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About
This Legislation:
A bill to improve quality in
health care by providing incentives for adoption of modern information
technology.
S 179 IS
111th CONGRESS
1st Session
S. 179
To improve quality in health care by
providing incentives for adoption of modern
information technology.
IN THE SENATE OF THE UNITED STATES
January 8, 2009
Ms. STABENOW (for herself and Ms. SNOWE)
introduced the following bill; which was read
twice and referred to the Committee on Finance
A BILL
To improve quality in health care by
providing incentives for adoption of modern
information technology.
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Health
Information Technology Act of 2009'.
SEC. 2. INFORMATICS SYSTEMS GRANT PROGRAM.
(1) IN GENERAL- The Secretary of Health
and Human Services (in this section
referred to as the `Secretary') shall
establish a program to award grants to
eligible entities that have submitted
applications in accordance with
subsection (b) for the purpose of
assisting such entities in offsetting
the costs incurred after December 31,
2008, that are related to clinical
health care informatics systems and
services designed to improve quality in
health care and patient safety.
(2) DURATION- The authority of the
Secretary to make grants under this
section shall terminate on September 30,
2014.
(3) COSTS DEFINED- For purposes of this
section, the term `costs' shall include
total expenditures incurred for--
(A) purchasing, leasing, and
installing computer software and
hardware, including handheld
computer technologies, and related
services;
(B) making improvements to existing
computer software and hardware;
(C) purchasing or leasing
communications capabilities
necessary for clinical data access,
storage, and exchange;
(D) services associated with
acquiring, implementing, operating,
or optimizing the use of new or
existing computer software and
hardware and clinical health care
informatics systems;
(E) providing education and training
to eligible entity staff on
information systems and technology
designed to improve patient safety
and quality of care; and
(F) purchasing, leasing,
subscribing, integrating, or
servicing clinical decision support
tools that--
(i) integrate patient-specific
clinical data with
well-established national
treatment guidelines; and
(ii) provide ongoing, continuous
quality improvement functions
that allow providers to assess
improvement rates over time and
against averages for similar
providers.
(4) ELIGIBLE ENTITY DEFINED- For
purposes of this section, the term
`eligible entity' means the following
entities:
(A) HOSPITAL- A hospital (as defined
in section 1861(e) of the Social
Security Act (42 U.S.C. 1395x(e))).
(B) CRITICAL ACCESS HOSPITAL- A
critical access hospital (as defined
in section 1861(mm)(1) of such Act
(42 U.S.C. 1395x(mm)(1))).
(C) SKILLED NURSING FACILITY- A
skilled nursing facility (as defined
in section 1819(a) of such Act (42
U.S.C. 1395i-3(a))).
(D) FEDERALLY QUALIFIED HEALTH
CENTER- A federally qualified health
center (as defined in section
1861(aa)(4) of such Act (42 U.S.C.
1395x(aa)(4))).
(E) PHYSICIAN- A physician (as
defined in section 1861(r) of such
Act (42 U.S.C. 1395x(r))).
(F) PHYSICIAN GROUP PRACTICE- A
physician group practice.
(G) COMMUNITY MENTAL HEALTH CENTER-
A community mental health center (as
defined in section 1861(ff)(3)(B) of
such Act (42 U.S.C.
1395x(ff)(3)(B))).
(1) IN GENERAL- An eligible entity
seeking a grant under this section shall
submit an application to the Secretary
at such time, in such form and manner,
and containing the information described
in paragraph (2).
(2) INFORMATION DESCRIBED- The
information described in this paragraph
is the following information:
(i) the clinical health care
informatics system and services
that the eligible entity intends
to implement with the assistance
received under this section;
(ii) how the system will improve
quality in health care and
patient safety, including
estimates of the impact on the
health of, and the health costs
associated with the treatment
of, patients with heart disease,
cancer, stroke, diabetes,
chronic obstructive pulmonary
disease, asthma, or any other
disease or condition specified
by the Secretary; and
(iii) how the system will ensure
the privacy and security of
individually identifiable health
information.
(B) Any additional information that
the Secretary may specify.
(c) Priority for Certain Eligible Entities-
In awarding grants under this section, the
Secretary shall give priority--
(1) first, to eligible entities--
(A) that are exempt from tax under
section 501(a) of the Internal
Revenue Code of 1986; and
(B)(i) in which the total of
individuals that are eligible for
benefits under the Medicare program
under title XVIII of the Social
Security Act, the Medicaid program
under title XIX of such Act, or
under the State children's health
insurance program under title XXI of
such Act make up a high percentage
(as determined appropriate by the
Secretary) of the total patient
population of the entity; or
(ii) that provide services to a
large number (as determined
appropriate by the Secretary) of
such individuals;
(2) then, to eligible entities that meet
the requirement under clause (i) or (ii)
of paragraph (1)(B); and
(3) then, to other eligible entities.
(d) Reserve Funds for Entities in Health
Professional Shortage Areas or Rural Areas-
(1) IN GENERAL- Subject to paragraph
(2), the Secretary shall ensure that at
least 20 percent of the funds available
for making grants under this section
to--
(A) hospitals and critical access
hospitals are used for making grants
to such hospitals that are located
exclusively in an applicable area;
(B) skilled nursing facilities are
used for making grants to such
facilities that are located
exclusively in an applicable area;
(C) federally qualified health
centers are used for making grants
to such centers that are located
exclusively in an applicable area;
(D) physicians and physician group
practices are used for making grants
to physicians and such practices
that are located exclusively in an
applicable area; and
(E) community mental health centers
are used for making grants to such
centers that are located exclusively
in an applicable area.
(2) AVAILABILITY OF RESERVE FUNDS IF
LIMITED NUMBER OF ENTITIES APPLY FOR
RESERVED GRANTS- If the Secretary
estimates that the amount of funds
reserved under subparagraph (A), (B),
(C), (D), or (E) of paragraph (1) for
the type of entity involved exceeds the
maximum amount of funds permitted for
such entities under subsection (e), the
Secretary may reduce the amount reserved
for such entities by an amount equal to
such excess and use such funds for
awarding grants to other eligible
entities.
(3) APPLICABLE AREA DEFINED- For
purposes of paragraph (1), the term
`applicable area' means--
(A) an area that is designated as a
health professional shortage area
under section 332(a)(1)(A) of the
Public Health Service Act;
(B) a rural area (as such term is
defined for purposes of section
1886(d) of the Social Security Act
(42 U.S.C. 1395ww(d))); or
(C) a rural census tract of a
metropolitan statistical area (as
determined under the most recent
modification of the Goldsmith
Modification, originally published
in the Federal Register on February
27, 1992 (57 Fed. Reg. 6725)).
(A) IN GENERAL- Subject to
subparagraph (B) and paragraph (2),
the Secretary shall determine the
amount of a grant awarded under this
section.
(B) CONSIDERATION- In determining
the amount of a grant under this
section, the Secretary shall take
into account the ability to take an
expense deduction for health care
informatics system expenses under
section 179F of the Internal Revenue
Code of 1986, as added by section 5.
(A) IN GENERAL- A grant awarded
under this section may not exceed
the lesser of--
(i) an amount equal to the
applicable percentage of the
costs incurred by the eligible
entity for the project for which
the entity is seeking assistance
under this section; or
(ii) in the case of a grant made
to--
(I) a hospital or a critical
access hospital, $1,000,000;
(II) a skilled nursing
facility, $200,000;
(III) a federally qualified
health center, $150,000;
(IV) a physician, $15,000;
(V) a physician group
practice, an amount equal to
$15,000 multiplied by the
number of physicians in the
practice; or
(VI) a community mental
health center, $75,000.
(B) APPLICABLE PERCENTAGE- For
purposes of subparagraph (A)(i), the
term `applicable percentage' means,
with respect to an eligible entity
for the period involved, the
percentage of total revenues
(excluding grants and gifts from
Federal, State, local government,
and private sources) for such period
that consists of total revenues from
the Medicare program, the Medicaid
program, and the State children's
health insurance program under
titles XVIII, XIX, and XXI,
respectively, of the Social Security
Act.
(1) COMPLIANT WITH STANDARDS- A clinical
health care informatics system funded
under this section and placed in service
on or after the date the standards are
adopted under section 4 shall be
compliant with such standards.
(2) NOTIFICATION- An eligible entity
receiving a grant under this section
shall notify patients if their
individually identifiable health
information is wrongfully disclosed.
(3) FURNISHING THE SECRETARY WITH
INFORMATION-
(A) IN GENERAL- An eligible entity
receiving a grant under this section
shall furnish the Secretary with
such information as the Secretary
may require to--
(i) evaluate the project for
which the grant is made; and
(ii) ensure that assistance
provided under the grant is
expended for the purposes for
which it is made.
(B) COORDINATION- The Secretary
shall ensure that the requirements
for furnishing information under
subparagraph (A) are coordinated
with other requirements for
furnishing information to the
Secretary that the eligible entity
is subject to.
(g) Studies- The Secretary shall conduct
studies to--
(1) evaluate the use of clinical health
care informatics systems and services
implemented with assistance under this
section to measure and report quality
data based on accepted clinical
performance measures; and
(2) assess the impact of such systems
and services on improving patient care,
reducing costs, and increasing
efficiencies.
(A) IN GENERAL- The Secretary shall
submit, at least annually, a report
to the appropriate committees of
Congress on the grant program
established under this section.
(B) CONTENTS- A report submitted
pursuant to subparagraph (A) shall
include information on--
(i) the number of grants made;
(ii) the nature of the projects
for which assistance is provided
under the grant program;
(iii) the geographic
distribution of grant
recipients;
(iv) the impact of the projects
on the health of, and the health
costs associated with the
treatment of, patients with
heart disease, cancer, stroke,
diabetes, chronic obstructive
pulmonary disease, asthma, or
any other disease or conditions
specified by the Secretary;
(v) the results of the studies
conducted under subsection (g);
and
(vi) such other matters as the
Secretary determines
appropriate.
(2) FINAL REPORT- Not later than 180
days after the completion of all of the
projects for which assistance is
provided under this section, the
Secretary shall submit a final report to
the appropriate committees of Congress
on the grant program established under
this section, together with such
recommendations for legislation and
administrative action as the Secretary
determines appropriate.
(1) HOSPITALS- There are appropriated
from the Federal Hospital Insurance
Trust Fund under section 1817 of the
Social Security Act (42 U.S.C. 1395i)
$250,000,000, for each of the fiscal
years 2010 through 2014, for the purpose
of making grants under this section to
eligible entities that are hospitals or
critical access hospitals.
(2) SKILLED NURSING FACILITIES- There
are appropriated from the Federal
Hospital Insurance Trust Fund under
section 1817 of the Social Security Act
(42 U.S.C. 1395i) $100,000,000, for each
of the fiscal years 2010 through 2014,
for the purpose of making grants under
this section to eligible entities that
are skilled nursing facilities.
(3) FEDERALLY QUALIFIED HEALTH CENTERS-
There are appropriated from the Federal
Supplementary Medical Insurance Trust
Fund under section 1841 of the Social
Security Act (42 U.S.C. 1395t)
$40,000,000, for each of the fiscal
years 2010 through 2014, for the purpose
of making grants under this section to
eligible entities that are Federally
qualified health centers.
(4) PHYSICIANS- There are appropriated
from the Federal Supplementary Medical
Insurance Trust Fund under section 1841
of the Social Security Act (42 U.S.C.
1395t) $400,000,000, for each of the
fiscal years 2010 through 2014, for the
purpose of making grants under this
section to eligible entities that are
physicians or physician group practices.
(5) COMMUNITY MENTAL HEALTH CENTERS-
There are appropriated from the Federal
Supplementary Medical Insurance Trust
Fund under section 1841 of the Social
Security Act (42 U.S.C. 1395t)
$20,000,000, for each of the fiscal
years 2010 through 2014, for the purpose
of making grants under this section to
eligible entities that are community
mental health centers.
SEC. 3. ADJUSTMENTS TO MEDICARE PAYMENTS FOR
HEALTH INFORMATION TECHNOLOGY ENABLED QUALITY
SERVICES.
(a) Adjustments- The Secretary of Health and
Human Services (in this section referred to
as the `Secretary') shall establish a
methodology for making adjustments in
payment amounts under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.)
made to providers of services and suppliers
who--
(1) furnish items or services for which
payment is made under such title; and
(2) in the course of furnishing such
items and services, use health
information technology and technology
services with patient-specific
applications that the Secretary
determines improves the quality and
accuracy of clinical decision-making,
compliance, health care delivery, and
efficiency, such as electronic medical
records, electronic prescribing,
clinical decision support tools
integrating well-established national
treatment guidelines with continuous
quality improvement functions, and
computerized physician order entry with
clinical decision-support capabilities.
(b) Requirements- The methodology
established under subsection (a) shall--
(1) include the establishment of new
codes, modification of existing codes,
and adjustment of evaluation and
management modifiers to such codes, that
take into account the costs of
acquiring, using, and maintaining health
information technology and services with
patient-specific applications;
(2) first address adjustments for
payments for items and services related
to the diagnosis or treatment of heart
disease, cancer, stroke, diabetes,
chronic obstructive pulmonary disease
(COPD), and other diseases and
conditions that result in high
expenditures under the Medicare program
and for which effective health
information technology exists; and
(3) take into account estimated
aggregate annual savings in overall
payments under such title XVIII
attributable to the use of health
information technology and services with
patient-specific applications.
(c) Duration- The Secretary may reduce or
eliminate adjustments made to payments
pursuant to subsection (a) as payment
methodologies under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.)
are adjusted to reflect provider quality and
efficiency.
(d) Rule of Construction- In making national
coverage determinations under section
1862(a) of the Social Security Act (42
U.S.C. 1395y(a)) with respect to maintaining
health information technology and services
with patient-specific applications, in
determining whether the health information
technology and services are reasonable and
necessary for the diagnosis or treatment of
illness or injury or to improve the
functioning of a malformed body member, the
Secretary shall consider whether the health
information technology and services improve
the health of Medicare beneficiaries,
including the improvement of clinical
outcomes or cost-effectiveness of treatment.
(e) Definitions- In this section:
(1) PROVIDER OF SERVICES- The term
`provider of services' has the meaning
given that term under section 1861(u) of
the Social Security Act (42 U.S.C.
1395x(u)).
(2) SUPPLIER- The term `supplier' has
the meaning given that term under
section 1861(d) of such Act (42 U.S.C.
1395x(d)).
SEC. 4. INTEROPERABILITY.
(a) Development and Adoption of Standards-
(1) IN GENERAL- Not later than 2 years
after the date of enactment of this Act,
the Secretary of Health and Human
Services (in this section referred to as
the `Secretary') shall provide for the
development and adoption under programs
administered by the Secretary of
national data and communication health
information technology standards that
promote the efficient exchange of data
between varieties of provider health
information technology systems. In
carrying out the preceding sentence, the
Secretary may adopt existing standards
consistent with standards established
under subsections (b)(2)(B)(i) and
(e)(4) of section 1860D-4 of the Social
Security Act (42 U.S.C. 1395w-104).
(2) REQUIREMENTS- The standards
developed and adopted under paragraph
(1) shall be designed to--
(A) enable health information
technology to be used for the
collection and use of clinically
specific data;
(B) promote the interoperability of
health care information across
health care settings, including
reporting to the Secretary and other
Federal agencies; and
(C) facilitate clinical decision
support through the use of health
information technology.
(b) Implementation of Procedures for the
Secretary To Accept Data Using Standards-
(1) DATA FROM NEW HEALTH CARE REPORTING
REQUIREMENTS- Not later than January 1,
2011, the Secretary shall implement
procedures to enable the Department of
Health and Human Services to accept the
optional submission of data derived from
health care reporting requirements
established after the date of enactment
of this Act using data standards adopted
under this section.
(2) DATA FROM ALL REQUIREMENTS-
(A) IN GENERAL- Not later than
January 1, 2013, the Secretary shall
implement procedures to enable the
Department of Health and Human
Services to accept the optional
submission of data derived from all
health care reporting requirements
using data standards adopted under
this section.
(i) IN GENERAL- On and after
January 1, 2013, if an entity or
individual elects to submit data
to the Secretary using data
standards adopted under this
section, the Secretary, subject
to clause (ii), may not require
such entity or individual to
also submit such data in an
additional format.
(ii) EXCEPTION- The Secretary
may provide for an exception,
not to exceed 2 years, to the
limitation under clause (i) with
respect to certain types of data
if the Secretary determines that
such an exception is
appropriate.
SEC. 5. ELECTION TO EXPENSE HEALTH CARE
INFORMATICS SYSTEMS.
(a) In General- Part VI of subchapter B of
chapter 1 of the Internal Revenue Code of
1986 (relating to itemized deductions for
individuals and corporations) is amended by
inserting after section 179E the following
new section:
`SEC. 179F. HEALTH CARE INFORMATICS SYSTEM
EXPENDITURES.
`(a) Treatment of Expenditures-
`(1) IN GENERAL- An eligible entity may
elect to treat any qualified health care
informatics system expenditure which is
paid or incurred by the taxpayer as an
expense which is not chargeable to
capital account. Any expenditure which
is so treated shall be allowed as a
deduction.
`(2) ELECTION- An election under
paragraph (1) shall be made under rules
similar to the rules of section 179(c).
`(1) DOLLAR LIMITATION- With respect to
any eligible entity, the aggregate cost
which may be taken into account under
subsection (a)(1) for any taxable year
shall not exceed, when added to any cost
taken into account under this section in
any preceding taxable year, the dollar
amount specified under section
2(e)(2)(A)(ii) of the Health Information
Technology Act of 2009.
`(2) APPLICABLE RULES- For purposes of
this subsection, rules similar to the
rules of paragraphs (3) and (4) of
subsection (b) and paragraphs (6), (7),
and (8) of subsection (d) of section 179
shall apply.
`(c) Definitions and Special Rules- For
purposes of this section--
`(1) QUALIFIED HEALTH CARE INFORMATICS
SYSTEM EXPENDITURES-
`(A) IN GENERAL- The term `qualified
health care informatics system
expenditure' means, with respect to
any taxable year, any direct or
indirect costs incurred and properly
taken into account with respect to
the purchase or installation of
equipment and facilities relating to
any qualified health care
informatics system. Such term shall
include so much of the purchase
price paid by the lessor of
equipment and facilities subject to
a lease described in subparagraph
(B)(ii) as is attributable to
expenditures incurred by the lessee
which would otherwise be described
in the preceding sentence.
`(B) WHEN EXPENDITURES TAKEN INTO
ACCOUNT-
`(i) IN GENERAL- Qualified
health care informatics system
expenditures shall be taken into
account under this section only
with respect to equipment and
facilities--
`(I) the original use of
which commences with the
taxpayer, and
`(II) which are placed in
service after December 31,
2008, and before October 1,
2013.
`(ii) SALE-LEASEBACKS- For
purposes of clause (i), if
property--
`(I) is originally placed in
service after December 31,
2008, and before October 1,
2013, by any person, and
`(II) sold and leased back
by such person within 3
months after the date such
property was originally
placed in service,
such property shall be treated
as originally placed in service
not earlier than the date on
which such property is used
under the leaseback referred to
in subclause (II).
`(C) GRANTS, ETC. EXCLUDED- The term
`qualified health care informatics
system expenditure' shall not
include any amount to the extent
such amount is funded by any grant,
contract, or otherwise by another
person (or any governmental entity).
`(2) QUALIFIED HEALTH CARE INFORMATICS
SYSTEM- The term `qualified health care
informatics system' means a system
which--
`(A) has been individually approved
by the Secretary of Health and Human
Services for purposes of this
section,
`(B) consists of electronic health
record systems and other health
information technologies, and
`(C) meets the standards adopted by
the Secretary of Health and Human
Services under section 4 of the
Health Information Technology Act of
2009 by not later than the date
which is 60 days after the date of
the adoption of such standards.
`(3) ELIGIBLE ENTITY- The term `eligible
entity' has the meaning given such term
by section 2(a)(4) of the Health
Information Technology Act of 2009.
`(4) PROPERTY USED OUTSIDE THE UNITED
STATES, ETC., NOT QUALIFIED- No
expenditures shall be taken into account
under subsection (a)(1) with respect to
the portion of the cost of any property
referred to in section 50(b) or with
respect to the portion of the cost of
any property specified in an election
under section 179.
`(5) ORDINARY INCOME RECAPTURE- For
purposes of section 1245, the amount of
the deduction allowable under subsection
(a)(1) with respect to any property
which is of a character subject to the
allowance for depreciation shall be
treated as a deduction allowed for
depreciation under section 167.'.
(b) Conforming Amendments-
(1) Section 263(a)(1) of the Internal
Revenue Code of 1986 (relating to
capital expenditures) is amended by
striking `or' at the end of subparagraph
(K), by striking the period at the end
of subparagraph (L) and inserting `,
or', and by adding at the end the
following new subparagraph:
`(M) expenditures for which a
deduction is allowed under section
179F.'.
(2) The table of sections for part VI of
subchapter A of chapter 1 of such Code
is amended by inserting after the item
relating to section 179E the following
new item:
`Sec. 179F. Health care informatics
system expenditures.'.
(c) Effective Date- The amendments made by
this section shall apply to property placed
in service after December 31, 2008.
SEC. 6. ENSURING PRIVACY AND SECURITY.
Nothing in this Act (or the amendments made
by this Act) shall be construed to affect
the scope, substance, or applicability of--
(1) section 264 of the Health Insurance
Portability and Accountability Act of
1996 (42 U.S.C. 1320d-2 note);
(2) the provisions of part C of title XI
of the Social Security Act (42 U.S.C.
1320d et seq.); and
(3) any regulation issued pursuant to
any such section.
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