify the establishment and
responsibilities of ONCHIT. The bill would require the
Secretary to prepare reports on certain activities initiated
pursuant to the executive order to promote the development of a
nationwide health information network and on issues related to
the development, operation, and implementation of state,
regional, and community organizations that share and coordinate
the deployment and use of health information technology (so-
called health information exchanges).
The bill would authorize the appropriation for 2006 through
2010 of such sums as are necessary to conduct ONCHIT's
activities. Based on information provided by the Department of
Health and Human Services (HHS), CBO estimates that funding the
authorized activities would require the appropriation of about
$116 million in 2007 and that funding requirements would grow
with inflation in subsequent years. Assuming appropriation of
those amounts, CBO estimates that ONCHIT's activities would
cost $58 million in 2007, $448 million over the 2007-2011
period, and $478 million over the 2007-2016 period.
SAFE HARBORS FOR GIFTS OF HEALTH INFORMATION TECHNOLOGY
H.R. 4157 would establish ``safe harbors'' for donations of
health information technology that might otherwise be subject
to civil monetary penalties, criminal penalties, or sanctions
for violating the prohibitions on certain physician referrals.
The bill would permit any entity to provide health information
technology (hardware, software, or related services) to
physicians. CBO estimates that provision would increase direct
spending by $25 million in 2007, $150 million over the 2007-
2011 period, and $360 million over the 2007-2016 period;
federal spending for Medicaid and Medicare would each account
for about half of those increases.
The Administration has identified the current application
of those penalties and sanctions as an impediment to the
success of efforts to promote the widespread adoption of
interoperable health information technology. Accordingly, the
HHS Office of the Inspector General and the Centers for
Medicare & Medicaid Services (CMS), under authority existing in
current law, are engaged in a rule-making process to establish
safe harbors for gifts of health information technology that
would balance enforcement of program-integrity rules with
promotion of the adoption of interoperable health information
technology. In the preliminary stage of the rule-making
process, those offices described a framework that would limit:
Entities eligible for the safe harbor (a
hospital may donate to members of its medical staff; a
group practice may donate to physicians who are members
of the group practice; and Medicare Advantage plans and
prescription drug plans may donate to their prescribing
physicians), and
Eligible donations (software and related
training).
It is likely that the final rules will specify a somewhat
broader set of eligible entities and donations than the
preliminary guidelines. In particular, we anticipate that
hospitals and group practices will be allowed to donate to a
broader set of physicians and that the eligible gifts will
include some equipment.
However, CBO expects that, based on concerns about program
integrity, the final rules will establish a set of eligible
entities that is narrower than those specified in the bill.
Thus, clinical laboratories, imaging centers, suppliers of
durable medical equipment, pharmaceutical manufacturers, and
other entities that probably will not be eligible for the safe
harbor under current law would qualify under the bill. Although
the legislation would prohibit the contract between the donor
and the physician from including a condition that links the
gift of technology to the volume or value of referrals to the
donor, CBO expects that, in some cases, that condition would be
implicit (or would be perceived by the physician as being
implicit). To the extent that a gift might lead to a shift of
business from one provider to another, such a development would
not affect the cost of the government's health care programs.
But CBOestimates that, in aggregate, such donations by entities
other than hospitals, group practices, Medicare Advantage plans, and
prescription drug plans would lead to an increase in the volume of
services that Medicare and state Medicaid programs pay for, thus
increasing costs.
Information furnished by CMS, the HHS Inspector General,
and the Department of Justice indicates that some physicians
who receive gifts of value from suppliers substantially
increase the volume of services they order. CBO's estimate
assumes that the number of physicians inclined to do so is
quite small--less than 1 percent of practicing physicians.
Moreover, CBO expects that many of those physicians would not
receive donations of technology from donors who would be
covered by the safe harbors under H.R. 4157 but not covered
under current law. Accordingly, CBO's estimate ofthe additional
direct spending for Medicare and Medicaid represents an
increase in spending for services furnished by the newly-
protected categories of donors of less than one-tenth of a
percent. (Total federal spending for such services in those two
programs is estimated to total about $55 billion in 2006.)
BUDGETARY EFFECTS OF HEALTH INFORMATION TECHNOLOGY
CBO expects that the use of information technology in the
health care sector will continue to grow under current law, and
that expanded use of such technology will likely produce
improvements in the quality of the health care provided to U.S.
residents. In some cases, that improvement in the quality of
health care might mean less use of medical services; in other
cases, it might mean an increase in utilization.
Under current law, CBO also expects that the expanded use
of health information technology will likely result in
increased efficiency in the health care system. That is, the
use of information technology will result in more health
benefits per dollar of spending than would otherwise be
realized.
Experts caution, however, that the evidence is mixed
concerning whether those improvements in quality and efficiency
will also result in lower spending for health care, either in
the private sector or for government programs.\1\ In her recent
testimony to the Senate Subcommittee on Technology, Innovation,
and Competitiveness, Dr. Carolyn Clancy (Director of the Agency
for Health Research and Quality) noted that, if poorly designed
or implemented, health information technology will not bring
those benefits, and in some cases may even lead to new medical
errors and potential costs. She also noted that achieving
improvements in health care and realizing potential cost
savings will require real process change and will not result
from simply acquiring and deploying hardware and software.
---------------------------------------------------------------------------
\1\See, for example:
Testimony of Carolyn Clancy, MD to the Subcommittee on Technology,
Innovation and Competitiveness of the Senate Committee on Commerce,
Science, and Transportation, June 21, 2006. (http://
commerce.senate.gov/public/XX--files/Clancy062106. pdf)
Clifford Goodman, ``Savings In Electronic Medical Record Systems?
Do It For The Quality'', Health Affairs, Sept/Oct. 2005. (http://
content.healthaffairs.org/cgi/content/full/24/5/1124)
Paul B. Ginsburg, Ph.D., ``Controlling Health Care Costs'', New
England Journal of Medicine, Oct 14, 2004. (http://content.nejm.org/
cgi/content/full/351/16/1591)
Jaan Sidorov, ``It Ain't Necessarily So: The Electronic Health
Record And The Unlikely Prospect Of Reducing Health Care Costs'',
Health Affairs, July/August 2006. (http://content.healthaffairs.org/
cgi/reprint/25/4/1079)
James Walker, ``Electronic Medical Records And Health Care
Transformation'', Health Affairs, Sept./Oct 2005. (http://
content.healthaffairs.org/cgi/content/full/24/5/1118)
---------------------------------------------------------------------------
To the extent that health information technology will
result in lower spending for health care, much of those savings
would not be passed through as a reduction in direct spending
for federal programs--particularly Medicare--under current law.
For example, two areas account for much of the potential
savings reported in the literature: reductions in the cost of
care during a hospital stay, and administrative savings for
providers and claims processors. Under current law, Medicare's
payment rates for hospital inpatient services are updated each
year to reflect changes in general inflation rates, and do not
reflect changes in the costs that hospitals incur (either for
administrative activities or for providing health care
services). Medicare might realize savings in the cost of
processing claims. However, funding for Medicare's claims-
processing activities is subject to appropriation, so such
savings could only be realized through the appropriations
process.
In preparing an estimate of the budgetary effect of
legislation involving health information technology, CBO
focuses on the extent to which the bill would change the rate
at which the use of health technology will grow or how well
that technology will be designed and implemented under current
law. CBO then evaluates the extent to which those changes, in
conjunction with other provisions in current law and in the
proposed legislation, would affect direct spending.
CBO estimates that enacting H.R. 4157 would not
significantly affect either the rate at which the use of health
technology will grow or how well that technology will be
designed and implemented. Therefore, with the exception of the
effects on spending described above, CBO estimates enacting the
bill would have no effect on spending by the federal
government.
STANDARDS FOR THE ELECTRONIC EXCHANGE OF HEALTH DATA
H.R. 4157 would require the Secretary of HHS to establish
expedited procedures for adopting updates to standards that
enable the electronic exchange of health data.
The bill would require that two sets of standards apply to
certain health information transactions by April 1, 2009: the
``X12'' standards developed by the Accredited Standards
Committee for electronic data interchange, and the updated
telecommunication standards adopted by the National Council for
Prescription Drug Programs. CBO estimates that implementing
those provisions would not have a significant effect on federal
spending.
In addition, the bill would require health plans,
providers, and clearinghouses to adopt the 10th revision of the
International Classification of Diseases (ICD-10) by October 1,
2009, for all services currently submitted for payment using
codes specified in the 9th revision (ICD-9). Under current law,
CBO expects that the ICD-10 standard will be adopted by the end
of fiscal year 2012.
Providers and health plans will incur costs for moving to
ICD-10 no matter when the transition occurs. Many providers and
health plans will purchase or upgrade computer hardware and
software to handle the new codes, which are longer and contain
alphanumeric characters. In addition, there will be costs to
train people to use the new codes, and reductions in
productivity while they become familiar with the new system.
There also will be benefits of moving to ICD-10, although
they are more difficult to estimate and are subject to greater
uncertainty. The increased specificity and clinical detail of
the new set of codes will reduce providers' and plans' costs.
For example, the more accurate coding will lower processing
costs through a reduction in the number of rejected claims that
must be resubmitted. Also, the more detailed information
included in the new codes may discourage improper or fraudulent
claims, which would lower plans' costs. However, those savings
will be relatively low in the first few years because error
rates will be higher during an initial period of unfamiliarity
with the new system, and new algorithms will need to be
developed for detecting improper claims under the new system.
Other changes could occur under the ICD-10 system that
might be beneficial to patients and result in better health
outcomes, but would not necessarily lower (and might even
raise) health care costs. For example, more accurate payments
for new procedures that would be possible under the new coding
system might result in newer and more appropriate procedures
being performed than under the old system. Health plans' costs
would decrease to the extent that less costly procedures were
performed, but would increase to the extent that more or more
costly procedures were performed.
CBO expects that implementing the ICD-10 system will result
in costs to providers and health plans in the first few years,
with benefits beginning later. The shift to an earlier
implementation date under the bill would thus result in
increased costs in the near term and subsequent savings that
would be realized earlier than under current law. In addition,
the reduced amount of time that providers and plans would have
to adopt ICD-10 under the bill, combined with the transition to
updated standards for claims and transactions that also will be
occurring during that same time period, would increase costs as
providers and health plans would have to compete for scarce
resources such as programmers and consultants.
Estimated Effect on Federal Revenues. CBO estimates that
the net effect of accelerating implementation of the ICD-10
system would be to increase the cost of private health care
benefits and health insurance premiums in the near term, and
decrease such costs in later years, compared to current law.
The changes would be small--an increase of 0.03 percent in
2008, followed by an even smaller decrease in later years.
Because health care benefits generally are excluded from
taxable incomes, H.R. 4157 would reduce federal tax revenues in
the near term by increasing the share of employee compensation
furnished as tax-excluded health benefits rather than as
taxable wages and salaries. That pattern would be reversed in
subsequent years. CBO estimates that enacting H.R. 4157 would
reduce federal revenues by $3 million in 2007 and by $26
million over the 2007-2011 period; it would increase revenues
by $58 million over the 2007-2016 period. Social Security
payroll taxes, which are off budget, account for about one-
third of those amounts.
Estimated Effect on Direct Spending. The Medicaid program
would be subject to a similar pattern of acceleration of both
the costs of implementing the ICD-10 coding system and the
subsequent realization of savings for health benefits. CBO
estimates that provision would increase Medicaid spending by
$30 million over the 2007-2011 period, and would reduce
spending for Medicaid by $100 million over the 2007-2016
period.
CBO expects that accelerating the implementation of the
ICD-10 coding system would not have a significant effect on
direct spending for Medicare for two reasons. First, Medicare
funding for processing claims--including the implementation and
maintenance of claims-processing systems--is subject to
appropriation. Second, under current law, the Medicare program
recalibrates payment rates each year to ensure that coding
changes are implemented on a budget-neutral basis.
Estimated Effect on Spending Subject to Appropriation.
Medicare's spending to implement, operate, and maintain
claims--processing systems--including the cost of transition to
the ICD-10 system--is subject to appropriation. In general,
accelerating implementation of the ICD-10 system would shift
implementation costs from the 2012-2016 period into the 2008-
2011 period. Assuming appropriation of the necessary amounts,
CBO estimates that thecost to Medicare of implementing the ICD-
10 system in 2009 would be $210 million over the 2007-2011 period and
$30 million over the 2007-2016 period.
Estimated impact on state, local, and tribal governments:
H.R. 4157 would preempt, in some circumstances, certain state
laws that govern the security and confidentiality of health
information as well as laws that establish civil or criminal
penalties for exchanging health information technology.
Although those preemptions would be intergovernmental mandates
as defined in UMRA, CBO estimates that the costs of the
mandates would be small and thus would not exceed the threshold
established in UMRA ($64 million in 2006, adjusted annually for
inflation).
The bill would direct the Secretary of HHS to conduct a
study of the variation in state security and confidentiality
laws, compare the range of those laws with existing federal
standards, and make recommendations to the Congress for
establishing greater commonality among laws. If the Congress
takes no action within 18 months after receiving the
recommendations, they would become regulations with the force
of law. The regulations would supersede any state security or
confidentiality laws that relate to but are different from
those standards. CBO estimates that this preemption would not
significantly affect the budgets of state, local, or tribal
governments because it would impose no duty on those
governments that would result in additional spending or a loss
of revenues.
The bill also would change safe-harbor guidelines for the
exchange of health information technology, and it would preempt
state laws that would assess civil or criminal penalties on
exchanges of information that the bill would allow. Although
this preemption could affect the ability of states to assess
penalties and collect revenues, CBO estimates that such losses
would be small.
OTHER IMPACTS
The bill would require health plans, providers, and
clearing houses to adopt revisions to medical coding
requirements by 2009. State, local, and tribal governments are
excluded from the definitions of those entities in ERISA, and
thus would not be directly subject to the required changes if
they operate their own health plans for employees. However,
from a practical perspective, they would have to comply in
order for their health plans to be able to communicate
information to providers, hospitals, other health plans, and
clearing houses. CBO estimates that employee health plans of
those governments would incur additional expenses of about $125
million over the 2007-2011 period in order to meet the 2009
deadline.
Those five-year costs are net of savings that would begin
to accrue to governments in 2011. In that year, savings are
estimated to total about $20 million.
The Medicaid program also would be subject to the new
deadline, but because states have significant flexibility in
that program to alter their programmatic and financial
responsibilities to meet the new requirement, the change would
not be an intergovernmental mandate as defined in UMRA. CBO
estimates that state spending would increase by about $20
million over the 2007-2011 period in order to meet the new
coding deadline for Medicaid programs. Again, those five-year
costs are net of savings that would begin to accrue in 2011.
The safe-harbor provisions would result in additional
spending by states for Medicaid totaling about $55 million over
the 2007-2011 period, CBO estimates.
Estimated impact on the private sector: The bill would
impose private-sector mandates on health plans, providers, and
clearing houses by requiring them to adopt updated coding and
transaction standards by specified future dates. CBO estimates
that the direct cost of these mandates would exceed the
threshold specified in UMRA ($128 million in 2006, adjusted
annually for inflation) in each of the first three years
following enactment of the bill.
First, the bill would require the adoption of the 10th
revision of the International Classification of Diseases (ICD-
10) by October 1, 2009. Under current law, CBO expects that
those updated standards will be adopted by the end of fiscal
year 2012. CBO estimates the direct cost to the mandated
entities would be $320 million in 2007, $470 million in 2008,
$490 million in 2009, and $70 million in 2010. The new
requirement would result in direct savings of $330 million in
2011 (and additional amounts in later years) because a
significant part of the adoption costs would be shifted to the
earlier years under the bill.
Second, the bill would require the adoption of updated
standards for claims transactions by April 1, 2009.
Specifically, health plans, providers, and clearing houses
would be required to adopt updated versions of the Accredited
Standards Committee X12 standards and the National Council for
Prescription Drug Programs Telecommunication Standards. CBO
expects that the deadline specified in the bill would be met
under current law. Thus, the mandate would impose no additional
costs on the mandated entities.
Estimate Prepared by: Federal Costs: Tom Bradley, Jeanne De
Sa, and Camile Williams; Impact on state, local and tribal
governments: Leo Lex; Impact on the private sector: Stuart
Hagen and Julie Lee.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee, based on public hearing testimony and
information from the Administration, concluded that it is
appropriate and timely to consider the bill as reported.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill H.R. 4157 makes de minimis authorization of funding.
C. Constitutional Authority Statement
With respect to clause 3(d)(1) of rule XIII of the Rules of
the House of Representatives, relating to Constitutional
Authority, the Committee states that the Committee's action in
reporting the bill is derived from Article 1 of the
Constitution, Section 8 (`The Congress shall have power to lay
and collect taxes, duties, imposts and excises, to pay the
debts and to provide for * * * the general Welfare of the
United States.')
D. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandate Act of 1995 (P.L. 104-4). The Committee
has determined that the bill does not contain Federal mandates
on the private sector. The Committee has determined that the
bill does not impose a Federal intergovernmental mandate on
State, local, or tribal governments.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (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
* * * * * * *
TITLE II--ADMINISTRATION AND MISCELLANEOUS PROVISIONS
* * * * * * *
PART D--HEALTH INFORMATION TECHNOLOGY
SEC. 271. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
(a) Establishment.--There is established within the
Department of Health and Human Services an Office of the
National Coordinator for Health Information Technology that
shall be headed by the National Coordinator for Health
Information Technology (referred to in this section as the
``National Coordinator''). The National Coordinator shall be
appointed by the President and shall report directly to the
Secretary. The National Coordinator shall be paid at a rate
equal to the rate of basic pay for level IV of the Executive
Schedule.
(b) Goals of Nationwide Interoperable Health Information
Technology Infrastructure.--The National Coordinator shall
perform the duties under subsection (c) in a manner consistent
with the development of a nationwide interoperable health
information technology infrastructure that--
(1) improves health care quality, reduces medical
errors, increases the efficiency of care, and advances
the delivery of appropriate, evidence-based health care
services;
(2) promotes wellness, disease prevention, and
management of chronic illnesses by increasing the
availability and transparency of information related to
the health care needs of an individual for such
individual;
(3) ensures that appropriate information necessary to
make medical decisions is available in a usable form at
the time and in the location that the medical service
involved is provided;
(4) produces greater value for health care
expenditures by reducing health care costs that result
from inefficiency, medical errors, inappropriate care,
and incomplete information;
(5) promotes a more effective marketplace, greater
competition, greater systems analysis, increased
choice, enhanced quality, and improved outcomes in
health care services;
(6) improves the coordination of information and the
provision of such services through an effective
infrastructure for the secure and authorized exchange
and use of health care information; and
(7) ensures that the confidentiality of individually
identifiable health information of a patient is secure
and protected.
(c) Duties of National Coordinator.--
(1) Strategic planner for interoperable health
information technology.--The National Coordinator shall
maintain, direct, and oversee the continuous
improvement of a strategic plan to guide the nationwide
implementation of interoperable health information
technology in both the public and private health care
sectors consistent with subsection (b).
(2) Principal advisor to hhs.--The National
Coordinator shall serve as the principal advisor of the
Secretary on the development, application, and use of
health information technology, and coordinate the
health information technology programs of the
Department of Health and Human Services.
(3) Coordinator of federal government activities.--
(A) In general.--The National Coordinator
shall serve as the coordinator of Federal
Government activities relating to health
information technology.
(B) Specific coordination functions.--In
carrying out subparagraph (A), the National
Coordinator shall provide for--
(i) the development and approval of
standards used in the electronic
creation, maintenance, or exchange of
health information; and
(ii) the certification and inspection
of health information technology
products, exchanges, and architectures
to ensure that such products,
exchanges, and architectures conform to
the applicable standards approved under
clause (i).
(C) Use of private entities.--The National
Coordinator shall, to the maximum extent
possible, contract with or recognize private
entities in carrying out subparagraph (B).
(D) Uniform application of standards.--A
standard approved under subparagraph (B)(i) for
use in the electronic creation, maintenance, or
exchange of health information shall preempt a
standard adopted under State law, regulation,
or rule for such a use.
(4) Intragovernmental coordinator.--The National
Coordinator shall ensure that health information
technology policies and programs of the Department of
Health and Human Services are coordinated with those of
relevant executive branch agencies and departments with
a goal to avoid duplication of effort and to ensure
that each agency or department conducts programs within
the areas of its greatest expertise and its mission in
order to create a national interoperable health
information system capable of meeting national public
health needs effectively and efficiently.
(5) Advisor to omb.--The National Coordinator shall
provide to the Director of the Office of Management and
Budget comments and advice with respect to specific
Federal health information technology programs.
(d) Authorization of Appropriations.--There are authorized to
be appropriated such sums as may be necessary to carry out this
section for each of fiscal years 2006 through 2010.
* * * * * * *
----------
SOCIAL SECURITY ACT
* * * * * * *
TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION
Part A--General Provisions
* * * * * * *
CIVIL MONETARY PENALTIES
Sec. 1128A. (a) * * *
(b)(1) * * *
* * * * * * *
(4)(A) For purposes of this subsection, a payment described
in paragraph (1) does not include any nonmonetary remuneration
(in the form of health information technology and related
services) made on or after the HIT effective date (as defined
in subparagraph (B)(ii)) by a hospital or critical access
hospital to a physician if the following requirements are met:
(i) The provision of such remuneration is made
without a condition that--
(I) limits or restricts the use of the health
information technology to services provided by
the physician to individuals receiving services
at the location of the hospital or critical
access hospital providing such technology;
(II) limits or restricts the use of the
health information technology in conjunction
with other health information technology; or
(III) takes into account the volume or value
of referrals (or other business generated) by
the physician to the hospital or critical
access hospital.
(ii) Such remuneration is arranged for in a written
agreement that is signed by a representative of the
hospital or critical access hospital and by the
physician and that specifies the remuneration made and
states that the provision of such remuneration is made
for the primary purpose of better coordination of care
or improvement of health care quality or efficiency.
(B) For purposes of subparagraph (A) and sections
1128B(b)(3)(J) and 1877(e)(9)--
(i) the term ``health information technology'' means
hardware, software, license, intellectual property,
equipment, or other information technology (including
new versions, upgrades, and connectivity) or related
services used for the electronic creation, maintenance,
and exchange of clinical health information; and
(ii) the term ``HIT effective date'' means the date
that is 180 days after the date of the enactment of
this paragraph.
* * * * * * *
CRIMINAL PENALTIES FOR ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS
Sec. 1128B. (a) * * *
(b)(1) * * *
* * * * * * *
(3) Paragraphs (1) and (2) shall not apply to--
(A) * * *
* * * * * * *
(G) the waiver or reduction by pharmacies (including
pharmacies of the Indian Health Service, Indian tribes,
tribal organizations, and urban Indian organizations)
of any cost-sharing imposed under part D of title
XVIII, if the conditions described in clauses (i)
through (iii) of section 1128A(i)(6)(A) are met with
respect to the waiver or reduction (except that, in the
case of such a waiver or reduction on behalf of a
subsidy eligible individual (as defined in section
1860D-14(a)(3)), section 1128A(i)(6)(A) shall be
applied without regard to clauses (ii) and (iii) of
that section); [and]
(H) any remuneration between a federally qualified
health center (or an entity controlled by such a health
center) and an MA organization pursuant to a written
agreement described in section 1853(a)(4)[.];
[(H)] (I) any remuneration between a health center
entity described under clause (i) or (ii) of section
1905(l)(2)(B) and any individual or entity providing
goods, items, services, donations, loans, or a
combination thereof, to such health center entity
pursuant to a contract, lease, grant, loan, or other
agreement, if such agreement contributes to the ability
of the health center entity to maintain or increase the
availability, or enhance the quality, of services
provided to a medically underserved population served
by the health center entity[.]; and
(J) any nonmonetary remuneration (in the form of
health information technology, as defined in section
1128A(b)(4)(B)(i), and related services) solicited or
received by a person on or after the HIT effective date
(as defined in section 1128A(b)(4)(B)(ii)) (or offered
or paid to a person on or after such date) if--
(i) such remuneration is solicited or
received (or offered or paid) without a
condition that--
(I) limits or restricts the use of
the health information technology to
services provided by the person to
individuals receiving services at the
location of the entity providing such
technology;
(II) limits or restricts the use of
the health information technology in
conjunction with other health
information technology; or
(III) takes into account the volume
or value of referrals (or other
business generated) by the person to
the entity providing such technology;
and
(ii) such remuneration is arranged for in a
written agreement that is signed by a
representative of the entity and by the
physician and that specifies the remuneration
made and states that the provision of such
remuneration is made for the primary purpose of
better coordination of care or improvement of
health care quality or efficiency.
* * * * * * *
Part C--Administrative Simplification
* * * * * * *
TIMETABLES FOR ADOPTION OF STANDARDS
Sec. 1174. (a) * * *
(b) Additions and Modifications to Standards.--
(1) In general.--Except as provided in paragraph (2),
the Secretary shall review the standards adopted under
section 1173, and shall adopt modifications to the
standards (including additions to the standards), as
determined appropriate, but not more frequently than
once every 12 months and in accordance with paragraph
(3). Any addition or modification to a standard shall
be completed in a manner which minimizes the disruption
and cost of compliance. For purposes of this subsection
and section 1173(c)(2), the term ``modification''
includes a new version or a version upgrade.
* * * * * * *
(3) Expedited procedures for adoption of additions
and modifications to standards.--
(A) In general.--For purposes of paragraph
(1), the Secretary shall provide for an
expedited upgrade program (in this paragraph
referred to as the ``upgrade program''), in
accordance with this paragraph, to develop and
approve additions and modifications to the
standards adopted under section 1173(a) to
improve the quality of such standards or to
extend the functionality of such standards to
meet evolving requirements in health care.
(B) Publication of notices.--Under the
upgrade program:
(i) Voluntary notice of initiation of
process.--Not later than 30 days after
the date the Secretary receives a
notice from a standard setting
organization that the organization is
initiating a process to develop an
addition or modification to a standard
adopted under section 1173, the
Secretary shall publish a notice in the
Federal Register that--
(I) identifies the subject
matter of the addition or
modification;
(II) provides a description
of how persons may participate
in the development process; and
(III) invites public
participation in such process.
(ii) Voluntary notice of preliminary
draft of additions or modifications to
standards.--Not later than 30 days
after the date the Secretary receives a
notice from a standard setting
organization that the organization has
prepared a preliminary draft of an
addition or modification to a standard
adopted by section 1173, the Secretary
shall publish a notice in the Federal
Register that--
(I) identifies the subject
matter of (and summarizes) the
draft;
(II) specifies the procedure
for obtaining documentation for
the draft;
(III) provides a description
of how persons may submit
comments in writing and at any
public hearing or meeting held
by the organization on the
draft; and
(IV) invites submission of
such comments and participation
in such hearing or meeting.
(iii) Notice of proposed addition or
modification to standards.--Not later
than 30 days after the date the
Secretary receives a notice from a
standard setting organization that the
organization has a proposed addition or
modification to a standard adopted
under section 1173 that the
organization intends to submit under
subparagraph (D)(iii), the Secretary
shall publish a notice in the Federal
Register that contains, with respect to
the proposed addition or modification,
the information required in the notice
under clause (ii) with respect to a
preliminary draft of an addition or
modification.
(iv) Construction.--Nothing in this
paragraph shall be construed as
requiring a standard setting
organization to request the notices
described in clauses (i) and (ii) with
respect to an addition or modification
to a standard in order to qualify for
an expedited determination under
subparagraph (C) with respect to a
proposal submitted to the Secretary for
adoption of such addition or
modification.
(C) Provision of expedited determination.--
Under the upgrade program and with respect to a
proposal by a standard setting organization for
an addition or modification to a standard
adopted under section 1173, if the Secretary
determines that the standard setting
organization developed such addition or
modification in accordance with the
requirements of subparagraph (D) and the
National Committee on Vital and Health
Statistics recommends approval of such addition
or modification under subparagraph (E), the
Secretary shall provide for expedited treatment
of such proposal in accordance with
subparagraph (F).
(D) Requirements.--The requirements under
this subparagraph with respect to a proposed
addition or modification to a standard by a
standard setting organization are the
following:
(i) Request for publication of
notice.--The standard setting
organization submits to the Secretary a
request for publication in the Federal
Register of a notice described in
subparagraph (B)(iii) for the proposed
addition or modification.
(ii) Process for receipt and
consideration of public comment.--The
standard setting organization provides
for a process through which, after the
publication of the notice referred to
under clause (i), the organization--
(I) receives and responds to
public comments submitted on a
timely basis on the proposed
addition or modification before
submitting such proposed
addition or modification to the
National Committee on Vital and
Health Statistics under clause
(iii); and
(II) makes publicly available
a written explanation for its
response in the proposed
addition or modification to
comments submitted on a timely
basis.
(iii) Submittal of final proposed
addition or modification to ncvhs.--
After completion of the process under
clause (ii), the standard setting
organization submits the proposed
addition or modification to the
National Committee on Vital and Health
Statistics for review and consideration
under subparagraph (E). Such submission
shall include information on the
organization's compliance with the
notice and comment requirements (and
responses to those comments) under
clause (ii).
(E) Hearing and recommendations by national
committee on vital and health statistics.--
Under the upgrade program, upon receipt of a
proposal submitted by a standard setting
organization under subparagraph (D)(iii) for
the adoption of an addition or modification to
a standard, the National Committee on Vital and
Health Statistics shall provide notice to the
public and a reasonable opportunity for public
testimony at a hearing on such addition or
modification. The Secretary may participate in
such hearing in such capacity (including
presiding ex officio) as the Secretary shall
determine appropriate. Not later than 120 days
after the date of receipt of the proposal, the
Committee shall submit to the Secretary its
recommendation to adopt (or not adopt) the
proposed addition or modification.
(F) Determination by secretary to accept or
reject national committee on vital and health
statistics recommendation.--
(i) Timely determination.--Under the
upgrade program, if the National
Committee on Vital and Health
Statistics submits to the Secretary a
recommendation under subparagraph (E)
to adopt a proposed addition or
modification, not later than 90 days
after the date of receipt of such
recommendation the Secretary shall make
a determination to accept or reject the
recommendation and shall publish notice
of such determination in the Federal
Register not later than 30 days after
the date of the determination.
(ii) Contents of notice.--If the
determination is to reject the
recommendation, such notice shall
include the reasons for the rejection.
If the determination is to accept the
recommendation, as part of such notice
the Secretary shall promulgate the
modified standard (including the
accepted proposed addition or
modification accepted) as a final rule
under this subsection without any
further notice or public comment
period.
(iii) Limitation on consideration.--
The Secretary shall not consider a
proposal under this subparagraph unless
the Secretary determines that the
requirements of subparagraph (D)
(including publication of notice and
opportunity for public comment) have
been met with respect to the proposal.
(G) Treatment as satisfying requirements for
notice-and-comment.--Any requirements under
section 553 of title 5, United States Code,
relating to notice and an opportunity for
public comment with respect to a final rule
promulgated under subparagraph (F) shall be
treated as having been met by meeting the
requirements of the notice and opportunity for
public comment provided under provisions of
subparagraphs (B)(iii), (D), and (E).
(H) No judicial review.--A final rule
promulgated under subparagraph (F) shall not be
subject to judicial review.
* * * * * * *
EFFECT ON STATE LAW
Sec. 1178. (a) General Effect.--Subject to section 4(b) of
the Health Information Technology Promotion Act of 2006--
(1) * * *
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part A--Hospital Insurance Benefits for the Aged and Disabled
* * * * * * *
PROVISIONS RELATING TO THE ADMINISTRATION OF PART A
Sec. 1816. (a) * * *
(b) With respect to--
(1) transactions under this part occurring on or
after April 1, 2009, all providers of services shall
use ASC X12 version 5010 with respect to services
provided under this part in compliance with section
5(a) of the Health Information Technology Promotion Act
of 2006; and
(2) services furnished on or after October 1, 2009--
(A) all providers of services shall use ICD-
10-CM codes with respect to services provided
under this part in compliance with section 5(b)
of such Act; and
(B) hospitals shall use ICD-10-PCS codes (as
well as ICD-10-CM codes) with respect to
inpatient hospital services provided under this
part in compliance with such section.
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
LIMITATION ON CERTAIN PHYSICIAN REFERRALS
Sec. 1877. (a) * * *
* * * * * * *
(e) Exceptions Relating to Other Compensation Arrangements.--
The following shall not be considered to be a compensation
arrangement described in subsection (a)(2)(B):
(1) * * *
* * * * * * *
(9) Information technology and services.--Any
nonmonetary remuneration (in the form of health
information technology, as defined in section
1128A(b)(4)(B)(i), and related services) made on or
after the HIT effective date (as defined in section
1128A(b)(4)(B)(ii)) by an entity to a physician if the
following requirements are met:
(A) The provision of such remuneration is
made without a condition that--
(i) limits or restricts the use of
the health information technology to
services provided by the physician to
individuals receiving services at the
location of the entity providing such
technology;
(ii) limits or restricts the use of
the health information technology in
conjunction with other health
information technology; or
(iii) takes into account the volume
or value of referrals (or other
business generated) by the physician to
the entity providing such technology.
(B) Such remuneration is arranged for in a
written agreement that is signed by a
representative of the entity and by the
physician and that specifies the remuneration
made and states that the provision of such
remuneration is made for the primary purpose of
better coordination of care or improvement of
health care quality or efficiency.
* * * * * * *
----------
SECTION 264 OF THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
OF 1996
SEC. 264. RECOMMENDATIONS WITH RESPECT TO PRIVACY OF CERTAIN HEALTH
INFORMATION.
(a) * * *
* * * * * * *
(c) Regulations.--
(1) * * *
(2) Preemption.--[A regulation] Subject to section
4(b) of the Health Information Technology Promotion Act
of 2006, a regulation promulgated under paragraph (1)
shall not supercede a contrary provision of State law,
if the provision of State law imposes requirements,
standards, or implementation specifications that are
more stringent than the requirements, standards, or
implementation specifications imposed under the
regulation.
* * * * * * *
VII. VIEWS
DISSENTING VIEWS ON H.R. 4157--``HEALTH INFORMATION TECHNOLOGY
PROMOTION ACT OF 2006''
The promise of expanding the use of interoperable health
information technology (IT) systems has been widely documented.
Information technology applications in the field of health care
are expected to yield greater efficiencies and save lives.
Total system-wide savings from widespread adoption of health
information technology are estimated to range from $81 billion
to $160 billion per year when fully implemented.
Unfortunately, H.R. 4157, as reported by the Committee on
Ways and Means, will not advance the goal of a nationwide
interoperable health information technology system. In fact,
this legislation actually causes greater harm by squandering an
important opportunity to establish a clear pathway to achieve
interoperability standards and assure widespread adoption.
Moreover, the bill will foster fraud, waste, and abuse in the
Medicare program, and sets in motion a process to preempt state
laws and regulations that protect the privacy and
confidentiality of individually identifiable health
information.
A number of organizations representing consumers, providers
and others wrote to express concerns with the Chairman's Mark
and support for several of the Democratic amendments discussed
below. Those letters have been inserted in the Record.
PRIVACY PROTECTIONS ARE ERODED
H.R. 4157, as reported, undermines patients' right to
privacy with respect to individually identifiable health
information. While the legislation reported out of the
Subcommittee on Health contained troubling provisions on
privacy, the Chairman's Mark amended the reported bill with a
provision that would ultimately clearly preempt state privacy
laws that are stronger than the federal law. This is
unacceptable.
The federal privacy regulations that resulted from the
Health Insurance Portability and Accountability Act of 1996
(HIPAA) established a minimum level of protection at the
federal level, while allowing continued application of more
protective state laws. As required under the law, the Clinton
Administration issued final regulations in 2000, after Congress
was unable to agree on privacy legislation in the three years
following the passage of HIPAA. The Bush Administration then
suspended the rules after taking office in 2001, and proposed
modifications and finalized new rules in 2002.
HIPAA applies directly to only providers, insurers, and
``health care clearinghouses,'' though others who use
information from these ``covered entities'' are vicariously
subject to HIPAA as ``business associates'' of the covered
entities. Regulatory changes made by the Bush Administration in
2002 authorize the use and disclosure without consent of
virtually all identifiable health information in routine
situations--e.g., for treatment, payment, or health care
operations (e.g., quality improvement activities; underwriting;
business planning and administration, certain fundraising for
the benefit of the covered entity, etc.).
Even with these weakened standards, enforcement is passive
and virtually non-existent, relying almost exclusively on
complaints to trigger investigations. According to the
Administration, the Department of Health and Human Services
(HHS) has been enforcing the privacy rule since April 2003,
which is the date by which most entities were required to be in
compliance, but no penalties have been levied. Plus, even if
enforcement were more aggressive, the penalties apply only in
narrow, egregious situations and only to covered entities, not
to business associates or to individual employees who have
actually engaged in the misconduct.
HHS may impose civil money penalties on a covered entity of
$1.00 per failure to comply, not to exceed $25,000 per year.
However, HHS may not impose a fine if the violation did not
involve willful neglect and the covered entity corrected the
violation within 30 days of when it knew or should have known
of the violation. In addition, criminal penalties are
theoretically available. A covered entity who knowingly obtains
or discloses protected health information could be fined
$50,000 and face up to one year in prison; higher penalties and
longer terms are available if the case involves false pretenses
or the intent to sell, transfer, or use the information for
commercial advantage, personal gain, or malicious harm.
Regardless, it is important to note that available remedies
under federal law, if applied, are provided to the government,
not the individual whose information was disclosed or misused.
Efforts to move toward an electronic environment need to
enhance--not erode--confidentiality of individually
identifiable health information and improve enforcement.
Electronic systems make it easier, not harder, to accommodate
different laws. Vendors or other software developers can build
the various laws into the system, and update as needed. More
uniformity may be desirable but would only be acceptable if it
leads to an improvement for all, not an erosion for many.
HIPAA was consciously designed as a floor upon which states
could build. As such, its provisions are inadequate in many
ways. States have a variety of laws that provide additional
protections for certain sensitive information. Some states even
provide for a right of action that allows individuals to pursue
remedies when information is improperly used or disclosed.
Careful consideration and public debate should occur before a
weak federal standard is used to preempt stronger state laws.
That has not occurred in this Committee.
LACKS A TIMELINE FOR STANDARDS DEVELOPMENT AND ADOPTION
To assure progress on the development of interoperability
standards for health information technology, Congress needs to
provide leadership and schedule a timeline for action. For more
than a decade, adoption of standards has been stalled to
protect proprietary interests. In such circumstances, it is
necessary for the government to step in to assert the public's
interest. Without uniform standards, systems are unable to
communicate with one another and the potential benefits of
expanding the use of technology in clinical practice remain out
of reach.
Although many standards have already been developed, few
have been adopted because there is no incentive for providers
or venders to adhere to particular standards. As a result,
patients and taxpayers have been forced to wait to enjoy the
benefits of an interoperable health information technology
system. As it stands, HR 4157 does not establish a deadline or
even a timeframe for adoption of standards. Accordingly, the
legislation fails to lay the fundamental groundwork needed to
move forward. The first step toward the vision of an
interoperable system is to set a deadline by which standards
have to be designated.
LACK OF FUNDING
To spur adoption among providers, Congress should fund
acquisition, support, and maintenance of information technology
systems that meet the designated standards. At the same time,
Congress should ensure that Medicare patients receive the full
benefit of health information technology systems by requiring
Medicare providers to use such systems. In addition, relevant
technology purchased by the federal government and its
contractors should also comply with the standards. The system-
wide savings expected from the more efficient health system
will more than offset the initial investments.
Unfortunately, HR 4157 fails to take these needed steps.
There is nothing in the legislation that assures meaningful use
of interoperable health technology. Absent widespread or near
universal adoption, the potential savings and clinical benefits
will never be fully realized. Even more alarming, because the
legislation lacks funding and encourages providers to invest in
technology that does not meet standards, HR 4157 could actually
undermine the goal of widespread adoption by creating perverse
incentives for investment in non-interoperable products just
prior to the designation of needed standards. This could lead
to further entrenchment and commitment to systems that may soon
be rendered obsolete.
INCREASES WASTE, FRAUD AND ABUSE
Rather than provide funding for acquisition and support of
health information technology, the Chairman's bill presumes
that providers themselves will supply equipment and services to
other providers. In order to accommodate these relationships,
section 3 of the bill creates several exceptions to Medicare's
anti-fraud and abuse statutes. These provisions will increase
Medicare's vulnerability to waste, fraud, and abuse, and will
not result in the level of investment needed to materially
advance the adoption of health information technology among
hospitals and physician offices.
Most hospitals do not have the capital resources necessary
to purchase health information technology for physicians, and
many physicians do not want to be beholden to hospitals or
other entities for the provision of IT. Poor and rural
communities will likely be left behind with this strategy,
exacerbating health disparities in under-served populations.
In testimony before the Subcommittee, a large health system
that has been a prime advocate for the exception to limitations
in the self-referral law admitted that the exception would only
benefit a handful of providers that met very specific
conditions. Other providers have privately admitted that they
want to use information technology to tighten relationships
with certain doctors or gain a competitive edge over other
hospitals in the market.
At the same time, physicians with privileges at multiple
hospitals do not want to be locked into one hospital in their
community, particularly when a hospital that has extra
resources to purchase information technology is likely to
already be more dominant. Conversely, forcing doctors to
maneuver between multiple information technology systems to
accommodate various hospitals in their community is
inefficient, undesirable and not feasible. Furthermore,
hospital-level systems may be inappropriate for physician
practices, and physicians are rightfully concerned about
hospitals ``owning'' their patients' data.
Creating safe harbors that encourage purchase of
information technology prior to the adoption and certification
of standards, as this legislation would do, will exacerbate
current problems relating to multiple systems that are not
interoperable. It will also undermine interest in moving
forward with compliant systems when standards are in place.
Promoting immediate investment in and subsequent adoption of
systems that are not interoperable or do not meet standards
will only impede future progress by encouraging stove-piping,
waste, and ``buy-in'' to old systems.
The Centers for Medicare and Medicaid Services (CMS) and
the HHS Office of the Inspector General (OIG) are predicted to
issue a final rule by the end of this year that would create
tightly-crafted safe harbors enabling these transactions. It is
difficult to draft safe harbors that balance the need to
maintain program integrity while permitting previously
impermissible activities; involvement of CMS, OIG and the
Department of Justice is critical, yet this does not appear to
have happened in the drafting of HR 4157.
Finally, the Congressional Budget Office has sent a letter,
as seen in the Record, indicating that section 3 will increase
Medicare spending because of the induced services and other
increased waste, fraud, and abuse expected as a result of these
provisions. A precise estimate is not available at this time.
DEMOCRATIC AMENDMENTS
Mr. Emanuel and Mr. Doggett offered an amendment, which was
defeated on a party-line vote, to strengthen current HIPAA
protections. This amendment would have replaced section 4 with
provisions to improve and preserve privacy, confidentiality and
security protections for individually identifiable health
information in the new electronic environment. The amendment
included provisions that would have--
(1) created a consent requirement;
(2) required breach notification to affected
individual(s) and the Secretary;
(3) extended the application of rules and protections
to all entities;
(4) established safeguard requirements; and
(5) provided access to damages and other relief for
individuals whose information is inappropriately
disclosed or used.
In addition, Mr. Stark offered an amendment to protect from
pre-emption state laws that provide greater protection of
information relating to mental health, substance abuse, rape,
incest and other domestic violence, family planning, HIV,
sexually transmitted diseases, screening for and presence of
genes or genetic markers, and other sensitive areas as
designated by the Secretary, or permit individuals to pursue
legal action against an entity that improperly uses or
discloses identifiable health information. This amendment was
also defeated on a party-line vote.
Two additional amendments would have addressed timeline and
funding concerns. The first, offered by Mr. Emanuel, would have
established a process for the Secretary to develop and approve
interoperability standards within 24 months of enactment if the
process set forth in section 2 of the bill did not produce
standards within 18 months of enactment. The amendment also
directed the Secretary of HHS to establish a Medicare payment
to finance the purchase of health information technology that
meets specified standards. Finally, the amendment would have
required Medicare providers--including Medicare Advantage and
Part D plans--to use electronic health records with the core
functionalities identified by the Institute of Medicine in
their correspondence to HHS, ``Key Capabilities of an
electronic Health Record System'' (July 31, 2003).
An amendment offered by Mr. Thompson proposed to give
Medicare providers the financial assistance necessary to
purchase, support, and maintain health information technology
systems. Recognizing that the cost of such systems is still
unknown, the amendment gave broad authority for the Secretary
of HHS to determine the appropriate amount and manner of
distributing these funds. Funding would be available to all
providers, including integrated delivery systems whose systems
needed to be conformed to meet the new standards. However,
given the current payment structure for Medicare Advantage
plans, most plans would have been ineligible for additional
funding under this provision.
Although it is widely acknowledged that direct financing is
an essential component for widespread adoption of health
information technology, these two amendments were defeated on
party-line votes.
Finally, Mr. Stark offered an amendment to strike section
3. It was also defeated on a party-line vote.
CONCLUSION
Democrats want to see widespread adoption of inter-operable
health information technology systems be a reality. That's why
amendments were offered to ensure progress on this critical
front.
Lack of ready access to critical information in a patient's
medical record has resulted in massive inefficiencies, sub-
optimal quality of care, and even death. The longer the
Congress waits to provide the leadership necessary to progress
toward a fully interoperable health information technology
system, the more damage that is done. Unfortunately, HR 4157 as
reported by the Committee misses the mark. Even worse, if
passed in its current form, this bill may hinder the
development of interoperable medical records for years to come.
The promotion of health information technology should not
be a partisan undertaking. However, the Committee leadership
has made it so every step of the way: rejecting our suggestions
and potential compromise positions to early drafts of the bill,
not seeking input from the minority in constructing a manager's
amendment, and defeating each of our amendments on party-line
votes.
In contrast, the Senate unanimously passed a bill (S 1418)
to establish standards and certification processes for
interoperability within a year of enactment, and to provide
funding to help health care providers acquire and support the
expanded use of information technology in their practices.
Although S 1418 does not go as far as we would like, it is
significantly better than the bill the Committee recommended.
We look forward to correcting the deficiencies in HR 4157
prior to final passage by the House in order to send into
conference with the Senate a strong bill with timelines for
action, clear guidance for advancement, financial support, and
improved patient privacy protections.
C. B. Rangel.
Lloyd Doggett.
Rahm Emanuel.
John B. Larson.
Jim McDermott.
Stephanie Tubbs Jones.
Pete Stark.
Xavier Becerra.
Michael R. McNulty.
John Tanner.
John Lewis.
Earl Pomeroy.
Mike Thompson.
Ben Cardin.
Richard E. Neal.
Sander Levin.