H. Rept. 111-7 - 111th Congress (2009-2010)
January 26, 2009

Report text available as:

Formatting necessary for an accurate reading of this legislative text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.




House Report 111-7 - ENERGY AND COMMERCE RECOVERY AND REINVESTMENT ACT




[House Report 111-7]
[From the U.S. Government Printing Office]



111th Congress                                              Rept. 111-7
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1
======================================================================
 
           ENERGY AND COMMERCE RECOVERY AND REINVESTMENT ACT

                                _______
                                

                January 26, 2009.--Ordered to be printed

                                _______
                                

 Mr. Waxman, from the Committee on Energy and Commmerce, submitted the 
                               following

                              R E P O R T

                             together with

                     MINORITY AND DISSENTING VIEWS

                        [To accompany H.R. 629]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 629) to provide energy and commerce provisions 
of the American Recovery and Reinvestment Act of 2009, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................    72
Background and Need for Legislation..............................   172
Legislative History..............................................    75
Section-by-Section...............................................    76
Explanation of Amendments........................................    94
Committee Consideration..........................................   100
Roll Call Votes..................................................   100
Application of Law to the Legislative Branch.....................   122
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................   122
Statement of General Performance Goals and Objectives............   122
Constitutional Authority Statement...............................   122
Federal Advisory Committee Act...................................   122
Unfunded Mandates Statement......................................   122
Earmark Identification...........................................   122
Committee Estimate...............................................   123
Budget Authority and Congressional Budget Office Cost Estimate...   124
Minority Views...................................................   130
Dissenting Views.................................................   166

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Energy and Commerce Recovery and 
Reinvestment Act''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.se TITLE I--BROADBAND COMMUNICATIONS
Sec. 1001. Inventory of Broadband Service Capability and Availability.
Sec. 1002. Wireless and Broadband Deployment Grant Programs.
Sec. 1003. National broadband plan.

                            TITLE II--ENERGY

Sec. 2001. Technical corrections to the Energy Independence and Security 
          Act of 2007.
Sec. 2002. Amendments to title XIII of the Energy Independence and 
          Security Act of 2007.
Sec. 2003. Renewable energy and electric power transmission loan 
          guarantee program.
Sec. 2004. Weatherization Assistance Program amendments.
Sec. 2005. Renewable electricity transmission study.
Sec. 2006. Additional State energy grants.
Sec. 2007. Inapplicability of limitation.

        TITLE III--HEALTH INSURANCE ASSISTANCE FOR THE UNEMPLOYED

Sec. 3001. Short title and table of contents of title.
Sec. 3002. Premium assistance for COBRA benefits and extension of COBRA 
          benefits for older or long-term employees.
Sec. 3003. Temporary optional Medicaid coverage for the unemployed.

                 TITLE IV--HEALTH INFORMATION TECHNOLOGY

Sec. 4001. Short title; table of contents of title.

         Subtitle A--Promotion of Health Information Technology

      Part 1--Improving Health Care Quality, Safety, and Efficiency

Sec. 4101. ONCHIT; standards development and adoption.
Sec. 4102. Technical amendment.
Sec. 4103. American technology required.

  Part 2--Application and Use of Adopted Health Information Technology 
                           Standards; Reports

Sec. 4111. Coordination of Federal activities with adopted standards and 
          implementation specifications.
Sec. 4112. Application to private entities.
Sec. 4113. Study and reports.

          Subtitle B--Testing of Health Information Technology

Sec. 4201. National Institute for Standards and Technology testing.
Sec. 4202. Research and development programs.

   Subtitle C--Incentives for the Use of Health Information Technology

                    Part I--Grants and Loans Funding

Sec. 4301. Grant, loan, and demonstration programs.

                        Part II--Medicare Program

Sec. 4311. Incentives for eligible professionals.
Sec. 4312. Incentives for hospitals.
Sec. 4313. Treatment of payments and savings; implementation funding.
Sec. 4314. Study on application of EHR payment incentives for providers 
          not receiving other incentive payments.

                       Part III--Medicaid Funding

Sec. 4321. Medicaid provider HIT adoption and operation payments; 
          implementation funding.

                           Subtitle D--Privacy

Sec. 4400. Definitions.

       Part I--Improved Privacy Provisions and Security Provisions

Sec. 4401. Application of security provisions and penalties to business 
          associates of covered entities; annual guidance on security 
          provisions.
Sec. 4402. Notification in the case of breach.
Sec. 4403. Education on Health Information Privacy.
Sec. 4404. Application of privacy provisions and penalties to business 
          associates of covered entities.
Sec. 4405. Restrictions on certain disclosures and sales of health 
          information; accounting of certain protected health 
          information disclosures; access to certain information in 
          electronic format.
Sec. 4406. Conditions on certain contacts as part of health care 
          operations.
Sec. 4407. Temporary breach notification requirement for vendors of 
          personal health records and other non-HIPAA covered entities.
Sec. 4408. Business associate contracts required for certain entities.
Sec. 4409. Clarification of application of wrongful disclosures criminal 
          penalties.
Sec. 4410. Improved enforcement.
Sec. 4411. Audits.
Sec. 4412. Securing individually identifiable health information.
Sec. 4413. Special rule for information to reduce medication errors and 
          improve patient safety.

 Part II--Relationship to Other Laws; Regulatory References; Effective 
                              Date; Reports

Sec. 4421. Relationship to other laws.
Sec. 4422. Regulatory references.
Sec. 4423. Effective date.
Sec. 4424. Studies, reports, guidance.

                      TITLE V--MEDICAID PROVISIONS

Sec. 5000. Table of contents of title.
Sec. 5001. Temporary increase of Medicaid FMAP.
Sec. 5002. Moratoria on certain regulations.
Sec. 5003. Transitional Medicaid assistance (TMA).
Sec. 5004. State eligibility option for family planning services.
Sec. 5005. Protections for Indians under Medicaid and CHIP.
Sec. 5006. Consultation on Medicaid and CHIP.
Sec. 5007. Temporary increase in DSH allotments during recession.

                   TITLE I--BROADBAND COMMUNICATIONS

SEC. 1001. INVENTORY OF BROADBAND SERVICE CAPABILITY AND AVAILABILITY.

  (a) Establishment.--To provide a comprehensive nationwide inventory 
of existing broadband service capability and availability, the National 
Telecommunications and Information Administration (``NTIA'') shall 
develop and maintain a broadband inventory map of the United States 
that identifies and depicts the geographic extent to which broadband 
service capability is deployed and available from a commercial provider 
or public provider throughout each State.
  (b) Public Availability and Interactivity.--Not later than 2 years 
after the date of enactment of this Act, the NTIA shall make the 
broadband inventory map developed and maintained pursuant to this 
section accessible by the public on a World Wide Web site of the NTIA 
in a form that is interactive and searchable.

SEC. 1002. WIRELESS AND BROADBAND DEPLOYMENT GRANT PROGRAMS.

  (a) Grants Authorized.--
          (1) In general.--The National Telecommunications and 
        Information Administration (``NTIA'') is authorized to carry 
        out a program to award grants to eligible entities for the non-
        recurring costs associated with the deployment of broadband 
        infrastructure in rural, suburban, and urban areas, in 
        accordance with the requirements of this section.
          (2) Program website.--The NTIA shall develop and maintain a 
        website to make publicly available information about the 
        program described in paragraph (1), including--
                  (A) each prioritization report submitted by a State 
                under subsection (b);
                  (B) a list of eligible entities that have applied for 
                a grant under this section, and the area or areas the 
                entity proposes to serve; and
                  (C) the status of each such application, whether 
                approved, denied, or pending.
  (b) State Priorities.--
          (1) Priorities report submission.--Not later than 75 days 
        after the date of enactment of this section, each State 
        intending to participate in the program under this section 
        shall submit to the NTIA a report indicating the geographic 
        areas of the State which--
                  (A) for the purposes of determining the need for 
                Wireless Deployment Grants under subsection (c), the 
                State considers to have the greatest priority for--
                          (i) wireless voice service in unserved areas; 
                        and
                          (ii) advanced wireless broadband service in 
                        underserved areas; and
                  (B) for the purposes of determining the need for 
                Broadband Deployment Grants under subsection (d), the 
                State considers to have the greatest priority for--
                          (i) basic broadband service in unserved 
                        areas; and
                          (ii) advanced broadband service in 
                        underserved areas.
          (2) Limitation.--The unserved and underserved areas 
        identified by a State in the report required by this subsection 
        shall not represent, in the aggregate, more than 20 percent of 
        the population of such State.
  (c) Wireless Deployment Grants.--
          (1) Authorized activity.--The NTIA shall award Wireless 
        Deployment Grants in accordance with this subsection from 
        amounts authorized for Wireless Deployment Grants by this 
        subtitle to eligible entities to deploy necessary 
        infrastructure for the provision of wireless voice service or 
        advanced wireless broadband service to end users in designated 
        areas.
          (2) Grant distribution.--The NTIA shall seek to distribute 
        grants, to the extent possible, so that 25 percent of the 
        grants awarded under this subsection shall be awarded to 
        eligible entities for providing wireless voice service to 
        unserved areas and 75 percent of grants awarded under this 
        subsection shall be awarded to eligible entities for providing 
        advanced wireless broadband service to underserved areas.
  (d) Broadband Deployment Grants.--
          (1) Authorized activity.--The NTIA shall award Broadband 
        Deployment Grants in accordance with this subsection from 
        amounts authorized for Broadband Deployment Grants by this 
        subtitle to eligible entities to deploy necessary 
        infrastructure for the provision of basic broadband service or 
        advanced broadband service to end users in designated areas.
          (2) Grant distribution.--The NTIA shall seek to distribute 
        grants, to the extent possible, so that 25 percent of the 
        grants awarded under this subsection shall be awarded to 
        eligible entities for providing basic broadband service to 
        unserved areas and 75 percent of grants awarded under this 
        subsection shall be awarded to eligible entities for providing 
        advanced broadband service to underserved areas.
  (e) Grant Requirements.--The NTIA shall--
          (1) adopt rules to protect against unjust enrichment; and
          (2) ensure that grant recipients--
                  (A) meet buildout requirements;
                  (B) maximize use of the supported infrastructure by 
                the public;
                  (C) operate basic and advanced broadband service 
                networks on an open access basis;
                  (D) operate advanced wireless broadband service on a 
                wireless open access basis; and
                  (E) adhere to the principles contained in the Federal 
                Communications Commission's broadband policy statement 
                (FCC 05-151, adopted August 5, 2005).
  (f) Applications.--
          (1) Submission.--To be considered for a grant awarded under 
        subsection (c) or (d), an eligible entity shall submit to the 
        NTIA an application at such time, in such manner, and 
        containing such information and assurances as the NTIA may 
        require. Such an application shall include--
                  (A) a cost-study estimate for serving the particular 
                geographic area to be served by the entity;
                  (B) a proposed build-out schedule to residential 
                households and small businesses in the area;
                  (C) for applicants for Wireless Deployment Grants 
                under subsection (c), a build-out schedule for 
                geographic coverage of such areas; and
                  (D) any other requirements the NTIA deems necessary.
          (2) Selection.--
                  (A) Notification.--The NTIA shall notify each 
                eligible entity that has submitted a complete 
                application whether the entity has been approved or 
                denied for a grant under this section in a timely 
                fashion.
                  (B) Grant distribution considerations.--In awarding 
                grants under this section, the NTIA shall, to the 
                extent practical--
                          (i) award not less than one grant in each 
                        State;
                          (ii) give substantial weight to whether an 
                        application is from an eligible entity to 
                        deploy infrastructure in an area that is an 
                        area--
                                  (I) identified by a State in a report 
                                submitted under subsection (b); or
                                  (II) in which the NTIA determines 
                                there will be a significant amount of 
                                public safety or emergency response use 
                                of the infrastructure;
                          (iii) consider whether an application from an 
                        eligible entity to deploy infrastructure in an 
                        area--
                                  (I) will, if approved, increase the 
                                affordability of, or subscribership to, 
                                service to the greatest population of 
                                underserved users in the area;
                                  (II) will, if approved, enhance 
                                service for health care delivery, 
                                education, or children to the greatest 
                                population of underserved users in the 
                                area;
                                  (III) contains concrete plans for 
                                enhancing computer ownership or 
                                computer literacy in the area;
                                  (IV) is from a recipient of more than 
                                20 percent matching grants from State, 
                                local, or private entities for service 
                                in the area and the extent of such 
                                commitment;
                                  (V) will, if approved, result in 
                                unjust enrichment because the eligible 
                                entity has applied for, or intends to 
                                apply for, support for the non-
                                recurring costs through another Federal 
                                program for service in the area; and
                                  (VI) will, if approved, significantly 
                                improve interoperable broadband 
                                communications systems available for 
                                use by public safety and emergency 
                                response; and
                          (iv) consider whether the eligible entity is 
                        a socially and economically disadvantaged small 
                        business concern, as defined under section 8(a) 
                        of the Small Business Act (15 U.S.C. 637).
  (g) Coordination and Consultation.--The NTIA shall coordinate with 
the Federal Communications Commission and shall consult with other 
appropriate Federal agencies in implementing this section.
  (h) Report Required.--The NTIA shall submit an annual report to the 
Committee on Energy and Commerce of the House of Representatives and 
the Committee on Commerce, Science, and Transportation of the Senate 
for 5 years assessing the impact of the grants funded under this 
section on the basis of the objectives and criteria described in 
subsection (f)(2)(B)(iii).
  (i) Rulemaking Authority.--The NTIA shall have the authority to 
prescribe such rules as necessary to carry out the purposes of this 
section.
  (j) Definitions.--For the purpose of this section--
          (1) the term ``advanced broadband service'' means a service 
        delivering data to the end user transmitted at a speed of at 
        least 45 megabits per second downstream and at least 15 
        megabits per second upstream;
          (2) the term ``advanced wireless broadband service'' means a 
        wireless service delivering to the end user data transmitted at 
        a speed of at least 3 megabits per second downstream and at 
        least 1 megabit per second upstream over an end-to-end internet 
        protocol wireless network;
          (3) the term ``basic broadband service'' means a service 
        delivering data to the end user transmitted at a speed of at 
        least 5 megabits per second downstream and at least 1 megabit 
        per second upstream;
          (4) the term ``eligible entity'' means--
                  (A) a provider of wireless voice service, advanced 
                wireless broadband service, basic broadband service, or 
                advanced broadband service, including a satellite 
                carrier that provides any such service;
                  (B) a State or unit of local government, or agency or 
                instrumentality thereof, that is or intends to be a 
                provider of any such service; and
                  (C) any other entity, including construction 
                companies, tower companies, backhaul companies, or 
                other service providers, that the NTIA authorizes by 
                rule to participate in the programs under this section, 
                if such other entity is required to provide access to 
                the supported infrastructure on a neutral, reasonable 
                basis to maximize use;
          (5) the term ``interoperable broadband communications 
        systems'' means communications systems which enable public 
        safety agencies to share information among local, State, 
        Federal, and tribal public safety agencies in the same area 
        using voice or data signals via advanced wireless broadband 
        service;
          (6) the term ``open access'' shall be defined by the Federal 
        Communications Commission not later than 45 days after the date 
        of enactment of this section;
          (7) the term ``State'' includes the District of Columbia and 
        the territories and possessions;
          (8) the term ``underserved area'' shall be defined by the 
        Federal Communications Commission not later than 45 days after 
        the date of enactment of this section;
          (9) the term ``unserved area'' shall be defined by the 
        Federal Communications Commission not later than 45 days after 
        the date of enactment of this section;
          (10) the term ``wireless open access'' shall be defined by 
        the Federal Communications Commission not later than 45 days 
        after the date of enactment of this section; and
          (11) the term ``wireless voice service'' means the provision 
        of two-way, real-time, voice communications using a mobile 
        service.
  (k) Review of Definitions.--Not later than 3 months after the date 
the NTIA makes a broadband inventory map of the United States 
accessible to the public pursuant to section 1001(b), the Federal 
Communications Commission shall review the definitions of ``underserved 
area'' and ``unserved area'', as defined by the Commission within 45 
days after the date of enactment of this Act (as required by paragraphs 
(8) and (9) of subsection (j)), and shall revise such definitions based 
on the data used by the NTIA to develop and maintain such map.

SEC. 1003. NATIONAL BROADBAND PLAN.

  (a) Report Required.--Not later than 1 year after the date of 
enactment of this section, the Federal Communications Commission shall 
submit to the Committee on Energy and Commerce of the House of 
Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate, a report containing a national broadband 
plan.
  (b) Contents of Plan.--The national broadband plan required by this 
section shall seek to ensure that all people of the United States have 
access to broadband capability and shall establish benchmarks for 
meeting that goal. The plan shall also include--
          (1) an analysis of the most effective and efficient 
        mechanisms for ensuring broadband access by all people of the 
        United States;
          (2) a detailed strategy for achieving affordability of such 
        service and maximum utilization of broadband infrastructure and 
        service by the public; and
          (3) a plan for use of broadband infrastructure and services 
        in advancing consumer welfare, civic participation, public 
        safety and homeland security, community development, health 
        care delivery, energy independence and efficiency, education, 
        worker training, private sector investment, entrepreneurial 
        activity, job creation and economic growth, and other national 
        purposes.

                            TITLE II--ENERGY

SEC. 2001. TECHNICAL CORRECTIONS TO THE ENERGY INDEPENDENCE AND 
                    SECURITY ACT OF 2007.

  (a) Section 543(a) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17153(a)) is amended--
          (1) by redesignating paragraphs (2) through (4) as paragraphs 
        (3) through (5), respectively; and
          (2) by striking paragraph (1) and inserting the following:
          ``(1) 34 percent to eligible units of local government-
        alternative 1, in accordance with subsection (b);
          ``(2) 34 percent to eligible units of local government-
        alternative 2, in accordance with subsection (b);''.
  (b) Section 543(b) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17153(b)) is amended by striking ``subsection (a)(1)'' 
and inserting ``subsection (a)(1) or (2)''.
  (c) Section 548(a)(1) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17158(a)(1)) is amending by striking ``; provided'' and 
all that follows through ``541(3)(B)''.

SEC. 2002. AMENDMENTS TO TITLE XIII OF THE ENERGY INDEPENDENCE AND 
                    SECURITY ACT OF 2007.

  Title XIII of the Energy Independence and Security Act of 2007 (42 
U.S.C. 17381 and following) is amended as follows:
          (1) By amending subparagraph (A) of section 1304(b)(3) to 
        read as follows:
                  ``(A) In general.--In carrying out the initiative, 
                the Secretary shall provide financial support to smart 
                grid demonstration projects in urban, suburban, and 
                rural areas, including areas where electric system 
                assets are controlled by tax-exempt entities and areas 
                where electric system assets are controlled by 
                investor-owned utilities.''.
          (2) By amending subparagraph (C) of section 1304(b)(3) to 
        read as follows:
                  ``(C) Federal share of cost of technology 
                investments.--The Secretary shall provide to an 
                electric utility described in subparagraph (B) or to 
                other parties financial assistance for use in paying an 
                amount equal to not more than 50 percent of the cost of 
                qualifying advanced grid technology investments made by 
                the electric utility or other party to carry out a 
                demonstration project.''.
          (3) By inserting after section 1304(b)(3)(D) the following 
        new subparagraphs:
                  ``(E) Availability of data.--The Secretary shall 
                establish and maintain a smart grid information 
                clearinghouse in a timely manner which will make data 
                from smart grid demonstration projects and other 
                sources available to the public. As a condition of 
                receiving financial assistance under this subsection, a 
                utility or other participant in a smart grid 
                demonstration project shall provide such information as 
                the Secretary may require to become available through 
                the smart grid information clearinghouse in the form 
                and within the timeframes as directed by the Secretary. 
                The Secretary shall assure that business proprietary 
                information and individual customer information is not 
                included in the information made available through the 
                clearinghouse.
                  ``(F) Open internet-based protocols and standards.--
                The Secretary shall require as a condition of receiving 
                funding under this subsection that demonstration 
                projects utilize open Internet-based protocols and 
                standards if available.''.
          (4) By amending paragraph (2) of section 1304(c) to read as 
        follows:
          ``(2) to carry out subsection (b), such sums as may be 
        necessary.''.
          (5) By amending subsection (a) of section 1306 by striking 
        ``reimbursement of one-fifth (20 percent)'' and inserting 
        ``grants of up to one-half (50 percent)''.
          (6) By striking the last sentence of subsection (b)(9) of 
        section 1306.
          (7) By striking ``are eligible for'' in subsection (c)(1) of 
        section 1306 and inserting ``utilize''.
          (8) By amending subsection (e) of section 1306 to read as 
        follows:
  ``(e) Procedures and Rules.--The Secretary shall--
          ``(1) establish within 60 days after the enactment of the 
        Energy and Commerce Recovery and Reinvestment Act procedures by 
        which applicants can obtain grants of not more than one-half of 
        their documented costs;
          ``(2) require as a condition of receiving a grant under this 
        section that grant recipients utilize open Internet-based 
        protocols and standards if available;
          ``(3) establish procedures to ensure that there is no 
        duplication or multiple payment or recovery for the same 
        investment or costs, that the grant goes to the party making 
        the actual expenditures for qualifying smart grid investments, 
        and that the grants made have significant effect in encouraging 
        and facilitating the development of a smart grid;
          ``(4) maintain public records of grants made, recipients, and 
        qualifying smart grid investments which have received grants;
          ``(5) establish procedures to provide advance payment of 
        moneys up to the full amount of the grant award; and
          ``(6) have and exercise the discretion to deny grants for 
        investments that do not qualify in the reasonable judgment of 
        the Secretary.''.

SEC. 2003. RENEWABLE ENERGY AND ELECTRIC POWER TRANSMISSION LOAN 
                    GUARANTEE PROGRAM.

  (a) Amendment.--Title XVII of the Energy Policy Act of 2005 (42 
U.S.C. 16511 et seq.) is amended by adding the following at the end:

``SEC. 1705. TEMPORARY PROGRAM FOR RAPID DEPLOYMENT OF RENEWABLE ENERGY 
                    AND ELECTRIC POWER TRANSMISSION PROJECTS.

  ``(a) In General.--Notwithstanding section 1703, the Secretary may 
make guarantees under this section only for commercial technology 
projects under subsection (b) that will commence construction not later 
than September 30, 2011.
  ``(b) Categories.--Projects from only the following categories shall 
be eligible for support under this section:
          ``(1) Renewable energy systems, including incremental 
        hydropower, that generate electricity.
          ``(2) Electric power transmission systems, including 
        upgrading and reconductoring projects.
          ``(3) Leading edge biofuel projects that will use 
        technologies performing at the pilot or demonstration scale 
        that the Secretary determines are likely to become commercial 
        technologies and will produce transportation fuels that 
        substantially reduce life-cycle greenhouse gas emissions 
        compared to other transportation fuels.
  ``(c) Factors Relating to Electric Power Transmission Systems.--In 
determining to make guarantees to projects described in subsection 
(b)(2), the Secretary shall consider the following factors:
          ``(1) The viability of the project without guarantees.
          ``(2) The availability of other Federal and State incentives.
          ``(3) The importance of the project in meeting reliability 
        needs.
          ``(4) The effect of the project in meeting a State or 
        region's environment (including climate change) and energy 
        goals.
  ``(d) Wage Rate Requirements.--The Secretary shall require that each 
recipient of support under this section provide reasonable assurance 
that all laborers and mechanics employed in the performance of the 
project for which the assistance is provided, including those employed 
by contractors or subcontractors, will be paid wages at rates not less 
than those prevailing on similar work in the locality as determined by 
the Secretary of Labor in accordance with subchapter IV of chapter 31 
of part A of subtitle II of title 40, United States Code (commonly 
referred to as the `Davis-Bacon Act').
  ``(e) Limitation.--Funding under this section for projects described 
in subsection (b)(3) shall not exceed $500,000,000.
  ``(f) Sunset.--The authority to enter into guarantees under this 
section shall expire on September 30, 2011.''.
  (b) Table of Contents Amendment.--The table of contents for the 
Energy Policy Act of 2005 is amended by inserting after the item 
relating to section 1704 the following new item:

``Sec. 1705. Temporary program for rapid deployment of renewable energy 
          and electric power transmission projects.''.

SEC. 2004. WEATHERIZATION ASSISTANCE PROGRAM AMENDMENTS.

  (a) Income Level.--Section 412(7) of the Energy Conservation and 
Production Act (42 U.S.C. 6862(7)) is amended by striking ``150 
percent'' both places it appears and inserting ``200 percent''.
  (b) Assistance Level Per Dwelling Unit.-- Section 415(c)(1) of the 
Energy Conservation and Production Act (42 U.S.C. 6865(c)(1)) is 
amended by striking ``$2,500'' and inserting ``$5,000''.
  (c) Effective Use of Funds.--In providing funds made available by 
this Act for the Weatherization Assistance Program, the Secretary may 
encourage States to give priority to using such funds for the most 
cost-effective efficiency activities, which may include insulation of 
attics, if, in the Secretary's view, such use of funds would increase 
the effectiveness of the program.

SEC. 2005. RENEWABLE ELECTRICITY TRANSMISSION STUDY.

  In completing the 2009 National Electric Transmission Congestion 
Study, the Secretary of Energy shall include--
          (1) an analysis of the significant potential sources of 
        renewable energy that are constrained in accessing appropriate 
        market areas by lack of adequate transmission capacity;
          (2) an analysis of the reasons for failure to develop the 
        adequate transmission capacity;
          (3) recommendations for achieving adequate transmission 
        capacity;
          (4) an analysis of the extent to which legal challenges filed 
        at the State and Federal level are delaying the construction of 
        transmission necessary to access renewable energy; and
          (5) an explanation of assumptions and projections made in the 
        Study, including--
                  (A) assumptions and projections relating to energy 
                efficiency improvements in each load center;
                  (B) assumptions and projections regarding the 
                location and type of projected new generation capacity; 
                and
                  (C) assumptions and projections regarding projected 
                deployment of distributed generation infrastructure.

SEC. 2006. ADDITIONAL STATE ENERGY GRANTS.

  (a) In General.--Amounts appropriated for the State Energy Program 
under the American Recovery and Reinvestment Act of 2009 shall be 
available to the Secretary of Energy for making additional grants under 
part D of title III of the Energy Policy and Conservation Act (42 
U.S.C. 6321 et seq.). The Secretary shall make grants under this 
section in excess of the base allocation established for a State under 
regulations issued pursuant to the authorization provided in section 
365(f) of such Act only if the governor of the recipient State notifies 
the Secretary of Energy that the governor will seek, to the extent of 
his or her authority, to ensure that each of the following will occur:
          (1) The applicable State regulatory authority will implement 
        the following regulatory policies for each electric and gas 
        utility with respect to which the State regulatory authority 
        has ratemaking authority:
                  (A) Policies that ensure that a utility's recovery of 
                prudent fixed costs of service is timely and 
                independent of its retail sales, without in the process 
                shifting prudent costs from variable to fixed charges. 
                This cost shifting constraint shall not apply to rate 
                designs adopted prior to the date of enactment of this 
                Act.
                  (B) Cost recovery for prudent investments by 
                utilities in energy efficiency.
                  (C) An earnings opportunity for utilities associated 
                with cost-effective energy efficiency savings.
          (2) The State, or the applicable units of local government 
        that have authority to adopt building codes, will implement the 
        following:
                  (A) A building energy code (or codes) for residential 
                buildings that meets or exceeds the most recently 
                published International Energy Conservation Code, or 
                achieves equivalent or greater energy savings.
                  (B) A building energy code (or codes) for commercial 
                buildings throughout the State that meets or exceeds 
                the ANSI/ASHRAE/IESNA Standard 90.1-2007, or achieves 
                equivalent or greater energy savings.
                  (C) A plan for the jurisdiction achieving compliance 
                with the building energy code or codes described in 
                subparagraphs (A) and (B) within 8 years of the date of 
                enactment of this Act in at least 90 percent of new and 
                renovated residential and commercial building space. 
                Such plan shall include active training and enforcement 
                programs and measurement of the rate of compliance each 
                year.
          (3) The State will to the extent practicable prioritize the 
        grants toward funding energy efficiency and renewable energy 
        programs, including--
                  (A) the expansion of existing energy efficiency 
                programs approved by the State or the appropriate 
                regulatory authority, including energy efficiency 
                retrofits of buildings and industrial facilities, that 
                are funded--
                          (i) by the State; or
                          (ii) through rates under the oversight of the 
                        applicable regulatory authority, to the extent 
                        applicable;
                  (B) the expansion of existing programs, approved by 
                the State or the appropriate regulatory authority, to 
                support renewable energy projects and deployment 
                activities, including programs operated by entities 
                which have the authority and capability to manage and 
                distribute grants, loans, performance incentives, and 
                other forms of financial assistance; and
                  (C) cooperation and joint activities between States 
                to advance more efficient and effective use of this 
                funding to support the priorities described in this 
                paragraph.
  (b) State Match.--The State cost share requirement under the item 
relating to ``DEPARTMENT OF ENERGY; energy conservation'' in title II 
of the Department of the Interior and Related Agencies Appropriations 
Act, 1985 (42 U.S.C. 6323a; 98 Stat. 1861) shall not apply to 
assistance provided under this section.
  (c) Equipment and Materials for Energy Efficiency Measures.--No 
limitation on the percentage of funding that may be used for the 
purchase and installation of equipment and materials for energy 
efficiency measures under grants provided under part D of title III of 
the Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) shall 
apply to assistance provided under this section.

SEC. 2007. INAPPLICABILITY OF LIMITATION.

  The limitations in section 399A(f)(2), (3), and (4) of the Energy 
Policy and Conservation Act (42 U.S.C. 6371h-1(f)(2), (3), and (4)) 
shall not apply to grants funded with appropriations provided by this 
Act, except that such grant funds shall be available for not more than 
an amount equal to 80 percent of the costs of the project for which the 
grant is provided.

       TITLE III--HEALTH INSURANCE ASSISTANCE FOR THE UNEMPLOYED

SEC. 3001. SHORT TITLE AND TABLE OF CONTENTS OF TITLE.

  (a) Short Title of Title.--This title may be cited as the ``Health 
Insurance Assistance for the Unemployed Act of 2009''.
  (b) Table of Contents of Title.--The table of contents of this title 
is as follows:

Sec. 3001. Short title and table of contents of title.
Sec. 3002. Premium assistance for COBRA benefits and extension of COBRA 
          benefits for older or long-term employees.
Sec. 3003. Temporary optional Medicaid coverage for the unemployed.

SEC. 3002. PREMIUM ASSISTANCE FOR COBRA BENEFITS AND EXTENSION OF COBRA 
                    BENEFITS FOR OLDER OR LONG-TERM EMPLOYEES.

  (a) Premium Assistance for COBRA Continuation Coverage for 
Individuals and Their Families.--
          (1) Provision of premium assistance.--
                  (A) Reduction of premiums payable.--In the case of 
                any premium for a period of coverage beginning on or 
                after the date of the enactment of this Act for COBRA 
                continuation coverage with respect to any assistance 
                eligible individual, such individual shall be treated 
                for purposes of any COBRA continuation provision as 
                having paid the amount of such premium if such 
                individual pays 35 percent of the amount of such 
                premium (as determined without regard to this 
                subsection).
                  (B) Premium reimbursement.--For provisions providing 
                the balance of such premium, see section 6431 of the 
                Internal Revenue Code of 1986, as added by paragraph 
                (12).
          (2) Limitation of period of premium assistance.--
                  (A) In general.--Paragraph (1)(A) shall not apply 
                with respect to any assistance eligible individual for 
                months of coverage beginning on or after the earlier 
                of--
                          (i) the first date that such individual is 
                        eligible for coverage under any other group 
                        health plan (other than coverage consisting of 
                        only dental, vision, counseling, or referral 
                        services (or a combination thereof), coverage 
                        under a health reimbursement arrangement or a 
                        health flexible spending arrangement, or 
                        coverage of treatment that is furnished in an 
                        on-site medical facility maintained by the 
                        employer and that consists primarily of first-
                        aid services, prevention and wellness care, or 
                        similar care (or a combination thereof)) or is 
                        eligible for benefits under title XVIII of the 
                        Social Security Act, or
                          (ii) the earliest of--
                                  (I) the date which is 12 months after 
                                the first day of the first month that 
                                paragraph (1)(A) applies with respect 
                                to such individual,
                                  (II) the date following the 
                                expiration of the maximum period of 
                                continuation coverage required under 
                                the applicable COBRA continuation 
                                coverage provision, or
                                  (III) the date following the 
                                expiration of the period of 
                                continuation coverage allowed under 
                                paragraph (4)(B)(ii).
                  (B) Timing of eligibility for additional coverage.--
                For purposes of subparagraph (A)(i), an individual 
                shall not be treated as eligible for coverage under a 
                group health plan before the first date on which such 
                individual could be covered under such plan.
                  (C) Notification requirement.--An assistance eligible 
                individual shall notify in writing the group health 
                plan with respect to which paragraph (1)(A) applies if 
                such paragraph ceases to apply by reason of 
                subparagraph (A)(i). Such notice shall be provided to 
                the group health plan in such time and manner as may be 
                specified by the Secretary of Labor.
          (3) Assistance eligible individual.--For purposes of this 
        section, the term ``assistance eligible individual'' means any 
        qualified beneficiary if--
                  (A) at any time during the period that begins with 
                September 1, 2008, and ends with December 31, 2009, 
                such qualified beneficiary is eligible for COBRA 
                continuation coverage,
                  (B) such qualified beneficiary elects such coverage,
                  (C) the qualifying event with respect to the COBRA 
                continuation coverage consists of the involuntary 
                termination of the covered employee's employment and 
                occurred during such period, and
                  (D) at the time of the election such qualified 
                beneficiary's annual income is less than $1,000,000.
          (4) Extension of election period and effect on coverage.--
                  (A) In general.--Notwithstanding section 605(a) of 
                the Employee Retirement Income Security Act of 1974, 
                section 4980B(f)(5)(A) of the Internal Revenue Code of 
                1986, section 2205(a) of the Public Health Service Act, 
                and section 8905a(c)(2) of title 5, United States Code, 
                in the case of an individual who is a qualified 
                beneficiary described in paragraph (3)(A) as of the 
                date of the enactment of this Act and has not made the 
                election referred to in paragraph (3)(B) as of such 
                date, such individual may elect the COBRA continuation 
                coverage under the COBRA continuation coverage 
                provisions containing such sections during the 60-day 
                period commencing with the date on which the 
                notification required under paragraph (7)(C) is 
                provided to such individual.
                  (B) Commencement of coverage; no reach-back.--Any 
                COBRA continuation coverage elected by a qualified 
                beneficiary during an extended election period under 
                subparagraph (A)--
                          (i) shall commence on the date of the 
                        enactment of this Act, and
                          (ii) shall not extend beyond the period of 
                        COBRA continuation coverage that would have 
                        been required under the applicable COBRA 
                        continuation coverage provision if the coverage 
                        had been elected as required under such 
                        provision.
                  (C) Preexisting conditions.--With respect to a 
                qualified beneficiary who elects COBRA continuation 
                coverage pursuant to subparagraph (A), the period--
                          (i) beginning on the date of the qualifying 
                        event, and
                          (ii) ending with the day before the date of 
                        the enactment of this Act,
                shall be disregarded for purposes of determining the 
                63-day periods referred to in section 701)(2) of the 
                Employee Retirement Income Security Act of 1974, 
                section 9801(c)(2) of the Internal Revenue Code of 
                1986, and section 2701(c)(2) of the Public Health 
                Service Act.
          (5) Expedited review of denials of premium assistance.--In 
        any case in which an individual requests treatment as an 
        assistance eligible individual and is denied such treatment by 
        the group health plan by reason of such individual's 
        ineligibility for COBRA continuation coverage, the Secretary of 
        Labor (or the Secretary of Health and Human services in 
        connection with COBRA continuation coverage which is provided 
        other than pursuant to part 6 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974), in 
        consultation with the Secretary of the Treasury, shall provide 
        for expedited review of such denial. An individual shall be 
        entitled to such review upon application to such Secretary in 
        such form and manner as shall be provided by such Secretary. 
        Such Secretary shall make a determination regarding such 
        individual's eligibility within 10 business days after receipt 
        of such individual's application for review under this 
        paragraph.
          (6) Disregard of subsidies for purposes of federal and state 
        programs.--Notwithstanding any other provision of law, any 
        premium reduction with respect to an assistance eligible 
        individual under this subsection shall not be considered income 
        or resources in determining eligibility for, or the amount of 
        assistance or benefits provided under, any other public benefit 
        provided under Federal law or the law of any State or political 
        subdivision thereof.
          (7) Notices to individuals.--
                  (A) General notice.--
                          (i) In general.--In the case of notices 
                        provided under section 606(4) of the Employee 
                        Retirement Income Security Act of 1974 (29 
                        U.S.C. 1166(4)), section 4980B(f)(6)(D) of the 
                        Internal Revenue Code of 1986, section 2206(4) 
                        of the Public Health Service Act (42 U.S.C. 
                        300bb-6(4)), or section 8905a(f)(2)(A) of title 
                        5, United States Code, with respect to 
                        individuals who, during the period described in 
                        paragraph (3)(A), become entitled to elect 
                        COBRA continuation coverage, such notices shall 
                        include an additional notification to the 
                        recipient of the availability of premium 
                        reduction with respect to such coverage under 
                        this subsection.
                          (ii) Alternative notice.--In the case of 
                        COBRA continuation coverage to which the notice 
                        provision under such sections does not apply, 
                        the Secretary of Labor, in consultation with 
                        the Secretary of the Treasury and the Secretary 
                        of Health and Human Services, shall, in 
                        coordination with administrators of the group 
                        health plans (or other entities) that provide 
                        or administer the COBRA continuation coverage 
                        involved, provide rules requiring the provision 
                        of such notice.
                          (iii) Form.--The requirement of the 
                        additional notification under this subparagraph 
                        may be met by amendment of existing notice 
                        forms or by inclusion of a separate document 
                        with the notice otherwise required.
                  (B) Specific requirements.--Each additional 
                notification under subparagraph (A) shall include--
                          (i) the forms necessary for establishing 
                        eligibility for premium reduction under this 
                        subsection,
                          (ii) the name, address, and telephone number 
                        necessary to contact the plan administrator and 
                        any other person maintaining relevant 
                        information in connection with such premium 
                        reduction,
                          (iii) a description of the extended election 
                        period provided for in paragraph (4)(A),
                          (iv) a description of the obligation of the 
                        qualified beneficiary under paragraph (2)(C) to 
                        notify the plan providing continuation coverage 
                        of eligibility for subsequent coverage under 
                        another group health plan or eligibility for 
                        benefits under title XVIII of the Social 
                        Security Act and the penalty provided for 
                        failure to so notify the plan, and
                          (v) a description, displayed in a prominent 
                        manner, of the qualified beneficiary's right to 
                        a reduced premium and any conditions on 
                        entitlement to the reduced premium.
                  (C) Notice relating to retroactive coverage.--In the 
                case of an individual described in paragraph (3)(A) who 
                has elected COBRA continuation coverage as of the date 
                of enactment of this Act or an individual described in 
                paragraph (4)(A), the administrator of the group health 
                plan (or other entity) involved shall provide (within 
                60 days after the date of enactment of this Act) for 
                the additional notification required to be provided 
                under subparagraph (A).
                  (D) Model notices.--Not later than 30 days after the 
                date of enactment of this Act, the Secretary of the 
                Labor, in consultation with the Secretary of the 
                Treasury and the Secretary of Health and Human 
                Services, shall prescribe models for the additional 
                notification required under this paragraph.
          (8) Safeguards.--The Secretary of the Treasury shall provide 
        such rules, procedures, regulations, and other guidance as may 
        be necessary and appropriate to prevent fraud and abuse under 
        this subsection.
          (9) Outreach.--The Secretary of Labor, in consultation with 
        the Secretary of the Treasury and the Secretary of Health and 
        Human Services, shall provide outreach consisting of public 
        education and enrollment assistance relating to premium 
        reduction provided under this subsection. Such outreach shall 
        target employers, group health plan administrators, public 
        assistance programs, States, insurers, and other entities as 
        determined appropriate by such Secretaries. Such outreach shall 
        include an initial focus on those individuals electing 
        continuation coverage who are referred to in paragraph (7)(C). 
        Information on such premium reduction, including enrollment, 
        shall also be made available on website of the Departments of 
        Labor, Treasury, and Health and Human Services.
          (10) Definitions.--For purposes of this subsection--
                  (A) Administrator.--The term ``administrator'' has 
                the meaning given such term in section 3(16) of the 
                Employee Retirement Income Security Act of 1974.
                  (B) COBRA continuation coverage.--The term ``COBRA 
                continuation coverage'' means continuation coverage 
                provided pursuant to part 6 of subtitle B of title I of 
                the Employee Retirement Income Security Act of 1974 
                (other than under section 609), title XXII of the 
                Public Health Service Act, section 4980B of the 
                Internal Revenue Code of 1986 (other than subsection 
                (f)(1) of such section insofar as it relates to 
                pediatric vaccines), or section 8905a of title 5, 
                United States Code, or under a State program that 
                provides continuation coverage comparable to such 
                continuation coverage. Such term does not include 
                coverage under a health flexible spending arrangement.
                  (C) COBRA continuation provision.--The term ``COBRA 
                continuation provision'' means the provisions of law 
                described in subparagraph (B).
                  (D) Covered employee.--The term ``covered employee'' 
                has the meaning given such term in section 607(2) of 
                the Employee Retirement Income Security Act of 1974.
                  (E) Qualified beneficiary.--The term ``qualified 
                beneficiary'' has the meaning given such term in 
                section 607(3) of the Employee Retirement Income 
                Security Act of 1974.
                  (F) Group health plan.--The term ``group health 
                plan'' has the meaning given such term in section 
                607(1) of the Employee Retirement Income Security Act 
                of 1974.
                  (G) State.--The term ``State'' includes the District 
                of Columbia, the Commonwealth of Puerto Rico, the 
                Virgin Islands, Guam, American Samoa, and the 
                Commonwealth of the Northern Mariana Islands.
          (11) Reports.--
                  (A) Interim report.--The Secretary of the Treasury 
                shall submit an interim report to the Committee on 
                Education and Labor, the Committee on Ways and Means, 
                and the Committee on Energy and Commerce of the House 
                of Representatives and the Committee on Health, 
                Education, Labor, and Pensions and the Committee on 
                Finance of the Senate regarding the premium reduction 
                provided under this subsection that includes--
                          (i) the number of individuals provided such 
                        assistance as of the date of the report; and
                          (ii) the total amount of expenditures 
                        incurred (with administrative expenditures 
                        noted separately) in connection with such 
                        assistance as of the date of the report.
                  (B) Final report.--As soon as practicable after the 
                last period of COBRA continuation coverage for which 
                premium reduction is provided under this section, the 
                Secretary of the Treasury shall submit a final report 
                to each Committee referred to in subparagraph (A) that 
                includes--
                          (i) the number of individuals provided 
                        premium reduction under this section;
                          (ii) the average dollar amount (monthly and 
                        annually) of premium reductions provided to 
                        such individuals; and
                          (iii) the total amount of expenditures 
                        incurred (with administrative expenditures 
                        noted separately) in connection with premium 
                        reduction under this section.
          (12) COBRA premium assistance.--
                  (A) In general.--Subchapter B of chapter 65 of the 
                Internal Revenue Code of 1986 is amended by adding at 
                the end the following new section:

``SEC. 6431. COBRA PREMIUM ASSISTANCE.

  ``(a) In General.--The entity to whom premiums are payable under 
COBRA continuation coverage shall be reimbursed for the amount of 
premiums not paid by plan beneficiaries by reason of section 3002(a) of 
the Health Insurance Assistance for the Unemployed Act of 2009. Such 
amount shall be treated as a credit against the requirement of such 
entity to make deposits of payroll taxes. To the extent that such 
amount exceeds the amount of such taxes, the Secretary shall pay to 
such entity the amount of such excess. No payment may be made under 
this subsection to an entity with respect to any assistance eligible 
individual until after such entity has received the reduced premium 
from such individual required under section 3002(a)(1)(A) of such Act.
  ``(b) Payroll Taxes.--For purposes of this section, the term `payroll 
taxes' means--
          ``(1) amounts required to be deducted and withheld for the 
        payroll period under section 3401 (relating to wage 
        withholding),
          ``(2) amounts required to be deducted for the payroll period 
        under section 3102 (relating to FICA employee taxes), and
          ``(3) amounts of the taxes imposed for the payroll period 
        under section 3111 (relating to FICA employer taxes).
  ``(c) Treatment of Credit.--Except as otherwise provided by the 
Secretary, the credit described in subsection (a) shall be applied as 
though the employer had paid to the Secretary, on the day that the 
qualified beneficiary's premium payment is received, an amount equal to 
such credit.
  ``(d) Treatment of Payment.--For purposes of section 1324(b)(2) of 
title 31, United States Code, any payment under this section shall be 
treated in the same manner as a refund of the credit under section 35.
  ``(e) Reporting.--
          ``(1) In general.--Each entity entitled to reimbursement 
        under subsection (a) for any period shall submit such reports 
        as the Secretary may require, including--
                  ``(A) an attestation of involuntary termination of 
                employment for each covered employee on the basis of 
                whose termination entitlement to reimbursement is 
                claimed under subsection (a), and
                  ``(B) a report of the amount of payroll taxes offset 
                under subsection (a) for the reporting period and the 
                estimated offsets of such taxes for the subsequent 
                reporting period in connection with reimbursements 
                under subsection (a).
          ``(2) Timing of reports relating to amount of payroll 
        taxes.--Reports required under paragraph (1)(B) shall be 
        submitted at the same time as deposits of taxes imposed by 
        chapters 21, 22, and 24 or at such time as is specified by the 
        Secretary.
  ``(f) Regulations.--The Secretary may issue such regulations or other 
guidance as may be necessary or appropriate to carry out this section, 
including the requirement to report information or the establishment of 
other methods for verifying the correct amounts of payments and credits 
under this section.''.
                  (B) Social security trust funds held harmless.--In 
                determining any amount transferred or appropriated to 
                any fund under the Social Security Act, section 6431 of 
                the Internal Revenue Code of 1986 shall not be taken 
                into account.
                  (C) Clerical amendment.--The table of sections for 
                subchapter B of chapter 65 of the Internal Revenue Code 
                of 1986 is amended by adding at the end the following 
                new item:

``Sec. 6431. COBRA premium assistance.''.
                  (D) Effective date.--The amendments made by this 
                paragraph shall apply to premiums to which subsection 
                (a)(1)(A) applies.
          (13) Penalty for failure to notify health plan of cessation 
        of eligibility for premium assistance.--
                  (A) In general.--Part I of subchapter B of chapter 68 
                of the Internal Revenue Code of 1986 is amended by 
                adding at the end the following new section:

``SEC. 6720C. PENALTY FOR FAILURE TO NOTIFY HEALTH PLAN OF CESSATION OF 
                    ELIGIBILITY FOR COBRA PREMIUM ASSISTANCE.

  ``(a) In General.--Any person required to notify a group health plan 
under section 3002(a)(2)(C)) of the Health Insurance Assistance for the 
Unemployed Act of 2009 who fails to make such a notification at such 
time and in such manner as the Secretary of Labor may require shall pay 
a penalty of 110 percent of the premium reduction provided under such 
section after termination of eligibility under such subsection.
  ``(b) Reasonable Cause Exception.--No penalty shall be imposed under 
subsection (a) with respect to any failure if it is shown that such 
failure is due to reasonable cause and not to willful neglect.''.
                  (B) Clerical amendment.--The table of sections of 
                part I of subchapter B of chapter 68 of such Code is 
                amended by adding at the end the following new item:

``Sec. 6720C. Penalty for failure to notify health plan of cessation of 
          eligibility for COBRA premium assistance.''.
                  (C) Effective date.--The amendments made by this 
                paragraph shall apply to failures occurring after the 
                date of the enactment of this Act.
          (14) Coordination with hctc.--
                  (A) In general.--Subsection (g) of section 35 of the 
                Internal Revenue Code of 1986 is amended by 
                redesignating paragraph (9) as paragraph (10) and 
                inserting after paragraph (8) the following new 
                paragraph:
          ``(9) COBRA premium assistance.--In the case of an assistance 
        eligible individual who receives premium reduction for COBRA 
        continuation coverage under section 3002(a) of the Health 
        Insurance Assistance for the Unemployed Act of 2009 for any 
        month during the taxable year, such individual shall not be 
        treated as an eligible individual, a certified individual, or a 
        qualifying family member for purposes of this section or 
        section 7527 with respect to such month.''.
                  (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to taxable years ending 
                after the date of the enactment of this Act.
          (15) Exclusion of cobra premium assistance from gross 
        income.--
                  (A) In general.--Part III of subchapter B of chapter 
                1 of the Internal Revenue Code of 1986 is amended by 
                inserting after section 139B the following new section:

``SEC. 139C. COBRA PREMIUM ASSISTANCE.

  ``In the case of an assistance eligible individual (as defined in 
section 3002 of the Health Insurance Assistance for the Unemployed Act 
of 2009), gross income does not include any premium reduction provided 
under subsection (a) of such section.''.
                  (B) Clerical amendment.--The table of sections for 
                part III of subchapter B of chapter 1 of such Code is 
                amended by inserting after the item relating to section 
                139B the following new item:

``Sec. 139C. COBRA premium assistance.''.
                  (C) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years ending after the 
                date of the enactment of this Act.
  (b) Extension of COBRA Benefits for Older or Long-Term Employees.--
          (1) ERISA amendment.--Section 602(2)(A) of the Employee 
        Retirement Income Security Act of 1974 is amended by adding at 
        the end the following new clauses:
                          ``(x) Special rule for older or long-term 
                        employees generally.--In the case of a 
                        qualifying event described in section 603(2) 
                        with respect to a covered employee who (as of 
                        such qualifying event) has attained age 55 or 
                        has completed 10 or more years of service with 
                        the entity that is the employer at the time of 
                        the qualifying event, clauses (i) and (ii) 
                        shall not apply.
                          ``(xi) Year of service.-- For purposes of 
                        this subparagraph, the term `year of service' 
                        shall have the meaning provided in section 
                        202(a)(3).''.
          (2) IRC amendment.--Clause (i) of section 4980B(f)(2)(B) of 
        the Internal Revenue Code of 1986 is amended by adding at the 
        end the following new subclauses:
                                  ``(X) Special rule for older or long-
                                term employees generally.--In the case 
                                of a qualifying event described in 
                                paragraph (3)(B) with respect to a 
                                covered employee who (as of such 
                                qualifying event) has attained age 55 
                                or has completed 10 or more years of 
                                service with the entity that is the 
                                employer at the time of the qualifying 
                                event, subclauses (I) and (II) shall 
                                not apply.
                                  ``(XI) Year of service.-- For 
                                purposes of this clause, the term `year 
                                of service' shall have the meaning 
                                provided in section 202(a)(3) of the 
                                Employee Retirement Income Security Act 
                                of 1974.''.
          (3) PHSA amendment.--Section 2202(2)(A) of the Public Health 
        Service Act is amended by adding at the end the following new 
        clauses:
                          ``(viii) Special rule for older or long-term 
                        employees generally.--In the case of a 
                        qualifying event described in section 2203(2) 
                        with respect to a covered employee who (as of 
                        such qualifying event) has attained age 55 or 
                        has completed 10 or more years of service with 
                        the entity that is the employer at the time of 
                        the qualifying event, clauses (i) and (ii) 
                        shall not apply.
                          ``(ix) Year of service.-- For purposes of 
                        this subparagraph, the term `year of service' 
                        shall have the meaning provided in section 
                        202(a)(3) of the Employee Retirement Income 
                        Security Act of 1974.''.
          (4) Effective date of amendments.--The amendments made by 
        this subsection shall apply to periods of coverage which would 
        (without regard to the amendments made by this section) end on 
        or after the date of the enactment of this Act.

SEC. 3003. TEMPORARY OPTIONAL MEDICAID COVERAGE FOR THE UNEMPLOYED.

  (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396b) is amended--
          (1) in subsection (a)(10)(A)(ii)--
                  (A) by striking ``or'' at the end of subclause 
                (XVIII);
                  (B) by adding ``or'' at the end of subclause (XIX); 
                and
                  (C) by adding at the end the following new subclause
                                  ``(XX) who are described in 
                                subsection (dd)(1) (relating to certain 
                                unemployed individuals and their 
                                families);''; and
          (2) by adding at the end the following new subsection:
  ``(dd)(1) Individuals described in this paragraph are--
  ``(A) individuals who--
          ``(i) are within one or more of the categories described in 
        paragraph (2), as elected under the State plan; and
          ``(ii) meet the applicable requirements of paragraph (3); and
  ``(B) individuals who--
          ``(i) are the spouse, or dependent child under 19 years of 
        age, of an individual described in subparagraph (A); and
          ``(ii) meet the requirement of paragraph (3)(B).
  ``(2) The categories of individuals described in this paragraph are 
each of the following:
          ``(A) Individuals who are receiving unemployment compensation 
        benefits.
          ``(B) Individuals who were receiving, but have exhausted, 
        unemployment compensation benefits on or after July 1, 2008.
          ``(C) Individuals who are involuntarily unemployed and were 
        involuntarily separated from employment on or after September 
        1, 2008, and before January 1, 2011, whose family gross income 
        does not exceed a percentage specified by the State (not to 
        exceed 200 percent) of the income official poverty line (as 
        defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Omnibus 
        Budget Reconciliation Act of 1981) applicable to a family of 
        the size involved, and who, but for subsection 
        (a)(10)(A)(ii)(XX), are not eligible for medical assistance 
        under this title or health assistance under title XXI.
          ``(D) Individuals who are involuntarily unemployed and were 
        involuntarily separated from employment on or after September 
        1, 2008, and before January 1, 2011, who are members of 
        households participating in the supplemental nutrition 
        assistance program established under the Food and Nutrition Act 
        of 2008 (7 U.S.C. 2011 et seq), and who, but for subsection 
        (a)(10)(A)(ii)(XX), are not eligible for medical assistance 
        under this title or health assistance under title XXI.
A State plan may elect one or more of the categories described in this 
paragraph but may not elect the category described in subparagraph (B) 
unless the State plan also elects the category described in 
subparagraph (A).
  ``(3) The requirements of this paragraph with respect to an 
individual are the following:
          ``(A) In the case of individuals within a category described 
        in subparagraph (A) or (B) of paragraph (2), the individual was 
        involuntarily separated from employment on or after September 
        1, 2008, and before January 1, 2011, or meets such comparable 
        requirement as the Secretary specifies through rule, guidance, 
        or otherwise in the case of an individual who was an 
        independent contractor.
          ``(B) The individual is not otherwise covered under 
        creditable coverage, as defined in section 2701(c) of the 
        Public Health Service Act (42 U.S.C. 300gg(c)), but applied 
        without regard to paragraph (1)(F) of such section and without 
        regard to coverage provided by reason of the application of 
        subsection (a)(10)(A)(ii)(XX).
  ``(4)(A) No income or resources test shall be applied with respect to 
any category of individuals described in subparagraph (A), (B), or (D) 
of paragraph (2) who are eligible for medical assistance only by reason 
of the application of subsection (a)(10)(A)(ii)(XX).
  ``(B) Nothing in this subsection shall be construed to prevent a 
State from imposing a resource test for the category of individuals 
described in paragraph (2)(C)).
  ``(C) In the case of individuals provided medical assistance by 
reason of the application of subsection (a)(10)(A)(ii)(XX), the 
requirements of subsections (i)(22) and (x) shall not apply.''.
  (b) 100 Percent Federal Matching Rate.--
          (1) FMAP for time-limited period.--The third sentence of 
        section 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended by 
        inserting before the period at the end the following: ``and for 
        items and services furnished on or after the date of enactment 
        of this Act and before January 1, 2011, to individuals who are 
        eligible for medical assistance only by reason of the 
        application of section 1902(a)(10)(A)(ii)(XX)''.
          (2) Certain enrollment-related administrative costs.--
        Notwithstanding any other provision of law, for purposes of 
        applying section 1903(a) of the Social Security Act (42 U.S.C. 
        1396b(a)), with respect to expenditures incurred on or after 
        the date of the enactment of this Act and before January 1, 
        2011, for costs of administration (including outreach and the 
        modification and operation of eligibility information systems) 
        attributable to eligibility determination and enrollment of 
        individuals who are eligible for medical assistance only by 
        reason of the application of section 1902(a)(10)(A)(ii)(XX) of 
        such Act, as added by subsection (a)(1), the Federal matching 
        percentage shall be 100 percent instead of the matching 
        percentage otherwise applicable.
  (c) Conforming Amendments.--(1) Section 1903(f)(4) of such Act (42 
U.S.C. 1396c(f)(4)) is amended by inserting ``1902(a)(10)(A)(ii)(XX), 
or'' after ``1902(a)(10)(A)(ii)(XIX),''.
  (2) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is amended, in 
the matter preceding paragraph (1)--
          (A) by striking ``or'' at the end of clause (xii);
          (B) by adding ``or'' at the end of clause (xiii); and
          (C) by inserting after clause (xiii) the following new 
        clause:
                          ``(xiv) individuals described in section 
                        1902(dd)(1),''.

                TITLE IV--HEALTH INFORMATION TECHNOLOGY

SEC. 4001. SHORT TITLE; TABLE OF CONTENTS OF TITLE.

  (a) Short Title.--This title may be cited as the ``Health Information 
Technology for Economic and Clinical Health Act'' or the ``HITECH 
Act''.
  (b) Table of Contents of Title.--The table of contents of this title 
is as follows:

Sec. 4001. Short title; table of contents of title.

         Subtitle A--Promotion of Health Information Technology

      Part I--Improving Health Care Quality, Safety, and Efficiency

Sec. 4101. ONCHIT; standards development and adoption.

         ``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY

    ``Sec. 3000. Definitions.

        ``Subtitle A--Promotion of Health Information Technology

    ``Sec. 3001. Office of the National Coordinator for Health 
              Information Technology.
    ``Sec. 3002. HIT Policy Committee.
    ``Sec. 3003. HIT Standards Committee.
    ``Sec. 3004. Process for adoption of endorsed recommendations; 
              adoption of initial set of standards, implementation 
              specifications, and certification criteria.
    ``Sec. 3005. Application and use of adopted standards and 
              implementation specifications by Federal agencies.
    ``Sec. 3006. Voluntary application and use of adopted standards and 
              implementation specifications by private entities.
    ``Sec. 3007. Federal health information technology.
    ``Sec. 3008. Transitions.
    ``Sec. 3009. Relation to HIPAA privacy and security law.
    ``Sec. 3010. Authorization for appropriations.
Sec. 4102. Technical amendment.
Sec. 4103. American technology required.

 Part II--Application and Use of Adopted Health Information Technology 
                           Standards; Reports

Sec. 4111. Coordination of Federal activities with adopted standards and 
          implementation specifications.
Sec. 4112. Application to private entities.
Sec. 4113. Study and reports.

          Subtitle B--Testing of Health Information Technology

Sec. 4201. National Institute for Standards and Technology testing.
Sec. 4202. Research and development programs.

   Subtitle C--Incentives for the Use of Health Information Technology

                    Part I--Grants and Loans Funding

Sec. 4301. Grant, loan, and demonstration programs.

  ``Subtitle B--Incentives for the Use of Health Information Technology

    ``Sec. 3011. Immediate funding to strengthen the health information 
              technology infrastructure.
    ``Sec. 3012. Health information technology implementation 
              assistance.
    ``Sec. 3013. State grants to promote health information technology.
    ``Sec. 3014. Competitive grants to States and Indian tribes for the 
              development of loan programs to facilitate the widespread 
              adoption of certified EHR technology.
    ``Sec. 3015. Demonstration program to integrate information 
              technology into clinical education.
    ``Sec. 3016. Information technology professionals on health care.
    ``Sec. 3017. General grant and loan provisions.
    ``Sec. 3018. Authorization for appropriations.

                        Part II--Medicare Program

Sec. 4311. Incentives for eligible professionals.
Sec. 4312. Incentives for hospitals.
Sec. 4313. Treatment of payments and savings; implementation funding.
Sec. 4314. Study on application of EHR payment incentives for providers 
          not receiving other incentive payments.

                       Part III--Medicaid Funding

Sec. 4321. Medicaid provider HIT adoption and operation payments; 
          implementation funding.

                           Subtitle D--Privacy

Sec. 4400. Definitions.

       Part I--Improved Privacy Provisions and Security Provisions

Sec. 4401. Application of security provisions and penalties to business 
          associates of covered entities; annual guidance on security 
          provisions.
Sec. 4402. Notification in the case of breach.
Sec. 4403. Education on Health Information Privacy.
Sec. 4404. Application of privacy provisions and penalties to business 
          associates of covered entities.
Sec. 4405. Restrictions on certain disclosures and sales of health 
          information; accounting of certain protected health 
          information disclosures; access to certain information in 
          electronic format.
Sec. 4406. Conditions on certain contacts as part of health care 
          operations.
Sec. 4407. Temporary breach notification requirement for vendors of 
          personal health records and other non-HIPAA covered entities.
Sec. 4408. Business associate contracts required for certain entities.
Sec. 4409. Clarification of application of wrongful disclosures criminal 
          penalties.
Sec. 4410. Improved enforcement.
Sec. 4411. Audits.
Sec. 4412. Securing individually identifiable health information.
Sec. 4413. Special rule for information to reduce medication errors and 
          improve patient safety.

 Part II--Relationship to Other Laws; Regulatory References; Effective 
                              Date; Reports

Sec. 4421. Relationship to other laws.
Sec. 4422. Regulatory references.
Sec. 4423. Effective date.
Sec. 4424. Studies, reports, guidance.

         Subtitle A--Promotion of Health Information Technology

     PART 1--IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY

SEC. 4101. ONCHIT; STANDARDS DEVELOPMENT AND ADOPTION.

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

         ``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY

``SEC. 3000. DEFINITIONS.

  ``In this title:
          ``(1) Certified ehr technology.--The term `certified EHR 
        technology' means a qualified electronic health record that is 
        certified pursuant to section 3001(c)(5) as meeting standards 
        adopted under section 3004 that are applicable to the type of 
        record involved (as determined by the Secretary, such as an 
        ambulatory electronic health record for office-based physicians 
        or an inpatient hospital electronic health record for 
        hospitals).
          ``(2) Enterprise integration.--The term `enterprise 
        integration' means the electronic linkage of health care 
        providers, health plans, the government, and other interested 
        parties, to enable the electronic exchange and use of health 
        information among all the components in the health care 
        infrastructure in accordance with applicable law, and such term 
        includes related application protocols and other related 
        standards.
          ``(3) Health care provider.--The term `health care provider' 
        means a hospital, skilled nursing facility, nursing facility, 
        home health entity or other long term care facility, health 
        care clinic, Federally qualified health center, group practice 
        (as defined in section 1877(h)(4) of the Social Security Act), 
        a pharmacist, a pharmacy, a laboratory, a physician (as defined 
        in section 1861(r) of the Social Security Act), a practitioner 
        (as described in section 1842(b)(18)(C) of the Social Security 
        Act), a provider operated by, or under contract with, the 
        Indian Health Service or by an Indian tribe (as defined in the 
        Indian Self-Determination and Education Assistance Act), tribal 
        organization, or urban Indian organization (as defined in 
        section 4 of the Indian Health Care Improvement Act), a rural 
        health clinic, a covered entity under section 340B, an 
        ambulatory surgical center described in section 1833(i) of the 
        Social Security Act, and any other category of facility or 
        clinician determined appropriate by the Secretary.
          ``(4) Health information.--The term `health information' has 
        the meaning given such term in section 1171(4) of the Social 
        Security Act.
          ``(5) Health information technology.--The term `health 
        information technology' means hardware, software, integrated 
        technologies and related licenses, intellectual property, 
        upgrades, and packaged solutions sold as services that are 
        specifically designed for use by health care entities for the 
        electronic creation, maintenance, or exchange of health 
        information.
          ``(6) Health plan.--The term `health plan' has the meaning 
        given such term in section 1171(5) of the Social Security Act.
          ``(7) HIT policy committee.--The term `HIT Policy Committee' 
        means such Committee established under section 3002(a).
          ``(8) HIT standards committee.--The term `HIT Standards 
        Committee' means such Committee established under section 
        3003(a).
          ``(9) Individually identifiable health information.--The term 
        `individually identifiable health information' has the meaning 
        given such term in section 1171(6) of the Social Security Act.
          ``(10) Laboratory.--The term `laboratory' has the meaning 
        given such term in section 353(a).
          ``(11) National coordinator.--The term `National Coordinator' 
        means the head of the Office of the National Coordinator for 
        Health Information Technology established under section 
        3001(a).
          ``(12) Pharmacist.--The term `pharmacist' has the meaning 
        given such term in section 804(2) of the Federal Food, Drug, 
        and Cosmetic Act.
          ``(13) Qualified electronic health record.--The term 
        `qualified electronic health record' means an electronic record 
        of health-related information on an individual that--
                  ``(A) includes patient demographic and clinical 
                health information, such as medical history and problem 
                lists; and
                  ``(B) has the capacity--
                          ``(i) to provide clinical decision support;
                          ``(ii) to support physician order entry;
                          ``(iii) to capture and query information 
                        relevant to health care quality; and
                          ``(iv) to exchange electronic health 
                        information with, and integrate such 
                        information from other sources.
          ``(14) State.--The term `State' means each of the several 
        States, the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.

        ``Subtitle A--Promotion of Health Information Technology

``SEC. 3001. 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 (referred to in this section as the 
`Office'). The Office shall be headed by a National Coordinator who 
shall be appointed by the Secretary and shall report directly to the 
Secretary.
  ``(b) Purpose.--The National Coordinator shall perform the duties 
under subsection (c) in a manner consistent with the development of a 
nationwide health information technology infrastructure that allows for 
the electronic use and exchange of information and that--
          ``(1) ensures that each patient's health information is 
        secure and protected, in accordance with applicable law;
          ``(2) improves health care quality, reduces medical errors, 
        reduces health disparities, and advances the delivery of 
        patient-centered medical care;
          ``(3) reduces health care costs resulting from inefficiency, 
        medical errors, inappropriate care, duplicative care, and 
        incomplete information;
          ``(4) provides appropriate information to help guide medical 
        decisions at the time and place of care;
          ``(5) ensures the inclusion of meaningful public input in 
        such development of such infrastructure;
          ``(6) improves the coordination of care and information among 
        hospitals, laboratories, physician offices, and other entities 
        through an effective infrastructure for the secure and 
        authorized exchange of health care information;
          ``(7) improves public health activities and facilitates the 
        early identification and rapid response to public health 
        threats and emergencies, including bioterror events and 
        infectious disease outbreaks;
          ``(8) facilitates health and clinical research and health 
        care quality;
          ``(9) promotes prevention of chronic diseases;
          ``(10) promotes a more effective marketplace, greater 
        competition, greater systems analysis, increased consumer 
        choice, and improved outcomes in health care services; and
          ``(11) improves efforts to reduce health disparities.
  ``(c) Duties of the National Coordinator.--
          ``(1) Standards.--The National Coordinator shall review and 
        determine whether to endorse each standard, implementation 
        specification, and certification criterion for the electronic 
        exchange and use of health information that is recommended by 
        the HIT Standards Committee under section 3003 for purposes of 
        adoption under section 3004. The Coordinator shall make such 
        determination, and report to the Secretary such determination, 
        not later than 45 days after the date the recommendation is 
        received by the Coordinator.
          ``(2) HIT policy coordination.--
                  ``(A) In general.--The National Coordinator shall 
                coordinate health information technology policy and 
                programs of the Department with those of other relevant 
                executive branch agencies with a goal of avoiding 
                duplication of efforts and of helping to ensure that 
                each agency undertakes health information technology 
                activities primarily within the areas of its greatest 
                expertise and technical capability and in a manner 
                towards a coordinated national goal.
                  ``(B) HIT policy and standards committees.--The 
                National Coordinator shall be a leading member in the 
                establishment and operations of the HIT Policy 
                Committee and the HIT Standards Committee and shall 
                serve as a liaison among those two Committees and the 
                Federal Government.
          ``(3) Strategic plan.--
                  ``(A) In general.--The National Coordinator shall, in 
                consultation with other appropriate Federal agencies 
                (including the National Institute of Standards and 
                Technology), update the Federal Health IT Strategic 
                Plan (developed as of June 3, 2008) to include specific 
                objectives, milestones, and metrics with respect to the 
                following:
                          ``(i) The electronic exchange and use of 
                        health information and the enterprise 
                        integration of such information.
                          ``(ii) The utilization of an electronic 
                        health record for each person in the United 
                        States by 2014.
                          ``(iii) The incorporation of privacy and 
                        security protections for the electronic 
                        exchange of an individual's individually 
                        identifiable health information.
                          ``(iv) Ensuring security methods to ensure 
                        appropriate authorization and electronic 
                        authentication of health information and 
                        specifying technologies or methodologies for 
                        rendering health information unusable, 
                        unreadable, or indecipherable.
                          ``(v) Specifying a framework for coordination 
                        and flow of recommendations and policies under 
                        this subtitle among the Secretary, the National 
                        Coordinator, the HIT Policy Committee, the HIT 
                        Standards Committee, and other health 
                        information exchanges and other relevant 
                        entities.
                          ``(vi) Methods to foster the public 
                        understanding of health information technology.
                          ``(vii) Strategies to enhance the use of 
                        health information technology in improving the 
                        quality of health care, reducing medical 
                        errors, reducing health disparities, improving 
                        public health, and improving the continuity of 
                        care among health care settings.
                  ``(B) Collaboration.--The strategic plan shall be 
                updated through collaboration of public and private 
                entities.
                  ``(C) Measurable outcome goals.--The strategic plan 
                update shall include measurable outcome goals.
                  ``(D) Publication.--The National Coordinator shall 
                republish the strategic plan, including all updates.
          ``(4) Website.--The National Coordinator shall maintain and 
        frequently update an Internet website on which there is posted 
        information on the work, schedules, reports, recommendations, 
        and other information to ensure transparency in promotion of a 
        nationwide health information technology infrastructure.
          ``(5) Certification.--
                  ``(A) In general.--The National Coordinator, in 
                consultation with the Director of the National 
                Institute of Standards and Technology, shall develop a 
                program (either directly or by contract) for the 
                voluntary certification of health information 
                technology as being in compliance with applicable 
                certification criteria adopted under this subtitle. 
                Such program shall include testing of the technology in 
                accordance with section 4201(b) of the HITECH Act.
                  ``(B) Certification criteria described.--In this 
                title, the term `certification criteria' means, with 
                respect to standards and implementation specifications 
                for health information technology, criteria to 
                establish that the technology meets such standards and 
                implementation specifications.
          ``(6) Reports and publications.--
                  ``(A) Report on additional funding or authority 
                needed.--Not later than 12 months after the date of the 
                enactment of this title, the National Coordinator shall 
                submit to the appropriate committees of jurisdiction of 
                the House of Representatives and the Senate a report on 
                any additional funding or authority the Coordinator or 
                the HIT Policy Committee or HIT Standards Committee 
                requires to evaluate and develop standards, 
                implementation specifications, and certification 
                criteria, or to achieve full participation of 
                stakeholders in the adoption of a nationwide health 
                information technology infrastructure that allows for 
                the electronic use and exchange of health information.
                  ``(B) Implementation report.--The National 
                Coordinator shall prepare a report that identifies 
                lessons learned from major public and private health 
                care systems in their implementation of health 
                information technology, including information on 
                whether the technologies and practices developed by 
                such systems may be applicable to and usable in whole 
                or in part by other health care providers.
                  ``(C) Assessment of impact of hit on communities with 
                health disparities and uninsured, underinsured, and 
                medically underserved areas.--The National Coordinator 
                shall assess and publish the impact of health 
                information technology in communities with health 
                disparities and in areas with a high proportion of 
                individuals who are uninsured, underinsured, and 
                medically underserved individuals (including urban and 
                rural areas) and identify practices to increase the 
                adoption of such technology by health care providers in 
                such communities.
                  ``(D) Evaluation of benefits and costs of the 
                electronic use and exchange of health information.--The 
                National Coordinator shall evaluate and publish 
                evidence on the benefits and costs of the electronic 
                use and exchange of health information and assess to 
                whom these benefits and costs accrue.
                  ``(E) Resource requirements.--The National 
                Coordinator shall estimate and publish resources 
                required annually to reach the goal of utilization of 
                an electronic health record for each person in the 
                United States by 2014, including the required level of 
                Federal funding, expectations for regional, State, and 
                private investment, and the expected contributions by 
                volunteers to activities for the utilization of such 
                records.
          ``(7) Assistance.--The National Coordinator may provide 
        financial assistance to consumer advocacy groups and not-for-
        profit entities that work in the public interest for purposes 
        of defraying the cost to such groups and entities to 
        participate under, whether in whole or in part, the National 
        Technology Transfer Act of 1995 (15 U.S.C. 272 note).
          ``(8) Governance for nationwide health information network.--
        The National Coordinator shall establish a governance mechanism 
        for the nationwide health information network.
  ``(d) Detail of Federal Employees.--
          ``(1) In general.--Upon the request of the National 
        Coordinator, the head of any Federal agency is authorized to 
        detail, with or without reimbursement from the Office, any of 
        the personnel of such agency to the Office to assist it in 
        carrying out its duties under this section.
          ``(2) Effect of detail.--Any detail of personnel under 
        paragraph (1) shall--
                  ``(A) not interrupt or otherwise affect the civil 
                service status or privileges of the Federal employee; 
                and
                  ``(B) be in addition to any other staff of the 
                Department employed by the National Coordinator.
          ``(3) Acceptance of detailees.--Notwithstanding any other 
        provision of law, the Office may accept detailed personnel from 
        other Federal agencies without regard to whether the agency 
        described under paragraph (1) is reimbursed.
  ``(e) Chief Privacy Officer of the Office of the National 
Coordinator.--Not later than 12 months after the date of the enactment 
of this title, the Secretary shall appoint a Chief Privacy Officer of 
the Office of the National Coordinator, whose duty it shall be to 
advise the National Coordinator on privacy, security, and data 
stewardship of electronic health information and to coordinate with 
other Federal agencies (and similar privacy officers in such agencies), 
with State and regional efforts, and with foreign countries with regard 
to the privacy, security, and data stewardship of electronic 
individually identifiable health information.

``SEC. 3002. HIT POLICY COMMITTEE.

  ``(a) Establishment.--There is established a HIT Policy Committee to 
make policy recommendations to the National Coordinator relating to the 
implementation of a nationwide health information technology 
infrastructure, including implementation of the strategic plan 
described in section 3001(c)(3).
  ``(b) Duties.--
          ``(1) Recommendations on health information technology 
        infrastructure.--The HIT Policy Committee shall recommend a 
        policy framework for the development and adoption of a 
        nationwide health information technology infrastructure that 
        permits the electronic exchange and use of health information 
        as is consistent with the strategic plan under section 
        3001(c)(3) and that includes the recommendations under 
        paragraph (2). The Committee shall update such recommendations 
        and make new recommendations as appropriate.
          ``(2) Specific areas of standard development.--
                  ``(A) In general.--The HIT Policy Committee shall 
                recommend the areas in which standards, implementation 
                specifications, and certification criteria are needed 
                for the electronic exchange and use of health 
                information for purposes of adoption under section 3004 
                and shall recommend an order of priority for the 
                development, harmonization, and recognition of such 
                standards, specifications, and certification criteria 
                among the areas so recommended. Such standards and 
                implementation specifications shall include named 
                standards, architectures, and software schemes for the 
                authentication and security of individually 
                identifiable health information and other information 
                as needed to ensure the reproducible development of 
                common solutions across disparate entities.
                  ``(B) Areas required for consideration.--For purposes 
                of subparagraph (A), the HIT Policy Committee shall 
                make recommendations for at least the following areas:
                          ``(i) Technologies that protect the privacy 
                        of health information and promote security in a 
                        qualified electronic health record, including 
                        for the segmentation and protection from 
                        disclosure of specific and sensitive 
                        individually identifiable health information 
                        with the goal of minimizing the reluctance of 
                        patients to seek care (or disclose information 
                        about a condition) because of privacy concerns, 
                        in accordance with applicable law, and for the 
                        use and disclosure of limited data sets of such 
                        information.
                          ``(ii) A nationwide health information 
                        technology infrastructure that allows for the 
                        electronic use and accurate exchange of health 
                        information.
                          ``(iii) The utilization of a certified 
                        electronic health record for each person in the 
                        United States by 2014.
                          ``(iv) Technologies that as a part of a 
                        qualified electronic health record allow for an 
                        accounting of disclosures made by a covered 
                        entity (as defined for purposes of regulations 
                        promulgated under section 264(c) of the Health 
                        Insurance Portability and Accountability Act of 
                        1996) for purposes of treatment, payment, and 
                        health care operations (as such terms are 
                        defined for purposes of such regulations).
                          ``(v) The use of certified electronic health 
                        records to improve the quality of health care, 
                        such as by promoting the coordination of health 
                        care and improving continuity of health care 
                        among health care providers, by reducing 
                        medical errors, by improving population health, 
                        by reducing health disparities, and by 
                        advancing research and education.
                  ``(C) Other areas for consideration.--In making 
                recommendations under subparagraph (A), the HIT Policy 
                Committee may consider the following additional areas:
                          ``(i) The appropriate uses of a nationwide 
                        health information infrastructure, including 
                        for purposes of--
                                  ``(I) the collection of quality data 
                                and public reporting;
                                  ``(II) biosurveillance and public 
                                health;
                                  ``(III) medical and clinical 
                                research; and
                                  ``(IV) drug safety.
                          ``(ii) Self-service technologies that 
                        facilitate the use and exchange of patient 
                        information and reduce wait times.
                          ``(iii) Telemedicine technologies, in order 
                        to reduce travel requirements for patients in 
                        remote areas.
                          ``(iv) Technologies that facilitate home 
                        health care and the monitoring of patients 
                        recuperating at home.
                          ``(v) Technologies that help reduce medical 
                        errors.
                          ``(vi) Technologies that facilitate the 
                        continuity of care among health settings.
                          ``(vii) Technologies that meet the needs of 
                        diverse populations.
                          ``(viii) Any other technology that the HIT 
                        Policy Committee finds to be among the 
                        technologies with the greatest potential to 
                        improve the quality and efficiency of health 
                        care.
          ``(3) Forum.--The HIT Policy Committee shall serve as a forum 
        for broad stakeholder input with specific expertise in policies 
        relating to the matters described in paragraphs (1) and (2).
  ``(c) Membership and Operations.--
          ``(1) In general.--The National Coordinator shall provide 
        leadership in the establishment and operations of the HIT 
        Policy Committee.
          ``(2) Membership.--The membership of the HIT Policy Committee 
        shall at least reflect providers, ancillary healthcare workers, 
        consumers, purchasers, health plans, technology vendors, 
        researchers, relevant Federal agencies, and individuals with 
        technical expertise on health care quality, privacy and 
        security, and on the electronic exchange and use of health 
        information.
          ``(3) Consideration.--The National Coordinator shall ensure 
        that the relevant recommendations and comments from the 
        National Committee on Vital and Health Statistics are 
        considered in the development of policies.
  ``(d) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.), other than section 14 of such Act, shall apply to the HIT 
Policy Committee.
  ``(e) Publication.--The Secretary shall provide for publication in 
the Federal Register and the posting on the Internet website of the 
Office of the National Coordinator for Health Information Technology of 
all policy recommendations made by the HIT Policy Committee under this 
section.

``SEC. 3003. HIT STANDARDS COMMITTEE.

  ``(a) Establishment.--There is established a committee to be known as 
the HIT Standards Committee to recommend to the National Coordinator 
standards, implementation specifications, and certification criteria 
for the electronic exchange and use of health information for purposes 
of adoption under section 3004, consistent with the implementation of 
the strategic plan described in section 3001(c)(3) and beginning with 
the areas listed in section 3002(b)(2)(B) in accordance with policies 
developed by the HIT Policy Committee.
  ``(b) Duties.--
          ``(1) Standards development.--
                  ``(A) In general.--The HIT Standards Committee shall 
                recommend to the National Coordinator standards, 
                implementation specifications, and certification 
                criteria described in subsection (a) that have been 
                developed, harmonized, or recognized by the HIT 
                Standards Committee. The HIT Standards Committee shall 
                update such recommendations and make new 
                recommendations as appropriate, including in response 
                to a notification sent under section 3004(b)(2). Such 
                recommendations shall be consistent with the latest 
                recommendations made by the HIT Policy Committee.
                  ``(B) Pilot testing of standards and implementation 
                specifications.--In the development, harmonization, or 
                recognition of standards and implementation 
                specifications, the HIT Standards Committee shall, as 
                appropriate, provide for the testing of such standards 
                and specifications by the National Institute for 
                Standards and Technology under section 4201 of the 
                HITECH Act.
                  ``(C) Consistency.--The standards, implementation 
                specifications, and certification criteria recommended 
                under this subsection shall be consistent with the 
                standards for information transactions and data 
                elements adopted pursuant to section 1173 of the Social 
                Security Act.
          ``(2) Forum.--The HIT Standards Committee shall serve as a 
        forum for the participation of a broad range of stakeholders to 
        provide input on the development, harmonization, and 
        recognition of standards, implementation specifications, and 
        certification criteria necessary for the development and 
        adoption of a nationwide health information technology 
        infrastructure that allows for the electronic use and exchange 
        of health information.
          ``(3) Schedule.--Not later than 90 days after the date of the 
        enactment of this title, the HIT Standards Committee shall 
        develop a schedule for the assessment of policy recommendations 
        developed by the HIT Policy Committee under section 3002. The 
        HIT Standards Committee shall update such schedule annually. 
        The Secretary shall publish such schedule in the Federal 
        Register.
          ``(4) Public input.--The HIT Standards Committee shall 
        conduct open public meetings and develop a process to allow for 
        public comment on the schedule described in paragraph (3) and 
        recommendations described in this subsection. Under such 
        process comments shall be submitted in a timely manner after 
        the date of publication of a recommendation under this 
        subsection.
  ``(c) Membership and Operations.--
          ``(1) In general.--The National Coordinator shall provide 
        leadership in the establishment and operations of the HIT 
        Standards Committee.
          ``(2) Membership.--The membership of the HIT Standards 
        Committee shall at least reflect providers, ancillary 
        healthcare workers, consumers, purchasers, health plans, 
        technology vendors, researchers, relevant Federal agencies, and 
        individuals with technical expertise on health care quality, 
        privacy and security, and on the electronic exchange and use of 
        health information.
          ``(3) Consideration.--The National Coordinator shall ensure 
        that the relevant recommendations and comments from the 
        National Committee on Vital and Health Statistics are 
        considered in the development of standards.
          ``(4) Assistance.--For the purposes of carrying out this 
        section, the Secretary may provide or ensure that financial 
        assistance is provided by the HIT Standards Committee to defray 
        in whole or in part any membership fees or dues charged by such 
        Committee to those consumer advocacy groups and not for profit 
        entities that work in the public interest as a part of their 
        mission.
  ``(d) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.), other than section 14, shall apply to the HIT Standards 
Committee.
  ``(e) Publication.--The Secretary shall provide for publication in 
the Federal Register and the posting on the Internet website of the 
Office of the National Coordinator for Health Information Technology of 
all recommendations made by the HIT Standards Committee under this 
section.

``SEC. 3004. PROCESS FOR ADOPTION OF ENDORSED RECOMMENDATIONS; ADOPTION 
                    OF INITIAL SET OF STANDARDS, IMPLEMENTATION 
                    SPECIFICATIONS, AND CERTIFICATION CRITERIA.

  ``(a) Process for Adoption of Endorsed Recommendations.--
          ``(1) Review of endorsed standards, implementation 
        specifications, and certification criteria.--Not later than 90 
        days after the date of receipt of standards, implementation 
        specifications, or certification criteria endorsed under 
        section 3001(c), the Secretary, in consultation with 
        representatives of other relevant Federal agencies, shall 
        jointly review such standards, implementation specifications, 
        or certification criteria and shall determine whether or not to 
        propose adoption of such standards, implementation 
        specifications, or certification criteria.
          ``(2) Determination to adopt standards, implementation 
        specifications, and certification criteria.--If the Secretary 
        determines--
                  ``(A) to propose adoption of any grouping of such 
                standards, implementation specifications, or 
                certification criteria, the Secretary shall, by 
                regulation, determine whether or not to adopt such 
                grouping of standards, implementation specifications, 
                or certification criteria; or
                  ``(B) not to propose adoption of any grouping of 
                standards, implementation specifications, or 
                certification criteria, the Secretary shall notify the 
                National Coordinator and the HIT Standards Committee in 
                writing of such determination and the reasons for not 
                proposing the adoption of such recommendation.
          ``(3) Publication.--The Secretary shall provide for 
        publication in the Federal Register of all determinations made 
        by the Secretary under paragraph (1).
  ``(b) Adoption of Initial Set of Standards, Implementation 
Specifications, and Certification Criteria.--
          ``(1) In general.--Not later than December 31, 2009, the 
        Secretary shall, through the rulemaking process described in 
        section 3003, adopt an initial set of standards, implementation 
        specifications, and certification criteria for the areas 
        required for consideration under section 3002(b)(2)(B).
          ``(2) Application of current standards, implementation 
        specifications, and certification criteria.--The standards, 
        implementation specifications, and certification criteria 
        adopted before the date of the enactment of this title through 
        the process existing through the Office of the National 
        Coordinator for Health Information Technology may be applied 
        towards meeting the requirement of paragraph (1).

``SEC. 3005. APPLICATION AND USE OF ADOPTED STANDARDS AND 
                    IMPLEMENTATION SPECIFICATIONS BY FEDERAL AGENCIES.

  ``For requirements relating to the application and use by Federal 
agencies of the standards and implementation specifications adopted 
under section 3004, see section 4111 of the HITECH Act.

``SEC. 3006. VOLUNTARY APPLICATION AND USE OF ADOPTED STANDARDS AND 
                    IMPLEMENTATION SPECIFICATIONS BY PRIVATE ENTITIES.

  ``(a) In General.--Except as provided under section 4112 of the 
HITECH Act, any standard or implementation specification adopted under 
section 3004 shall be voluntary with respect to private entities.
  ``(b) Rule of Construction.--Nothing in this subtitle shall be 
construed to require that a private entity that enters into a contract 
with the Federal Government apply or use the standards and 
implementation specifications adopted under section 3004 with respect 
to activities not related to the contract.

``SEC. 3007. FEDERAL HEALTH INFORMATION TECHNOLOGY.

  ``(a) In General.--The National Coordinator shall support the 
development, routine updating, and provision of qualified EHR 
technology (as defined in section 3000) consistent with subsections (b) 
and (c) unless the Secretary determines that the needs and demands of 
providers are being substantially and adequately met through the 
marketplace.
  ``(b) Certification.--In making such EHR technology publicly 
available, the National Coordinator shall ensure that the qualified EHR 
technology described in subsection (a) is certified under the program 
developed under section 3001(c)(3) to be in compliance with applicable 
standards adopted under section 3003(a).
  ``(c) Authorization to Charge a Nominal Fee.--The National 
Coordinator may impose a nominal fee for the adoption by a health care 
provider of the health information technology system developed or 
approved under subsection (a) and (b). Such fee shall take into account 
the financial circumstances of smaller providers, low income providers, 
and providers located in rural or other medically underserved areas.
  ``(d) Rule of Construction.--Nothing in this section shall be 
construed to require that a private or government entity adopt or use 
the technology provided under this section.

``SEC. 3008. TRANSITIONS.

  ``(a) ONCHIT.--To the extent consistent with section 3001, all 
functions, personnel, assets, liabilities, and administrative actions 
applicable to the National Coordinator for Health Information 
Technology appointed under Executive Order 13335 or the Office of such 
National Coordinator on the date before the date of the enactment of 
this title shall be transferred to the National Coordinator appointed 
under section 3001(a) and the Office of such National Coordinator as of 
the date of the enactment of this title.
  ``(b) AHIC.--
          ``(1) To the extent consistent with sections 3002 and 3003, 
        all functions, personnel, assets, and liabilities applicable to 
        the AHIC Successor, Inc. doing business as the National eHealth 
        Collaborative as of the day before the date of the enactment of 
        this title shall be transferred to the HIT Policy Committee or 
        the HIT Standards Committee, established under section 3002(a) 
        or 3003(a), as appropriate, as of the date of the enactment of 
        this title.
          ``(2) In carrying out section 3003(b)(1)(A), until 
        recommendations are made by the HIT Policy Committee, 
        recommendations of the HIT Standards Committee shall be 
        consistent with the most recent recommendations made by such 
        AHIC Successor, Inc.
  ``(c) Rules of Construction.--
          ``(1) ONCHIT.--Nothing in section 3001 or subsection (a) 
        shall be construed as requiring the creation of a new entity to 
        the extent that the Office of the National Coordinator for 
        Health Information Technology established pursuant to Executive 
        Order 13335 is consistent with the provisions of section 3001.
          ``(2) AHIC.--Nothing in sections 3002 or 3003 or subsection 
        (b) shall be construed as prohibiting the AHIC Successor, Inc. 
        doing business as the National eHealth Collaborative from 
        modifying its charter, duties, membership, and any other 
        structure or function required to be consistent with section 
        3002 and 3003 in a manner that would permit the Secretary to 
        choose to recognize such AHIC Successor, Inc. as the HIT Policy 
        Committee or the HIT Standards Committee.

``SEC. 3009. RELATION TO HIPAA PRIVACY AND SECURITY LAW.

  ``(a) In General.--With respect to the relation of this title to 
HIPAA privacy and security law:
          ``(1) This title may not be construed as having any effect on 
        the authorities of the Secretary under HIPAA privacy and 
        security law.
          ``(2) The purposes of this title include ensuring that the 
        health information technology standards and implementation 
        specifications adopted under section 3004 take into account the 
        requirements of HIPAA privacy and security law.
  ``(b) Definition.--For purposes of this section, the term `HIPAA 
privacy and security law' means--
          ``(1) the provisions of part C of title XI of the Social 
        Security Act, section 264 of the Health Insurance Portability 
        and Accountability Act of 1996, and subtitle D of title IV of 
        the HITECH Act; and
          ``(2) regulations under such provisions.

``SEC. 3010. AUTHORIZATION FOR APPROPRIATIONS.

  ``There is authorized to be appropriated to the Office of the 
National Coordinator for Health Information Technology to carry out 
this subtitle $250,000,000 for fiscal year 2009.''.

SEC. 4102. TECHNICAL AMENDMENT.

  Section 1171(5) of the Social Security Act (42 U.S.C. 1320d) is 
amended by striking ``or C'' and inserting ``C, or D''.

SEC. 4103. AMERICAN TECHNOLOGY REQUIRED.

  (a) Requirement.--Any funds made available to carry out this title 
and the amendments made by this title (including through grants, 
contracts, loans, payments under title XVIII or XIX of the Social 
Security Act, or other assistance) may be used to purchase health 
information technology only if such technology is manufactured, 
including the engineering and programming of any software, in the 
United States substantially all from articles, materials, or supplies 
mined, produced, or manufactured, as the case may be, in the United 
States.
  (b) Definition.--In this section, the term ``health information 
technology'' has the meaning given to that term in section 3000 of the 
Public Health Service Act, as added by section 4101.

 PART 2--APPLICATION AND USE OF ADOPTED HEALTH INFORMATION TECHNOLOGY 
                           STANDARDS; REPORTS

SEC. 4111. COORDINATION OF FEDERAL ACTIVITIES WITH ADOPTED STANDARDS 
                    AND IMPLEMENTATION SPECIFICATIONS.

  (a) Spending on Health Information Technology Systems.--As each 
agency (as defined in the Executive Order issued on August 22, 2006, 
relating to promoting quality and efficient health care in Federal 
government administered or sponsored health care programs) implements, 
acquires, or upgrades health information technology systems used for 
the direct exchange of individually identifiable health information 
between agencies and with non-Federal entities, it shall utilize, where 
available, health information technology systems and products that meet 
standards and implementation specifications adopted under section 3004 
of the Public Health Service Act, as added by section 4101.
  (b) Federal Information Collection Activities.--With respect to a 
standard or implementation specification adopted under section 3004 of 
the Public Health Service Act, as added by section 4101, the President 
shall take measures to ensure that Federal activities involving the 
broad collection and submission of health information are consistent 
with such standard or implementation specification, respectively, 
within three years after the date of such adoption.
  (c) Application of Definitions.--The definitions contained in section 
3000 of the Public Health Service Act, as added by section 4101, shall 
apply for purposes of this part.

SEC. 4112. APPLICATION TO PRIVATE ENTITIES.

  Each agency (as defined in such Executive Order issued on August 22, 
2006, relating to promoting quality and efficient health care in 
Federal government administered or sponsored health care programs) 
shall require in contracts or agreements with health care providers, 
health plans, or health insurance issuers that as each provider, plan, 
or issuer implements, acquires, or upgrades health information 
technology systems, it shall utilize, where available, health 
information technology systems and products that meet standards and 
implementation specifications adopted under section 3004 of the Public 
Health Service Act, as added by section 4101.

SEC. 4113. STUDY AND REPORTS.

  (a) Report on Adoption of Nationwide System.--Not later than 2 years 
after the date of the enactment of this Act and annually thereafter, 
the Secretary of Health and Human Services shall submit to the 
appropriate committees of jurisdiction of the House of Representatives 
and the Senate a report that--
          (1) describes the specific actions that have been taken by 
        the Federal Government and private entities to facilitate the 
        adoption of a nationwide system for the electronic use and 
        exchange of health information;
          (2) describes barriers to the adoption of such a nationwide 
        system; and
          (3) contains recommendations to achieve full implementation 
        of such a nationwide system.
  (b) Reimbursement Incentive Study and Report.--
          (1) Study.--The Secretary of Health and Human Services shall 
        carry out, or contract with a private entity to carry out, a 
        study that examines methods to create efficient reimbursement 
        incentives for improving health care quality in Federally 
        qualified health centers, rural health clinics, and free 
        clinics.
          (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall submit to the appropriate committees of 
        jurisdiction of the House of Representatives and the Senate a 
        report on the study carried out under paragraph (1).
  (c) Aging Services Technology Study and Report.--
          (1) In general.--The Secretary of Health and Human Services 
        shall carry out, or contract with a private entity to carry 
        out, a study of matters relating to the potential use of new 
        aging services technology to assist seniors, individuals with 
        disabilities, and their caregivers throughout the aging 
        process.
          (2) Matters to be studied.--The study under paragraph (1) 
        shall include--
                  (A) an evaluation of--
                          (i) methods for identifying current, 
                        emerging, and future health technology that can 
                        be used to meet the needs of seniors and 
                        individuals with disabilities and their 
                        caregivers across all aging services settings, 
                        as specified by the Secretary;
                          (ii) methods for fostering scientific 
                        innovation with respect to aging services 
                        technology within the business and academic 
                        communities; and
                          (iii) developments in aging services 
                        technology in other countries that may be 
                        applied in the United States; and
                  (B) identification of--
                          (i) barriers to innovation in aging services 
                        technology and devising strategies for removing 
                        such barriers; and
                          (ii) barriers to the adoption of aging 
                        services technology by health care providers 
                        and consumers and devising strategies to 
                        removing such barriers.
          (3) Report.--Not later than 24 months after the date of the 
        enactment of this Act, the Secretary shall submit to the 
        appropriate committees of jurisdiction of the House of 
        Representatives and of the Senate a report on the study carried 
        out under paragraph (1).
          (4) Definitions.--For purposes of this subsection:
                  (A) Aging services technology.--The term ``aging 
                services technology'' means health technology that 
                meets the health care needs of seniors, individuals 
                with disabilities, and the caregivers of such seniors 
                and individuals.
                  (B) Senior.--The term ``senior'' has such meaning as 
                specified by the Secretary.

          Subtitle B--Testing of Health Information Technology

SEC. 4201. NATIONAL INSTITUTE FOR STANDARDS AND TECHNOLOGY TESTING.

  (a) Pilot Testing of Standards and Implementation Specifications.--In 
coordination with the HIT Standards Committee established under section 
3003 of the Public Health Service Act, as added by section 4101, with 
respect to the development of standards and implementation 
specifications under such section, the Director of the National 
Institute for Standards and Technology shall test such standards and 
implementation specifications, as appropriate, in order to assure the 
efficient implementation and use of such standards and implementation 
specifications.
  (b) Voluntary Testing Program.--In coordination with the HIT 
Standards Committee established under section 3003 of the Public Health 
Service Act, as added by section 4101, with respect to the development 
of standards and implementation specifications under such section, the 
Director of the National Institute of Standards and Technology shall 
support the establishment of a conformance testing infrastructure, 
including the development of technical test beds. The development of 
this conformance testing infrastructure may include a program to 
accredit independent, non-Federal laboratories to perform testing.

SEC. 4202. RESEARCH AND DEVELOPMENT PROGRAMS.

  (a) Health Care Information Enterprise Integration Research 
Centers.--
          (1) In general.--The Director of the National Institute of 
        Standards and Technology, in consultation with the Director of 
        the National Science Foundation and other appropriate Federal 
        agencies, shall establish a program of assistance to 
        institutions of higher education (or consortia thereof which 
        may include nonprofit entities and Federal Government 
        laboratories) to establish multidisciplinary Centers for Health 
        Care Information Enterprise Integration.
          (2) Review; competition.--Grants shall be awarded under this 
        subsection on a merit-reviewed, competitive basis.
          (3) Purpose.--The purposes of the Centers described in 
        paragraph (1) shall be--
                  (A) to generate innovative approaches to health care 
                information enterprise integration by conducting 
                cutting-edge, multidisciplinary research on the systems 
                challenges to health care delivery; and
                  (B) the development and use of health information 
                technologies and other complementary fields.
          (4) Research areas.--Research areas may include--
                  (A) interfaces between human information and 
                communications technology systems;
                  (B) voice-recognition systems;
                  (C) software that improves interoperability and 
                connectivity among health information systems;
                  (D) software dependability in systems critical to 
                health care delivery;
                  (E) measurement of the impact of information 
                technologies on the quality and productivity of health 
                care;
                  (F) health information enterprise management;
                  (G) health information technology security and 
                integrity; and
                  (H) relevant health information technology to reduce 
                medical errors.
          (5) Applications.--An institution of higher education (or a 
        consortium thereof) seeking funding under this subsection shall 
        submit an application to the Director of the National Institute 
        of Standards and Technology at such time, in such manner, and 
        containing such information as the Director may require. The 
        application shall include, at a minimum, a description of--
                  (A) the research projects that will be undertaken by 
                the Center established pursuant to assistance under 
                paragraph (1) and the respective contributions of the 
                participating entities;
                  (B) how the Center will promote active collaboration 
                among scientists and engineers from different 
                disciplines, such as information technology, biologic 
                sciences, management, social sciences, and other 
                appropriate disciplines;
                  (C) technology transfer activities to demonstrate and 
                diffuse the research results, technologies, and 
                knowledge; and
                  (D) how the Center will contribute to the education 
                and training of researchers and other professionals in 
                fields relevant to health information enterprise 
                integration.
  (b) National Information Technology Research and Development 
Program.--The National High-Performance Computing Program established 
by section 101 of the High-Performance Computing Act of 1991 (15 U.S.C. 
5511) shall coordinate Federal research and development programs 
related to the development and deployment of health information 
technology, including activities related to--
          (1) computer infrastructure;
          (2) data security;
          (3) development of large-scale, distributed, reliable 
        computing systems;
          (4) wired, wireless, and hybrid high-speed networking;
          (5) development of software and software-intensive systems;
          (6) human-computer interaction and information management 
        technologies; and
          (7) the social and economic implications of information 
        technology.

  Subtitle C--Incentives for the Use of Health Information Technology

                    PART I--GRANTS AND LOANS FUNDING

SEC. 4301. GRANT, LOAN, AND DEMONSTRATION PROGRAMS.

  Title XXX of the Public Health Service Act, as added by section 4101, 
is amended by adding at the end the following new subtitle:

 ``Subtitle B--Incentives for the Use of Health Information Technology

``SEC. 3011. IMMEDIATE FUNDING TO STRENGTHEN THE HEALTH INFORMATION 
                    TECHNOLOGY INFRASTRUCTURE.

  ``(a) In General.--The Secretary shall, using amounts appropriated 
under section 3018, invest in the infrastructure necessary to allow for 
and promote the electronic exchange and use of health information for 
each individual in the United States consistent with the goals outlined 
in the strategic plan developed by the National Coordinator (and as 
available) under section 3001. To the greatest extent practicable, the 
Secretary shall ensure that any funds so appropriated shall be used for 
the acquisition of health information technology that meets standards 
and certification criteria adopted before the date of the enactment of 
this title until such date as the standards are adopted under section 
3004. The Secretary shall invest funds through the different agencies 
with expertise in such goals, such as the Office of the National 
Coordinator for Health Information Technology, the Health Resources and 
Services Administration, the Agency for Healthcare Research and 
Quality, the Centers of Medicare & Medicaid Services, the Centers for 
Disease Control and Prevention, and the Indian Health Service to 
support the following:
          ``(1) Health information technology architecture that will 
        support the nationwide electronic exchange and use of health 
        information in a secure, private, and accurate manner, 
        including connecting health information exchanges, and which 
        may include updating and implementing the infrastructure 
        necessary within different agencies of the Department of Health 
        and Human Services to support the electronic use and exchange 
        of health information.
          ``(2) Development and adoption of appropriate certified 
        electronic health records for categories of providers, as 
        defined in section 3000, not eligible for support under title 
        XVIII or XIX of the Social Security Act for the adoption of 
        such records.
          ``(3) Training on and dissemination of information on best 
        practices to integrate health information technology, including 
        electronic health records, into a provider's delivery of care, 
        consistent with best practices learned from the Health 
        Information Technology Research Center developed under section 
        3012(b), including community health centers receiving 
        assistance under section 330, covered entities under section 
        340B, and providers participating in one or more of the 
        programs under titles XVIII, XIX, and XXI of the Social 
        Security Act (relating to Medicare, Medicaid, and the State 
        Children's Health Insurance Program).
          ``(4) Infrastructure and tools for the promotion of 
        telemedicine, including coordination among Federal agencies in 
        the promotion of telemedicine.
          ``(5) Promotion of the interoperability of clinical data 
        repositories or registries.
          ``(6) Promotion of technologies and best practices that 
        enhance the protection of health information by all holders of 
        individually identifiable health information.
          ``(7) Improvement and expansion of the use of health 
        information technology by public health departments.
          ``(8) Provision of $300 million to support regional or sub-
        national efforts towards health information exchange.
  ``(b) Coordination.--The Secretary shall ensure funds under this 
section are used in a coordinated manner with other health information 
promotion activities.
  ``(c) Additional Use of Funds.--In addition to using funds as 
provided in subsection (a), the Secretary may use amounts appropriated 
under section 3018 to carry out health information technology 
activities that are provided for under laws in effect on the date of 
the enactment of this title.

``SEC. 3012. HEALTH INFORMATION TECHNOLOGY IMPLEMENTATION ASSISTANCE.

  ``(a) Health Information Technology Extension Program.--To assist 
health care providers to adopt, implement, and effectively use 
certified EHR technology that allows for the electronic exchange and 
use of health information, the Secretary, acting through the Office of 
the National Coordinator, shall establish a health information 
technology extension program to provide health information technology 
assistance services to be carried out through the Department of Health 
and Human Services. The National Coordinator shall consult with other 
Federal agencies with demonstrated experience and expertise in 
information technology services, such as the National Institute of 
Standards and Technology, in developing and implementing this program.
  ``(b) Health Information Technology Research Center.--
          ``(1) In general.--The Secretary shall create a Health 
        Information Technology Research Center (in this section 
        referred to as the `Center') to provide technical assistance 
        and develop or recognize best practices to support and 
        accelerate efforts to adopt, implement, and effectively utilize 
        health information technology that allows for the electronic 
        exchange and use of information in compliance with standards, 
        implementation specifications, and certification criteria 
        adopted under section 3004.
          ``(2) Input.--The Center shall incorporate input from--
                  ``(A) other Federal agencies with demonstrated 
                experience and expertise in information technology 
                services such as the National Institute of Standards 
                and Technology;
                  ``(B) users of health information technology, such as 
                providers and their support and clerical staff and 
                others involved in the care and care coordination of 
                patients, from the health care and health information 
                technology industry; and
                  ``(C) others as appropriate.
          ``(3) Purposes.--The purposes of the Center are to--
                  ``(A) provide a forum for the exchange of knowledge 
                and experience;
                  ``(B) accelerate the transfer of lessons learned from 
                existing public and private sector initiatives, 
                including those currently receiving Federal financial 
                support;
                  ``(C) assemble, analyze, and widely disseminate 
                evidence and experience related to the adoption, 
                implementation, and effective use of health information 
                technology that allows for the electronic exchange and 
                use of information including through the regional 
                centers described in subsection (c);
                  ``(D) provide technical assistance for the 
                establishment and evaluation of regional and local 
                health information networks to facilitate the 
                electronic exchange of information across health care 
                settings and improve the quality of health care;
                  ``(E) provide technical assistance for the 
                development and dissemination of solutions to barriers 
                to the exchange of electronic health information; and
                  ``(F) learn about effective strategies to adopt and 
                utilize health information technology in medically 
                underserved communities.
  ``(c) Health Information Technology Regional Extension Centers.--
          ``(1) In general.--The Secretary shall provide assistance for 
        the creation and support of regional centers (in this 
        subsection referred to as `regional centers') to provide 
        technical assistance and disseminate best practices and other 
        information learned from the Center to support and accelerate 
        efforts to adopt, implement, and effectively utilize health 
        information technology that allows for the electronic exchange 
        and use of information in compliance with standards, 
        implementation specifications, and certification criteria 
        adopted under section 3004. Activities conducted under this 
        subsection shall be consistent with the strategic plan 
        developed by the National Coordinator, (and, as available) 
        under section 3001.
          ``(2) Affiliation.--Regional centers shall be affiliated with 
        any United States-based nonprofit institution or organization, 
        or group thereof, that applies and is awarded financial 
        assistance under this section. Individual awards shall be 
        decided on the basis of merit.
          ``(3) Objective.--The objective of the regional centers is to 
        enhance and promote the adoption of health information 
        technology through--
                  ``(A) assistance with the implementation, effective 
                use, upgrading, and ongoing maintenance of health 
                information technology, including electronic health 
                records, to healthcare providers nationwide;
                  ``(B) broad participation of individuals from 
                industry, universities, and State governments;
                  ``(C) active dissemination of best practices and 
                research on the implementation, effective use, 
                upgrading, and ongoing maintenance of health 
                information technology, including electronic health 
                records, to health care providers in order to improve 
                the quality of healthcare and protect the privacy and 
                security of health information;
                  ``(D) participation, to the extent practicable, in 
                health information exchanges; and
                  ``(E) utilization, when appropriate, of the expertise 
                and capability that exists in Federal agencies other 
                than the Department; and
                  ``(F) integration of health information technology, 
                including electronic health records, into the initial 
                and ongoing training of health professionals and others 
                in the healthcare industry that would be instrumental 
                to improving the quality of healthcare through the 
                smooth and accurate electronic use and exchange of 
                health information.
          ``(4) Regional assistance.--Each regional center shall aim to 
        provide assistance and education to all providers in a region, 
        but shall prioritize any direct assistance first to the 
        following:
                  ``(A) Public or not-for-profit hospitals or critical 
                access hospitals.
                  ``(B) Federally qualified health centers (as defined 
                in section 1861(aa)(4) of the Social Security Act).
                  ``(C) Entities that are located in rural and other 
                areas that serve uninsured, underinsured, and medically 
                underserved individuals (regardless of whether such 
                area is urban or rural).
                  ``(D) Individual or small group practices (or a 
                consortium thereof) that are primarily focused on 
                primary care.
          ``(5) Financial support.--The Secretary may provide financial 
        support to any regional center created under this subsection 
        for a period not to exceed four years. The Secretary may not 
        provide more than 50 percent of the capital and annual 
        operating and maintenance funds required to create and maintain 
        such a center, except in an instance of national economic 
        conditions which would render this cost-share requirement 
        detrimental to the program and upon notification to Congress as 
        to the justification to waive the cost-share requirement.
          ``(6) Notice of program description and availability of 
        funds.--The Secretary shall publish in the Federal Register, 
        not later than 90 days after the date of the enactment of this 
        title, a draft description of the program for establishing 
        regional centers under this subsection. Such description shall 
        include the following:
                  ``(A) A detailed explanation of the program and the 
                programs goals.
                  ``(B) Procedures to be followed by the applicants.
                  ``(C) Criteria for determining qualified applicants.
                  ``(D) Maximum support levels expected to be available 
                to centers under the program.
          ``(7) Application review.--The Secretary shall subject each 
        application under this subsection to merit review. In making a 
        decision whether to approve such application and provide 
        financial support, the Secretary shall consider at a minimum 
        the merits of the application, including those portions of the 
        application regarding--
                  ``(A) the ability of the applicant to provide 
                assistance under this subsection and utilization of 
                health information technology appropriate to the needs 
                of particular categories of health care providers;
                  ``(B) the types of service to be provided to health 
                care providers;
                  ``(C) geographical diversity and extent of service 
                area; and
                  ``(D) the percentage of funding and amount of in-kind 
                commitment from other sources.
          ``(8) Biennial evaluation.--Each regional center which 
        receives financial assistance under this subsection shall be 
        evaluated biennially by an evaluation panel appointed by the 
        Secretary. Each evaluation panel shall be composed of private 
        experts, none of whom shall be connected with the center 
        involved, and of Federal officials. Each evaluation panel shall 
        measure the involved center's performance against the objective 
        specified in paragraph (3). The Secretary shall not continue to 
        provide funding to a regional center unless its evaluation is 
        overall positive.
          ``(9) Continuing support.--After the second year of 
        assistance under this subsection, a regional center may receive 
        additional support under this subsection if it has received 
        positive evaluations and a finding by the Secretary that 
        continuation of Federal funding to the center was in the best 
        interest of provision of health information technology 
        extension services.

``SEC. 3013. STATE GRANTS TO PROMOTE HEALTH INFORMATION TECHNOLOGY.

  ``(a) In General.--The Secretary, acting through the National 
Coordinator, shall establish a program in accordance with this section 
to facilitate and expand the electronic movement and use of health 
information among organizations according to nationally recognized 
standards.
  ``(b) Planning Grants.--The Secretary may award a grant to a State or 
qualified State-designated entity (as described in subsection (f)) that 
submits an application to the Secretary at such time, in such manner, 
and containing such information as the Secretary may specify, for the 
purpose of planning activities described in subsection (d).
  ``(c) Implementation Grants.--The Secretary may award a grant to a 
State or qualified State designated entity that--
          ``(1) has submitted, and the Secretary has approved, a plan 
        described in subsection (e) (regardless of whether such plan 
        was prepared using amounts awarded under subsection (b); and
          ``(2) submits an application at such time, in such manner, 
        and containing such information as the Secretary may specify.
  ``(d) Use of Funds.--Amounts received under a grant under subsection 
(c) shall be used to conduct activities to facilitate and expand the 
electronic movement and use of health information among organizations 
according to nationally recognized standards through activities that 
include--
          ``(1) enhancing broad and varied participation in the 
        authorized and secure nationwide electronic use and exchange of 
        health information;
          ``(2) identifying State or local resources available towards 
        a nationwide effort to promote health information technology;
          ``(3) complementing other Federal grants, programs, and 
        efforts towards the promotion of health information technology;
          ``(4) providing technical assistance for the development and 
        dissemination of solutions to barriers to the exchange of 
        electronic health information;
          ``(5) promoting effective strategies to adopt and utilize 
        health information technology in medically underserved 
        communities;
          ``(6) assisting patients in utilizing health information 
        technology;
          ``(7) encouraging clinicians to work with Health Information 
        Technology Regional Extension Centers as described in section 
        3012, to the extent they are available and valuable;
          ``(8) supporting public health agencies' authorized use of 
        and access to electronic health information;
          ``(9) promoting the use of electronic health records for 
        quality improvement including through quality measures 
        reporting; and
          ``(10) such other activities as the Secretary may specify.
  ``(e) Plan.--
          ``(1) In general.--A plan described in this subsection is a 
        plan that describes the activities to be carried out by a State 
        or by the qualified State-designated entity within such State 
        to facilitate and expand the electronic movement and use of 
        health information among organizations according to nationally 
        recognized standards and implementation specifications.
          ``(2) Required elements.--A plan described in paragraph (1) 
        shall--
                  ``(A) be pursued in the public interest;
                  ``(B) be consistent with the strategic plan developed 
                by the National Coordinator, (and, as available) under 
                section 3001;
                  ``(C) include a description of the ways the State or 
                qualified State-designated entity will carry out the 
                activities described in subsection (b); and
                  ``(D) contain such elements as the Secretary may 
                require.
  ``(f) Qualified State-Designated Entity.--For purposes of this 
section, to be a qualified State-designated entity, with respect to a 
State, an entity shall--
          ``(1) be designated by the State as eligible to receive 
        awards under this section;
          ``(2) be a not-for-profit entity with broad stakeholder 
        representation on its governing board;
          ``(3) demonstrate that one of its principal goals is to use 
        information technology to improve health care quality and 
        efficiency through the authorized and secure electronic 
        exchange and use of health information;
          ``(4) adopt nondiscrimination and conflict of interest 
        policies that demonstrate a commitment to open, fair, and 
        nondiscriminatory participation by stakeholders; and
          ``(5) conform to such other requirements as the Secretary may 
        establish.
  ``(g) Required Consultation.--In carrying out activities described in 
subsections (b) and (c), a State or qualified State-designated entity 
shall consult with and consider the recommendations of--
          ``(1) health care providers (including providers that provide 
        services to low income and underserved populations);
          ``(2) health plans;
          ``(3) patient or consumer organizations that represent the 
        population to be served;
          ``(4) health information technology vendors;
          ``(5) health care purchasers and employers;
          ``(6) public health agencies;
          ``(7) health professions schools, universities and colleges;
          ``(8) clinical researchers;
          ``(9) other users of health information technology such as 
        the support and clerical staff of providers and others involved 
        in the care and care coordination of patients; and
          ``(10) such other entities, as may be determined appropriate 
        by the Secretary.
  ``(h) Continuous Improvement.--The Secretary shall annually evaluate 
the activities conducted under this section and shall, in awarding 
grants under this section, implement the lessons learned from such 
evaluation in a manner so that awards made subsequent to each such 
evaluation are made in a manner that, in the determination of the 
Secretary, will lead towards the greatest improvement in quality of 
care, decrease in costs, and the most effective authorized and secure 
electronic exchange of health information.
  ``(i) Required Match.--
          ``(1) In general.--For a fiscal year (beginning with fiscal 
        year 2011), the Secretary may not make a grant under this 
        section to a State unless the State agrees to make available 
        non-Federal contributions (which may include in-kind 
        contributions) toward the costs of a grant awarded under 
        subsection (c) in an amount equal to--
                  ``(A) for fiscal year 2011, not less than $1 for each 
                $10 of Federal funds provided under the grant;
                  ``(B) for fiscal year 2012, not less than $1 for each 
                $7 of Federal funds provided under the grant; and
                  ``(C) for fiscal year 2013 and each subsequent fiscal 
                year, not less than $1 for each $3 of Federal funds 
                provided under the grant.
          ``(2) Authority to require state match for fiscal years 
        before fiscal year 2011.--For any fiscal year during the grant 
        program under this section before fiscal year 2011, the 
        Secretary may determine the extent to which there shall be 
        required a non-Federal contribution from a State receiving a 
        grant under this section.

``SEC. 3014. COMPETITIVE GRANTS TO STATES AND INDIAN TRIBES FOR THE 
                    DEVELOPMENT OF LOAN PROGRAMS TO FACILITATE THE 
                    WIDESPREAD ADOPTION OF CERTIFIED EHR TECHNOLOGY.

  ``(a) In General.--The National Coordinator may award competitive 
grants to eligible entities for the establishment of programs for loans 
to health care providers to conduct the activities described in 
subsection (e).
  ``(b) Eligible Entity Defined.--For purposes of this subsection, the 
term `eligible entity' means a State or Indian tribe (as defined in the 
Indian Self-Determination and Education Assistance Act) that--
          ``(1) submits to the National Coordinator an application at 
        such time, in such manner, and containing such information as 
        the National Coordinator may require;
          ``(2) submits to the National Coordinator a strategic plan in 
        accordance with subsection (d) and provides to the National 
        Coordinator assurances that the entity will update such plan 
        annually in accordance with such subsection;
          ``(3) provides assurances to the National Coordinator that 
        the entity will establish a Loan Fund in accordance with 
        subsection (c);
          ``(4) provides assurances to the National Coordinator that 
        the entity will not provide a loan from the Loan Fund to a 
        health care provider unless the provider agrees to--
                  ``(A) submit reports on quality measures adopted by 
                the Federal Government (by not later than 90 days after 
                the date on which such measures are adopted), to--
                          ``(i) the Administrator of the Centers for 
                        Medicare & Medicaid Services (or his or her 
                        designee), in the case of an entity 
                        participating in the Medicare program under 
                        title XVIII of the Social Security Act or the 
                        Medicaid program under title XIX of such Act; 
                        or
                          ``(ii) the Secretary in the case of other 
                        entities;
                  ``(B) demonstrate to the satisfaction of the 
                Secretary (through criteria established by the 
                Secretary) that any certified EHR technology purchased, 
                improved, or otherwise financially supported under a 
                loan under this section is used to exchange health 
                information in a manner that, in accordance with law 
                and standards (as adopted under section 3004) 
                applicable to the exchange of information, improves the 
                quality of health care, such as promoting care 
                coordination; and
                  ``(C) comply with such other requirements as the 
                entity or the Secretary may require;
                  ``(D) include a plan on how health care providers 
                involved intend to maintain and support the certified 
                EHR technology over time;
                  ``(E) include a plan on how the health care providers 
                involved intend to maintain and support the certified 
                EHR technology that would be purchased with such loan, 
                including the type of resources expected to be involved 
                and any such other information as the State or Indian 
                Tribe, respectively, may require; and
          ``(5) agrees to provide matching funds in accordance with 
        subsection (h).
  ``(c) Establishment of Fund.--For purposes of subsection (b)(3), an 
eligible entity shall establish a certified EHR technology loan fund 
(referred to in this subsection as a `Loan Fund') and comply with the 
other requirements contained in this section. A grant to an eligible 
entity under this section shall be deposited in the Loan Fund 
established by the eligible entity. No funds authorized by other 
provisions of this title to be used for other purposes specified in 
this title shall be deposited in any Loan Fund.
  ``(d) Strategic Plan.--
          ``(1) In general.--For purposes of subsection (b)(2), a 
        strategic plan of an eligible entity under this subsection 
        shall identify the intended uses of amounts available to the 
        Loan Fund of such entity.
          ``(2) Contents.--A strategic plan under paragraph (1), with 
        respect to a Loan Fund of an eligible entity, shall include for 
        a year the following:
                  ``(A) A list of the projects to be assisted through 
                the Loan Fund during such year.
                  ``(B) A description of the criteria and methods 
                established for the distribution of funds from the Loan 
                Fund during the year.
                  ``(C) A description of the financial status of the 
                Loan Fund as of the date of submission of the plan.
                  ``(D) The short-term and long-term goals of the Loan 
                Fund.
  ``(e) Use of Funds.--Amounts deposited in a Loan Fund, including loan 
repayments and interest earned on such amounts, shall be used only for 
awarding loans or loan guarantees, making reimbursements described in 
subsection (g)(4)(A), or as a source of reserve and security for 
leveraged loans, the proceeds of which are deposited in the Loan Fund 
established under subsection (c). Loans under this section may be used 
by a health care provider to--
          ``(1) facilitate the purchase of certified EHR technology;
          ``(2) enhance the utilization of certified EHR technology;
          ``(3) train personnel in the use of such technology; or
          ``(4) improve the secure electronic exchange of health 
        information.
  ``(f) Types of Assistance.--Except as otherwise limited by applicable 
State law, amounts deposited into a Loan Fund under this section may 
only be used for the following:
          ``(1) To award loans that comply with the following:
                  ``(A) The interest rate for each loan shall not 
                exceed the market interest rate.
                  ``(B) The principal and interest payments on each 
                loan shall commence not later than 1 year after the 
                date the loan was awarded, and each loan shall be fully 
                amortized not later than 10 years after the date of the 
                loan.
                  ``(C) The Loan Fund shall be credited with all 
                payments of principal and interest on each loan awarded 
                from the Loan Fund.
          ``(2) To guarantee, or purchase insurance for, a local 
        obligation (all of the proceeds of which finance a project 
        eligible for assistance under this subsection) if the guarantee 
        or purchase would improve credit market access or reduce the 
        interest rate applicable to the obligation involved.
          ``(3) As a source of revenue or security for the payment of 
        principal and interest on revenue or general obligation bonds 
        issued by the eligible entity if the proceeds of the sale of 
        the bonds will be deposited into the Loan Fund.
          ``(4) To earn interest on the amounts deposited into the Loan 
        Fund.
          ``(5) To make reimbursements described in subsection 
        (g)(4)(A).
  ``(g) Administration of Loan Funds.--
          ``(1) Combined financial administration.--An eligible entity 
        may (as a convenience and to avoid unnecessary administrative 
        costs) combine, in accordance with applicable State law, the 
        financial administration of a Loan Fund established under this 
        subsection with the financial administration of any other 
        revolving fund established by the entity if otherwise not 
        prohibited by the law under which the Loan Fund was 
        established.
          ``(2) Cost of administering fund.--Each eligible entity may 
        annually use not to exceed 4 percent of the funds provided to 
        the entity under a grant under this section to pay the 
        reasonable costs of the administration of the programs under 
        this section, including the recovery of reasonable costs 
        expended to establish a Loan Fund which are incurred after the 
        date of the enactment of this title.
          ``(3) Guidance and regulations.--The National Coordinator 
        shall publish guidance and promulgate regulations as may be 
        necessary to carry out the provisions of this section, 
        including--
                  ``(A) provisions to ensure that each eligible entity 
                commits and expends funds allotted to the entity under 
                this section as efficiently as possible in accordance 
                with this title and applicable State laws; and
                  ``(B) guidance to prevent waste, fraud, and abuse.
          ``(4) Private sector contributions.--
                  ``(A) In general.--A Loan Fund established under this 
                section may accept contributions from private sector 
                entities, except that such entities may not specify the 
                recipient or recipients of any loan issued under this 
                subsection. An eligible entity may agree to reimburse a 
                private sector entity for any contribution made under 
                this subparagraph, except that the amount of such 
                reimbursement may not be greater than the principal 
                amount of the contribution made.
                  ``(B) Availability of information.--An eligible 
                entity shall make publicly available the identity of, 
                and amount contributed by, any private sector entity 
                under subparagraph (A) and may issue letters of 
                commendation or make other awards (that have no 
                financial value) to any such entity.
  ``(h) Matching Requirements.--
          ``(1) In general.--The National Coordinator may not make a 
        grant under subsection (a) to an eligible entity unless the 
        entity agrees to make available (directly or through donations 
        from public or private entities) non-Federal contributions in 
        cash to the costs of carrying out the activities for which the 
        grant is awarded in an amount equal to not less than $1 for 
        each $5 of Federal funds provided under the grant.
          ``(2) Determination of amount of non-federal contribution.--
        In determining the amount of non-Federal contributions that an 
        eligible entity has provided pursuant to subparagraph (A), the 
        National Coordinator may not include any amounts provided to 
        the entity by the Federal Government.
  ``(i) Effective Date.--The Secretary may not make an award under this 
section prior to January 1, 2010.

``SEC. 3015. DEMONSTRATION PROGRAM TO INTEGRATE INFORMATION TECHNOLOGY 
                    INTO CLINICAL EDUCATION.

  ``(a) In General.--The Secretary may award grants under this section 
to carry out demonstration projects to develop academic curricula 
integrating certified EHR technology in the clinical education of 
health professionals. Such awards shall be made on a competitive basis 
and pursuant to peer review.
  ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
          ``(1) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require;
          ``(2) submit to the Secretary a strategic plan for 
        integrating certified EHR technology in the clinical education 
        of health professionals to reduce medical errors and enhance 
        health care quality;
          ``(3) be--
                  ``(A) a school of medicine, osteopathic medicine, 
                dentistry, or pharmacy, a graduate program in 
                behavioral or mental health, or any other graduate 
                health professions school;
                  ``(B) a graduate school of nursing or physician 
                assistant studies;
                  ``(C) a consortium of two or more schools described 
                in subparagraph (A) or (B); or
                  ``(D) an institution with a graduate medical 
                education program in medicine, osteopathic medicine, 
                dentistry, pharmacy, nursing, or physician assistance 
                studies;
          ``(4) provide for the collection of data regarding the 
        effectiveness of the demonstration project to be funded under 
        the grant in improving the safety of patients, the efficiency 
        of health care delivery, and in increasing the likelihood that 
        graduates of the grantee will adopt and incorporate certified 
        EHR technology, in the delivery of health care services; and
          ``(5) provide matching funds in accordance with subsection 
        (d).
  ``(c) Use of Funds.--
          ``(1) In general.--With respect to a grant under subsection 
        (a), an eligible entity shall--
                  ``(A) use grant funds in collaboration with 2 or more 
                disciplines; and
                  ``(B) use grant funds to integrate certified EHR 
                technology into community-based clinical education.
          ``(2) Limitation.--An eligible entity shall not use amounts 
        received under a grant under subsection (a) to purchase 
        hardware, software, or services.
  ``(d) Financial Support.--The Secretary may not provide more than 50 
percent of the costs of any activity for which assistance is provided 
under subsection (a), except in an instance of national economic 
conditions which would render the cost-share requirement under this 
subsection detrimental to the program and upon notification to Congress 
as to the justification to waive the cost-share requirement.
  ``(e) Evaluation.--The Secretary shall take such action as may be 
necessary to evaluate the projects funded under this section and 
publish, make available, and disseminate the results of such 
evaluations on as wide a basis as is practicable.
  ``(f) Reports.--Not later than 1 year after the date of enactment of 
this title, and annually thereafter, the Secretary shall submit to the 
Committee on Health, Education, Labor, and Pensions and the Committee 
on Finance of the Senate, and the Committee on Energy and Commerce of 
the House of Representatives a report that--
          ``(1) describes the specific projects established under this 
        section; and
          ``(2) contains recommendations for Congress based on the 
        evaluation conducted under subsection (e).

``SEC. 3016. INFORMATION TECHNOLOGY PROFESSIONALS ON HEALTH CARE.

  ``(a) In General.--The Secretary, in consultation with the Director 
of the National Science Foundation, shall provide assistance to 
institutions of higher education (or consortia thereof) to establish or 
expand medical health informatics education programs, including 
certification, undergraduate, and masters degree programs, for both 
health care and information technology students to ensure the rapid and 
effective utilization and development of health information 
technologies (in the United States health care infrastructure).
  ``(b) Activities.--Activities for which assistance may be provided 
under subsection (a) may include the following:
          ``(1) Developing and revising curricula in medical health 
        informatics and related disciplines.
          ``(2) Recruiting and retaining students to the program 
        involved.
          ``(3) Acquiring equipment necessary for student instruction 
        in these programs, including the installation of testbed 
        networks for student use.
          ``(4) Establishing or enhancing bridge programs in the health 
        informatics fields between community colleges and universities.
  ``(c) Priority.--In providing assistance under subsection (a), the 
Secretary shall give preference to the following:
          ``(1) Existing education and training programs.
          ``(2) Programs designed to be completed in less than six 
        months.
  ``(d) Financial Support.--The Secretary may not provide more than 50 
percent of the costs of any activity for which assistance is provided 
under subsection (a), except in an instance of national economic 
conditions which would render the cost-share requirement under this 
subsection detrimental to the program and upon notification to Congress 
as to the justification to waive the cost-share requirement.

``SEC. 3017. GENERAL GRANT AND LOAN PROVISIONS.

  ``(a) Reports.--The Secretary may require that an entity receiving 
assistance under this subtitle shall submit to the Secretary, not later 
than the date that is 1 year after the date of receipt of such 
assistance, a report that includes--
          ``(1) an analysis of the effectiveness of the activities for 
        which the entity receives such assistance, as compared to the 
        goals for such activities; and
          ``(2) an analysis of the impact of the project on health care 
        quality and safety.
  ``(b) Requirement to Improve Quality of Care and Decrease in Costs.--
The National Coordinator shall annually evaluate the activities 
conducted under this subtitle and shall, in awarding grants, implement 
the lessons learned from such evaluation in a manner so that awards 
made subsequent to each such evaluation are made in a manner that, in 
the determination of the National Coordinator, will result in the 
greatest improvement in the quality and efficiency of health care.

``SEC. 3018. AUTHORIZATION FOR APPROPRIATIONS.

  ``For the purposes of carrying out this subtitle, there is authorized 
to be appropriated such sums as may be necessary for each of the fiscal 
years 2009 through 2013. Amounts so appropriated shall remain available 
until expended.''.

                       PART II--MEDICARE PROGRAM

SEC. 4311. INCENTIVES FOR ELIGIBLE PROFESSIONALS.

  (a) Incentive Payments.--Section 1848 of the Social Security Act (42 
U.S.C. 1395w-4) is amended by adding at the end the following new 
subsection:
  ``(o) Incentives for Adoption and Meaningful Use of Certified EHR 
Technology.--
          ``(1) Incentive payments.--
                  ``(A) In general.--Subject to the succeeding 
                subparagraphs of this paragraph, with respect to 
                covered professional services furnished by an eligible 
                professional during a payment year (as defined in 
                subparagraph (E)), if the eligible professional is a 
                meaningful EHR user (as determined under paragraph (2)) 
                for the reporting period with respect to such year, in 
                addition to the amount otherwise paid under this part, 
                there also shall be paid to the eligible professional 
                (or to an employer or facility in the cases described 
                in clause (A) of section 1842(b)(6)), from the Federal 
                Supplementary Medical Insurance Trust Fund established 
                under section 1841 an amount equal to 75 percent of the 
                Secretary's estimate (based on claims submitted not 
                later than 2 months after the end of the payment year) 
                of the allowed charges under this part for all such 
                covered professional services furnished by the eligible 
                professional during such year.
                  ``(B) Limitations on amounts of incentive payments.--
                          ``(i) In general.--In no case shall the 
                        amount of the incentive payment provided under 
                        this paragraph for an eligible professional for 
                        a payment year exceed the applicable amount 
                        specified under this subparagraph with respect 
                        to such eligible professional and such year.
                          ``(ii) Amount.--Subject to clause (iii), the 
                        applicable amount specified in this 
                        subparagraph for an eligible professional is as 
                        follows:
                                  ``(I) For the first payment year for 
                                such professional, $15,000.
                                  ``(II) For the second payment year 
                                for such professional, $12,000.
                                  ``(III) For the third payment year 
                                for such professional, $8,000.
                                  ``(IV) For the fourth payment year 
                                for such professional, $4,000.
                                  ``(V) For the fifth payment year for 
                                such professional, $2,000.
                                  ``(VI) For any succeeding payment 
                                year for such professional, $0.
                          ``(iii) Phase down for eligible professionals 
                        first adopting ehr after 2013.--If the first 
                        payment year for an eligible professional is 
                        after 2013, then the amount specified in this 
                        subparagraph for a payment year for such 
                        professional is the same as the amount 
                        specified in clause (ii) for such payment year 
                        for an eligible professional whose first 
                        payment year is 2013. If the first payment year 
                        for an eligible professional is after 2015 then 
                        the applicable amount specified in this 
                        subparagraph for such professional for such 
                        year and any subsequent year shall be $0.
                  ``(C) Non-application to hospital-based eligible 
                professionals.--
                          ``(i) In general.--No incentive payment may 
                        be made under this paragraph in the case of a 
                        hospital-based eligible professional.
                          ``(ii) Hospital-based eligible 
                        professional.--For purposes of clause (i), the 
                        term `hospital-based eligible professional' 
                        means, with respect to covered professional 
                        services furnished by an eligible professional 
                        during the reporting period for a payment year, 
                        an eligible professional, such as a 
                        pathologist, anesthesiologist, or emergency 
                        physician, who furnishes substantially all of 
                        such services in a hospital setting (whether 
                        inpatient or outpatient) and through the use of 
                        the facilities and equipment, including 
                        computer equipment, of the hospital.
                  ``(D) Payment.--
                          ``(i) Form of payment.--The payment under 
                        this paragraph may be in the form of a single 
                        consolidated payment or in the form of such 
                        periodic installments as the Secretary may 
                        specify.
                          ``(ii) Coordination of application of 
                        limitation for professionals in different 
                        practices.--In the case of an eligible 
                        professional furnishing covered professional 
                        services in more than one practice (as 
                        specified by the Secretary), the Secretary 
                        shall establish rules to coordinate the 
                        incentive payments, including the application 
                        of the limitation on amounts of such incentive 
                        payments under this paragraph, among such 
                        practices.
                          ``(iii) Coordination with medicaid.--The 
                        Secretary shall seek, to the maximum extent 
                        practicable, to avoid duplicative requirements 
                        from Federal and State Governments to 
                        demonstrate meaningful use of certified EHR 
                        technology under this title and title XIX. In 
                        doing so, the Secretary may deem satisfaction 
                        of State requirements for such meaningful use 
                        for a payment year under title XIX to be 
                        sufficient to qualify as meaningful use under 
                        this subsection and subsection (a)(7) and vice 
                        versa. The Secretary may also adjust the 
                        reporting periods under such title and such 
                        subsections in order to carry out this clause.
                  ``(E) Payment year defined.--
                          ``(i) In general.--For purposes of this 
                        subsection, the term `payment year' means a 
                        year beginning with 2011.
                          ``(ii) First, second, etc. payment year.--The 
                        term `first payment year' means, with respect 
                        to covered professional services furnished by 
                        an eligible professional, the first year for 
                        which an incentive payment is made for such 
                        services under this subsection. The terms 
                        `second payment year', `third payment year', 
                        `fourth payment year', and `fifth payment year' 
                        mean, with respect to covered professional 
                        services furnished by such eligible 
                        professional, each successive year immediately 
                        following the first payment year for such 
                        professional.
          ``(2) Meaningful ehr user.--
                  ``(A) In general.--For purposes of paragraph (1), an 
                eligible professional shall be treated as a meaningful 
                EHR user for a reporting period for a payment year (or, 
                for purposes of subsection (a)(7), for a reporting 
                period under such subsection for a year) if each of the 
                following requirements is met:
                          ``(i) Meaningful use of certified ehr 
                        technology.--The eligible professional 
                        demonstrates to the satisfaction of the 
                        Secretary, in accordance with subparagraph 
                        (C)(i), that during such period the 
                        professional is using certified EHR technology 
                        in a meaningful manner, which shall include the 
                        use of electronic prescribing as determined to 
                        be appropriate by the Secretary.
                          ``(ii) Information exchange.--The eligible 
                        professional demonstrates to the satisfaction 
                        of the Secretary, in accordance with 
                        subparagraph (C)(i), that during such period 
                        such certified EHR technology is connected in a 
                        manner that provides, in accordance with law 
                        and standards applicable to the exchange of 
                        information, for the electronic exchange of 
                        health information to improve the quality of 
                        health care, such as promoting care 
                        coordination.
                          ``(iii) Reporting on measures using ehr.--
                        Subject to subparagraph (B)(ii) and using such 
                        certified EHR technology, the eligible 
                        professional submits information for such 
                        period, in a form and manner specified by the 
                        Secretary, on such clinical quality measures 
                        and such other measures as selected by the 
                        Secretary under subparagraph (B)(i).
                The Secretary may provide for the use of alternative 
                means for meeting the requirements of clauses (i), 
                (ii), and (iii) in the case of an eligible professional 
                furnishing covered professional services in a group 
                practice (as defined by the Secretary). The Secretary 
                shall seek to improve the use of electronic health 
                records and health care quality over time by requiring 
                more stringent measures of meaningful use selected 
                under this paragraph.
                  ``(B) Reporting on measures.--
                          ``(i) Selection.--The Secretary shall select 
                        measures for purposes of subparagraph (A)(iii) 
                        but only consistent with the following:
                                  ``(I) The Secretary shall provide 
                                preference to clinical quality measures 
                                that have been endorsed by the entity 
                                with a contract with the Secretary 
                                under section 1890(a).
                                  ``(II) Prior to any measure being 
                                selected under this subparagraph, the 
                                Secretary shall publish in the Federal 
                                Register such measure and provide for a 
                                period of public comment on such 
                                measure.
                          ``(ii) Limitation.--The Secretary may not 
                        require the electronic reporting of information 
                        on clinical quality measures under subparagraph 
                        (A)(iii) unless the Secretary has the capacity 
                        to accept the information electronically, which 
                        may be on a pilot basis.
                          ``(iii) Coordination of reporting of 
                        information.--In selecting such measures, and 
                        in establishing the form and manner for 
                        reporting measures under subparagraph (A)(iii), 
                        the Secretary shall seek to avoid redundant or 
                        duplicative reporting otherwise required, 
                        including reporting under subsection (k)(2)(C).
                  ``(C) Demonstration of meaningful use of certified 
                ehr technology and information exchange.--
                          ``(i) In general.--A professional may satisfy 
                        the demonstration requirement of clauses (i) 
                        and (ii) of subparagraph (A) through means 
                        specified by the Secretary, which may include--
                                  ``(I) an attestation;
                                  ``(II) the submission of claims with 
                                appropriate coding (such as a code 
                                indicating that a patient encounter was 
                                documented using certified EHR 
                                technology);
                                  ``(III) a survey response;
                                  ``(IV) reporting under subparagraph 
                                (A)(iii); and
                                  ``(V) other means specified by the 
                                Secretary.
                          ``(ii) Use of part d data.--Notwithstanding 
                        sections 1860D-15(d)(2)(B) and 1860D-15(f)(2), 
                        the Secretary may use data regarding drug 
                        claims submitted for purposes of section 1860D-
                        15 that are necessary for purposes of 
                        subparagraph (A).
          ``(3) Application.--
                  ``(A) Physician reporting system rules.--Paragraphs 
                (5), (6), and (8) of subsection (k) shall apply for 
                purposes of this subsection in the same manner as they 
                apply for purposes of such subsection.
                  ``(B) Coordination with other payments.--The 
                provisions of this subsection shall not be taken into 
                account in applying the provisions of subsection (m) of 
                this section and of section 1833(m) and any payment 
                under such provisions shall not be taken into account 
                in computing allowable charges under this subsection.
                  ``(C) Limitations on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the determination of any 
                incentive payment under this subsection and the payment 
                adjustment under subsection (a)(7), including the 
                determination of a meaningful EHR user under paragraph 
                (2), a limitation under paragraph (1)(B), and the 
                exception under subsection (a)(7)(B).
                  ``(D) Posting on website.--The Secretary shall post 
                on the Internet website of the Centers for Medicare & 
                Medicaid Services, in an easily understandable format, 
                a list of the names, business addresses, and business 
                phone numbers of the eligible professionals who are 
                meaningful EHR users and, as determined appropriate by 
                the Secretary, of group practices receiving incentive 
                payments under paragraph (1).
          ``(4) Certified ehr technology defined.--For purposes of this 
        section, the term `certified EHR technology' means a qualified 
        electronic health record (as defined in 3000(13) of the Public 
        Health Service Act) that is certified pursuant to section 
        3001(c)(5) of such Act as meeting standards adopted under 
        section 3004 of such Act that are applicable to the type of 
        record involved (as determined by the Secretary, such as an 
        ambulatory electronic health record for office-based physicians 
        or an inpatient hospital electronic health record for 
        hospitals).
          ``(5) Definitions.--For purposes of this subsection:
                  ``(A) Covered professional services.--The term 
                `covered professional services' has the meaning given 
                such term in subsection (k)(3).
                  ``(B) Eligible professional.--The term `eligible 
                professional' means a physician, as defined in section 
                1861(r).
                  ``(C) Reporting period.--The term `reporting period' 
                means any period (or periods), with respect to a 
                payment year, as specified by the Secretary.''.
  (b) Incentive Payment Adjustment.--Section 1848(a) of the Social 
Security Act (42 U.S.C. 1395w-4(a)) is amended by adding at the end the 
following new paragraph:
          ``(7) Incentives for meaningful use of certified ehr 
        technology.--
                  ``(A) Adjustment.--
                          ``(i) In general.--Subject to subparagraphs 
                        (B) and (D), with respect to covered 
                        professional services furnished by an eligible 
                        professional during 2016 or any subsequent 
                        payment year, if the eligible professional is 
                        not a meaningful EHR user (as determined under 
                        subsection (o)(2)) for a reporting period for 
                        the year, the fee schedule amount for such 
                        services furnished by such professional during 
                        the year (including the fee schedule amount for 
                        purposes of determining a payment based on such 
                        amount) shall be equal to the applicable 
                        percent of the fee schedule amount that would 
                        otherwise apply to such services under this 
                        subsection (determined after application of 
                        paragraph (3) but without regard to this 
                        paragraph).
                          ``(ii) Applicable percent.--Subject to clause 
                        (iii), for purposes of clause (i), the term 
                        `applicable percent' means--
                                  ``(I) for 2016, 99 percent;
                                  ``(II) for 2017, 98 percent; and
                                  ``(III) for 2018 and each subsequent 
                                year, 97 percent.
                          ``(iii) Authority to decrease applicable 
                        percentage for 2019 and subsequent years.--For 
                        2019 and each subsequent year, if the Secretary 
                        finds that the proportion of eligible 
                        professionals who are meaningful EHR users (as 
                        determined under subsection (o)(2)) is less 
                        than 75 percent, the applicable percent shall 
                        be decreased by 1 percentage point from the 
                        applicable percent in the preceding year, but 
                        in no case shall the applicable percent be less 
                        than 95 percent.
                  ``(B) Significant hardship exception.--The Secretary 
                may, on a case-by-case basis, exempt an eligible 
                professional from the application of the payment 
                adjustment under subparagraph (A) if the Secretary 
                determines, subject to annual renewal, that compliance 
                with the requirement for being a meaningful EHR user 
                would result in a significant hardship, such as in the 
                case of an eligible professional who practices in a 
                rural area without sufficient Internet access. In no 
                case may an eligible professional be granted an 
                exemption under this subparagraph for more than 5 
                years.
                  ``(C) Application of physician reporting system 
                rules.--Paragraphs (5), (6), and (8) of subsection (k) 
                shall apply for purposes of this paragraph in the same 
                manner as they apply for purposes of such subsection.
                  ``(D) Non-application to hospital-based eligible 
                professionals.--No payment adjustment may be made under 
                subparagraph (A) in the case of hospital-based eligible 
                professionals (as defined in subsection (o)(1)(C)(ii)).
                  ``(E) Definitions.--For purposes of this paragraph:
                          ``(i) Covered professional services.--The 
                        term `covered professional services' has the 
                        meaning given such term in subsection (k)(3).
                          ``(ii) Eligible professional.--The term 
                        `eligible professional' means a physician, as 
                        defined in section 1861(r).
                          ``(iii) Reporting period.--The term 
                        `reporting period' means, with respect to a 
                        year, a period specified by the Secretary.''.
  (c) Application to Certain HMO-Affiliated Eligible Professionals.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is amended 
by adding at the end the following new subsection:
  ``(l) Application of Eligible Professional Incentives for Certain MA 
Organizations for Adoption and Meaningful Use of Certified EHR 
Technology.--
          ``(1) In general.--Subject to paragraphs (3) and (4), in the 
        case of a qualifying MA organization, the provisions of 
        sections 1848(o) and 1848(a)(7) shall apply with respect to 
        eligible professionals described in paragraph (2) of the 
        organization who the organization attests under paragraph (6) 
        to be meaningful EHR users in a similar manner as they apply to 
        eligible professionals under such sections. Incentive payments 
        under paragraph (3) shall be made to and payment adjustments 
        under paragraph (4) shall apply to such qualifying 
        organizations.
          ``(2) Eligible professional described.--With respect to a 
        qualifying MA organization, an eligible professional described 
        in this paragraph is an eligible professional (as defined for 
        purposes of section 1848(o)) who--
                  ``(A)(i) is employed by the organization; or
                  ``(ii)(I) is employed by, or is a partner of, an 
                entity that through contract with the organization 
                furnishes at least 80 percent of the entity's patient 
                care services to enrollees of such organization; and
                  ``(II) furnishes at least 75 percent of the 
                professional services of the eligible professional to 
                enrollees of the organization; and
                  ``(B) furnishes, on average, at least 20 hours per 
                week of patient care services.
          ``(3) Eligible professional incentive payments.--
                  ``(A) In general.--In applying section 1848(o) under 
                paragraph (1), instead of the additional payment amount 
                under section 1848(o)(1)(A) and subject to subparagraph 
                (B), the Secretary may substitute an amount determined 
                by the Secretary to the extent feasible and practical 
                to be similar to the estimated amount in the aggregate 
                that would be payable if payment for services furnished 
                by such professionals was payable under part B instead 
                of this part.
                  ``(B) Avoiding duplication of payments.--
                          ``(i) In general.--If an eligible 
                        professional described in paragraph (2) is 
                        eligible for the maximum incentive payment 
                        under section 1848(o)(1)(A) for the same 
                        payment period, the payment incentive shall be 
                        made only under such section and not under this 
                        subsection.
                          ``(ii) Methods.--In the case of an eligible 
                        professional described in paragraph (2) who is 
                        eligible for an incentive payment under section 
                        1848(o)(1)(A) but is not described in clause 
                        (i) for the same payment period, the Secretary 
                        shall develop a process--
                                  ``(I) to ensure that duplicate 
                                payments are not made with respect to 
                                an eligible professional both under 
                                this subsection and under section 
                                1848(o)(1)(A); and
                                  ``(II) to collect data from Medicare 
                                Advantage organizations to ensure 
                                against such duplicate payments.
                  ``(C) Fixed schedule for application of limitation on 
                incentive payments for all eligible professionals.--In 
                applying section 1848(o)(1)(B)(ii) under subparagraph 
                (A), in accordance with rules specified by the 
                Secretary, a qualifying MA organization shall specify a 
                year (not earlier than 2011) that shall be treated as 
                the first payment year for all eligible professionals 
                with respect to such organization.
          ``(4) Payment adjustment.--
                  ``(A) In general.--In applying section 1848(a)(7) 
                under paragraph (1), instead of the payment adjustment 
                being an applicable percent of the fee schedule amount 
                for a year under such section, subject to subparagraph 
                (D), the payment adjustment under paragraph (1) shall 
                be equal to the percent specified in subparagraph (B) 
                for such year of the payment amount otherwise provided 
                under this section for such year.
                  ``(B) Specified percent.--The percent specified under 
                this subparagraph for a year is 100 percent minus a 
                number of percentage points equal to the product of--
                          ``(i) the number of percentage points by 
                        which the applicable percent (under section 
                        1848(a)(7)(A)(ii)) for the year is less than 
                        100 percent; and
                          ``(ii) the Medicare physician expenditure 
                        proportion specified in subparagraph (C) for 
                        the year.
                  ``(C) Medicare physician expenditure proportion.--The 
                Medicare physician expenditure proportion under this 
                subparagraph for a year is the Secretary's estimate of 
                the proportion, of the expenditures under parts A and B 
                that are not attributable to this part, that are 
                attributable to expenditures for physicians' services.
                  ``(D) Application of payment adjustment.--In the case 
                that a qualifying MA organization attests that not all 
                eligible professionals are meaningful EHR users with 
                respect to a year, the Secretary shall apply the 
                payment adjustment under this paragraph based on the 
                proportion of such eligible professionals that are not 
                meaningful EHR users for such year.
          ``(5) Qualifying ma organization defined.--In this subsection 
        and subsection (m), the term `qualifying MA organization' means 
        a Medicare Advantage organization that is organized as a health 
        maintenance organization (as defined in section 2791(b)(3) of 
        the Public Health Service Act).
          ``(6) Meaningful ehr user attestation.--For purposes of this 
        subsection and subsection (m), a qualifying MA organization 
        shall submit an attestation, in a form and manner specified by 
        the Secretary which may include the submission of such 
        attestation as part of submission of the initial bid under 
        section 1854(a)(1)(A)(iv), identifying--
                  ``(A) whether each eligible professional described in 
                paragraph (2), with respect to such organization is a 
                meaningful EHR user (as defined in section 1848(o)(2)) 
                for a year specified by the Secretary; and
                  ``(B) whether each eligible hospital described in 
                subsection (m)(1), with respect to such organization, 
                is a meaningful EHR user (as defined in section 
                1886(n)(3)) for an applicable period specified by the 
                Secretary.''.
  (d) Conforming Amendments.--Section 1853 of the Social Security Act 
(42 U.S.C. 1395w-23) is amended--
          (1) in subsection (a)(1)(A), by striking ``and (i)'' and 
        inserting ``(i), and (l)'';
          (2) in subsection (c)--
                  (A) in paragraph (1)(D)(i), by striking ``section 
                1886(h)'' and inserting ``sections 1848(o) and 
                1886(h)''; and
                  (B) in paragraph (6)(A), by inserting after ``under 
                part B,'' the following: ``excluding expenditures 
                attributable to subsections (a)(7) and (o) of section 
                1848,''; and
          (3) in subsection (f), by inserting ``and for payments under 
        subsection (l)'' after ``with the organization''.
  (e) Conforming Amendments to e-Prescribing.--
          (1) Section 1848(a)(5)(A) of the Social Security Act (42 
        U.S.C. 1395w-4(a)(5)(A)) is amended--
                  (A) in clause (i), by striking ``or any subsequent 
                year'' and inserting ``, 2013, 2014, or 2015''; and
                  (B) in clause (ii), by striking ``and each subsequent 
                year'' and inserting ``and 2015''.
          (2) Section 1848(m)(2) of such Act (42 U.S.C. 1395w-4(m)(2)) 
        is amended--
                  (A) in subparagraph (A), by striking ``For 2009'' and 
                inserting ``Subject to subparagraph (D), for 2009''; 
                and
                  (B) by adding at the end the following new 
                subparagraph:
                  ``(D) Limitation with respect to ehr incentive 
                payments.--The provisions of this paragraph shall not 
                apply to an eligible professional (or, in the case of a 
                group practice under paragraph (3)(C), to the group 
                practice) if, for the reporting period the eligible 
                professional (or group practice) receives an incentive 
                payment under subsection (o)(1)(A) with respect to a 
                certified EHR technology (as defined in subsection 
                (o)(4)) that has the capability of electronic 
                prescribing.''.

SEC. 4312. INCENTIVES FOR HOSPITALS.

  (a) Incentive Payment.--Section 1886 of the Social Security Act (42 
U.S.C. 1395ww) is amended by adding at the end the following new 
subsection:
  ``(n) Incentives for Adoption and Meaningful Use of Certified EHR 
Technology.--
          ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, with respect to inpatient hospital services 
        furnished by an eligible hospital during a payment year (as 
        defined in paragraph (2)(G)), if the eligible hospital is a 
        meaningful EHR user (as determined under paragraph (3)) for the 
        reporting period with respect to such year, in addition to the 
        amount otherwise paid under this section, there also shall be 
        paid to the eligible hospital, from the Federal Hospital 
        Insurance Trust Fund established under section 1817, an amount 
        equal to the applicable amount specified in paragraph (2)(A) 
        for the hospital for such payment year.
          ``(2) Payment amount.--
                  ``(A) In general.--Subject to the succeeding 
                subparagraphs of this paragraph, the applicable amount 
                specified in this subparagraph for an eligible hospital 
                for a payment year is equal to the product of the 
                following:
                          ``(i) Initial amount.--The sum of--
                                  ``(I) the base amount specified in 
                                subparagraph (B); plus
                                  ``(II) the discharge related amount 
                                specified in subparagraph (C) for a 12-
                                month period selected by the Secretary 
                                with respect to such payment year.
                          ``(ii) Medicare share.--The Medicare share as 
                        specified in subparagraph (D) for the hospital 
                        for a period selected by the Secretary with 
                        respect to such payment year.
                          ``(iii) Transition factor.--The transition 
                        factor specified in subparagraph (E) for the 
                        hospital for the payment year.
                  ``(B) Base amount.--The base amount specified in this 
                subparagraph is $2,000,000.
                  ``(C) Discharge related amount.--The discharge 
                related amount specified in this subparagraph for a 12-
                month period selected by the Secretary shall be 
                determined as the sum of the amount, based upon total 
                discharges (regardless of any source of payment) for 
                the period, for each discharge up to the 23,000th 
                discharge as follows:
                          ``(i) For the 1,150th through the 9,200nd 
                        discharge, $200.
                          ``(ii) For the 9,201st through the 13,800th 
                        discharge, 50 percent of the amount specified 
                        in clause (i).
                          ``(iii) For the 13,801st through the 23,000th 
                        discharge, 30 percent of the amount specified 
                        in clause (i).
                  ``(D) Medicare share.--The Medicare share specified 
                under this subparagraph for a hospital for a period 
                selected by the Secretary for a payment year is equal 
                to the fraction--
                          ``(i) the numerator of which is the sum (for 
                        such period and with respect to the hospital) 
                        of--
                                  ``(I) the number of inpatient-bed-
                                days (as established by the Secretary) 
                                which are attributable to individuals 
                                with respect to whom payment may be 
                                made under part A; and
                                  ``(II) the number of inpatient-bed-
                                days (as so established) which are 
                                attributable to individuals who are 
                                enrolled with a Medicare Advantage 
                                organization under part C; and
                          ``(ii) the denominator of which is the 
                        product of--
                                  ``(I) the total number of inpatient-
                                bed-days with respect to the hospital 
                                during such period; and
                                  ``(II) the total amount of the 
                                hospital's charges during such period, 
                                not including any charges that are 
                                attributable to charity care (as such 
                                term is used for purposes of hospital 
                                cost reporting under this title), 
                                divided by the total amount of the 
                                hospital's charges during such period.
                Insofar as the Secretary determines that data are not 
                available on charity care necessary to calculate the 
                portion of the formula specified in clause (ii)(II), 
                the Secretary shall use data on uncompensated care and 
                may adjust such data so as to be an appropriate proxy 
                for charity care including a downward adjustment to 
                eliminate bad debt data from uncompensated care data. 
                In the absence of the data necessary, with respect to a 
                hospital, for the Secretary to compute the amount 
                described in clause (ii)(II), the amount under such 
                clause shall be deemed to be 1. In the absence of data, 
                with respect to a hospital, necessary to compute the 
                amount described in clause (i)(II), the amount under 
                such clause shall be deemed to be 0.
                  ``(E) Transition factor specified.--
                          ``(i) In general.--Subject to clause (ii), 
                        the transition factor specified in this 
                        subparagraph for an eligible hospital for a 
                        payment year is as follows:
                                  ``(I) For the first payment year for 
                                such hospital, 1.
                                  ``(II) For the second payment year 
                                for such hospital, \3/4\.
                                  ``(III) For the third payment year 
                                for such hospital, \1/2\.
                                  ``(IV) For the fourth payment year 
                                for such hospital, \1/4\.
                                  ``(V) For any succeeding payment year 
                                for such hospital, 0.
                          ``(ii) Phase down for eligible hospitals 
                        first adopting ehr after 2013.--If the first 
                        payment year for an eligible hospital is after 
                        2013, then the transition factor specified in 
                        this subparagraph for a payment year for such 
                        hospital is the same as the amount specified in 
                        clause (i) for such payment year for an 
                        eligible hospital for which the first payment 
                        year is 2013. If the first payment year for an 
                        eligible hospital is after 2015 then the 
                        transition factor specified in this 
                        subparagraph for such hospital and for such 
                        year and any subsequent year shall be 0.
                  ``(F) Form of payment.--The payment under this 
                subsection for a payment year may be in the form of a 
                single consolidated payment or in the form of such 
                periodic installments as the Secretary may specify.
                  ``(G) Payment year defined.--
                          ``(i) In general.--For purposes of this 
                        subsection, the term `payment year' means a 
                        fiscal year beginning with fiscal year 2011.
                          ``(ii) First, second, etc. payment year.--The 
                        term `first payment year' means, with respect 
                        to inpatient hospital services furnished by an 
                        eligible hospital, the first fiscal year for 
                        which an incentive payment is made for such 
                        services under this subsection. The terms 
                        `second payment year', `third payment year', 
                        and `fourth payment year' mean, with respect to 
                        an eligible hospital, each successive year 
                        immediately following the first payment year 
                        for that hospital.
          ``(3) Meaningful ehr user.--
                  ``(A) In general.--For purposes of paragraph (1), an 
                eligible hospital shall be treated as a meaningful EHR 
                user for a reporting period for a payment year (or, for 
                purposes of subsection (b)(3)(B)(ix), for a reporting 
                period under such subsection for a fiscal year) if each 
                of the following requirements are met:
                          ``(i) Meaningful use of certified ehr 
                        technology.--The eligible hospital demonstrates 
                        to the satisfaction of the Secretary, in 
                        accordance with subparagraph (C)(i), that 
                        during such period the hospital is using 
                        certified EHR technology in a meaningful 
                        manner.
                          ``(ii) Information exchange.--The eligible 
                        hospital demonstrates to the satisfaction of 
                        the Secretary, in accordance with subparagraph 
                        (C)(i), that during such period such certified 
                        EHR technology is connected in a manner that 
                        provides, in accordance with law and standards 
                        applicable to the exchange of information, for 
                        the electronic exchange of health information 
                        to improve the quality of health care, such as 
                        promoting care coordination.
                          ``(iii) Reporting on measures using ehr.--
                        Subject to subparagraph (B)(ii) and using such 
                        certified EHR technology, the eligible hospital 
                        submits information for such period, in a form 
                        and manner specified by the Secretary, on such 
                        clinical quality measures and such other 
                        measures as selected by the Secretary under 
                        subparagraph (B)(i).
                The Secretary shall seek to improve the use of 
                electronic health records and health care quality over 
                time by requiring more stringent measures of meaningful 
                use selected under this paragraph.
                  ``(B) Reporting on measures.--
                          ``(i) Selection.--The Secretary shall select 
                        measures for purposes of subparagraph (A)(iii) 
                        but only consistent with the following:
                                  ``(I) The Secretary shall provide 
                                preference to clinical quality measures 
                                that have been selected for purposes of 
                                applying subsection (b)(3)(B)(viii) or 
                                that have been endorsed by the entity 
                                with a contract with the Secretary 
                                under section 1890(a).
                                  ``(II) Prior to any measure (other 
                                than a clinical quality measure that 
                                has been selected for purposes of 
                                applying subsection (b)(3)(B)(viii)) 
                                being selected under this subparagraph, 
                                the Secretary shall publish in the 
                                Federal Register such measure and 
                                provide for a period of public comment 
                                on such measure.
                          ``(ii) Limitations.--The Secretary may not 
                        require the electronic reporting of information 
                        on clinical quality measures under subparagraph 
                        (A)(iii) unless the Secretary has the capacity 
                        to accept the information electronically, which 
                        may be on a pilot basis.
                          ``(iii) Coordination of reporting of 
                        information.--In selecting such measures, and 
                        in establishing the form and manner for 
                        reporting measures under subparagraph (A)(iii), 
                        the Secretary shall seek to avoid redundant or 
                        duplicative reporting with reporting otherwise 
                        required, including reporting under subsection 
                        (b)(3)(B)(viii).
                  ``(C) Demonstration of meaningful use of certified 
                ehr technology and information exchange.--
                          ``(i) In general.--A hospital may satisfy the 
                        demonstration requirement of clauses (i) and 
                        (ii) of subparagraph (A) through means 
                        specified by the Secretary, which may include--
                                  ``(I) an attestation;
                                  ``(II) the submission of claims with 
                                appropriate coding (such as a code 
                                indicating that inpatient care was 
                                documented using certified EHR 
                                technology);
                                  ``(III) a survey response;
                                  ``(IV) reporting under subparagraph 
                                (A)(iii); and
                                  ``(V) other means specified by the 
                                Secretary.
                          ``(ii) Use of part d data.--Notwithstanding 
                        sections 1860D-15(d)(2)(B) and 1860D-15(f)(2), 
                        the Secretary may use data regarding drug 
                        claims submitted for purposes of section 1860D-
                        15 that are necessary for purposes of 
                        subparagraph (A).
          ``(4) Application.--
                  ``(A) Limitations on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the determination of any 
                incentive payment under this subsection and the payment 
                adjustment under subsection (b)(3)(B)(ix), including 
                the determination of a meaningful EHR user under 
                paragraph (3), determination of measures applicable to 
                services furnished by eligible hospitals under this 
                subsection, and the exception under subsection 
                (b)(3)(B)(ix)(II).
                  ``(B) Posting on website.--The Secretary shall post 
                on the Internet website of the Centers for Medicare & 
                Medicaid Services, in an easily understandable format, 
                a list of the names of the eligible hospitals that are 
                meaningful EHR users under this subsection or 
                subsection (b)(3)(B)(ix) and other relevant data as 
                determined appropriate by the Secretary. The Secretary 
                shall ensure that a hospital has the opportunity to 
                review the other relevant data that are to be made 
                public with respect to the hospital prior to such data 
                being made public.
          ``(5) Certified ehr technology defined.--The term `certified 
        EHR technology' has the meaning given such term in section 
        1848(o)(4).
          ``(6) Definitions.--For purposes of this subsection:
                  ``(A) Eligible hospital.--The term `eligible 
                hospital' means a subsection (d) hospital.
                  ``(B) Reporting period.--The term `reporting period' 
                means any period (or periods), with respect to a 
                payment year, as specified by the Secretary.''.
  (b) Incentive Market Basket Adjustment.--Section 1886(b)(3)(B) of the 
Social Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
          (1) in clause (viii)(I), by inserting ``(or, beginning with 
        fiscal year 2016, by one-quarter)'' after ``2.0 percentage 
        points''; and
          (2) by adding at the end the following new clause:
  ``(ix)(I) For purposes of clause (i) for fiscal year 2016 and each 
subsequent fiscal year, in the case of an eligible hospital (as defined 
in subsection (n)(6)(A)) that is not a meaningful EHR user (as defined 
in subsection (n)(3)) for the reporting period for such fiscal year, 
three-quarters of the applicable percentage increase otherwise 
applicable under clause (i) for such fiscal year shall be reduced by 
33\1/3\ percent for fiscal year 2016, 66\2/3\ percent for fiscal year 
2017, and 100 percent for fiscal year 2018 and each subsequent fiscal 
year. Such reduction shall apply only with respect to the fiscal year 
involved and the Secretary shall not take into account such reduction 
in computing the applicable percentage increase under clause (i) for a 
subsequent fiscal year.
  ``(II) The Secretary may, on a case-by-case basis, exempt a 
subsection (d) hospital from the application of subclause (I) with 
respect to a fiscal year if the Secretary determines, subject to annual 
renewal, that requiring such hospital to be a meaningful EHR user 
during such fiscal year would result in a significant hardship, such as 
in the case of a hospital in a rural area without sufficient Internet 
access. In no case may a hospital be granted an exemption under this 
subclause for more than 5 years.
  ``(III) For fiscal year 2016 and each subsequent fiscal year, a State 
in which hospitals are paid for services under section 1814(b)(3) shall 
adjust the payments to each subsection (d) hospital in the State that 
is not a meaningful EHR user (as defined in subsection (n)(3)) in a 
manner that is designed to result in an aggregate reduction in payments 
to hospitals in the State that is equivalent to the aggregate reduction 
that would have occurred if payments had been reduced to each 
subsection (d) hospital in the State in a manner comparable to the 
reduction under the previous provisions of this clause. The State shall 
report to the Secretary the methodology it will use to make the payment 
adjustment under the previous sentence.
  ``(IV) For purposes of this clause, the term `reporting period' 
means, with respect to a fiscal year, any period (or periods), with 
respect to the fiscal year, as specified by the Secretary.''.
  (c) Application to Certain HMO-Affiliated Eligible Hospitals.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as 
amended by section 4311(c), is further amended by adding at the end the 
following new subsection:
  ``(m) Application of Eligible Hospital Incentives for Certain MA 
Organizations for Adoption and Meaningful Use of Certified EHR 
Technology.--
          ``(1) Application.--Subject to paragraphs (3) and (4), in the 
        case of a qualifying MA organization, the provisions of 
        sections 1886(n) and 1886(b)(3)(B)(ix) shall apply with respect 
        to eligible hospitals described in paragraph (2) of the 
        organization which the organization attests under subsection 
        (l)(6) to be meaningful EHR users in a similar manner as they 
        apply to eligible hospitals under such sections. Incentive 
        payments under paragraph (3) shall be made to and payment 
        adjustments under paragraph (4) shall apply to such qualifying 
        organizations.
          ``(2) Eligible hospital described.--With respect to a 
        qualifying MA organization, an eligible hospital described in 
        this paragraph is an eligible hospital that is under common 
        corporate governance with such organization and serves 
        individuals enrolled under an MA plan offered by such 
        organization.
          ``(3) Eligible hospital incentive payments.--
                  ``(A) In general.--In applying section 1886(n)(2) 
                under paragraph (1), instead of the additional payment 
                amount under section 1886(n)(2), there shall be 
                substituted an amount determined by the Secretary to be 
                similar to the estimated amount in the aggregate that 
                would be payable if payment for services furnished by 
                such hospitals was payable under part A instead of this 
                part. In implementing the previous sentence, the 
                Secretary--
                          ``(i) shall, insofar as data to determine the 
                        discharge related amount under section 
                        1886(n)(2)(C) for an eligible hospital are not 
                        available to the Secretary, use such 
                        alternative data and methodology to estimate 
                        such discharge related amount as the Secretary 
                        determines appropriate; and
                          ``(ii) shall, insofar as data to determine 
                        the medicare share described in section 
                        1886(n)(2)(D) for an eligible hospital are not 
                        available to the Secretary, use such 
                        alternative data and methodology to estimate 
                        such share, which data and methodology may 
                        include use of the inpatient bed days (or 
                        discharges) with respect to an eligible 
                        hospital during the appropriate period which 
                        are attributable to both individuals for whom 
                        payment may be made under part A or individuals 
                        enrolled in an MA plan under a Medicare 
                        Advantage organization under this part as a 
                        proportion of the total number of patient-bed-
                        days (or discharges) with respect to such 
                        hospital during such period.
                  ``(B) Avoiding duplication of payments.--
                          ``(i) In general.--In the case of a hospital 
                        that for a payment year is an eligible hospital 
                        described in paragraph (2), is an eligible 
                        hospital under section 1886(n), and for which 
                        at least one-third of their discharges (or bed-
                        days) of Medicare patients for the year are 
                        covered under part A, payment for the payment 
                        year shall be made only under section 1886(n) 
                        and not under this subsection.
                          ``(ii) Methods.--In the case of a hospital 
                        that is an eligible hospital described in 
                        paragraph (2) and also is eligible for an 
                        incentive payment under section 1886(n) but is 
                        not described in clause (i) for the same 
                        payment period, the Secretary shall develop a 
                        process--
                                  ``(I) to ensure that duplicate 
                                payments are not made with respect to 
                                an eligible hospital both under this 
                                subsection and under section 1886(n); 
                                and
                                  ``(II) to collect data from Medicare 
                                Advantage organizations to ensure 
                                against such duplicate payments.
          ``(4) Payment adjustment.--
                  ``(A) Subject to paragraph (3), in the case of a 
                qualifying MA organization (as defined in section 
                1853(l)(5)), if, according to the attestation of the 
                organization submitted under subsection (l)(6) for an 
                applicable period, one or more eligible hospitals (as 
                defined in section 1886(n)(6)(A)) that are under common 
                corporate governance with such organization and that 
                serve individuals enrolled under a plan offered by such 
                organization are not meaningful EHR users (as defined 
                in section 1886(n)(3)) with respect to a period, the 
                payment amount payable under this section for such 
                organization for such period shall be the percent 
                specified in subparagraph (B) for such period of the 
                payment amount otherwise provided under this section 
                for such period.
                  ``(B) Specified percent.--The percent specified under 
                this subparagraph for a year is 100 percent minus a 
                number of percentage points equal to the product of--
                          ``(i) the number of the percentage point 
                        reduction effected under section 
                        1886(b)(3)(B)(ix)(I) for the period; and
                          ``(ii) the Medicare hospital expenditure 
                        proportion specified in subparagraph (C) for 
                        the year.
                  ``(C) Medicare hospital expenditure proportion.--The 
                Medicare hospital expenditure proportion under this 
                subparagraph for a year is the Secretary's estimate of 
                the proportion, of the expenditures under parts A and B 
                that are not attributable to this part, that are 
                attributable to expenditures for inpatient hospital 
                services.
                  ``(D) Application of payment adjustment.--In the case 
                that a qualifying MA organization attests that not all 
                eligible hospitals are meaningful EHR users with 
                respect to an applicable period, the Secretary shall 
                apply the payment adjustment under this paragraph based 
                on a methodology specified by the Secretary, taking 
                into account the proportion of such eligible hospitals, 
                or discharges from such hospitals, that are not 
                meaningful EHR users for such period.''.
  (d) Conforming Amendments.--
          (1) Section 1814(b) of the Social Security Act (42 U.S.C. 
        1395f(b)) is amended--
                  (A) in paragraph (3), in the matter preceding 
                subparagraph (A), by inserting ``, subject to section 
                1886(d)(3)(B)(ix)(III),'' after ``then''; and
                  (B) by adding at the end the following: ``For 
                purposes of applying paragraph (3), there shall be 
                taken into account incentive payments, and payment 
                adjustments under subsection (b)(3)(B)(ix) or (n) of 
                section 1886.''.
          (2) Section 1851(i)(1) of the Social Security Act (42 U.S.C. 
        1395w-21(i)(1)) is amended by striking ``and 1886(h)(3)(D)'' 
        and inserting ``1886(h)(3)(D), and 1853(m)''.
          (3) Section 1853 of the Social Security Act (42 U.S.C. 1395w-
        23), as amended by section 4311(d)(1), is amended--
                  (A) in subsection (c)--
                          (i) in paragraph (1)(D)(i), by striking 
                        ``1848(o)'' and inserting ``, 1848(o), and 
                        1886(n)''; and
                          (ii) in paragraph (6)(A), by inserting ``and 
                        subsections (b)(3)(B)(ix) and (n) of section 
                        1886'' after ``section 1848''; and
                  (B) in subsection (f), by inserting ``and subsection 
                (m)'' after ``under subsection (l)''.

SEC. 4313. TREATMENT OF PAYMENTS AND SAVINGS; IMPLEMENTATION FUNDING.

  (a) Premium Hold Harmless.--
          (1) In general.--Section 1839(a)(1) of the Social Security 
        Act (42 U.S.C. 1395r(a)(1)) is amended by adding at the end the 
        following: ``In applying this paragraph there shall not be 
        taken into account additional payments under section 1848(o) 
        and section 1853(l)(3) and the Government contribution under 
        section 1844(a)(3).''.
          (2) Payment.--Section 1844(a) of such Act (42 U.S.C. 
        1395w(a)) is amended--
                  (A) in paragraph (2), by striking the period at the 
                end and inserting ``; plus''; and
                  (B) by adding at the end the following new paragraph:
          ``(3) a Government contribution equal to the amount of 
        payment incentives payable under sections 1848(o) and 
        1853(l)(3).''.
  (b) Medicare Improvement Fund.--Section 1898 of the Social Security 
Act (42 U.S.C. 1395iii), as added by section 7002(a) of the 
Supplemental Appropriations Act, 2008 (Public Law 110-252) and as 
amended by section 188(a)(2) of the Medicare Improvements for Patients 
and Providers Act of 2008 (Public Law 110-275; 122 Stat. 2589) and by 
section 6 of the QI Program Supplemental Funding Act of 2008, is 
amended--
          (1) in subsection (a)--
                  (A) by inserting ``medicare'' before ``fee-for-
                service''; and
                  (B) by inserting before the period at the end the 
                following: ``including, but not limited to, an increase 
                in the conversion factor under section 1848(d) to 
                address, in whole or in part, any projected shortfall 
                in the conversion factor for 2014 relative to the 
                conversion factor for 2008 and adjustments to payments 
                for items and services furnished by providers of 
                services and suppliers under such original medicare 
                fee-for-service program''; and
          (2) in subsection (b)--
                  (A) in paragraph (1), by striking ``during fiscal 
                year 2014,'' and all that follows and inserting the 
                following: ``during--
                  ``(A) fiscal year 2014, $22,290,000,000; and
                  ``(B) fiscal year 2020 and each subsequent fiscal 
                year, the Secretary's estimate, as of July 1 of the 
                fiscal year, of the aggregate reduction in expenditures 
                under this title during the preceding fiscal year 
                directly resulting from the reduction in payment 
                amounts under sections 1848(a)(7), 1853(l)(4), 
                1853(m)(4), and 1886(b)(3)(B)(ix).''; and
                  (B) by adding at the end the following new paragraph:
          ``(4) No effect on payments in subsequent years.--In the case 
        that expenditures from the Fund are applied to, or otherwise 
        affect, a payment rate for an item or service under this title 
        for a year, the payment rate for such item or service shall be 
        computed for a subsequent year as if such application or effect 
        had never occurred.''.
  (c) Implementation Funding.--In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise appropriated, 
there are appropriated to the Secretary of Health and Human Services 
for the Center for Medicare & Medicaid Services Program Management 
Account, $60,000,000 for each of fiscal years 2009 through 2015 and 
$30,000,000 for each succeeding fiscal year through fiscal year 2019, 
which shall be available for purposes of carrying out the provisions of 
(and amendments made by) this part. Amounts appropriated under this 
subsection for a fiscal year shall be available until expended.

SEC. 4314. STUDY ON APPLICATION OF EHR PAYMENT INCENTIVES FOR PROVIDERS 
                    NOT RECEIVING OTHER INCENTIVE PAYMENTS.

  (a) Study.--
          (1) In general.--The Secretary of Health and Human Services 
        shall conduct a study to determine the extent to which and 
        manner in which payment incentives (such as under title XVIII 
        or XIX of the Social Security Act) and other funding for 
        purposes of implementing and using certified EHR technology (as 
        defined in section 3000 of the Public Health Service Act) 
        should be made available to health care providers who are 
        receiving minimal or no payment incentives or other funding 
        under this Act, under title XVIII or XIX of the Social Security 
        Act, or otherwise, for such purposes.
          (2) Details of study.--Such study shall include an 
        examination of--
                  (A) the adoption rates of certified EHR technology by 
                such health care providers;
                  (B) the clinical utility of such technology by such 
                health care providers;
                  (C) whether the services furnished by such health 
                care providers are appropriate for or would benefit 
                from the use of such technology;
                  (D) the extent to which such health care providers 
                work in settings that might otherwise receive an 
                incentive payment or other funding under this Act, 
                title XVIII or XIX of the Social Security Act, or 
                otherwise;
                  (E) the potential costs and the potential benefits of 
                making payment incentives and other funding available 
                to such health care providers; and
                  (F) any other issues the Secretary deems to be 
                appropriate.
  (b) Report.--Not later than June 30, 2010, the Secretary shall submit 
to Congress a report on the findings and conclusions of the study 
conducted under subsection (a).

                       PART III--MEDICAID FUNDING

SEC. 4321. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAYMENTS; 
                    IMPLEMENTATION FUNDING.

  (a) In General.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended--
          (1) in subsection (a)(3)--
                  (A) by striking ``and'' at the end of subparagraph 
                (D);
                  (B) by striking ``plus'' at the end of subparagraph 
                (E) and inserting ``and''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(F)(i) 100 percent of so much of the sums expended 
                during such quarter as are attributable to payments for 
                certified EHR technology (and support services 
                including maintenance and training that is for, or is 
                necessary for the adoption and operation of, such 
                technology) by Medicaid providers described in 
                subsection (t)(1); and
                  ``(ii) 90 percent of so much of the sums expended 
                during such quarter as are attributable to payments for 
                reasonable administrative expenses related to the 
                administration of payments described in clause (i) if 
                the State meets the condition described in subsection 
                (t)(9); plus''; and
          (2) by inserting after subsection (s) the following new 
        subsection:
  ``(t)(1) For purposes of subsection (a)(3)(F), the payments for 
certified EHR technology (and support services including maintenance 
that is for, or is necessary for the operation of, such technology) by 
Medicaid providers described in this paragraph are payments made by the 
State in accordance with this subsection of 85 percent of the net 
allowable costs of Medicaid providers (as defined in paragraph (2)) for 
such technology (and support services).
  ``(2) In this subsection and subsection (a)(3)(F), the term `Medicaid 
provider' means--
          ``(A) an eligible professional (as defined in paragraph 
        (3)(B)) who is not hospital-based and has at least 30 percent 
        of the professional's patient volume (as estimated in 
        accordance with standards established by the Secretary) 
        attributable to individuals who are receiving medical 
        assistance under this title; and
          ``(B)(i) a children's hospital, (ii) an acute-care hospital 
        that is not described in clause (i) and that has at least 10 
        percent of the hospital's patient volume (as estimated in 
        accordance with standards established by the Secretary) 
        attributable to individuals who are receiving medical 
        assistance under this title, or (iii) a Federally-qualified 
        health center or rural health clinic that has at least 30 
        percent of the center's or clinic's patient volume (as 
        estimated in accordance with standards established by the 
        Secretary) attributable to individuals who are receiving 
        medical assistance under this title.
An eligible professional shall not qualify as a Medicaid provider under 
this subsection unless the eligible professional has waived, in a 
manner specified by the Secretary, any right to payment under section 
1848(o) with respect to the adoption or support of certified EHR 
technology by the professional. In applying clauses (ii) and (iii) of 
subparagraph (B), the standards established by the Secretary for 
patient volume shall include individuals enrolled in a Medicaid managed 
care plan (under section 1903(m) or section 1932).
  ``(3) In this subsection and subsection (a)(3)(F):
          ``(A) The term `certified EHR technology' means a qualified 
        electronic health record (as defined in 3000(13) of the Public 
        Health Service Act) that is certified pursuant to section 
        3001(c)(5) of such Act as meeting standards adopted under 
        section 3004 of such Act that are applicable to the type of 
        record involved (as determined by the Secretary, such as an 
        ambulatory electronic health record for office-based physicians 
        or an inpatient hospital electronic health record for 
        hospitals).
          ``(B) The term `eligible professional' means a physician as 
        defined in paragraphs (1) and (2) of section 1861(r), and 
        includes a nurse mid-wife and a nurse practitioner.
          ``(C) The term `hospital-based' means, with respect to an 
        eligible professional, a professional (such as a pathologist, 
        anesthesiologist, or emergency physician) who furnishes 
        substantially all of the individual's professional services in 
        a hospital setting (whether inpatient or outpatient) and 
        through the use of the facilities and equipment, including 
        computer equipment, of the hospital.
  ``(4)(A) The term `allowable costs' means, with respect to certified 
EHR technology of a Medicaid provider, costs of such technology (and 
support services including maintenance and training that is for, or is 
necessary for the adoption and operation of, such technology) as 
determined by the Secretary to be reasonable.
  ``(B) The term `net allowable costs' means allowable costs reduced by 
any payment that is made to the Medicaid provider involved from any 
other source that is directly attributable to payment for certified EHR 
technology or services described in subparagraph (A).
  ``(C) In no case shall--
          ``(i) the aggregate allowable costs under this subsection 
        (covering one or more years) with respect to a Medicaid 
        provider described in paragraph (2)(A) for purchase and initial 
        implementation of certified EHR technology (and services 
        described in subparagraph (A)) exceed $25,000 or include costs 
        over a period of longer than 5 years;
          ``(ii) for costs not described in clause (i) relating to the 
        operation, maintenance, or use of certified EHR technology, the 
        annual allowable costs under this subsection with respect to 
        such a Medicaid provider for costs not described in clause (i) 
        for any year exceed $10,000;
          ``(iii) payment described in paragraph (1) for costs 
        described in clause (ii) be made with respect to such a 
        Medicaid provider over a period of more than 5 years;
          ``(iv) the aggregate allowable costs under this subsection 
        with respect to such a Medicaid provider for all costs exceed 
        $75,000; or
          ``(v) the allowable costs, whether for purchase and initial 
        implementation, maintenance, or otherwise, for a Medicaid 
        provider described in paragraph (2)(B) exceed such aggregate or 
        annual limitation as the Secretary shall establish, based on an 
        amount determined by the Secretary as being adequate to adopt 
        and maintain certified EHR technology, consistent with 
        paragraph (6).
  ``(5) Payments described in paragraph (1) are not in accordance with 
this subsection unless the following requirements are met:
          ``(A) The State provides assurances satisfactory to the 
        Secretary that amounts received under subsection (a)(3)(F) with 
        respect to costs of a Medicaid provider are paid directly to 
        such provider without any deduction or rebate.
          ``(B) Such Medicaid provider is responsible for payment of 
        the costs described in such paragraph that are not provided 
        under this title.
          ``(C) With respect to payments to such Medicaid provider for 
        costs other than costs related to the initial adoption of 
        certified EHR technology, the Medicaid provider demonstrates 
        meaningful use of certified EHR technology through a means that 
        is approved by the State and acceptable to the Secretary, and 
        that may be based upon the methodologies applied under section 
        1848(o) or 1886(n).
          ``(D) To the extent specified by the Secretary, the certified 
        EHR technology is compatible with State or Federal 
        administrative management systems.
  ``(6)(A) In no case shall the payments described in paragraph (1), 
with respect to a hospital, exceed in the aggregate the product of--
          ``(i) the overall hospital EHR amount for the hospital 
        computed under subparagraph (B); and
          ``(ii) the Medicaid share for such hospital computed under 
        subparagraph (C).
  ``(B) For purposes of this paragraph, the overall hospital EHR 
amount, with respect to a hospital, is the sum of the applicable 
amounts specified in section 1886(n)(2)(A) for such hospital for the 
first 4 payment years (as estimated by the Secretary) determined as if 
the Medicare share specified in clause (ii) of such section were 1. The 
Secretary shall publish in the Federal Register the overall hospital 
EHR amount for each hospital eligible for payments under this 
subsection. In computing amounts under clause (ii) for payment years 
after the first payment year, the Secretary shall assume that in 
subsequent payment years discharges increase at the average annual rate 
of growth of the most recent 3 years for which discharge data are 
available per year.
  ``(C) The Medicaid share computed under this subparagraph, for a 
hospital for a period specified by the Secretary, shall be calculated 
in the same manner as the Medicare share under section 1886(n)(2)(D) 
for such a hospital and period, except that there shall be substituted 
for the numerator under clause (i) of such section the amount that is 
equal to the number of inpatient-bed-days (as established by the 
Secretary) which are attributable to individuals who are receiving 
medical assistance under this title and who are not described in 
section 1886(n)(2)(D)(i). In computing inpatient-bed-days under the 
previous sentence, the Secretary shall take into account inpatient-bed-
days attributable to inpatient-bed-days that are paid for individuals 
enrolled in a Medicaid managed care plan (under section 1903(m) or 
section 1932).
  ``(7) With respect to health care providers other than hospitals, the 
Secretary shall ensure coordination of the different programs for 
payment of such health care providers for adoption or use of health 
information technology (including certified EHR technology), as well as 
payments for such health care providers provided under this title or 
title XVIII, to assure no duplication of funding.
  ``(8) In carrying out paragraph (5)(C), the State and Secretary shall 
seek, to the maximum extent practicable, to avoid duplicative 
requirements from Federal and State Governments to demonstrate 
meaningful use of certified EHR technology under this title and title 
XVIII. In doing so, the Secretary may deem satisfaction of requirements 
for such meaningful use for a payment year under title XVIII to be 
sufficient to qualify as meaningful use under this subsection. The 
Secretary may also specify the reporting periods under this subsection 
in order to carry out this paragraph.
  ``(9) In order to be provided Federal financial participation under 
subsection (a)(3)(F)(ii), a State must demonstrate to the satisfaction 
of the Secretary, that the State--
          ``(A) is using the funds provided for the purposes of 
        administering payments under this subsection, including 
        tracking of meaningful use by Medicaid providers;
          ``(B) is conducting adequate oversight of the program under 
        this subsection, including routine tracking of meaningful use 
        attestations and reporting mechanisms; and
          ``(C) is pursuing initiatives to encourage the adoption of 
        certified EHR technology to promote health care quality and the 
        exchange of health care information under this title, subject 
        to applicable laws and regulations governing such exchange.
  ``(10) The Secretary shall periodically submit reports to the 
Committee on Energy and Commerce of the House of Representatives and 
the Committee on Finance of the Senate on status, progress, and 
oversight of payments under paragraph (1).''.
  (b) Implementation Funding.--In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise appropriated, 
there are appropriated to the Secretary of Health and Human Services 
for the Center for Medicare & Medicaid Services Program Management 
Account, $40,000,000 for each of fiscal years 2009 through 2015 and 
$20,000,000 for each succeeding fiscal year through fiscal year 2019, 
which shall be available for purposes of carrying out the provisions of 
(and the amendments made by) this part. Amounts appropriated under this 
subsection for a fiscal year shall be available until expended.

                          Subtitle D--Privacy

SEC. 4400. DEFINITIONS.

  In this subtitle, except as specified otherwise:
          (1) Breach.--The term ``breach'' means the unauthorized 
        acquisition, access, use, or disclosure of protected health 
        information which compromises the security, privacy, or 
        integrity of protected health information maintained by or on 
        behalf of a person. Such term does not include any 
        unintentional acquisition, access, use, or disclosure of such 
        information by an employee or agent of the covered entity or 
        business associate involved if such acquisition, access, use, 
        or disclosure, respectively, was made in good faith and within 
        the course and scope of the employment or other contractual 
        relationship of such employee or agent, respectively, with the 
        covered entity or business associate and if such information is 
        not further acquired, accessed, used, or disclosed by such 
        employee or agent.
          (2) Business associate.--The term ``business associate'' has 
        the meaning given such term in section 160.103 of title 45, 
        Code of Federal Regulations.
          (3) Covered entity.--The term ``covered entity'' has the 
        meaning given such term in section 160.103 of title 45, Code of 
        Federal Regulations.
          (4) Disclose.--The terms ``disclose'' and ``disclosure'' have 
        the meaning given the term ``disclosure'' in section 160.103 of 
        title 45, Code of Federal Regulations.
          (5) Electronic health record.--The term ``electronic health 
        record'' means an electronic record of health-related 
        information on an individual that is created, gathered, 
        managed, and consulted by authorized health care clinicians and 
        staff.
          (6) Health care operations.--The term ``health care 
        operation'' has the meaning given such term in section 164.501 
        of title 45, Code of Federal Regulations.
          (7) Health care provider.--The term ``health care provider'' 
        has the meaning given such term in section 160.103 of title 45, 
        Code of Federal Regulations.
          (8) Health plan.--The term ``health plan'' has the meaning 
        given such term in section 1171(5) of the Social Security Act.
          (9) National coordinator.--The term ``National Coordinator'' 
        means the head of the Office of the National Coordinator for 
        Health Information Technology established under section 3001(a) 
        of the Public Health Service Act, as added by section 4101.
          (10) Payment.--The term ``payment'' has the meaning given 
        such term in section 164.501 of title 45, Code of Federal 
        Regulations.
          (11) Personal health record.--The term ``personal health 
        record'' means an electronic record of individually 
        identifiable health information on an individual that can be 
        drawn from multiple sources and that is managed, shared, and 
        controlled by or for the individual.
          (12) Protected health information.--The term ``protected 
        health information'' has the meaning given such term in section 
        160.103 of title 45, Code of Federal Regulations.
          (13) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
          (14) Security.--The term ``security'' has the meaning given 
        such term in section 164.304 of title 45, Code of Federal 
        Regulations.
          (15) State.--The term ``State'' means each of the several 
        States, the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
          (16) Treatment.--The term ``treatment'' has the meaning given 
        such term in section 164.501 of title 45, Code of Federal 
        Regulations.
          (17) Use.--The term ``use'' has the meaning given such term 
        in section 160.103 of title 45, Code of Federal Regulations.
          (18) Vendor of personal health records.--The term ``vendor of 
        personal health records'' means an entity, other than a covered 
        entity (as defined in paragraph (3)), that offers or maintains 
        a personal health record.

      PART I--IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS

SEC. 4401. APPLICATION OF SECURITY PROVISIONS AND PENALTIES TO BUSINESS 
                    ASSOCIATES OF COVERED ENTITIES; ANNUAL GUIDANCE ON 
                    SECURITY PROVISIONS.

  (a) Application of Security Provisions.--Sections 164.308, 164.310, 
164.312, and 164.316 of title 45, Code of Federal Regulations, shall 
apply to a business associate of a covered entity in the same manner 
that such sections apply to the covered entity. The additional 
requirements of this title that relate to security and that are made 
applicable with respect to covered entities shall also be applicable to 
such a business associate and shall be incorporated into the business 
associate agreement between the business associate and the covered 
entity.
  (b) Application of Civil and Criminal Penalties.--In the case of a 
business associate that violates any security provision specified in 
subsection (a), sections 1176 and 1177 of the Social Security Act (42 
U.S.C. 1320d-5, 1320d-6) shall apply to the business associate with 
respect to such violation in the same manner such sections apply to a 
covered entity that violates such security provision.
  (c) Annual Guidance.--For the first year beginning after the date of 
the enactment of this Act and annually thereafter, the Secretary of 
Health and Human Services shall, in consultation with industry 
stakeholders, annually issue guidance on the most effective and 
appropriate technical safeguards for use in carrying out the sections 
referred to in subsection (a) and the security standards in subpart C 
of part 164 of title 45, Code of Federal Regulations, as such 
provisions are in effect as of the date before the enactment of this 
Act.

SEC. 4402. NOTIFICATION IN THE CASE OF BREACH.

  (a) In General.--A covered entity that accesses, maintains, retains, 
modifies, records, stores, destroys, or otherwise holds, uses, or 
discloses unsecured protected health information (as defined in 
subsection (h)(1)) shall, in the case of a breach of such information 
that is discovered by the covered entity, notify each individual whose 
unsecured protected health information has been, or is reasonably 
believed by the covered entity to have been, accessed, acquired, or 
disclosed as a result of such breach.
  (b) Notification of Covered Entity by Business Associate.--A business 
associate of a covered entity that accesses, maintains, retains, 
modifies, records, stores, destroys, or otherwise holds, uses, or 
discloses unsecured protected health information shall, following the 
discovery of a breach of such information, notify the covered entity of 
such breach. Such notice shall include the identification of each 
individual whose unsecured protected health information has been, or is 
reasonably believed by the business associate to have been, accessed, 
acquired, or disclosed during such breach.
  (c) Breaches Treated as Discovered.--For purposes of this section, a 
breach shall be treated as discovered by a covered entity or by a 
business associate as of the first day on which such breach is known to 
such entity or associate, respectively, (including any person, other 
than the individual committing the breach, that is an employee, 
officer, or other agent of such entity or associate, respectively) or 
should reasonably have been known to such entity or associate (or 
person) to have occurred.
  (d) Timeliness of Notification.--
          (1) In general.--Subject to subsection (g), all notifications 
        required under this section shall be made without unreasonable 
        delay and in no case later than 60 calendar days after the 
        discovery of a breach by the covered entity involved (or 
        business associate involved in the case of a notification 
        required under subsection (b)).
          (2) Burden of proof.--The covered entity involved (or 
        business associate involved in the case of a notification 
        required under subsection (b)), shall have the burden of 
        demonstrating that all notifications were made as required 
        under this part, including evidence demonstrating the necessity 
        of any delay.
  (e) Methods of Notice.--
          (1) Individual notice.--Notice required under this section to 
        be provided to an individual, with respect to a breach, shall 
        be provided promptly and in the following form:
                  (A) Written notification by first-class mail to the 
                individual (or the next of kin of the individual if the 
                individual is deceased) at the last known address of 
                the individual or the next of kin, respectively, or, if 
                specified as a preference by the individual, by 
                electronic mail. The notification may be provided in 
                one or more mailings as information is available.
                  (B) In the case in which there is insufficient, or 
                out-of-date contact information (including a phone 
                number, email address, or any other form of appropriate 
                communication) that precludes direct written (or, if 
                specified by the individual under subparagraph (A), 
                electronic) notification to the individual, a 
                substitute form of notice shall be provided, including, 
                in the case that there are 10 or more individuals for 
                which there is insufficient or out-of-date contact 
                information, a conspicuous posting for a period 
                determined by the Secretary on the home page of the Web 
                site of the covered entity involved or notice in major 
                print or broadcast media, including major media in 
                geographic areas where the individuals affected by the 
                breach likely reside. Such a notice in media or web 
                posting will include a toll-free phone number where an 
                individual can learn whether or not the individual's 
                unsecured protected health information is possibly 
                included in the breach.
                  (C) In any case deemed by the covered entity involved 
                to require urgency because of possible imminent misuse 
                of unsecured protected health information, the covered 
                entity, in addition to notice provided under 
                subparagraph (A), may provide information to 
                individuals by telephone or other means, as 
                appropriate.
          (2) Media notice.--Notice shall be provided to prominent 
        media outlets serving a State or jurisdiction, following the 
        discovery of a breach described in subsection (a), if the 
        unsecured protected health information of more than 500 
        residents of such State or jurisdiction is, or is reasonably 
        believed to have been, accessed, acquired, or disclosed during 
        such breach.
          (3) Notice to secretary.--Notice shall be provided to the 
        Secretary by covered entities of unsecured protected health 
        information that has been acquired or disclosed in a breach. If 
        the breach was with respect to 500 or more individuals than 
        such notice must be provided immediately. If the breach was 
        with respect to less than 500 individuals, the covered entity 
        involved may maintain a log of any such breach occurring and 
        annually submit such a log to the Secretary documenting such 
        breaches occurring during the year involved.
          (4) Posting on hhs public website.--The Secretary shall make 
        available to the public on the Internet website of the 
        Department of Health and Human Services a list that identifies 
        each covered entity involved in a breach described in 
        subsection (a) in which the unsecured protected health 
        information of more than 500 individuals is acquired or 
        disclosed.
  (f) Content of Notification.--Regardless of the method by which 
notice is provided to individuals under this section, notice of a 
breach shall include, to the extent possible, the following:
          (1) A brief description of what happened, including the date 
        of the breach and the date of the discovery of the breach, if 
        known.
          (2) A description of the types of unsecured protected health 
        information that were involved in the breach (such as full 
        name, Social Security number, date of birth, home address, 
        account number, or disability code).
          (3) The steps individuals should take to protect themselves 
        from potential harm resulting from the breach.
          (4) A brief description of what the covered entity involved 
        is doing to investigate the breach, to mitigate losses, and to 
        protect against any further breaches.
          (5) Contact procedures for individuals to ask questions or 
        learn additional information, which shall include a toll-free 
        telephone number, an e-mail address, Web site, or postal 
        address.
  (g) Delay of Notification Authorized for Law Enforcement Purposes.--
If a law enforcement official determines that a notification, notice, 
or posting required under this section would impede a criminal 
investigation or cause damage to national security, such notification, 
notice, or posting shall be delayed in the same manner as provided 
under section 164.528(a)(2) of title 45, Code of Federal Regulations, 
in the case of a disclosure covered under such section.
  (h) Unsecured Protected Health Information.--
          (1) Definition.--
                  (A) In general.--Subject to subparagraph (B), for 
                purposes of this section, the term ``unsecured 
                protected health information'' means protected health 
                information that is not secured through the use of a 
                technology or methodology specified by the Secretary in 
                the guidance issued under paragraph (2).
                  (B) Exception in case timely guidance not issued.--In 
                the case that the Secretary does not issue guidance 
                under paragraph (2) by the date specified in such 
                paragraph, for purposes of this section, the term 
                ``unsecured protected health information'' shall mean 
                protected health information that is not secured by a 
                technology standard that renders protected health 
                information unusable, unreadable, or indecipherable to 
                unauthorized individuals and is developed or endorsed 
                by a standards developing organization that is 
                accredited by the American National Standards 
                Institute.
          (2) Guidance.--For purposes of paragraph (1) and section 
        407(f)(3), not later than the date that is 60 days after the 
        date of the enactment of this Act, the Secretary shall, after 
        consultation with stakeholders, issue (and annually update) 
        guidance specifying the technologies and methodologies that 
        render protected health information unusable, unreadable, or 
        indecipherable to unauthorized individuals.
  (i) Report to Congress on Breaches.--
          (1) In general.--Not later than 12 months after the date of 
        the enactment of this Act and annually thereafter, the 
        Secretary shall prepare and submit to the Committee on Finance 
        and the Committee on Health, Education, Labor, and Pensions of 
        the Senate and the Committee on Ways and Means and the 
        Committee on Energy and Commerce of the House of 
        Representatives a report containing the information described 
        in paragraph (2) regarding breaches for which notice was 
        provided to the Secretary under subsection (e)(3).
          (2) Information.--The information described in this paragraph 
        regarding breaches specified in paragraph (1) shall include--
                  (A) the number and nature of such breaches; and
                  (B) actions taken in response to such breaches.
  (j) Regulations; Effective Date.--To carry out this section, the 
Secretary of Health and Human Services shall promulgate interim final 
regulations by not later than the date that is 180 days after the date 
of the enactment of this title. The provisions of this section shall 
apply to breaches that are discovered on or after the date that is 30 
days after the date of publication of such interim final regulations.

SEC. 4403. EDUCATION ON HEALTH INFORMATION PRIVACY.

  (a) Regional Office Privacy Advisors.--Not later than 6 months after 
the date of the enactment of this Act, the Secretary shall designate an 
individual in each regional office of the Department of Health and 
Human Services to offer guidance and education to covered entities, 
business associates, and individuals on their rights and 
responsibilities related to Federal privacy and security requirements 
for protected health information.
  (b) Education Initiative on Uses of Health Information.--Not later 
than 12 months after the date of the enactment of this Act, the Office 
for Civil Rights within the Department of Health and Human Services 
shall develop and maintain a multi-faceted national education 
initiative to enhance public transparency regarding the uses of 
protected health information, including programs to educate individuals 
about the potential uses of their protected health information, the 
effects of such uses, and the rights of individuals with respect to 
such uses. Such programs shall be conducted in a variety of languages 
and present information in a clear and understandable manner.

SEC. 4404. APPLICATION OF PRIVACY PROVISIONS AND PENALTIES TO BUSINESS 
                    ASSOCIATES OF COVERED ENTITIES.

  (a) Application of Contract Requirements.--In the case of a business 
associate of a covered entity that obtains or creates protected health 
information pursuant to a written contract (or other written 
arrangement) described in section 164.502(e)(2) of title 45, Code of 
Federal Regulations, with such covered entity, the business associate 
may use and disclose such protected health information only if such use 
or disclosure, respectively, is in compliance with each applicable 
requirement of section 164.504(e) of such title. The additional 
requirements of this subtitle that relate to privacy and that are made 
applicable with respect to covered entities shall also be applicable to 
such a business associate and shall be incorporated into the business 
associate agreement between the business associate and the covered 
entity.
  (b) Application of Knowledge Elements Associated With Contracts.--
Section 164.504(e)(1)(ii) of title 45, Code of Federal Regulations, 
shall apply to a business associate described in subsection (a), with 
respect to compliance with such subsection, in the same manner that 
such section applies to a covered entity, with respect to compliance 
with the standards in sections 164.502(e) and 164.504(e) of such title, 
except that in applying such section 164.504(e)(1)(ii) each reference 
to the business associate, with respect to a contract, shall be treated 
as a reference to the covered entity involved in such contract.
  (c) Application of Civil and Criminal Penalties.--In the case of a 
business associate that violates any provision of subsection (a) or 
(b), the provisions of sections 1176 and 1177 of the Social Security 
Act (42 U.S.C. 1320d-5, 1320d-6) shall apply to the business associate 
with respect to such violation in the same manner as such provisions 
apply to a person who violates a provision of part C of title XI of 
such Act.

SEC. 4405. RESTRICTIONS ON CERTAIN DISCLOSURES AND SALES OF HEALTH 
                    INFORMATION; ACCOUNTING OF CERTAIN PROTECTED HEALTH 
                    INFORMATION DISCLOSURES; ACCESS TO CERTAIN 
                    INFORMATION IN ELECTRONIC FORMAT.

  (a) Requested Restrictions on Certain Disclosures of Health 
Information.--In the case that an individual requests under paragraph 
(a)(1)(i)(A) of section 164.522 of title 45, Code of Federal 
Regulations, that a covered entity restrict the disclosure of the 
protected health information of the individual, notwithstanding 
paragraph (a)(1)(ii) of such section, the covered entity must comply 
with the requested restriction if--
          (1) except as otherwise required by law, the disclosure is to 
        a health plan for purposes of carrying out payment or health 
        care operations (and is not for purposes of carrying out 
        treatment); and
          (2) the protected health information pertains solely to a 
        health care item or service for which the health care provider 
        involved has been paid out of pocket in full.
  (b) Disclosures Required to Be Limited to the Limited Data Set or the 
Minimum Necessary.--
          (1) In general.--
                  (A) In general.--Subject to subparagraph (B), a 
                covered entity shall be treated as being in compliance 
                with section 164.502(b)(1) of title 45, Code of Federal 
                Regulations, with respect to the use, disclosure, or 
                request of protected health information described in 
                such section, only if the covered entity limits such 
                protected health information, to the extent 
                practicable, to the limited data set (as defined in 
                section 164.514(e)(2) of such title) or, if needed by 
                such entity, to the minimum necessary to accomplish the 
                intended purpose of such use, disclosure, or request, 
                respectively.
                  (B) Guidance.--Not later than 18 months after the 
                date of the enactment of this section, the Secretary 
                shall issue guidance on what constitutes ``minimum 
                necessary'' for purposes of subpart E of part 164 of 
                title 45, Code of Federal Regulation. In issuing such 
                guidance the Secretary shall take into consideration 
                the guidance under section 4424(c).
                  (C) Sunset.--Subparagraph (A) shall not apply on and 
                after the effective date on which the Secretary issues 
                the guidance under subparagraph (B).
          (2) Determination of minimum necessary.--For purposes of 
        paragraph (1), in the case of the disclosure of protected 
        health information, the covered entity or business associate 
        disclosing such information shall determine what constitutes 
        the minimum necessary to accomplish the intended purpose of 
        such disclosure.
          (3) Application of exceptions.--The exceptions described in 
        section 164.502(b)(2) of title 45, Code of Federal Regulations, 
        shall apply to the requirement under paragraph (1) as of the 
        effective date described in section 4423 in the same manner 
        that such exceptions apply to section 164.502(b)(1) of such 
        title before such date.
          (4) Rule of construction.--Nothing in this subsection shall 
        be construed as affecting the use, disclosure, or request of 
        protected health information that has been de-identified.
  (c) Accounting of Certain Protected Health Information Disclosures 
Required if Covered Entity Uses Electronic Health Record.--
          (1) In general.--In applying section 164.528 of title 45, 
        Code of Federal Regulations, in the case that a covered entity 
        uses or maintains an electronic health record with respect to 
        protected health information--
                  (A) the exception under paragraph (a)(1)(i) of such 
                section shall not apply to disclosures through an 
                electronic health record made by such entity of such 
                information; and
                  (B) an individual shall have a right to receive an 
                accounting of disclosures described in such paragraph 
                of such information made by such covered entity during 
                only the three years prior to the date on which the 
                accounting is requested.
          (2) Regulations.--The Secretary shall promulgate regulations 
        on what information shall be collected about each disclosure 
        referred to in paragraph (1)(A) not later than 18 months after 
        the date on which the Secretary adopts standards on accounting 
        for disclosure described in the section 3002(b)(2)(B)(iv) of 
        the Public Health Service Act, as added by section 4101. Such 
        regulations shall only require such information to be collected 
        through an electronic health record in a manner that takes into 
        account the interests of individuals in learning the 
        circumstances under which their protected health information is 
        being disclosed and takes into account the administrative 
        burden of accounting for such disclosures.
          (3) Construction.--Nothing in this subsection shall be 
        construed as requiring a covered entity to account for 
        disclosures of protected health information that are not made 
        by such covered entity or by a business associate acting on 
        behalf of the covered entity.
          (4) Effective date.--
                  (A) Current users of electronic records.--In the case 
                of a covered entity insofar as it acquired an 
                electronic health record as of January 1, 2009, 
                paragraph (1) shall apply to disclosures, with respect 
                to protected health information, made by the covered 
                entity from such a record on and after January 1, 2014.
                  (B) Others.--In the case of a covered entity insofar 
                as it acquires an electronic health record after 
                January 1, 2009, paragraph (1) shall apply to 
                disclosures, with respect to protected health 
                information, made by the covered entity from such 
                record on and after the later of the following:
                          (i) January 1, 2011; or
                          (ii) the date that it acquires an electronic 
                        health record.
  (d) Review of Health Care Operations.--Not later than 18 months after 
the date of the enactment of this title, the Secretary shall promulgate 
regulations to eliminate from the definition of health care operations 
under section 164.501 of title 45, Code of Federal Regulations, those 
activities that can reasonably and efficiently be conducted through the 
use of information that is de-identified (in accordance with the 
requirements of section 164.514(b) of such title) or that should 
require a valid authorization for use or disclosure. In promulgating 
such regulations, the Secretary may choose to narrow or clarify 
activities that the Secretary chooses to retain in the definition of 
health care operations and the Secretary shall take into account the 
report under section 424(d). In such regulations the Secretary shall 
specify the date on which such regulations shall apply to disclosures 
made by a covered entity, but in no case would such date be sooner than 
the date that is 24 months after the date of the enactment of this 
section.
  (e) Prohibition on Sale of Electronic Health Records or Protected 
Health Information.--
          (1) In general.--Except as provided in paragraph (2), a 
        covered entity or business associate shall not directly or 
        indirectly receive remuneration in exchange for any protected 
        health information of an individual unless the covered entity 
        obtained from the individual, in accordance with section 
        164.508 of title 45, Code of Federal Regulations, a valid 
        authorization that includes, in accordance with such section, a 
        specification of whether the protected health information can 
        be further exchanged for remuneration by the entity receiving 
        protected health information of that individual.
          (2) Exceptions.--Paragraph (1) shall not apply in the 
        following cases:
                  (A) The purpose of the exchange is for research or 
                public health activities (as described in sections 
                164.501, 164.512(i), and 164.512(b) of title 45, Code 
                of Federal Regulations) and the price charged reflects 
                the costs of preparation and transmittal of the data 
                for such purpose.
                  (B) The purpose of the exchange is for the treatment 
                of the individual and the price charges reflects not 
                more than the costs of preparation and transmittal of 
                the data for such purpose.
                  (C) The purpose of the exchange is the health care 
                operation specifically described in subparagraph (iv) 
                of paragraph (6) of the definition of health care 
                operations in section 164.501 of title 45, Code of 
                Federal Regulations.
                  (D) The purpose of the exchange is for remuneration 
                that is provided by a covered entity to a business 
                associate for activities involving the exchange of 
                protected health information that the business 
                associate undertakes on behalf of and at the specific 
                request of the covered entity pursuant to a business 
                associate agreement.
                  (E) The purpose of the exchange is to provide an 
                individual with a copy of the individual's protected 
                health information pursuant to section 164.524 of title 
                45, Code of Federal Regulations.
                  (F) The purpose of the exchange is otherwise 
                determined by the Secretary in regulations to be 
                similarly necessary and appropriate as the exceptions 
                provided in subparagraphs (A) through (E).
          (3) Regulations.--The Secretary shall promulgate regulations 
        to carry out paragraph (this subsection, including exceptions 
        described in paragraph (2), not later than 18 months after the 
        date of the enactment of this title.
          (4) Effective date.--Paragraph (1) shall apply to exchanges 
        occurring on or after the date that is 6 months after the date 
        of the promulgation of final regulations implementing this 
        subsection.
  (f) Access to Certain Information in Electronic Format.--In applying 
section 164.524 of title 45, Code of Federal Regulations, in the case 
that a covered entity uses or maintains an electronic health record 
with respect to protected health information of an individual--
          (1) the individual shall have a right to obtain from such 
        covered entity a copy of such information in an electronic 
        format; and
          (2) notwithstanding paragraph (c)(4) of such section, any fee 
        that the covered entity may impose for providing such 
        individual with a copy of such information (or a summary or 
        explanation of such information) if such copy (or summary or 
        explanation) is in an electronic form shall not be greater than 
        the entity's labor costs in responding to the request for the 
        copy (or summary or explanation).

SEC. 4406. CONDITIONS ON CERTAIN CONTACTS AS PART OF HEALTH CARE 
                    OPERATIONS.

  (a) Marketing.--
          (1) In general.--A communication by a covered entity or 
        business associate that is about a product or service and that 
        encourages recipients of the communication to purchase or use 
        the product or service shall not be considered a health care 
        operation for purposes of subpart E of part 164 of title 45, 
        Code of Federal Regulations, unless the communication is made 
        as described in subparagraph (i), (ii), or (iii) of paragraph 
        (1) of the definition of marketing in section 164.501 of such 
        title.
          (2) Payment for certain communications.--A covered entity or 
        business associate may not receive direct or indirect payment 
        in exchange for making any communication described in 
        subparagraph (i), (ii), or (iii) of paragraph (1) of the 
        definition of marketing in section 164.501 of title 45, Code of 
        Federal Regulations, except--
                  (A) a business associate of a covered entity may 
                receive payment from the covered entity for making any 
                such communication on behalf of the covered entity that 
                is consistent with the written contract (or other 
                written arrangement) described in section 164.502(e)(2) 
                of such title between such business associate and 
                covered entity; or
                  (B) a covered entity may receive payment in exchange 
                for making any such communication if the entity obtains 
                from the recipient of the communication, in accordance 
                with section 164.508 of title 45, Code of Federal 
                Regulations, a valid authorization (as described in 
                paragraph (b) of such section) with respect to such 
                communication.
  (b) Fundraising.--Fundraising for the benefit of a covered entity 
shall not be considered a health care operation for purposes of section 
164.501 of title 45, Code of Federal Regulations.
  (c) Effective Date.--This section shall apply to contracting 
occurring on or after the effective date specified under section 4423.

SEC. 4407. TEMPORARY BREACH NOTIFICATION REQUIREMENT FOR VENDORS OF 
                    PERSONAL HEALTH RECORDS AND OTHER NON-HIPAA COVERED 
                    ENTITIES.

  (a) In General.--In accordance with subsection (c), each vendor of 
personal health records, following the discovery of a breach of 
security of unsecured PHR identifiable health information that is in a 
personal health record maintained or offered by such vendor, and each 
entity described in clause (ii) or (iii) of section 4424(b)(1)(A), 
following the discovery of a breach of security of such information 
that is obtained through a product or service provided by such entity, 
shall--
          (1) notify each individual who is a citizen or resident of 
        the United States whose unsecured PHR identifiable health 
        information was acquired by an unauthorized person as a result 
        of such a breach of security; and
          (2) notify the Federal Trade Commission.
  (b) Notification by Third Party Service Providers.--A third party 
service provider that provides services to a vendor of personal health 
records or to an entity described in clause (ii) or (iii) of section 
4424(b)(1)(A) in connection with the offering or maintenance of a 
personal health record or a related product or service and that 
accesses, maintains, retains, modifies, records, stores, destroys, or 
otherwise holds, uses, or discloses unsecured PHR identifiable health 
information in such a record as a result of such services shall, 
following the discovery of a breach of security of such information, 
notify such vendor or entity, respectively, of such breach. Such notice 
shall include the identification of each individual whose unsecured PHR 
identifiable health information has been, or is reasonably believed to 
have been, accessed, acquired, or disclosed during such breach.
  (c) Application of Requirements for Timeliness, Method, and Content 
of Notifications.--Subsections (c), (d), (e), and (f) of section 402 
shall apply to a notification required under subsection (a) and a 
vendor of personal health records, an entity described in subsection 
(a) and a third party service provider described in subsection (b), 
with respect to a breach of security under subsection (a) of unsecured 
PHR identifiable health information in such records maintained or 
offered by such vendor, in a manner specified by the Federal Trade 
Commission.
  (d) Notification of the Secretary.--Upon receipt of a notification of 
a breach of security under subsection (a)(2), the Federal Trade 
Commission shall notify the Secretary of such breach.
  (e) Enforcement.--A violation of subsection (a) or (b) shall be 
treated as an unfair and deceptive act or practice in violation of a 
regulation under section 18(a)(1)(B) of the Federal Trade Commission 
Act (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive acts or 
practices.
  (f) Definitions.--For purposes of this section:
          (1) Breach of security.--The term ``breach of security'' 
        means, with respect to unsecured PHR identifiable health 
        information of an individual in a personal health record, 
        acquisition of such information without the authorization of 
        the individual.
          (2) PHR identifiable health information.--The term ``PHR 
        identifiable health information'' means individually 
        identifiable health information, as defined in section 1171(6) 
        of the Social Security Act (42 U.S.C. 1320d(6)), and includes, 
        with respect to an individual, information--
                  (A) that is provided by or on behalf of the 
                individual; and
                  (B) that identifies the individual or with respect to 
                which there is a reasonable basis to believe that the 
                information can be used to identify the individual.
          (3) Unsecured phr identifiable health information.--
                  (A) In general.--Subject to subparagraph (B), the 
                term ``unsecured PHR identifiable health information'' 
                means PHR identifiable health information that is not 
                protected through the use of a technology or 
                methodology specified by the Secretary in the guidance 
                issued under section 4402(h)(2).
                  (B) Exception in case timely guidance not issued.--In 
                the case that the Secretary does not issue guidance 
                under section 4402(h)(2) by the date specified in such 
                section, for purposes of this section, the term 
                ``unsecured PHR identifiable health information'' shall 
                mean PHR identifiable health information that is not 
                secured by a technology standard that renders protected 
                health information unusable, unreadable, or 
                indecipherable to unauthorized individuals and that is 
                developed or endorsed by a standards developing 
                organization that is accredited by the American 
                National Standards Institute.
  (g) Regulations; Effective Date; Sunset.--
          (1) Regulations; effective date.--To carry out this section, 
        the Secretary of Health and Human Services shall promulgate 
        interim final regulations by not later than the date that is 
        180 days after the date of the enactment of this section. The 
        provisions of this section shall apply to breaches of security 
        that are discovered on or after the date that is 30 days after 
        the date of publication of such interim final regulations.
          (2) Sunset.--The provisions of this section shall not apply 
        to breaches of security occurring on or after the earlier of 
        the following the dates:
                  (A) The date on which a standard relating to 
                requirements for entities that are not covered entities 
                that includes requirements relating to breach 
                notification has been promulgated by the Secretary.
                  (B) The date on which a standard relating to 
                requirements for entities that are not covered entities 
                that includes requirements relating to breach 
                notification has been promulgated by the Federal Trade 
                Commission and has taken effect.

SEC. 4408. BUSINESS ASSOCIATE CONTRACTS REQUIRED FOR CERTAIN ENTITIES.

  Each organization, with respect to a covered entity, that provides 
data transmission of protected health information to such entity (or 
its business associate) and that requires access on a routine basis to 
such protected health information, such as a Health Information 
Exchange Organization, Regional Health Information Organization, E-
prescribing Gateway, or each vendor that contracts with a covered 
entity to allow that covered entity to offer a personal health record 
to patients as part of its electronic health record, is required to 
enter into a written contract (or other written arrangement) described 
in section 164.502(e)(2) of title 45, Code of Federal Regulations and a 
written contract (or other arrangement) described in section 164.308(b) 
of such title, with such entity and shall be treated as a business 
associate of the covered entity for purposes of the provisions of this 
subtitle and subparts C and E of part 164 of title 45, Code of Federal 
Regulations, as such provisions are in effect as of the date of 
enactment of this title.

SEC. 4409. CLARIFICATION OF APPLICATION OF WRONGFUL DISCLOSURES 
                    CRIMINAL PENALTIES.

  Section 1177(a) of the Social Security Act (42 U.S.C. 1320d-6(a)) is 
amended by adding at the end the following new sentence: ``For purposes 
of the previous sentence, a person (including an employee or other 
individual) shall be considered to have obtained or disclosed 
individually identifiable health information in violation of this part 
if the information is maintained by a covered entity (as defined in the 
HIPAA privacy regulation described in section 1180(b)(3)) and the 
individual obtained or disclosed such information without 
authorization.''.

SEC. 4410. IMPROVED ENFORCEMENT.

  (a) In General.--Section 1176 of the Social Security Act (42 U.S.C. 
1320d-5) is amended--
          (1) in subsection (b)(1), by striking ``the act constitutes 
        an offense punishable under section 1177'' and inserting ``a 
        penalty has been imposed under section 1177 with respect to 
        such act''; and
          (2) by adding at the end the following new subsection:
  ``(c) Noncompliance Due to Willful Neglect.--
          ``(1) In general.--A violation of a provision of this part 
        due to willful neglect is a violation for which the Secretary 
        is required to impose a penalty under subsection (a)(1).
          ``(2) Required investigation.--For purposes of paragraph (1), 
        the Secretary shall formally investigate any complaint of a 
        violation of a provision of this part if a preliminary 
        investigation of the facts of the complaint indicate such a 
        possible violation due to willful neglect.''.
  (b) Effective Date; Regulations.--
          (1) The amendments made by subsection (a) shall apply to 
        penalties imposed on or after the date that is 24 months after 
        the date of the enactment of this title.
          (2) Not later than 18 months after the date of the enactment 
        of this title, the Secretary of Health and Human Services shall 
        promulgate regulations to implement such amendments.
  (c) Distribution of Certain Civil Monetary Penalties Collected.--
          (1) In general.--Subject to the regulation promulgated 
        pursuant to paragraph (3), any civil monetary penalty or 
        monetary settlement collected with respect to an offense 
        punishable under this subtitle or section 1176 of the Social 
        Security Act (42 U.S.C. 1320d-5) insofar as such section 
        relates to privacy or security shall be transferred to the 
        Office of Civil Rights of the Department of Health and Human 
        Services to be used for purposes of enforcing the provisions of 
        this subtitle and subparts C and E of part 164 of title 45, 
        Code of Federal Regulations, as such provisions are in effect 
        as of the date of enactment of this Act.
          (2) GAO report.--Not later than 18 months after the date of 
        the enactment of this title, the Comptroller General shall 
        submit to the Secretary a report including recommendations for 
        a methodology under which an individual who is harmed by an act 
        that constitutes an offense referred to in paragraph (1) may 
        receive a percentage of any civil monetary penalty or monetary 
        settlement collected with respect to such offense.
          (3) Establishment of methodology to distribute percentage of 
        cmps collected to harmed individuals.--Not later than 3 years 
        after the date of the enactment of this title, the Secretary 
        shall establish by regulation and based on the recommendations 
        submitted under paragraph (2), a methodology under which an 
        individual who is harmed by an act that constitutes an offense 
        referred to in paragraph (1) may receive a percentage of any 
        civil monetary penalty or monetary settlement collected with 
        respect to such offense.
          (4) Application of methodology.--The methodology under 
        paragraph (3) shall be applied with respect to civil monetary 
        penalties or monetary settlements imposed on or after the 
        effective date of the regulation.
  (d) Tiered Increase in Amount of Civil Monetary Penalties.--
          (1) In general.--Section 1176(a)(1) of the Social Security 
        Act (42 U.S.C. 1320d-5(a)(1)) is amended by striking ``who 
        violates a provision of this part a penalty of not more than'' 
        and all that follows and inserting the following: ``who 
        violates a provision of this part--
                  ``(A) in the case of a violation of such provision in 
                which it is established that the person did not know 
                (and by exercising reasonable diligence would not have 
                known) that such person violated such provision, a 
                penalty for each such violation of an amount that is at 
                least the amount described in paragraph (3)(A) but not 
                to exceed the amount described in paragraph (3)(D);
                  ``(B) in the case of a violation of such provision in 
                which it is established that the violation was due to 
                reasonable cause and not to willful neglect, a penalty 
                for each such violation of an amount that is at least 
                the amount described in paragraph (3)(B) but not to 
                exceed the amount described in paragraph (3)(D); and
                  ``(C) in the case of a violation of such provision in 
                which it is established that the violation was due to 
                willful neglect--
                          ``(i) if the violation is corrected as 
                        described in subsection (b)(3)(A), a penalty in 
                        an amount that is at least the amount described 
                        in paragraph (3)(C) but not to exceed the 
                        amount described in paragraph (3)(D); and
                          ``(ii) if the violation is not corrected as 
                        described in such subsection, a penalty in an 
                        amount that is at least the amount described in 
                        paragraph (3)(D).
                In determining the amount of a penalty under this 
                section for a violation, the Secretary shall base such 
                determination on the nature and extent of the violation 
                and the nature and extent of the harm resulting from 
                such violation.''.
          (2) Tiers of penalties described.--Section 1176(a) of such 
        Act (42 U.S.C. 1320d-5(a)) is further amended by adding at the 
        end the following new paragraph:
          ``(3) Tiers of penalties described.--For purposes of 
        paragraph (1), with respect to a violation by a person of a 
        provision of this part--
                  ``(A) the amount described in this subparagraph is 
                $100 for each such violation, except that the total 
                amount imposed on the person for all such violations of 
                an identical requirement or prohibition during a 
                calendar year may not exceed $25,000;
                  ``(B) the amount described in this subparagraph is 
                $1,000 for each such violation, except that the total 
                amount imposed on the person for all such violations of 
                an identical requirement or prohibition during a 
                calendar year may not exceed $100,000;
                  ``(C) the amount described in this subparagraph is 
                $10,000 for each such violation, except that the total 
                amount imposed on the person for all such violations of 
                an identical requirement or prohibition during a 
                calendar year may not exceed $250,000; and
                  ``(D) the amount described in this subparagraph is 
                $50,000 for each such violation, except that the total 
                amount imposed on the person for all such violations of 
                an identical requirement or prohibition during a 
                calendar year may not exceed $1,500,000.''.
          (3) Conforming amendments.--Section 1176(b) of such Act (42 
        U.S.C. 1320d-5(b)) is amended--
                  (A) by striking paragraph (2) and redesignating 
                paragraphs (3) and (4) as paragraphs (2) and (3), 
                respectively; and
                  (B) in paragraph (2), as so redesignated--
                          (i) in subparagraph (A), by striking ``in 
                        subparagraph (B), a penalty may not be imposed 
                        under subsection (a) if'' and all that follows 
                        through ``the failure to comply is corrected'' 
                        and inserting ``in subparagraph (B) or 
                        subsection (a)(1)(C), a penalty may not be 
                        imposed under subsection (a) if the failure to 
                        comply is corrected''; and
                          (ii) in subparagraph (B), by striking 
                        ``(A)(ii)'' and inserting ``(A)'' each place it 
                        appears.
          (4) Effective date.--The amendments made by this subsection 
        shall apply to violations occurring after the date of the 
        enactment of this title.
  (e) Enforcement Through State Attorneys General.--
          (1) In general.--Section 1176 of the Social Security Act (42 
        U.S.C. 1320d-5) is amended by adding at the end the following 
        new subsection:
  ``(c) Enforcement by State Attorneys General.--
          ``(1) Civil action.--Except as provided in subsection (b), in 
        any case in which the attorney general of a State has reason to 
        believe that an interest of one or more of the residents of 
        that State has been or is threatened or adversely affected by 
        any person who violates a provision of this part, the attorney 
        general of the State, as parens patriae, may bring a civil 
        action on behalf of such residents of the State in a district 
        court of the United States of appropriate jurisdiction--
                  ``(A) to enjoin further such violation by the 
                defendant; or
                  ``(B) to obtain damages on behalf of such residents 
                of the State, in an amount equal to the amount 
                determined under paragraph (2).
          ``(2) Statutory damages.--
                  ``(A) In general.--For purposes of paragraph (1)(B), 
                the amount determined under this paragraph is the 
                amount calculated by multiplying the number of 
                violations by up to $100. For purposes of the preceding 
                sentence, in the case of a continuing violation, the 
                number of violations shall be determined consistent 
                with the HIPAA privacy regulations (as defined in 
                section 1180(b)(3)) for violations of subsection (a).
                  ``(B) Limitation.--The total amount of damages 
                imposed on the person for all violations of an 
                identical requirement or prohibition during a calendar 
                year may not exceed $25,000.
                  ``(C) Reduction of damages.--In assessing damages 
                under subparagraph (A), the court may consider the 
                factors the Secretary may consider in determining the 
                amount of a civil money penalty under subsection (a) 
                under the HIPAA privacy regulations.
          ``(3) Attorney fees.--In the case of any successful action 
        under paragraph (1), the court, in its discretion, may award 
        the costs of the action and reasonable attorney fees to the 
        State.
          ``(4) Notice to secretary.--The State shall serve prior 
        written notice of any action under paragraph (1) upon the 
        Secretary and provide the Secretary with a copy of its 
        complaint, except in any case in which such prior notice is not 
        feasible, in which case the State shall serve such notice 
        immediately upon instituting such action. The Secretary shall 
        have the right--
                  ``(A) to intervene in the action;
                  ``(B) upon so intervening, to be heard on all matters 
                arising therein; and
                  ``(C) to file petitions for appeal.
          ``(5) Construction.--For purposes of bringing any civil 
        action under paragraph (1), nothing in this section shall be 
        construed to prevent an attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of that State.
          ``(6) Venue; service of process.--
                  ``(A) Venue.--Any action brought under paragraph (1) 
                may be brought in the district court of the United 
                States that meets applicable requirements relating to 
                venue under section 1391 of title 28, United States 
                Code.
                  ``(B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                          ``(i) is an inhabitant; or
                          ``(ii) maintains a physical place of 
                        business.
          ``(7) Limitation on state action while federal action is 
        pending.--If the Secretary has instituted an action against a 
        person under subsection (a) with respect to a specific 
        violation of this part, no State attorney general may bring an 
        action under this subsection against the person with respect to 
        such violation during the pendency of that action.
          ``(8) Application of cmp statute of limitation.--A civil 
        action may not be instituted with respect to a violation of 
        this part unless an action to impose a civil money penalty may 
        be instituted under subsection (a) with respect to such 
        violation consistent with the second sentence of section 
        1128A(c)(1).''.
          (2) Conforming amendments.--Subsection (b) of such section, 
        as amended by subsection (d)(3), is amended--
                  (A) in paragraph (1), by striking ``A penalty may not 
                be imposed under subsection (a)'' and inserting ``No 
                penalty may be imposed under subsection (a) and no 
                damages obtained under subsection (c)'';
                  (B) in paragraph (2)(A)--
                          (i) in the matter before clause (i), by 
                        striking ``a penalty may not be imposed under 
                        subsection (a)'' and inserting ``no penalty may 
                        be imposed under subsection (a) and no damages 
                        obtained under subsection (c)''; and
                          (ii) in clause (ii), by inserting ``or 
                        damages'' after ``the penalty'';
                  (C) in paragraph (2)(B)(i), by striking ``The 
                period'' and inserting ``With respect to the imposition 
                of a penalty by the Secretary under subsection (a), the 
                period''; and
                  (D) in paragraph (3), by inserting ``and any damages 
                under subsection (c)'' after ``any penalty under 
                subsection (a)''.
          (3) Effective date.--The amendments made by this subsection 
        shall apply to violations occurring after the date of the 
        enactment of this Act.
  (f) Allowing Continued Use of Corrective Action.--Such section is 
further amended by adding at the end the following new subsection:
  ``(d) Allowing Continued Use of Corrective Action.--Nothing in this 
section shall be construed as preventing the Office of Civil Rights of 
the Department of Health and Human Services from continuing, in its 
discretion, to use corrective action without a penalty in cases where 
the person did not know (and by exercising reasonable diligence would 
not have known) of the violation involved.''.

SEC. 4411. AUDITS.

  The Secretary shall provide for periodic audits to ensure that 
covered entities and business associates that are subject to the 
requirements of this subtitle and subparts C and E of part 164 of title 
45, Code of Federal Regulations, as such provisions are in effect as of 
the date of enactment of this Act, comply with such requirements.

SEC. 4412. SECURING INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.

  Notwithstanding the previous provisions of this title, a covered 
entity or business associate must use a technology standard that 
renders protected health information unusable, unreadable, or 
indecipherable to unauthorized individuals and is developed or endorsed 
by a standards developing organization that is accredited by the 
American National Standards Institute to secure individually 
identifiable health information that is transmitted in the nationwide 
health information network supported in this title or physically 
transported outside of a covered entity's or business associate's 
secured, physical perimeter, including information transported on 
removable media and on portable devices. The Secretary may establish 
implementation criteria such that smaller covered entities with fewer 
resources are granted a longer period of time to comply with these 
requirements.

SEC. 4413. SPECIAL RULE FOR INFORMATION TO REDUCE MEDICATION ERRORS AND 
                    IMPROVE PATIENT SAFETY.

  Nothing under this subtitle shall prevent a pharmacist from 
collecting and sharing information with patients in order to reduce 
medication errors and improve patient safety as long as any 
renumeration received for making such communication is reasonable and 
cost-based. Within 180 days of the date of the enactment of this Act, 
the Secretary shall promulgate regulations implementing this section.

 PART II--RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE 
                             DATE; REPORTS

SEC. 4421. RELATIONSHIP TO OTHER LAWS.

  (a) Application of HIPAA State Preemption.--Section 1178 of the 
Social Security Act (42 U.S.C. 1320d-7) shall apply to a provision or 
requirement under this subtitle in the same manner that such section 
applies to a provision or requirement under part C of title XI of such 
Act or a standard or implementation specification adopted or 
established under sections 1172 through 1174 of such Act.
  (b) Health Insurance Portability and Accountability Act.--The 
standards governing the privacy and security of individually 
identifiable health information promulgated by the Secretary under 
sections 262(a) and 264 of the Health Insurance Portability and 
Accountability Act of 1996 shall remain in effect to the extent that 
they are consistent with this subtitle. The Secretary shall by rule 
amend such Federal regulations as required to make such regulations 
consistent with this subtitle.

SEC. 4422. REGULATORY REFERENCES.

  Each reference in this subtitle to a provision of the Code of Federal 
Regulations refers to such provision as in effect on the date of the 
enactment of this title (or to the most recent update of such 
provision).

SEC. 4423. EFFECTIVE DATE.

  Except as otherwise specifically provided, the provisions of part I 
shall take effect on the date that is 12 months after the date of the 
enactment of this title.

SEC. 4424. STUDIES, REPORTS, GUIDANCE.

  (a) Report on Compliance.--
          (1) In general.--For the first year beginning after the date 
        of the enactment of this Act and annually thereafter, the 
        Secretary shall prepare and submit to the Committee on Health, 
        Education, Labor, and Pensions of the Senate and the Committee 
        on Ways and Means and the Committee on Energy and Commerce of 
        the House of Representatives a report concerning complaints of 
        alleged violations of law, including the provisions of this 
        subtitle as well as the provisions of subparts C and E of part 
        164 of title 45, Code of Federal Regulations, (as such 
        provisions are in effect as of the date of enactment of this 
        Act) relating to privacy and security of health information 
        that are received by the Secretary during the year for which 
        the report is being prepared. Each such report shall include, 
        with respect to such complaints received during the year--
                  (A) the number of such complaints;
                  (B) the number of such complaints resolved 
                informally, a summary of the types of such complaints 
                so resolved, and the number of covered entities that 
                received technical assistance from the Secretary during 
                such year in order to achieve compliance with such 
                provisions and the types of such technical assistance 
                provided;
                  (C) the number of such complaints that have resulted 
                in the imposition of civil monetary penalties or have 
                been resolved through monetary settlements, including 
                the nature of the complaints involved and the amount 
                paid in each penalty or settlement;
                  (D) the number of compliance reviews conducted and 
                the outcome of each such review;
                  (E) the number of subpoenas or inquiries issued;
                  (F) the Secretary's plan for improving compliance 
                with and enforcement of such provisions for the 
                following year; and
                  (G) the number of audits performed and a summary of 
                audit findings pursuant to section 4411.
          (2) Availability to public.--Each report under paragraph (1) 
        shall be made available to the public on the Internet website 
        of the Department of Health and Human Services.
  (b) Study and Report on Application of Privacy and Security 
Requirements to Non-HIPAA Covered Entities.--
          (1) Study.--Not later than one year after the date of the 
        enactment of this title, the Secretary, in consultation with 
        the Federal Trade Commission, shall conduct a study, and submit 
        a report under paragraph (2), on privacy and security 
        requirements for entities that are not covered entities or 
        business associates as of the date of the enactment of this 
        title, including--
                  (A) requirements relating to security, privacy, and 
                notification in the case of a breach of security or 
                privacy (including the applicability of an exemption to 
                notification in the case of individually identifiable 
                health information that has been rendered unusable, 
                unreadable, or indecipherable through technologies or 
                methodologies recognized by appropriate professional 
                organization or standard setting bodies to provide 
                effective security for the information) that should be 
                applied to--
                          (i) vendors of personal health records;
                          (ii) entities that offer products or services 
                        through the website of a vendor of personal 
                        health records;
                          (iii) entities that are not covered entities 
                        and that offer products or services through the 
                        websites of covered entities that offer 
                        individuals personal health records;
                          (iv) entities that are not covered entities 
                        and that access information in a personal 
                        health record or send information to a personal 
                        health record; and
                          (v) third party service providers used by a 
                        vendor or entity described in clause (i), (ii), 
                        (iii), or (iv) to assist in providing personal 
                        health record products or services;
                  (B) a determination of which Federal government 
                agency is best equipped to enforce such requirements 
                recommended to be applied to such vendors, entities, 
                and service providers under subparagraph (A); and
                  (C) a timeframe for implementing regulations based on 
                such findings.
          (2) Report.--The Secretary shall submit to the Committee on 
        Finance, the Committee on Health, Education, Labor, and 
        Pensions, and the Committee on Commerce of the Senate and the 
        Committee on Ways and Means and the Committee on Energy and 
        Commerce of the House of Representatives a report on the 
        findings of the study under paragraph (1) and shall include in 
        such report recommendations on the privacy and security 
        requirements described in such paragraph.
  (c) Guidance on Implementation Specification to De-Identify Protected 
Health Information.--Not later than 12 months after the date of the 
enactment of this title, the Secretary shall, in consultation with 
stakeholders, issue guidance on how best to implement the requirements 
for the de-identification of protected health information under section 
164.514(b) of title 45, Code of Federal Regulations.
  (d) GAO Report on Treatment Disclosures.--Not later than one year 
after the date of the enactment of this title, the Comptroller General 
of the United States shall submit to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on Ways 
and Means and the Committee on Energy and Commerce of the House of 
Representatives a report on the best practices related to the 
disclosure among health care providers of protected health information 
of an individual for purposes of treatment of such individual. Such 
report shall include an examination of the best practices implemented 
by States and by other entities, such as health information exchanges 
and regional health information organizations, an examination of the 
extent to which such best practices are successful with respect to the 
quality of the resulting health care provided to the individual and 
with respect to the ability of the health care provider to manage such 
best practices, and an examination of the use of electronic informed 
consent for disclosing protected health information for treatment, 
payment, and health care operations.

                      TITLE V--MEDICAID PROVISIONS

SEC. 5000. TABLE OF CONTENTS OF TITLE.

  The table of contents of this title is as follows:

Sec. 5000. Table of contents of title.
Sec. 5001. Temporary increase of Medicaid FMAP.
Sec. 5002. Moratoria on certain regulations.
Sec. 5003. Transitional Medicaid assistance (TMA).
Sec. 5004. State eligibility option for family planning services.
Sec. 5005. Protections for Indians under Medicaid and CHIP.
Sec. 5006. Consultation on Medicaid and CHIP.
Sec. 5007. Temporary increase in DSH allotments during recession.

SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP.

  (a) Permitting Maintenance of FMAP.--Subject to subsections (e), (f), 
and (g), if the FMAP determined without regard to this section for a 
State for--
          (1) fiscal year 2009 is less than the FMAP as so determined 
        for fiscal year 2008, the FMAP for the State for fiscal year 
        2008 shall be substituted for the State's FMAP for fiscal year 
        2009, before the application of this section;
          (2) fiscal year 2010 is less than the FMAP as so determined 
        for fiscal year 2008 or fiscal year 2009 (after the application 
        of paragraph (1)), the greater of such FMAP for the State for 
        fiscal year 2008 or fiscal year 2009 shall be substituted for 
        the State's FMAP for fiscal year 2010, before the application 
        of this section; and
          (3) fiscal year 2011 is less than the FMAP as so determined 
        for fiscal year 2008, fiscal year 2009 (after the application 
        of paragraph (1)), or fiscal year 2010 (after the application 
        of paragraph (2)), the greatest of such FMAP for the State for 
        fiscal year 2008, fiscal year 2009, or fiscal year 2010 shall 
        be substituted for the State's FMAP for fiscal year 2011, 
        before the application of this section, but only for the first 
        calendar quarter in fiscal year 2011.
  (b) General 4.9 Percentage Point Increase.--
          (1) In general.--Subject to subsections (e), (f), and (g) and 
        paragraph (2), for each State for calendar quarters during the 
        recession adjustment period (as defined in subsection (h)(2)), 
        the FMAP (after the application of subsection (a)) shall be 
        increased (without regard to any limitation otherwise specified 
        in section 1905(b) of the Social Security Act) by 4.9 
        percentage points.
          (2) Special election for territories.--In the case of a State 
        that is not one of the 50 States or the District of Columbia, 
        paragraph (1) shall only apply if the State makes a one-time 
        election, in a form and manner specified by the Secretary and 
        for the entire recession adjustment period, to apply the 
        increase in FMAP under paragraph (1) and a 10 percent increase 
        under subsection (d) instead of applying a 20 percent increase 
        under subsection (d).
  (c) Additional Adjustment to Reflect Increase in Unemployment.--
          (1) In general.--Subject to subsections (e), (f), and (g), in 
        the case of a State that is a high unemployment State (as 
        defined in paragraph (2)) for a calendar quarter during the 
        recession adjustment period, the FMAP (taking into account the 
        application of subsections (a) and (b)) for such quarter shall 
        be further increased by the high unemployment percentage point 
        adjustment specified in paragraph (3) for the State for the 
        quarter.
          (2) High unemployment state.--
                  (A) In general.--In this subsection, subject to 
                subparagraph (B), the term ``high unemployment State'' 
                means, with respect to a calendar quarter in the 
                recession adjustment period, a State that is 1 of the 
                50 States or the District of Columbia and for which the 
                State unemployment increase percentage (as computed 
                under paragraph (5)) for the quarter is not less than 
                1.5 percentage points.
                  (B) Maintenance of status.--If a State is a high 
                unemployment State for a calendar quarter, it shall 
                remain a high unemployment State for each subsequent 
                calendar quarter ending before July 1, 2010.
          (3) High unemployment percentage point adjustment.--
                  (A) In general.--The high unemployment percentage 
                point adjustment specified in this paragraph for a high 
                unemployment State for a quarter is equal to the 
                product of--
                          (i) the SMAP for such State and quarter 
                        (determined after the application of subsection 
                        (a) and before the application of subsection 
                        (b)); and
                          (ii) subject to subparagraph (B), the State 
                        unemployment reduction factor specified in 
                        paragraph (4) for the State and quarter.
                  (B) Maintenance of adjustment level for certain 
                quarters.--In no case shall the State unemployment 
                reduction factor applied under subparagraph (A)(ii) for 
                a State for a quarter (beginning on or after January 1, 
                2009, and ending before July 1, 2010) be less than the 
                State unemployment reduction factor applied to the 
                State for the previous quarter (taking into account the 
                application of this subparagraph).
          (4) State unemployment reduction factor.--In the case of a 
        high unemployment State for which the State unemployment 
        increase percentage (as computed under paragraph (5)) with 
        respect to a calendar quarter is--
                  (A) not less than 1.5, but is less than 2.5, 
                percentage points, the State unemployment reduction 
                factor for the State and quarter is 6 percent;
                  (B) not less than 2.5, but is less than 3.5, 
                percentage points, the State unemployment reduction 
                factor for the State and quarter is 12 percent; or
                  (C) not less than 3.5 percentage points, the State 
                unemployment reduction factor for the State and quarter 
                is 14 percent.
          (5) Computation of state unemployment increase percentage.--
                  (A) In general.--In this subsection, the ``State 
                unemployment increase percentage'' for a State for a 
                calendar quarter is equal to the number of percentage 
                points (if any) by which--
                          (i) the average monthly unemployment rate for 
                        the State for months in the most recent 
                        previous 3-consecutive-month period for which 
                        data are available, subject to subparagraph 
                        (C); exceeds
                          (ii) the lowest average monthly unemployment 
                        rate for the State for any 3-consecutive-month 
                        period preceding the period described in clause 
                        (i) and beginning on or after January 1, 2006.
                  (B) Average monthly unemployment rate defined.--In 
                this paragraph, the term ``average monthly unemployment 
                rate'' means the average of the monthly number 
                unemployed, divided by the average of the monthly 
                civilian labor force, seasonally adjusted, as 
                determined based on the most recent monthly 
                publications of the Bureau of Labor Statistics of the 
                Department of Labor.
                  (C) Special rule.--With respect to--
                          (i) the first 2 calendar quarters of the 
                        recession adjustment period, the most recent 
                        previous 3-consecutive-month period described 
                        in subparagraph (A)(i) shall be the 3-
                        consecutive-month period beginning with October 
                        2008; and
                          (ii) the last 2 calendar quarters of the 
                        recession adjustment period, the most recent 
                        previous 3-consecutive-month period described 
                        in such subparagraph shall be the 3-
                        consecutive-month period beginning with 
                        December 2009.
  (d)  Increase in Cap on Medicaid Payments to Territories.--Subject to 
subsections (f) and (g) , with respect to entire fiscal years occurring 
during the recession adjustment period and with respect to fiscal years 
only a portion of which occurs during such period (and in proportion to 
the portion of the fiscal year that occurs during such period), the 
amounts otherwise determined for Puerto Rico, the Virgin Islands, Guam, 
the Northern Mariana Islands, and American Samoa under subsections (f) 
and (g) of section 1108 of the Social Security Act (42 U.S.C. 1308) 
shall each be increased by 20 percent (or, in the case of an election 
under subsection (b)(2), 10 percent).
  (e) Scope of Application.--The increases in the FMAP for a State 
under this section shall apply for purposes of title XIX of the Social 
Security Act and--
          (1) the increases applied under subsections (a), (b), and (c) 
        shall not apply with respect--
                  (A) to payments under parts A, B, and D of title IV 
                or title XXI of such Act (42 U.S.C. 601 et seq. and 
                1397aa et seq.);
                  (B) to payments under title XIX of such Act that are 
                based on the enhanced FMAP described in section 2105(b) 
                of such Act (42 U.S.C. 1397ee(b)); and
                  (C) to payments for disproportionate share hospital 
                (DSH) payment adjustments under section 1923 of such 
                Act (42 U.S.C. 1396r-4); and
          (2) the increase provided under subsection (c) shall not 
        apply with respect to payments under part E of title IV of such 
        Act.
  (f) State Ineligibility and Limitation.--
          (1) In general.--Subject to paragraphs (2) and (3), a State 
        is not eligible for an increase in its FMAP under subsection 
        (a), (b), or (c), or an increase in a cap amount under 
        subsection (d), if eligibility standards, methodologies, or 
        procedures under its State plan under title XIX of the Social 
        Security Act (including any waiver under such title or under 
        section 1115 of such Act (42 U.S.C. 1315)) are more restrictive 
        than the eligibility standards, methodologies, or procedures, 
        respectively, under such plan (or waiver) as in effect on July 
        1, 2008.
          (2) State reinstatement of eligibility permitted.--Subject to 
        paragraph (3), a State that has restricted eligibility 
        standards, methodologies, or procedures under its State plan 
        under title XIX of the Social Security Act (including any 
        waiver under such title or under section 1115 of such Act (42 
        U.S.C. 1315)) after July 1, 2008, is no longer ineligible under 
        paragraph (1) beginning with the first calendar quarter in 
        which the State has reinstated eligibility standards, 
        methodologies, or procedures that are no more restrictive than 
        the eligibility standards, methodologies, or procedures, 
        respectively, under such plan (or waiver) as in effect on July 
        1, 2008.
          (3) Special rules.--A State shall not be ineligible under 
        paragraph (1)--
                  (A) before July 1, 2009, on the basis of a 
                restriction that was applied after July 1, 2008, and 
                before the date of the enactment of this Act; or
                  (B) on the basis of a restriction that was effective 
                under State law as of July 1, 2008, and would have been 
                in effect as of such date, but for a delay (of not 
                longer than 1 calendar quarter) in the approval of a 
                request for a new waiver under section 1115 of such Act 
                with respect to such restriction.
          (4) State's application toward rainy day fund.--A State is 
        not eligible for an increase in its FMAP under subsection (b) 
        or (c), or an increase in a cap amount under subsection (d), if 
        any amounts attributable (directly or indirectly) to such 
        increase are deposited or credited into any reserve or rainy 
        day fund of the State.
          (5) Rule of construction.--Nothing in paragraph (1) or (2) 
        shall be construed as affecting a State's flexibility with 
        respect to benefits offered under the State Medicaid program 
        under title XIX of the Social Security Act (42 U.S.C. 1396 et 
        seq.) (including any waiver under such title or under section 
        1115 of such Act (42 U.S.C. 1315)).
          (6) No waiver authority.--The Secretary may not waive the 
        application of this subsection or subsection (g) under section 
        1115 of the Social Security Act or otherwise.
  (g) Requirement for Certain States.--In the case of a State that 
requires political subdivisions within the State to contribute toward 
the non-Federal share of expenditures under the State Medicaid plan 
required under section 1902(a)(2) of the Social Security Act (42 U.S.C. 
1396a(a)(2)), the State is not eligible for an increase in its FMAP 
under subsection (a), (b), or (c), or an increase in a cap amount under 
subsection (d), if it requires that such political subdivisions pay a 
greater percentage of the non-Federal share of such expenditures for 
quarters during the recession adjustment period, than the percentage 
that would have been required by the State under such plan on September 
30, 2008, prior to application of this section.
  (h) Definitions.--In this section, except as otherwise provided:
          (1) FMAP.--The term ``FMAP'' means the Federal medical 
        assistance percentage, as defined in section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)), as determined without 
        regard to this section except as otherwise specified.
          (2) Recession adjustment period.--The term ``recession 
        adjustment period'' means the period beginning on October 1, 
        2008, and ending on December 31, 2010.
          (3) Secretary.--The term ``Secretary'' means the Secretary of 
        Health and Human Services.
          (4) SMAP.--The term ``SMAP'' means, for a State, 100 percent 
        minus the Federal medical assistance percentage.
          (5) State.--The term ``State'' has the meaning given such 
        term in section 1101(a)(1) of the Social Security Act (42 
        U.S.C. 1301(a)(1)) for purposes of title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
  (i) Sunset.--This section shall not apply to items and services 
furnished after the end of the recession adjustment period.

SEC. 5002. MORATORIA ON CERTAIN REGULATIONS.

  (a) Extension of Moratoria on Certain Medicaid Regulations.--The 
following sections are each amended by striking ``April 1, 2009'' and 
inserting ``July 1, 2009'':
          (1) Section 7002(a)(1) of the U.S. Troop Readiness, Veterans' 
        Care, Katrina Recovery, and Iraq Accountability Appropriations 
        Act, 2007 (Public Law 110-28), as amended by section 7001(a)(1) 
        of the Supplemental Appropriations Act, 2008 (Public Law 110-
        252).
          (2) Section 206 of the Medicare, Medicaid, and SCHIP 
        Extension Act of 2007 (Public Law 110-173), as amended by 
        section 7001(a)(2) of the Supplemental Appropriations Act, 2008 
        (Public Law 110-252).
          (3) Section 7001(a)(3)(A) of the Supplemental Appropriations 
        Act, 2008 (Public Law 110-252).
  (b) Additional Medicaid Moratorium.--Notwithstanding any other 
provision of law, with respect to expenditures for services furnished 
during the period beginning on December 8, 2008 and ending on June 30, 
2009, the Secretary of Health and Human Services shall not take any 
action (through promulgation of regulation, issuance of regulatory 
guidance, use of Federal payment audit procedures, or other 
administrative action, policy, or practice, including a Medical 
Assistance Manual transmittal or letter to State Medicaid directors) to 
implement the final regulation relating to clarification of the 
definition of outpatient hospital facility services under the Medicaid 
program published on November 7, 2008 (73 Federal Register 66187).

SEC. 5003. TRANSITIONAL MEDICAID ASSISTANCE (TMA).

  (a) 18-Month Extension.--
          (1) In general.--Sections 1902(e)(1)(B) and 1925(f) of the 
        Social Security Act (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are 
        each amended by striking ``September 30, 2003'' and inserting 
        ``December 31, 2010''.
          (2) Effective date.--The amendments made by this subsection 
        shall take effect on July 1, 2009.
  (b) State Option of Initial 12-Month Eligibility.--Section 1925 of 
the Social Security Act (42 U.S.C. 1396r-6) is amended--
          (1) in subsection (a)(1), by inserting ``but subject to 
        paragraph (5)'' after ``Notwithstanding any other provision of 
        this title'';
          (2) by adding at the end of subsection (a) the following:
          ``(5) Option of 12-month initial eligibility period.--A State 
        may elect to treat any reference in this subsection to a 6-
        month period (or 6 months) as a reference to a 12-month period 
        (or 12 months). In the case of such an election, subsection (b) 
        shall not apply.''; and
          (3) in subsection (b)(1), by inserting ``but subject to 
        subsection (a)(5)'' after ``Notwithstanding any other provision 
        of this title''.
  (c) Removal of Requirement for Previous Receipt of Medical 
Assistance.--Section 1925(a)(1) of such Act (42 U.S.C. 1396r-6(a)(1)), 
as amended by subsection (b)(1), is further amended--
          (1) by inserting ``subparagraph (B) and'' before ``paragraph 
        (5)'';
          (2) by redesignating the matter after ``Requirement.--'' as a 
        subparagraph (A) with the heading ``In general.--'' and with 
        the same indentation as subparagraph (B) (as added by paragraph 
        (3)); and
          (3) by adding at the end the following:
                  ``(B) State option to waive requirement for 3 months 
                before receipt of medical assistance.--A State may, at 
                its option, elect also to apply subparagraph (A) in the 
                case of a family that was receiving such aid for fewer 
                than three months or that had applied for and was 
                eligible for such aid for fewer than 3 months during 
                the 6 immediately preceding months described in such 
                subparagraph.''.
  (d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 of such Act (42 U.S.C. 1396r-6), as amended by this 
section, is further amended by adding at the end the following new 
subsection:
  ``(g) Collection and Reporting of Participation Information.--
          ``(1) Collection of information from states.--Each State 
        shall collect and submit to the Secretary (and make publicly 
        available), in a format specified by the Secretary, information 
        on average monthly enrollment and average monthly participation 
        rates for adults and children under this section and of the 
        number and percentage of children who become ineligible for 
        medical assistance under this section whose medical assistance 
        is continued under another eligibility category or who are 
        enrolled under the State's child health plan under title XXI. 
        Such information shall be submitted at the same time and 
        frequency in which other enrollment information under this 
        title is submitted to the Secretary.
          ``(2) Annual reports to congress.--Using the information 
        submitted under paragraph (1), the Secretary shall submit to 
        Congress annual reports concerning enrollment and participation 
        rates described in such paragraph.''.
  (e) Effective Date.--The amendments made by subsections (b) through 
(d) shall take effect on July 1, 2009.

SEC. 5004. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

  (a) Coverage as Optional Categorically Needy Group.--
          (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        section 3003(a) of the Health Insurance Assistance for the 
        Unemployed Act of 2009, is amended--
                  (A) in subclause (XIX), by striking ``or'' at the 
                end;
                  (B) in subclause (XX), by adding ``or'' at the end; 
                and
                  (C) by adding at the end the following new subclause:
          ``(XXI) who are described in subsection (ee) (relating to 
        individuals who meet certain income standards);''.
          (2) Group described.--Section 1902 of such Act (42 U.S.C. 
        1396a), as amended by section 3003(a) of the Health Insurance 
        Assistance for the Unemployed Act of 2009, is amended by adding 
        at the end the following new subsection:
  ``(ee)(1) Individuals described in this subsection are individuals--
                  ``(A) whose income does not exceed an income 
                eligibility level established by the State that does 
                not exceed the highest income eligibility level 
                established under the State plan under this title (or 
                under its State child health plan under title XXI) for 
                pregnant women; and
                  ``(B) who are not pregnant.
          ``(2) At the option of a State, individuals described in this 
        subsection may include individuals who, had individuals applied 
        on or before January 1, 2007, would have been made eligible 
        pursuant to the standards and processes imposed by that State 
        for benefits described in clause (XV) of the matter following 
        subparagraph (G) of section subsection (a)(10) pursuant to a 
        waiver granted under section 1115.
          ``(3) At the option of a State, for purposes of subsection 
        (a)(17)(B), in determining eligibility for services under this 
        subsection, the State may consider only the income of the 
        applicant or recipient.''.
          (3) Limitation on benefits.--Section 1902(a)(10) of the 
        Social Security Act (42 U.S.C. 1396a(a)(10)) is amended in the 
        matter following subparagraph (G)--
                  (A) by striking ``and (XIV)'' and inserting 
                ``(XIV)''; and
                  (B) by inserting ``, and (XV) the medical assistance 
                made available to an individual described in subsection 
                (ee) shall be limited to family planning services and 
                supplies described in section 1905(a)(4)(C) including 
                medical diagnosis and treatment services that are 
                provided pursuant to a family planning service in a 
                family planning setting'' after ``cervical cancer''.
          (4) Conforming amendments.--Section 1905(a) of the Social 
        Security Act (42 U.S.C. 1396d(a)), as amended by section 
        3003(c)(2) of the Health Insurance Assistance for the 
        Unemployed Act of 2009, is amended in the matter preceding 
        paragraph (1)--
                  (A) in clause (xiii), by striking ``or'' at the end;
                  (B) in clause (xiv), by adding ``or'' at the end; and
                  (C) by inserting after clause (xiii) the following:
                          ``(xv) individuals described in section 
                        1902(ee),''.
  (b) Presumptive Eligibility.--
          (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended by inserting after section 
        1920B the following:
         ``presumptive eligibility for family planning services
  ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(ee) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(ee), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
  ``(b) Definitions.--For purposes of this section:
          ``(1) Presumptive eligibility period.--The term `presumptive 
        eligibility period' means, with respect to an individual 
        described in subsection (a), the period that--
                  ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(ee); and
                  ``(B) ends with (and includes) the earlier of--
                          ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                          ``(ii) in the case of such an individual who 
                        does not file an application by the last day of 
                        the month following the month during which the 
                        entity makes the determination referred to in 
                        subparagraph (A), such last day.
          ``(2) Qualified entity.--
                  ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                          ``(i) is eligible for payments under a State 
                        plan approved under this title; and
                          ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                  ``(B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities in order to prevent fraud and abuse.
  ``(c) Administration.--
          ``(1) In general.--The State agency shall provide qualified 
        entities with--
                  ``(A) such forms as are necessary for an application 
                to be made by an individual described in subsection (a) 
                for medical assistance under the State plan; and
                  ``(B) information on how to assist such individuals 
                in completing and filing such forms.
          ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection (a) is presumptively eligible for 
        medical assistance under a State plan shall--
                  ``(A) notify the State agency of the determination 
                within 5 working days after the date on which 
                determination is made; and
                  ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance is required to be made by not later than the 
                last day of the month following the month during which 
                the determination is made.
          ``(3) Application for medical assistance.--In the case of an 
        individual described in subsection (a) who is determined by a 
        qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance by not later than the last day of the month 
        following the month during which the determination is made.
  ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
          ``(1) is furnished to an individual described in subsection 
        (a)--
                  ``(A) during a presumptive eligibility period;
                  ``(B) by a entity that is eligible for payments under 
                the State plan; and
          ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
          (2) Conforming amendments.--
                  (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)) is amended by inserting before 
                the semicolon at the end the following: ``and provide 
                for making medical assistance available to individuals 
                described in subsection (a) of section 1920C during a 
                presumptive eligibility period in accordance with such 
                section''.
                  (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
                1396b(u)(1)(D)(v)) is amended--
                          (i) by striking ``or for'' and inserting 
                        ``for''; and
                          (ii) by inserting before the period the 
                        following: ``, or for medical assistance 
                        provided to an individual described in 
                        subsection (a) of section 1920C during a 
                        presumptive eligibility period under such 
                        section''.
  (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)) is amended by adding at the end the following:
          ``(5) Coverage of family planning services and supplies.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark-
        equivalent coverage under this section unless such coverage 
        includes for any individual described in section 1905(a)(4)(C), 
        medical assistance for family planning services and supplies in 
        accordance with such section.''.
  (d) Effective Date.--The amendments made by this section take effect 
on the date of the enactment of this Act and shall apply to items and 
services furnished on or after such date.

SEC. 5005. PROTECTIONS FOR INDIANS UNDER MEDICAID AND CHIP.

  (a) Premiums and Cost Sharing Protection Under Medicaid.--
          (1) In general.--Section 1916 of the Social Security Act (42 
        U.S.C. 1396o) is amended--
                  (A) in subsection (a), in the matter preceding 
                paragraph (1), by striking ``and (i)'' and inserting 
                ``, (i), and (j)''; and
                  (B) by adding at the end the following new 
                subsection:
  ``(j) No Premiums or Cost Sharing for Indians Furnished Items or 
Services Directly by Indian Health Programs or Through Referral Under 
Contract Health Services.--
          ``(1) No cost sharing for items or services furnished to 
        indians through indian health programs.--
                  ``(A) In general.--No enrollment fee, premium, or 
                similar charge, and no deduction, copayment, cost 
                sharing, or similar charge shall be imposed against an 
                Indian who is furnished an item or service directly by 
                the Indian Health Service, an Indian Tribe, Tribal 
                Organization, or Urban Indian Organization or through 
                referral under contract health services for which 
                payment may be made under this title.
                  ``(B) No reduction in amount of payment to indian 
                health providers.--Payment due under this title to the 
                Indian Health Service, an Indian Tribe, Tribal 
                Organization, or Urban Indian Organization, or a health 
                care provider through referral under contract health 
                services for the furnishing of an item or service to an 
                Indian who is eligible for assistance under such title, 
                may not be reduced by the amount of any enrollment fee, 
                premium, or similar charge, or any deduction, 
                copayment, cost sharing, or similar charge that would 
                be due from the Indian but for the operation of 
                subparagraph (A).
          ``(2) Rule of construction.--Nothing in this subsection shall 
        be construed as restricting the application of any other 
        limitations on the imposition of premiums or cost sharing that 
        may apply to an individual receiving medical assistance under 
        this title who is an Indian.''.
          (2) Conforming amendment.--Section 1916A(b)(3) of such Act 
        (42 U.S.C. 1396o-1(b)(3)) is amended--
                  (A) in subparagraph (A), by adding at the end the 
                following new clause:
                          ``(vi) An Indian who is furnished an item or 
                        service directly by the Indian Health Service, 
                        an Indian Tribe, Tribal Organization or Urban 
                        Indian Organization or through referral under 
                        contract health services.''; and
                  (B) in subparagraph (B), by adding at the end the 
                following new clause:
                          ``(ix) Items and services furnished to an 
                        Indian directly by the Indian Health Service, 
                        an Indian Tribe, Tribal Organization or Urban 
                        Indian Organization or through referral under 
                        contract health services.''.
          (3) Effective date.--The amendments made by this subsection 
        shall take effect on October 1, 2009.
  (b) Treatment of Certain Property From Resources for Medicaid and 
CHIP Eligibility.--
          (1) Medicaid.--Section 1902 of the Social Security Act (42 
        U.S.C. 1396a), as amended by section 3003(a) of the Health 
        Insurance Assistance for the Unemployed Act of 2009 and section 
        5004, is amended by adding at the end the following new 
        subsection:
  ``(ff) Notwithstanding any other requirement of this title or any 
other provision of Federal or State law, a State shall disregard the 
following property from resources for purposes of determining the 
eligibility of an individual who is an Indian for medical assistance 
under this title:
          ``(1) Property, including real property and improvements, 
        that is held in trust, subject to Federal restrictions, or 
        otherwise under the supervision of the Secretary of the 
        Interior, located on a reservation, including any federally 
        recognized Indian Tribe's reservation, pueblo, or colony, 
        including former reservations in Oklahoma, Alaska Native 
        regions established by the Alaska Native Claims Settlement Act, 
        and Indian allotments on or near a reservation as designated 
        and approved by the Bureau of Indian Affairs of the Department 
        of the Interior.
          ``(2) For any federally recognized Tribe not described in 
        paragraph (1), property located within the most recent 
        boundaries of a prior Federal reservation.
          ``(3) Ownership interests in rents, leases, royalties, or 
        usage rights related to natural resources (including extraction 
        of natural resources or harvesting of timber, other plants and 
        plant products, animals, fish, and shellfish) resulting from 
        the exercise of federally protected rights.
          ``(4) Ownership interests in or usage rights to items not 
        covered by paragraphs (1) through (3) that have unique 
        religious, spiritual, traditional, or cultural significance or 
        rights that support subsistence or a traditional lifestyle 
        according to applicable tribal law or custom.''.
          (2) Application to chip.--Section 2107(e)(1) of such Act (42 
        U.S.C. 1397gg(e)(1)) is amended by adding at the end the 
        following new subparagraph:
                  ``(E) Section 1902(ff) (relating to disregard of 
                certain property for purposes of making eligibility 
                determinations).''.
  (c) Continuation of Current Law Protections of Certain Indian 
Property From Medicaid Estate Recovery.--Section 1917(b)(3) of the 
Social Security Act (42 U.S.C. 1396p(b)(3)) is amended--
          (1) by inserting ``(A)'' after ``(3)''; and
          (2) by adding at the end the following new subparagraph:
                  ``(B) The standards specified by the Secretary under 
                subparagraph (A) shall require that the procedures 
                established by the State agency under subparagraph (A) 
                exempt income, resources, and property that are exempt 
                from the application of this subsection as of April 1, 
                2003, under manual instructions issued to carry out 
                this subsection (as in effect on such date) because of 
                the Federal responsibility for Indian Tribes and Alaska 
                Native Villages. Nothing in this subparagraph shall be 
                construed as preventing the Secretary from providing 
                additional estate recovery exemptions under this title 
                for Indians.''.

SEC. 5006. CONSULTATION ON MEDICAID AND CHIP.

  (a) In General.--Section 1139 of the Social Security Act (42 U.S.C. 
1320b-9) is amended to read as follows:
       ``consultation with tribal technical advisory group (ttag)
  ``Sec. 1139. 
  ``The Secretary shall maintain within the Centers for Medicaid & 
Medicare Services (CMS) a Tribal Technical Advisory Group, which was 
first established in accordance with requirements of the charter dated 
September 30, 2003, and the Secretary shall include in such Group a 
representative of the Urban Indian Organizations and the Service. The 
representative of the Urban Indian Organization shall be deemed to be 
an elected officer of a tribal government for purposes of applying 
section 204(b) of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1534(b)).''.
  (b) Solicitation of Advice Under Medicaid and CHIP.--
          (1) Medicaid state plan amendment.--Section 1902(a) of the 
        Social Security Act (42 U.S.C. 1396a(a)) is amended--
                  (A) in paragraph (70), by striking ``and'' at the 
                end;
                  (B) in paragraph (71), by striking the period at the 
                end and inserting ``; and''; and
                  (C) by inserting after paragraph (71), the following 
                new paragraph:
          ``(72) in the case of any State in which 1 or more Indian 
        Health Programs or Urban Indian Organizations furnishes health 
        care services, provide for a process under which the State 
        seeks advice on a regular, ongoing basis from designees of such 
        Indian Health Programs and Urban Indian Organizations on 
        matters relating to the application of this title that are 
        likely to have a direct effect on such Indian Health Programs 
        and Urban Indian Organizations and that--
                  ``(A) shall include solicitation of advice prior to 
                submission of any plan amendments, waiver requests, and 
                proposals for demonstration projects likely to have a 
                direct effect on Indians, Indian Health Programs, or 
                Urban Indian Organizations; and
                  ``(B) may include appointment of an advisory 
                committee and of a designee of such Indian Health 
                Programs and Urban Indian Organizations to the medical 
                care advisory committee advising the State on its State 
                plan under this title.''.
          (2) Application to chip.--Section 2107(e)(1) of such Act (42 
        U.S.C. 1397gg(e)(1)), as amended by section 5005(b), is amended 
        by adding at the end the following new subparagraph:
                  ``(F) Section 1902(a)(72) (relating to requiring 
                certain States to seek advice from designees of Indian 
                Health Programs and Urban Indian Organizations).''.
  (c) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed as superseding existing advisory committees, 
working groups, guidance, or other advisory procedures established by 
the Secretary of Health and Human Services or by any State with respect 
to the provision of health care to Indians.

SEC. 5007. TEMPORARY INCREASE IN DSH ALLOTMENTS DURING RECESSION.

  Section 1923(f)(3) of the Social Security Act (42 U.S.C. 1396r-
4(f)(3)) is amended--
          (1) in subparagraph (A), by striking ``paragraph (6)'' and 
        inserting ``paragraph (6) and subparagraph (E)''; and
          (2) by adding at the end the following new subparagraph:
                  ``(E) Temporary increase in allotments during 
                recession.--
                          ``(i) In general.--Subject to clause (ii), 
                        the DSH allotment for any State--
                                  ``(I) for fiscal year 2009 is equal 
                                to 102.5 percent of the DSH allotment 
                                that would be determined under this 
                                paragraph for the State for fiscal year 
                                2009 without application of this 
                                subparagraph, notwithstanding 
                                subparagraph (B);
                                  ``(II) for fiscal year 2010 is equal 
                                to 102.5 percent of the the DSH 
                                allotment for the State for fiscal year 
                                2009, as determined under subclause 
                                (I); and
                                  ``(III) for each succeeding fiscal 
                                year is equal to the DSH allotment for 
                                the State under this paragraph 
                                determined without applying subclauses 
                                (I) and (II).
                          ``(ii) Application.--Clause (i) shall not 
                        apply to a State for a year in the case that 
                        the DSH allotment for such State for such year 
                        under this paragraph determined without 
                        applying clause (i) would grow higher than the 
                        DSH allotment specified under clause (i) for 
                        the State for such year.''.

                          Purpose and Summary

    H.R. 629, the Energy and Commerce Recovery and Investment 
Act, was introduced by Rep Henry A. Waxman on January 22, 2009. 
The purpose of the bill is to promote recovery in the nation's 
foundering economy by investing in the following areas: (1) 
broadband infrastructure so that businesses and households in 
rural and other underserved areas can link to the global 
economy; (2) clean energy technologies that will put people to 
work, clean our environment, and reduce our dependence on 
foreign oil; and (3) health to create new jobs related to 
health information technology, provide health insurance 
assistance for workers hurt by the recession, and strengthen a 
key safety net by increasing the federal contribution to 
Medicaid.

                  Background and Need for Legislation


                               BROADBAND

    Broadband infrastructure is the foundation of the digital 
economy. The broadband networks that must be constructed 
throughout the nation will be as important to the nation's 
economic success as the postal roads, canals, rail lines, and 
interstate highways of the past. Unfortunately, the United 
States has fallen behind other nations in terms of broadband 
deployment and adoption.\1\ This legislation will put people to 
work building new broadband infrastructure. The Communications 
Workers of America estimate that a $5 billion investment in 
broadband will result in 100,000 new jobs, and it will begin 
the process of restoring the United States' position as the 
leading broadband nation in the world.
---------------------------------------------------------------------------
    \1\ For instance, the United States ranks 15th in broadband 
penetration among OECD nations. See http://www.oecd.org/dataoecd/21/35/
39574709.x1s.
---------------------------------------------------------------------------
    The legislation requires the grant administrator to attempt 
to award 25% of available funds to areas with either no 
wireless voice service or no basic broadband service so that 
these unserved areas can begin the process of building 
communications infrastructure. The measure also requires the 
grant administrator to attempt to award 75% of the funds to 
areas in need of an upgrade of existing wireless and wireline 
broadband facilities. The aim of these provisions is to 
stimulate job creation in all parts of the country and to not 
limit the expected economic development to certain regions. 
These provisions will help ensure that all Americans have a 
chance to benefit from new and upgraded infrastructure.

                                 ENERGY

    In the ``American Recovery and Reinvestment Act,'' the 
House Appropriations Committee has proposed to provide 
approximately $30 billion for energy-related programs created 
by the Committee on Energy and Commerce. This investment would 
create new jobs, increase the efficiency of the nation's 
existing infrastructure and upgrade critical energy 
infrastructure. This effort would serve as the foundation for 
renewed economic growth that is consistent with meeting our 
energy and environmental challenges.
    In light of the levels of funding proposed for these 
programs and the intention to move the appropriated funds 
rapidly into active use, the Committee on Energy and Commerce 
considered whether amendments to the authorizing language 
creating these programs should be adopted to assure that the 
funds were used to their full intended effect. Specifically, 
the Energy and Commerce Committee considered and amended 
portions of the provisions that make up Sections 5001, 5002, 
5003, 5005, and 5007 of the ``American Recovery and 
Reinvestment Act'' approved by the Appropriations Committee, 
and added new provisions with respect to conditions that should 
apply other programs for which authorization language changes 
had not been proposed by the Appropriations Committee.

                                 HEALTH

1. Health Insurance assistance for the unemployed

    According to the Congressional Budget Office (CBO), the 
United States is in a recession that ``will probably be the 
longest and deepest since World War II.'' \2\ CBO estimates 
that the unemployment rate, which was 5.7% in 2008, is 
projected to increase to 8.3% in 2009 and 9% into 2010.\3\
---------------------------------------------------------------------------
    \2\ Congressional Budget Office, The Budget and Economic Outlook: 
Fiscal Years 2009 to 2019, at 1 (Jan. 2009).
    \3\ Id., Table B-1.
---------------------------------------------------------------------------
    Each 1 percentage point increase in unemployment translates 
into a 0.6 percentage point increase in the number of 
nonelderly adults without health insurance coverage. Put 
another way, if, as projected, the unemployment rate rises to 
9%, the number of uninsured adults will increase by 4.8 
million.\4\
---------------------------------------------------------------------------
    \4\ J. Holahan, A. Bowen Garrett, Rising Unemployment, Medicaid, 
and the Uninsured, Kaiser Commission on Medicaid and the Uninsured, at 
4 (Jan. 2009).
---------------------------------------------------------------------------
    The bill contains two provisions to address this 
foreseeable increase in the number of unemployed Americans 
without health insurance coverage. It provides temporary 
subsidies for COBRA premiums to enable workers who have been 
involuntarily terminated from their jobs to maintain the 
coverage they had through work. To address the needs of those 
workers (and their families) that do not have access to COBRA 
coverage, the bill also creates a temporary option for states 
to extend health care coverage to displaced workers through 
their Medicaid programs.
    CBO estimates that these two provisions will provide health 
care coverage to a total of 8.2 million unemployed workers and 
dependents in 2009. Of these, 7 million will be covered through 
COBRA; the remaining 1.2 million will be covered through 
Medicaid.\5\
---------------------------------------------------------------------------
    \5\ Both are preliminary estimates that reflect the total number of 
people over the course of CY 2009 that receive benefits from sections 
3002 and 3003. These are mutually exclusive groups, so they are 
additive and take into account interactions between both sections.
---------------------------------------------------------------------------
    CBO estimates these provisions will cost $40.2 billion over 
the next 5 years. Of this amount, over 90 percent will be spent 
during 2009 and 2010, maximizing the economic impact of this 
spending during the recession.

2. Health information technology

    The U.S. health care system is characterized by systemic 
quality and efficiency shortcomings. The system's quality 
problems are evidenced by high rates of medical and medication 
errors and a lack of adherence to practice guidelines. In a 
2000 study, the Institute of Medicine (IOM) found that as many 
as 98,000 people die each year due to preventable medical 
errors.\6\ According to the Agency for Healthcare Research and 
Quality (AHRQ), an average of 17 years is required for findings 
from randomized clinical trials to be implemented into clinical 
practice. These documented shortcomings in our quality of care 
contribute to higher health care costs and place patients at 
risk.
---------------------------------------------------------------------------
    \6\ To Err is Human. IOM (2000) National Academy Press.
---------------------------------------------------------------------------
    Nationwide adoption of health information technology (HIT), 
that supports the electronic exchange of health information, 
has the potential to ameliorate many of the quality and 
efficiency problems endemic to our health care system. HIT 
would allow for the centralization of patient information, 
enhanced, real-time communication between providers to improve 
the coordination of care, improved patient access to medical 
records, and access to a variety of quality enhancing programs 
and tools.
    According to the Congressional Budget Office, only 5% of 
physicians have and use a comprehensive electronic health 
record, those that provide decision support capability, 
physician order entry and more.\7\ Similarly, only 11% of 
hospitals have adopted such systems.\8\ A commonly cited 
impediment to the adoption of HIT is cost. A study published in 
the New England Journal of Medicine showed that a large 
majority of physicians using electronic health records are 
satisfied and report that those systems have positive effects 
on the quality of patient care.\9\ The study, which surveyed 
2,607 physicians, showed that physicians without HIT systems 
were concerned about financial barriers.\10\ Evidence from this 
study and others strongly indicate that health care providers 
need guidance and financial support if HIT is to be widely 
adopted in the United States.\11\
---------------------------------------------------------------------------
    \7\ Congressional Budget Office, Budget Options Health Care, Volume 
I, Option 46 (Dec. 2008).
    \8\ Congressional Budget Office, Evidence on the Cost and Benefits 
of Health Information Technology (May 2008).
    \9\ Catherine M. DesRoches, Dr.P.H., Eric G. Campbell, Ph.D., 
Sowmya R. Rao, Ph.D., Karen Donelan, Sc.D., Timothy G. Ferris, M.D., 
M.P.H., Ashish Jha, M.D., M.P.H., Rainu Kaushal, M.D., M.P.H., Douglas 
E. Levy, Ph.D., Sara Rosenbaum, J.D., Alexandra E. Shields, Ph.D., and 
David Blumenthal, M.D., M.P.P, ``Electronic Health Records in 
Ambulatory Care--A National Survey of Physicians'' The New England 
Journal of Medicine, Published at www.nejm.org (June 18, 2008) 
(10.1056/NEJMsa0802005).
    \10\ Id.
    \11\ Id.
---------------------------------------------------------------------------
    In addition to costs, concerns about the security and 
privacy of health information have also been regarded as an 
obstacle to the adoption of HIT. As the electronic transmission 
of health information between various independent entities is 
encouraged, the privacy and security of that health information 
becomes a much greater concern. The Health Insurance 
Portability and Accountability Act of 1996 (HIPAA; P.L. 104-
191) resulted in the Secretary of HHS developing privacy and 
security standards giving patients the right of access to their 
medical information and placing restrictions on the use and 
disclosure of that information without the patient's consent. 
The HIPAA ``Privacy Rule'' and ``Security Rule'' currently 
provide the federal standard for the protection of individually 
identifiable health information.
    There are, however, clear gaps in the current privacy and 
security structure established under HIPAA that have become 
apparent over time. For example, there are no requirements that 
a person be notified if their information is accessed by an 
unauthorized party. In addition, between April 2003 and March 
2007, HHS documented 26,408 complaints of Privacy Rule 
violations.\12\ Despite the relatively large number of 
complaints, no civil penalties were levied during that period 
and only one civil fine has been levied since then.\13\ The 
bill would address these barriers to adoption and take steps to 
provide for greater privacy and security of health information 
and stronger enforcement of violations of federal law.
---------------------------------------------------------------------------
    \12\ Stevens, Gina Marie, ``Enforcement of the HIPAA Privacy 
Rule,'' CRS Report RL33989 (Apr. 30, 2007).
    \13\ Id.
---------------------------------------------------------------------------

3. Medicaid provisions

    The rise in unemployment during a recession also has severe 
impact on state Medicaid programs. Caseloads rise as workers 
lose their incomes. If, as projected, the unemployment rate 
rises to 9%, the number of children enrolled in Medicaid or the 
Children's Health Insurance Program (CHIP) will increase by 2.8 
million, while the number of non-elderly adults in Medicaid 
will rise by 1.6 million.\14\
---------------------------------------------------------------------------
    \14\ Holahan and Garrett, op. cit., Table 2.
---------------------------------------------------------------------------
    At the same time, the revenues that states need to pay for 
their Medicaid programs fall as income tax, sales tax, property 
tax, and corporate tax receipts decline. A 1 percentage point 
increase in the unemployment rate causes state general fund 
revenue to drop by 3% to 4% below the level of revenues 
expected. A 9 percent unemployment rate would reduce state 
revenues by an estimated $26 billion.\15\
---------------------------------------------------------------------------
    \15\ Id. at 8.
---------------------------------------------------------------------------
    Because the states, on average, pay 43% of Medicaid program 
costs, states would have to reduce their Medicaid spending by 
over $60 billion in order to reduce their state-only spending 
by $26 billion. Withdrawing $60 billion in aggregate demand 
from the health care sector of the economy is likely to prolong 
the recession.
    The bill contains provisions to assist states in 
maintaining their Medicaid programs in the face of caseload 
increases and revenue shortfalls. The bill provides a temporary 
increase in the federal Medicaid matching rate (FMAP) targeted 
in part at states with high unemployment. The bill also extends 
a moratorium on regulations that would substantially reduce 
federal Medicaid matching payments to states.
    CBO estimates that these provisions will increase federal 
Medicaid spending by $89.5 billion over the next five years. Of 
this amount, about $80 billion, or nearly 90%, will be spent 
during 2009 and 2010, providing immediate fiscal relief to 
state Medicaid programs while the recession is underway.

                          Legislative History

    H.R. 629, the Energy and Commerce Recovery and Investment 
Act, was introduced by Rep. Henry A. Waxman on January 22, 
2009, and referred to the Committee on Energy and Commerce.
    On January 22, 2009, the Committee met in open markup 
session to consider five Committee prints that correspond to 
the five titles of H.R. 629. The Committee by unanimous consent 
substituted the text of these five prints, as amended during 
the markup session, for the text of H.R. 629 as introduced, and 
approved H.R. 629, amended, by a voice vote.

                           Section-By-Section


                   Title I--Broadband Communications


Section 1001: Inventory of broadband service capability and 
        availability

    Subsection (a) directs the National Telecommunications and 
Information Administration (``NTIA'') to develop and maintain a 
broadband inventory map of the United States that identifies 
and depicts broadband service availability and capability. 
Subsection (b) directs the NTIA to make the map accessible 
online no later than 2 years after the date of enactment of 
this Act.

Section 1002: Wireless and broadband deployment grant programs

    Subsection (a) authorizes the creation of grant programs 
for wireless and wireline broadband infrastructure to be 
administered by the NTIA.
    Subsection (b) authorizes a state to submit a priority 
report to NTIA that identifies the geographic areas within that 
state that have greatest need for new or additional 
telecommunications infrastructure. A state may not identify 
areas encompassing more than 20% of that state's population.
    Subsection (c) authorizes the NTIA to award Wireless 
Broadband Grants. The NTIA shall seek to distribute grants, to 
the extent possible, so that 25% of the available funds to 
``unserved areas'' for basic voice services and 75% to 
``underserved areas'' for advanced broadband services.
    Subsection (d) authorizes the NTIA to award Broadband 
Deployment Grants. The NTIA shall seek to distribute grants, to 
the extent possible, so that 25% of the available funds go to 
``unserved areas'' for basic broadband services and 75% to 
``underserved areas'' for advanced broadband services.
    Subsection (e) directs the NTIA to establish certain grant 
requirements, including that grant recipients are not unjustly 
enriched by the program, that grant recipients adhere to the 
FCC's August 5, 2005, broadband Internet policy statement, 
which grant recipients operate networks on an open access 
basis, and that grant recipients adhere to a build out 
schedule.
    Subsection (f) sets for the requirements of the grant 
application and grant selection criteria. The NTIA is required 
to consider certain public policy goals (e.g., public safety 
benefits and enhancement in computer ownership or literacy) 
before awarding grants.
    Subsection (g) requires the NTIA to coordinate with the FCC 
and to consult with other agencies as necessary to implement 
this Section.
    Subsection (h) requires NTIA to submit an annual report to 
Congress assessing the impact o the grants on the policy 
objectives and criteria contained in this Section.
    Subsection (i) grants the NTIA authority to prescribe rules 
as necessary to implement this Section.
    Subsection (j) contains definitions of terms used in this 
Section, and directs the FCC to develop definitions for certain 
terms.

Section 1003: National Broadband Plan

    Subsection (a) requires the FCC to, not later than one year 
after the date of enactment of this section, develop and submit 
to Congress a report containing a national broadband plan.
    Subsection (b) sets forth the contents of the plan.

                            Title II--Energy


Section 2001: Technical corrections to the Energy Independence and 
        Security Act of 2007

    This section provides technical corrections to the Energy 
Independence and Security Act of 2007 (EISA) to eliminate 
confusion in grant fund allocations.

Section 2002: Amendments to Title XIII of the Energy Independence And 
        Security Act of 2007

    Presented in Appropriations Committee bill as ``Technical 
Corrections'' to EISA, this section in fact comprises 
substantive changes to that title and has therefore been 
retitled ``Amendments to Title XIII'' of EISA by the Committee. 
The language of subsection (1)(A) has been clarified to avoid 
concern that demonstration projects would be limited to those 
in rural areas when the intent is to have them in a variety of 
geographic settings. An additional paragraph (F) was added 
requiring grantees for EISA section 1304 Demonstration Projects 
to ``utilize open Internet-based protocols and standards if 
available.'' The same conditioning language is also applied to 
Smart Grid grantees under section 1306 of EISA as an addition 
to the procedural changes in subsection (8)(e)(2).

Section 2003: Renewable energy and electric power transmission loan 
        guarantee programs

    This provision creates a new section of Title XVII of the 
Energy Policy Act of 2005 (EPAct) to provide temporary loan 
guarantee authority for certain commercially ready renewable 
energy technologies. The bill modifies the categories of 
eligible recipients to clarify that ``renewable energy 
systems'' would be those ``including incremental hydropower, 
that generate electricity,'' and that ``electric power 
transmission systems'' would include ``upgrading and 
reconductoring projects.'' The bill adds a third category of 
eligible users, ``leading edge biofuel projects,'' judged by 
the Secretary of Energy as likely to become commercial, and 
limited to using $500 million of the total authority provided. 
These projects are required to ``substantially reduce life 
cycle greenhouse gas emissions'' and it is expected that the 
Secretary will use a procedure and methodology consistent for 
calculating emissions that is consistent with those being 
developed by the U.S. Environmental Protection Agency. The bill 
also includes factors to be considered by the Secretary in 
reviewing transmission projects for federal support.

Section 2004: Weatherization program amendments

    This section contains language allowing the Secretary of 
Energy to encourage states to move forward with attic 
insulation and other low-cost high-efficiency techniques in 
weatherization program actions for qualifying homes rather than 
weatherizing single homes at once with all techniques, if the 
Secretary judged that such action would increase the 
effectiveness of the program.

Section 2005: Renewable electricity transmission study

    This section provides for additional elements to the 
triennial DOE study of transmission congestion, required under 
Section 1221 of the Energy Policy Act of 2005. It requires the 
analysis of renewable transmission constraints and legal 
actions as 8 obstacles to new renewable transmission, and 
requiring that assumptions and projections involved in the 
study be explained.

Section 2006: Additional state energy grants

    This section adds conditions that would apply to acceptance 
by a state of incremental State Energy Program grant funding 
beyond base amounts. The funds would be conditioned on 
governors of states notifying the Secretary of Energy that they 
would seek, within the limits of their authority, to ensure 
that three conditions were met.
    First, the governor would seek to promote policies to 
ensure that recovery of a utility's fixed costs of service are 
independent of retail sales, that a utility could recover costs 
for energy efficiency and that an earnings opportunity existed 
for energy efficiency. This provision is designed to nudge a 
state toward adopting policies that would remove disincentives 
that utilities have to invest in energy efficiency and promote 
new incentives to encourage energy efficiency. Experience in 
states that have adopted these policies show that consumer 
rates may fluctuate only minimally while delivering substantial 
benefits and reducing the need for additional power plant 
construction.
    Care was taken to ensure that governors were not encouraged 
to advocate that variable charges be shifted to fixed charges. 
In this way, consumers can continue to save money through their 
own conservation efforts and rate structures that are not 
advantageous to consumers are not encouraged. Moreover, the 
Committee understands the limited effect of this condition. 
Public utility commissions are generally independent of a 
governor's office and a governor's notification under this 
section will not legally require a public utility commission to 
adopt any specific regulatory policy. In fact, nothing in this 
section preempts state laws or in anyway limits the authority 
of a state to protect its consumers. This provision is intended 
to aid consumers by ensuring that the most cost-effective 
energy solutions are sought. The Committee expects that public 
utility commissions will maintain their practice of ensuring 
that only prudent investments are recovered and that consumers 
are protected.
    Second, the governor would seek to promote the adoption of 
updated energy efficient building codes adopted by leading 
code-setting organizations or their equivalent.
    Finally, the governor would seek, to the extent 
practicable, to prioritize the use of such funds in the 
expansion of existing energy efficiency programs or renewable 
energy programs. A separate provision of the section eliminates 
the 20% state match required under current law for receipt of 
Economic Recovery Act revenues. Another provision removes any 
limits in current law as to percentages of funding that can be 
used for purchase and installation of equipment and materials 
for energy efficiency measures.

Section 2007: Inapplicability of limitation

    This provision temporarily lifts current statutory 
limitations and conditions on grant and loan funding pursuant 
to Section 471 of EISA, Sustainability and Energy Efficiency 
Loans and Grants for Institutions, to accord with the 
``American Recovery and Reinvestment Act of 2009'' 
appropriation timing and amounts. It provides that not more 
than 80% of the funding for any project can be provided in the 
form of grant funding.

       Title III--Health Insurance Assistance for the Unemployed


Section 3001: Short title and table of contents

    Sets forth the short title and table of contents.

Section 3002: Premium assistance for cobra benefits and Extension of 
        Cobra Benefits for older or long-term employees

    Section 3002 establishes a temporary premium assistance 
program for COBRA benefits and extends COBRA benefits for older 
or long-term employees.
    To be eligible for COBRA under current law, a worker must 
have worked for an employer with 20 or more employees, have 
been enrolled in the employer's health plan, and have lost his/
her health coverage due to termination of employment for 
reasons other than gross misconduct. Workers must pay 100% of 
the premium plus 2% in administrative costs. In addition, some 
states offer similar health care continuation coverage for 
those employers with less than 20 employees.
    The bill provides a 65% subsidy for COBRA continuation 
premiums for up to 12 months for workers who have been 
involuntarily terminated (and their families) and are otherwise 
eligible for federal or state COBRA continuation coverage. To 
qualify for this COBRA premium assistance, a worker must be 
involuntarily terminated between
    September 1, 2008, and December 31, 2009, and not have an 
income of over 1 million dollars. The subsidy would terminate 
upon offer of any new employer-sponsored coverage.
    The bill also provides that those COBRA-eligible workers 
who are 55 and older, or who have worked for an employer for 10 
or more years, would be able to retain COBRA coverage, at their 
own expense, until they become Medicare eligible at age 65.

Section 3003: Temporary optional medicaid coverage for the unemployed

    This section provides temporary optional Medicaid coverage 
for the unemployed without health insurance coverage. State 
Medicaid programs will have the option of covering one or more 
of the following groups of unemployed individuals without 
health insurance (and their uninsured spouses and dependents):
    (1) individuals who are receiving unemployment benefits and 
individuals who were receiving but have exhausted unemployment 
benefits on or after July 1, 2008;
    (2) individuals who are involuntarily unemployed and were 
involuntarily separated from employment on or after September 
1, 2008, and before January 1, 2009, with a gross family income 
below 200% of the poverty level ($44,100 per year for a family 
of four in 2009) and are not otherwise eligible for Medicaid;
    (3) individuals who are involuntarily unemployed and were 
involuntarily separated from employment on or after September 
1, 2008, and before January 1, 2009, are member of households 
participating in the food stamps program, and are not otherwise 
eligible for Medicaid.
    The federal government will assume 100% of the costs of 
benefits and administration for individuals enrolled under this 
option through December 31, 2010. The costs of administration 
include the cost of outreach and modification and operation of 
eligibility information systems.
    Individuals eligible for coverage as of December 31, 2010, 
will continue to be entitled to coverage until their next 
regularly-scheduled eligibility redetermination date. During 
this post-December 31, 2010, coverage period, the federal 
government will share in the cost of covered items and services 
for such individuals at the state's regular matching rate.

                Title IV--Health Information Technology


Sec. 4001: Short title, table of contents of title

    Provides that the title of the section is the Health 
Information Technology for Economic and Clinical Health Act or 
the HITECH Act.

         Subtitle A--Promotion of Health Information Technology


      Part I--Improving Health Care Quality, Safety and Efficiency


Sec. 4101: ONCHIT; standards development and adoption

    This section makes a number of amendments to the Public 
Health Service Act (PHSA):
    Sec. 3000--Definitions. These provisions define key terms 
related to the promotion of health information technologies.
    Sec. 3001--Office of the National Coordinator for Health 
Information Technology. The Office of the National Coordinator 
of Health Information Technology (ONCHIT), which was originally 
created by Executive Order 13335, is codified into statute 
within the U.S. Department of Health and Human Services (HHS). 
The head of ONCHIT (the National Coordinator) will lead the 
efforts for the development of policies and recognition of 
standards to allow for the secure electronic exchange of health 
information that leads to improvements in the quality of 
clinical care.
    The National Coordinator is charged with the following 
duties:
    
 Update and maintain strategic plan on how to 
achieve widespread adoption and use of interoperable, secure, 
and clinically useful electronic health records. The plan shall 
include measurable goals and the National Coordinator is 
required to regularly evaluate and publicly report on progress 
toward achieving these goals.
    
 Provide guidance to and act as a liaison between 
the HIT Policy and HIT Policy Committees.
    
 Review and recommend standards and guidance to the 
Secretary to ensure interoperability, security/privacy, and 
clinical utility of electronic health information. Such 
recommendations will be developed with input from the HIT 
Standards Committee.
    
 Develop a program for the voluntary testing and 
certification of products as meeting the standards adopted by 
the Secretary for the secure electronic exchange of health 
information.
    
 Coordinate efforts throughout the federal 
government to promote and utilize electronic health information 
technology.
    
 Appoint a Chief Privacy Officer who shall assist 
the National Coordinator with initiatives to promote privacy, 
security, and data stewardship of electronic health 
information.
    
 Regularly report on progress on efforts to achieve 
the goals outlined in the strategic plan, as well as the impact 
of health information technology in communities with health 
disparities and medically underserved areas.
    Sec. 3002--HIT Policy Committee. Establishes a federal 
advisory committee of public and private stakeholders to 
provide input and assistance to the National Coordinator. The 
HIT Policy Committee will serve as a forum for input and 
expertise in the area of health information technology. The HIT 
Policy Committee will provide policy advice and make 
recommendations to the National Coordinator on how best to 
achieve the goals outlined in the strategic plan, including how 
to achieve the goal of ensuring that every person in the nation 
has a secure electronic health record by 2014.
    Sec. 3003--HIT Standards Committee. Establishes a federal 
advisory committee of public and private stakeholders to 
provide input and assistance to the National Coordinator. The 
HIT Standards Committee will recommend standards, 
implementation specifications, and certification criteria for 
the secure electronic exchange and use of health information 
technology consistent with the strategic plan and policy 
recommendations from the HIT Policy Committee.
    Sec. 3004--Process for adoption of endorsed 
recommendations; adoption of initials set of standards, 
implementation of specifications, and certification criteria. 
Directs the Secretary, in consultation with other relevant 
agencies, to review standards recommended by the National 
Coordinator and, where appropriate, provide for adoption by the 
government through a rulemaking process. Requires that the 
Secretary adopt an initial set of standards, which may be based 
on standards already developed by the National Coordinator, no 
later than December 31, 2009.
    Sec. 3005--Application and use of adopted standards and 
implementation specifications by federal agencies. Requires 
that federal agencies implementing or using electronic health 
information do so in a way that is consistent with Section 
4111.
    Sec. 3006--Voluntary application and use of adopted 
standards and implementation specifications by private 
entities. Except as provided for under Section 4112, states 
that standards developed under this Act shall not be binding on 
private entities, but may be voluntarily adopted.
    Sec. 3007--Federal health information technology. Directs 
the Secretary to support the development of, and make 
available, a low-cost electronic health record that is 
certified as meeting the adopted standards, unless the 
Secretary finds that provider demand for such systems is being 
met through the marketplace. States that no public or private 
entity will be required to adopt or use the system developed 
under this Section.
    Sec. 3008--Transitions. Provides for transitions to allow 
for the development and harmonization of standards currently 
taking place to continue to occur as ONCHIT is codified and the 
functions of the American Health Information Community 
Successor, Inc. flow appropriately to the HIT Policy and 
Standards Committees.
    Sec. 3009--Relation to HIPPA privacy and security law. 
Specifies that this title may not be construed as having any 
effect on the authorities granted to the Secretary under the 
HIPAA privacy and security law.
    Sec. 3010--Authorization for appropriations. Authorizes an 
appropriation of $250 million to ONCHIT for 2009 to implement 
this title.

Sec. 4102: Technical amendment

    Amends the HIPAA definition of health plan to include 
Medicare Part D.

Sec. 4103: American technology required

    Requires all funds made available pursuant to this Act for 
the purchase of health information technology only purchase 
technology that is manufactured, engineered, programmed in the 
United States and made substantially from articles, materials, 
supplies, mined, produced or manufactured in the United States.

 Part II--Application and Use of Adopted Health Information Technology 
                           Standards; Reports


Sec. 4111: Coordination of Federal activities with adopted standards 
        and implementation specifications

    Codifies a 2006 executive order to require federal agencies 
implementing, acquiring, or upgrading HIT systems for the 
electronic exchange of identifiable health information use HIT 
products meeting standards adopted by the Secretary of HHS in 
accordance with this bill. It also requires that the President 
ensure that federal activities involving the collection and 
submission of health information be consistent with standards 
established under this bill for the electronic exchange of 
health information.

Sec. 4112: Application to private entities

    Requires that private entities contracting with the federal 
government to carry out health activities adopt the standards 
established under this bill for the electronic exchange of 
health information.

Sec. 4113: Study and reports

    Requires the Secretary to submit an annual report to 
Congress on the efforts toward, and barriers to, facilitating 
the electronic exchange of health information nationwide. It 
also requires the Secretary to study methods to create 
efficient reimbursement incentives for improving healthcare 
quality in federally-qualified health centers, rural health 
clinics, and free clinics.

          Subtitle B--Testing of Health Information Technology


Sec. 4201: National Institute for Standards and Technology Testing

    Requires that the National Institute for Standards and 
Technology (NIST) work in coordination with the Office of the 
National Coordinator to test standards. These are standards 
being developed or recognized for the electronic exchange of 
health information by the Office of National Coordinator. It 
additionally requires the director of NIST in coordination with 
the Office of the National Coordinator to support the 
establishment of accredited testing laboratories for the 
voluntary testing of products for certification by the National 
Coordinator that they meet standards for the electronic 
exchange of information.

Sec. 4202: Research and development programs

    Requires that the Director of NIST, in consultation with 
the Director of the National Science Foundation and other 
appropriate federal agencies, award competitive grants to 
institutes of higher education to research innovative 
approaches for the use of HIT in the delivery of health care. 
Additionally, it directs the National High-Performance 
Computing Program, created by the High Performance Computing 
Act of 1991, to coordinate federal research and programs 
related to the development and deployment of HIT.

  Subtitle C--Incentives for the Use of Health Information Technology


                    Part I--Grants and Loans Funding


Sec. 4301: Grant, Loan and Demonstration Programs

    This section makes a number of amendments to the Public 
Health Service Act (PHSA):
    Sec. 3011--Immediate funding to strengthen the health 
information technology infrastructure, Authorizes the Secretary 
to make immediate investments in the infrastructure necessary 
to facilitate the electronic exchange and use of health 
information for each individual in the United States consistent 
with the goals and strategies outlined in the strategic plan 
developed by the Office of the National Coordinator, including 
assistance to providers not eligible for assistance under 
Medicare or Medicaid.
    Sec. 3012--Health information technology implementation 
assistance. Establishes several programs to help providers 
adopt and use health information technology. These programs 
will serve as a forum for exchanging knowledge and experience, 
disseminate lessons learned and best practices, and provide 
technical assistance to providers and health information 
networks about how to implement health IT. The program will 
prioritize direct assistance first to non-for profit hospitals, 
federally qualified health care centers, providers in medically 
underserved areas, and individual or small group practices 
focused on primary care.
    Sec. 3013--State grants to promote health information 
technology. Authorizes the Secretary to award states, or 
qualified state-designated entities, grants to implement and 
expand the electronic exchange of health information.
    Sec. 3014--Competitive grants to States and Indian Tribes 
for the development of loan programs to facilitate the 
widespread adoption of certified EHR technology. Authorizes the 
National Coordinator to award states and Indian Tribes grants 
for the purpose of establishing health IT loan programs. Such 
loans could only be used to assist with the purchase of health 
information technology that facilitates the electronic exchange 
of health information and improves the quality of care.
    Sec. 3015--Demonstration program to integrate information 
technology into clinical education. Establishes a demonstration 
program for awarding grants to medical, dental, nursing 
schools, and other graduate health education programs to 
integrate health IT into the clinical education of health care 
professionals.
    Sec. 3016--Information technology professionals on health 
care. Directs the Secretary, in consultation with the National 
Science Foundation, to provide financial assistance to 
educational institutions to support training in medical health 
informatics.
    Sec. 3017--General grant and loan provisions. Permits the 
Secretary to require that grantees report on the effectiveness 
of activities funded through the grant, and requires the 
National Coordinator to annually evaluate the effectiveness of 
grants in improving the quality and efficiency of health care.
    Sec. 3018--Authorization for appropriations. Authorizes 
appropriations of such sums as are necessary to carry out this 
subtitle from 2009 through 2013.

                       Part II--Medicare Program


Sec. 4311: Incentives for eligible professionals

    Provides for incentive payments to Section 1861(r) 
physicians and providers who adopt and utilize EHR technology 
that is certified as meeting appropriate standards for 
interoperability, security and clinical functionality. In order 
to receive the incentives, providers must demonstrate that they 
are engaging in meaningful use of the EHR technology, including 
electronically exchanging clinical information with other 
providers and reporting on clinical quality measures. In 
selecting the quality measures the Secretary is instructed to 
seek to select measures that are consistent with those already 
in use under other quality reporting programs under Title 
XVIII, such as the Physician Quality Reporting Initiative 
(PQRI) program.
    Beginning in fiscal year 2011, professionals that 
demonstrate they have adopted and are utilizing a certified EHR 
system are eligible to receive incentive payments through the 
Medicare program. Professionals who demonstrate they are 
meaningful EHR users starting in 2011, 2012, or 2013 will 
receive incentive payments that are phased out over a five-year 
period. Eligible professionals who use a certified EHR may 
receive up to $41,000 over five years, which may be made in 
annual lump-sum payments or a series of smaller payments. 
Professionals that become meaningful EHR users in 2014 and 2015 
will receive a reduced series of payments over a 4 and 3 year 
period, respectively. No incentive payments are available for 
professionals who begin meaningful use of EHR technology after 
2015. The Secretary is instructed to coordinate payments for 
professionals who participate in more than one practice to 
ensure proper application of payment incentives and limits. The 
Secretary is also given authority to adjust measures of 
meaningful use for professionals in group practice as 
appropriate.
    Starting in 2016, Medicare payments are reduced by a 
percentage of allowed charges for any eligible professional who 
does not demonstrate they are meaningfully using a certified 
EHR system. Allowed charges are reduced by 1% in 2016 and by an 
additional percentage point each year until payments are 
reduced by 3% for non-users. If less than 75% of eligible 
professionals are not demonstrating meaningful use of a 
certified EHR system, the reduction in payments will increase 
by 1% a year for a maximum reduction of 5%. The Secretary may 
provide a time-limited exemption from the payment reductions to 
professionals who demonstrate a significant hardship in meeting 
the meaningful use criteria.
    Similar payment incentives and reductions will apply to 
professionals who are affiliated with certain staff or group 
model Medicare Advantage (MA) plans. Furthermore, MA benchmark 
payments are not affected by incentive payments or penalties 
that apply to professionals in fee-for-service Medicare for the 
use of EHRs.

Sec. 4312: Incentives for hospitals

    Provides incentive payments to Section 1886(d) hospitals 
that adopt and utilize EHR technology that is certified as 
meeting appropriate standards for interoperability, security 
and clinical functionality. In order to receive the incentives, 
hospitals must demonstrate that they are engaging in meaningful 
use of EHR technology, including electronically exchanging 
clinical information with other providers and reporting on 
clinical quality measures. In selecting clinical quality 
measures the Secretary is instructed to seek to avoid redundant 
or duplicative reporting with reporting required under the 
Reporting Hospital Quality Data for Annual Payment Update 
(RHQDAPU) Program under 1886(b)(3)(B)(viii) of the Social 
Security Act.
    Beginning in fiscal year 2011, hospitals that demonstrate 
they have adopted and are utilizing an approved EHR system are 
eligible to receive incentive payments through Part A of the 
Medicare program. Hospitals that demonstrate they are 
meaningful EHR users by either fiscal 2011, 2012, or 2013 
receive incentive payments that are phased out over a four-year 
period. Hospitals that become meaningful EHR users in 2014 and 
2015 receive 3 and 2 years of incentive payments respectively. 
No incentive payments are available for hospitals that begin 
adoption and meaningful use of EHR technology after 2015.
    All hospitals that meet the standards for meaningful EHR 
use receive a base payment based on their Medicare share of 
business. Hospitals receive additional payments based on total 
discharges, at a declining rate per discharge, up to a maximum 
number of discharges. All payments are adjusted by Medicare 
share, taking into account the level of charity care provided 
by the hospital.
    The market basket update is reduced for any eligible 
hospital that has not adopted a certified system by 2016. The 
Secretary may provide a time-limited exemption from the payment 
reduction to professionals who demonstrate a significant 
hardship in meeting the meaningful use criteria.
    Similar payment incentives and reductions will apply to 
hospitals which are affiliated with certain staff or group 
model Medicare Advantage (MA) plans and have less than one-
third of their total discharges covered under Medicare fee-for-
service. MA benchmark payments are not affected by incentive 
payments and penalties to 1886(d) hospitals for the development 
of EHRs.

Sec. 4313: Treatment of payments and savings; implementation funding

    This section excludes all payment incentives made by this 
Act from Medicare beneficiary premiums. All funds currently 
held in the Medicare Improvement Fund are designated to be 
expended in fiscal year 2014, and any savings resulting from 
payment reductions for failing to use certified EHRs is 
deposited into the Fund starting in 2020. Provides funding to 
the Centers for Medicare and Medicaid Service to implement the 
incentive programs described in this part of the Act.

Sec. 4314: Study on application of EHR payment incentives for providers 
        not receiving other incentive payments

    Instructs the Secretary to conduct a study to determine the 
extent to which and manner in which incentives and other 
funding for adoption and use of qualified EHR technology should 
be made available to health care providers who are receiving 
minimal or no payments under this Act, titles XVIII, or XIX of 
the Social Security Act, or otherwise. The study is due to 
Congress by June 30, 2010.

                       Part III--Medicaid Funding


Sec. 4321: Medicaid provider HIT adoption and operation payments; 
        implementation funding

    Provides incentives to encourage the adoption and use of an 
electronic health record that is certified as meeting 
appropriate standards for interoperability, security, and 
clinical functionality among providers participating in the 
Medicaid program under title XIX of the Social Security Act. 
Incentives are administered by state Medicaid programs 
according to statute and under regulatory supervision of the 
Secretary of Health and Human Services. There is no payment 
reduction associated with incentive payments under this 
section.
    Eligible practitioners include physicians as defined in 
Sections 1861(r)(1) and 1861(r)(2) of the Social Security Act, 
nurse practitioners, and certified nurse midwives with at least 
30% of patient volume attributable to patients receiving 
assistance under title XIX. Such practitioners would be 
eligible to receive 85% of the costs of implementing and 
operating health information technology up to $75,000 over a 
period of six years, or $63,750 in federal spending. Up to 
$25,000 of this funding would be for the initial adoption of an 
electronic health record with the rest being for operation and 
maintenance costs spread over the succeeding five years.
    Practitioners receiving such assistance would be required 
to demonstrate meaningful use of certified electronic health 
records in a manner specified by the State and satisfactory to 
the Secretary. In order to avoid duplicative reporting 
requirements such demonstration may be based on the rules 
developed for the Medicare program.
    Other eligible providers include children's hospitals, 
acute care hospitals with at least 10 percent of their patient 
volume attributable to patients receiving assistance under 
title XIX, and federally qualified health centers (FQHCs) and 
rural health clinics (RHCs) with at least 30% of their patient 
volume attributable to such individuals. Payments to hospitals 
are calculated in a similar fashion as under Section 4312 of 
this Act. Hospitals demonstrating meaningful use of certified 
electronic health records (under standards administered by the 
states and acceptable to the Secretary) may receive a base 
payment based on their Medicaid share, with additional amounts 
for additional discharges. All payments are adjusted by the 
percentage of discharges made for individuals receiving 
assistance under title XIX (the Medicaid share, including 
individuals enrolled in managed care plans) and the amount of 
charity care being provided by the hospital. Payments to FQHCs 
and RHCs are made according to a formula to be developed by the 
Secretary.
    State spending for payments to providers for adoption and 
operation of certified electronic health records will be 
entirely paid for by the federal government; 90% of state costs 
in administering the program will be reimbursed by the federal 
government. Funding is provided to the Centers for Medicare & 
Medicaid Services to administer this section.

                          Subtitle D--Privacy


Sec. 4400: Definitions

    These provisions define key terms related to the privacy 
and security provisions of this bill.

      Part I--Improved Privacy Provisions and Security Provisions


Sec. 4401: Application of security provisions and penalties to business 
        associates of covered entities; annual guidance on security 
        provisions

    Requires that security safeguards promulgated pursuant to 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA) and this bill, and the penalties for violation of those 
safeguards apply to business associates under HIPAA (see note 
below) in the same manner as applied to covered entities. This 
provision also requires that the Secretary, in consultation 
with stakeholders, annually issue guidance on the most 
appropriate security safeguard technologies for protecting 
information.

Sec. 4401: Notification in the case of breach

    Requires that, in the case of a breach of unsecured 
Protected Health Information (PHI), a covered entity must 
notify each individual whose information has been, or is 
reasonably believed to have been, breached. In the case of a 
breach of unsecured PHI that is under the control of a business 
associate, that business associate is required to notify the 
covered entity. All breach notifications must be made without 
unreasonable delay and no later than 60 calendar days after 
discovery. The provision provides instruction for the required 
methods by which an individual must be notified and the content 
of the notification. However, this notification may be delayed 
if it could impede a criminal investigation or damage national 
security.
    The Secretary is also required to issue guidance within 60 
days, and annually thereafter, as to the technologies or 
methodologies that meet the standard of making information 
secure (i.e. unusable, unreadable, or indecipherable). If the 
Secretary fails to issue guidance within 60 days, PHI will be 
considered secure if it is protected by technology standards 
developed or endorsed by a standards developing organization 
that is accredited by the American National Standards Institute 
(ANSI).
    Finally, the Secretary is required each year to compile and 
analyze the number and nature of breaches reported to the 
Secretary and issue a report to Congress concerning the scope 
of the problem and steps that have or will be taken to address 
it at a federal level and through guidance on best practices 
for covered entities and business associates.

Sec. 4403: Education on health information technology privacy

    Requires that the Secretary designate an individual in each 
regional HHS office to offer education and guidance on privacy 
requirements regarding PHI.

Sec. 4404: Application of privacy provisions and penalties to business 
        associates of covered entities

    Requires that privacy provisions promulgated pursuant to 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA) and this bill, and the penalties for violation of those 
privacy provisions apply to business associates under HIPAA in 
the same manner as applied to covered entities.

Sec. 4405: Restrictions on certain disclosures and sales of health 
        information; accounting of certain protected health information 
        disclosures; access to certain information in electronic format

    Permits a patient to request that their PHI regarding a 
specific healthcare item or service not be disclosed by a 
covered entity to a health plan for purposes of payment or 
healthcare operations, unless otherwise required by law, if 
that patient has paid in full out-of-pocket for that item or 
service. In such a circumstance, the covered entity is required 
to honor the patient's request.
    Also requires covered entities to make reasonable effort to 
restrict the use, disclosure, request of PHI to a ``limited 
data set'' of information as defined in the HIPAA rules until 
such time that the Secretary issues guidance on what 
constitutes the ``minimum necessary'' for use or disclosure of 
such data.
    The provision also gives an individual the right to request 
an accounting of disclosures of PHI from an entity or business 
associate to another party for treatment, payment, and health 
care operations in the three years prior to the request if that 
entity is utilizing an electronic health record and the 
disclosure was made from the electronic health record. Covered 
entities would not be required to make an accounting for uses 
of PHI or oral disclosures of such information.
    The provision additionally requires the Secretary to review 
the definition of health care operations to determine those 
activities that can reasonably and efficiently be conducted 
through the use of information that is de-identified. Health 
care operations are activities for which providers and insurers 
can share a patient's protected health information without 
their authorization.
    Additionally, this provision clarifies that certain uses 
and disclosures of PHI are not permitted without a valid 
authorization, such as the sale of PHI (with some exceptions) 
and the unauthorized re-identification of de-identified data or 
the limited data set.
    This provision also gives individuals the right to receive 
electronic copies of their PHI used or maintained by a covered 
entity in electronic format if the entity uses an electronic 
medical record or electronic health record. The provider would 
be able to charge a reasonable cost based fee for doing so.

Sec. 4406: Conditions on certain contracts as part of health care 
        operations

    Clarifies the definition of marketing under HIPAA and 
precludes direct or indirect payment to covered entities for 
the use of PHI to make certain communications without valid 
patient authorization. Removes fundraising from the HIPAA 
definition of health care operations.

Sec. 4407: Temporary breach notification requirement for vendors of 
        personal health records and other non-HIPPA covered entities

    In the case that an individual's personal health record 
(PHR) unsecured identifiable health information is breached, 
requires that PHR vendors notify that individual along with the 
Federal Trade Commission (FTC). The provision requires that the 
notification requirements applicable to covered entities under 
section 4402 of this bill be applied to notifications required 
under this section and that FTC notify HHS of breach notices 
received by FTC. The provision gives the FTC enforcement 
authority regarding breaches of health information maintained 
by PHR vendors. The provision sunsets when either HHS or FTC 
adopt privacy and security standards specific to PHRs and other 
non-HIPAA covered entities.

Sec. 4408: Business associate contracts required for certain entities

    Requires organizations such as Health Information 
Exchanges, Regional Health Information Organizations, E-
prescribing Gateways, and vendors of PHRs who have entered into 
contracts with covered entities to have business associate 
agreement as defined under HIPAA.

Sec. 4409: Clarification of application of wrongful disclosures 
        criminal penalties

    Clarifies that criminal penalties for violations of HIPAA 
can be applied directly to individuals, whether they are 
employees of covered entities or have no relationship to 
covered entities.

Sec. 4410: Improved enforcement

    Improves enforcement of the federal health privacy law by 
the Office of Civil Rights (OCR) at HHS by requiring a formal 
investigation of complaints and the imposition of civil 
monetary penalties for violations that rise to the level of 
willful neglect or other violations that are not corrected. The 
provision also increases the amount of civil monetary penalties 
and authorizes a percentage of the penalty to accrue to the 
individual(s) harmed and the OCR, through the application of a 
methodology to be developed by the GAO and adopted by the 
Secretary.
    Preserves OCR's current tools for informal resolution, 
technical assistance, and correction without the imposition of 
a penalty in situations where the violation was due to a 
reasonable cause. Currently, all complaints and violations can 
be handled informally and without the imposition of civil 
monetary penalties.
    In addition, this provision permits OCR to pursue an 
investigation and the imposition of civil monetary penalties 
against any individual for an alleged criminal violation of the 
federal health privacy law if the Department of Justice has not 
prosecuted the individual.
    Finally, this provision authorizes state attorneys general 
to enforce federal privacy and security laws.

Sec. 4411: Audits

    Directs the Secretary to perform periodic audits to oversee 
compliance with the privacy and security provisions.

Sec. 4412: Securing individually identifiable health information

    Requires covered entities and business associates to use 
technology to make all data transmitted in the nationwide 
health information network or transported outside a covered 
entities or business associate's physical perimeter unusable, 
unreadable, or indecipherable to unauthorized individuals.

Sec. 4413: Special rule for information to reduce medication errors and 
        improve patient safety

    Clarifies that nothing in the privacy subtitle of the Act 
shall prevent a pharmacist from collecting and sharing 
information with a patient in order to reduce medication errors 
and improve patient safety so long as any remuneration received 
for making such communication is reasonable and cost based.

 Part II--Relationship to other laws; regulatory references; effective 
                             date; reports


Sec. 4421: Relationship to other laws

    Applies the preemption in Section 1178 of the Social 
Security Act to the provisions of title IV of this bill and 
preserves the HIPAA and the regulations promulgated pursuant to 
that Act to the extent that they are consistent with Title IV 
of this bill.

Sec. 4422: Regulatory references

    States that each reference in this subtitle to a federal 
regulation refers to the most recent version of the regulation.

Sec. 4423: Effective date

    With the exception of certain specified provisions, this 
bill shall become effective 12 months after the date of 
enactment of this Act.

Sec. 4424: Studies, reports, guidance

    This provision requires that the Secretary annually report 
to Congress on the number and nature of complaints of alleged 
violations and how they were resolved, including the imposition 
and amount of civil money penalties; the number of audits 
performed, and more.
    In addition, this section requires study on the application 
of privacy and security requirements to vendors of personal 
health records. The provision requires the Secretary, in 
consultation with the Federal Trade Commission (FTC) to submit 
recommendations to Congress regarding: (1) the requirements 
relating to security, privacy, and notification in the case of 
a breach of protected health information, including the 
applicability of an exemption to notification in the case of 
PHI that has been rendered indecipherable through the use of 
encryption or alternative technologies, with respect to 
personal health record vendors; and (2) the federal agency best 
equipped to enforce those requirements.
    Finally, this section requires that the GAO study and 
report on the disclosures of protected health information made 
for treatment purposes and best practices used by entities and 
states for such disclosures.

                      Title V--Medicaid Provisions


Section 5000: Table of contents of title

    Sets forth the table of contents.

Section 5001: Temporary increase of Medicaid FMAP

    Provides for a temporary increase in the federal medical 
assistance percentage (FMAP) to assist states in meeting the 
costs of increasing Medicaid caseloads at a time when their 
revenues are falling due to rising unemployment. Three types of 
temporary assistance will apply to the costs of Medicaid items 
and services during the period October 1, 2008, through 
December 31, 2010:
    (1) States that would otherwise experience a drop in their 
federal matching rate under the regular FMAP formula during FY 
2009 or FY 2010 or the first quarter of FY 2011 will be held 
harmless against any decline.
    (2) Every state will receive an increase in its FMAP by 4.9 
percentage points for the entire nine quarter period.
    (3) States experiencing an increase in their unemployment 
rate will receive an additional percentage point increase in 
their FMAP as follows. Each state's average monthly 
unemployment rate for the most recent previous three-
consecutive-month period for which data are available is 
compared to the state's lowest average monthly unemployment 
rate for any three-consecutive-month period beginning on or 
after January 1, 2006. If the most recent rate exceeds the 
lowest rate by not less than 1.5 percentage points but less 
than 2.5 percentage points, the additional percentage point 
increase in FMAP is the product of 6 percent and the state's 
regular state matching rate. If the most recent rate exceeds 
the lowest rate by not less than 2.5 percentage points but less 
than 3.5 percentage points, the additional percentage point 
increase in FMAP is the product of 12 percent and the state's 
regular state matching rate. If the most recent rate exceeds 
the lowest rate by not less than 3.5 percentage points, the 
additional percentage point increase in FMAP is the product of 
14 percent and the state's regular state matching rate.
    For purposes of this calculation, the state's regular state 
matching rate is determined after applying the hold harmless 
but before applying the 4.9 percentage point increase.
    This high unemployment percentage point adjustment will 
automatically adjust upward, per the formula described above, 
to reflect increases in a state's unemployment rates until the 
quarter ending June 30, 2010. Until that time, the percentage 
point adjustment can only remain unchanged or go up; it cannot 
go down. For the last two quarters in calendar year 2010, the 
adjustment will be determined based on the state's average 
monthly unemployment rate for December 2009, January 2010, and 
February 2010.
    Puerto Rico, the Virgin Islands, Guam, the Northern 
Marianna Islands, and American Samoa will have the option of a 
20% increase in their medical assistance cap amount or a 4.9 
percentage point increase in their FMAP plus a 10% increase in 
their cap.
    The temporary increase in FMAP resulting from the hold 
harmless provision and the 4.9 percentage point increase will 
apply to payments under Title IV-E (relating to foster care and 
adoption assistance). None of the three temporary FMAP 
increases described above will apply to Medicaid payments to 
disproportionate share (DSH) hospital or to payments under the 
State Children's Health Insurance Program (SCHIP).
    In order to receive the temporary FMAP increase, a state 
must have in place eligibility standards, methodologies, and 
procedures (such as the length of a redetermination period) 
that are no more restrictive than those in effect on July 1, 
2008. The bill provides special rules for states that 
implemented more restrictive eligibility standards, 
methodologies, or procedures after July 1, 2008, but before 
enactment.
    A state is not eligible for the 4.9 percentage point 
adjustment or any high unemployment adjustment if any amounts 
attributable (directly or indirectly) to such an increase are 
deposited or credited into any reserve or rainy day fund.
    In the case of a state that requires a county or other 
locality to contribute toward the state share of Medicaid 
costs, the state is not eligible for any increase in its FMAP 
if it requires the county or other locality to pay a larger 
percentage of the state share than the county or other locality 
was required to contribute as of September 30, 2008.

Section 5002: Moratoria on certain medicaid regulations

    Extends from March 31, 2009, through June 30, 2009, the 
current law moratoria on implementation of Medicaid regulations 
relating to cost limits on public providers, graduate medical 
education (GME) payments, provider taxes, rehabilitative 
services, targeted case management services, and school 
administration and transportation services. In addition, the 
bill imposes a moratorium through June 30, 2009, on 
implementation of a final regulation published on November 7, 
2008, relating to Medicaid outpatient hospital services.

Section 5003: Transitional medical assistance

    Extends and simplifies transitional medical assistance 
(TMA), under which individuals who leave welfare to go to work 
receive up to one year of Medicaid coverage so long as they 
continue working. The bill extends the current TMA provision, 
which expires on June 30, 2009, through December 31, 2010. In 
addition, the bill gives states the option of simplifying TMA 
eligibility determinations to reduce administrative burden and 
turnover.

Section 5004: State eligibility option for family planning services

    This section gives states the option of providing Medicaid 
coverage for family planning services and supplies to 
individuals who are not pregnant and whose income does not 
exceed the highest income eligibility level for pregnant women 
established under the state's Medicaid or State Children's 
Health Insurance programs. The allowable coverage includes 
medical diagnosis and treatment services provided pursuant to a 
family planning service in a family planning setting. In 
addition, states will have the option of providing this 
coverage to such individuals during a presumptive eligibility 
period.
    In its Budget Options for Health Care (December 2009), CBO 
presents an option that would require state Medicaid programs 
to cover family planning services and supplies for low-income 
women who are not pregnant. The bill allows each state to make 
its own decision as to whether to provide such coverage. CBO 
estimates that the option provided by the Committee bill will 
save the federal government $700 million in Medicaid outlays 
over the next ten years.
    The arguments cited by CBO in support of its budget option 
apply with equal force to this section of the bill: ``The main 
argument for this option is that it would reduce the number of 
unplanned pregnancies while resulting in savings to the states 
and the federal government. A number of benefits are associated 
with lowering the rate of unplanned pregnancies. Women with 
unplanned pregnancies are less likely to recognize early signs 
of pregnancy and thus delay the use of prenatal services until 
later in their pregnancies, possibly increasing the risk of 
birth complications. In addition, motherhood among young women 
tends to result in lower educational attainment and higher 
reliance on public assistance. Finally, reducing unplanned 
pregnancies could reduce the adverse health consequences of 
closely spaced births.''

Section 5005: Protections for Indians under Medicaid and CHIP

    This section establishes protections for American Indians 
and Alaska Natives under Medicaid and the State Children's 
Health Insurance Program (SCHIP). The bill prohibits state 
Medicaid programs from imposing cost-sharing requirements on 
Medicaid-eligible American Indians or Alaska Natives when the 
beneficiary is receiving an item or service directly from an 
Indian health care provider or through referral from a Contract 
Health Services (CHS) provider. The bill requires that states 
disregard certain property in determining the Medicaid or SCHIP 
eligibility of American Indians or Alaska Natives. Finally, the 
bill requires that the procedures used by state Medicaid 
programs for estate recovery exempt certain income, resources, 
and property described in manual instructions in effect on 
April 1, 2003.

Section 5006: Consultation on Medicaid and CHIP

    This section requires state Medicaid and SCHIP programs to 
seek advice on a regular, ongoing basis from Indian Health 
Programs and Urban Indian Organizations on all matters likely 
to have a direct effect on such Programs and Organizations, 
including plan amendments, waiver request, and proposals for 
demonstration projects.

Section 5007: Temporary increase in DSH allotments during recession

    Provides a temporary increase in state allotments for 
payments to Medicaid disproportionate share (DSH) hospitals. 
The bill increases the DSH allotment for each state for FY 2009 
by 2.5% above the allotment the state would otherwise receive. 
Each state's DSH allotment for FY 2010 will be 102.5% of its 
DSH allotment for FY 2009, as increased by the bill. For FY 
2011 and each fiscal year thereafter, each state's DSH 
allotment will be determined as under current law without 
regard to the temporary increases for FY 2009 and FY 2010.

                       Explanation of Amendments

    During the January 22, 2009, Committee business meeting, 
the Committee considered five separate Committee prints on the 
following subjects: (1) broadband; (2) energy; (3) health 
insurance for the unemployed; (4) health information 
technology; and (5) Medicaid. The text of these prints was 
comprised of provisions of the legislation proposed by the 
House Appropriations Committee known as the ``American Recovery 
and Reinvestment Act'' that fund communications, energy, and 
health-related programs created by and within the jurisdiction 
of the Committee on Energy and Commerce.
    At the conclusion of consideration of these prints, the 
Committee by unanimous consent agreed to replace the text of 
H.R. 629 as introduced with the text of the five Committee 
prints as amended during the Committee business meeting. This 
section will therefore describe amendments to the five 
Committee prints.

                               BROADBAND

    Chairman Waxman offered an Amendment in the Nature of a 
Substitute (``ANS'') that incorporated several technical 
changes. The ANS changed the funding language of ``from money 
appropriated'' to ``from amounts authorized.'' It added a 
requirement that the NTIA coordinate with the FCC while 
consulting with other federal agencies. To provide enhanced 
oversight, the ANS added a requirement that NTIA submit an 
annual report to Congress for five years assessing the impact 
of the grants funded under this program and whether the grants 
are meeting the objectives and criteria described. It also gave 
the NTIA the explicit authority to prescribe rules as necessary 
to carry out the purposes of the section. The ANS modified the 
definition of eligible entities to make it clear that satellite 
providers, tower companies, and ``backhaul companies'' 
(companies that provide facilities critical for connecting 
broadband and wireless networks) are all potentially eligible 
for the funds. Finally the ANS dropped the requirement that 
applicants provide an ``engineering plan.'' The amendment was 
adopted by voice vote.
    Rep. Stupak offered an amendment that requires the FCC to 
revise its definitions of ``unserved'' and ``underserved'' 
based on data used by the NTIA to develop and maintain its new 
national broadband map no later than three months after the map 
becomes available. This allows the FCC to utilize the best 
available data for the purpose of defining the terms. The 
Stupak amendment was accepted by voice vote.
    Rep. Stupak offered a second amendment that would add to 
the list of public policy goals to be considered by the NTIA in 
making the grants whether a grant application will 
significantly improve interoperable broadband communications 
used by public safety. The term ``interoperable broadband 
communications systems'' is defined as communications systems 
which enable public safety agencies to share information using 
voice or data signals via advanced wireless broadband services. 
Equipment used would include hardware, software, middleware, or 
network-based IP solutions. The amendment was accepted by voice 
vote.
    Rep. Rush offered an amendment that would add to the list 
of public policy goals to be considered by the NTIA in making 
the grants whether the applicant is a ``socially and 
economically disadvantaged small business concern'' as defined 
under the Small Business Act. The amendment was accepted by 
voice vote.
    Rep. Markey offered an amendment to direct the FCC to 
submit a National Broadband Plan to the Energy and Commerce 
Committee within one year after enactment. The amendment was 
accepted by voice vote.
    Rep. Walden offered an amendment to delete the prohibition 
on a state from identifying more than 20% of the geographic 
area of that state as an area worthy of grant funds. The Walden 
amendment was adopted by voice vote.
    Rep. Blunt offered an amendment that would have prioritized 
grant applications for unserved areas over underserved areas 
based on the number of existing service providers. The 
amendment was defeated on a 23-to-33 vote.
    Rep. Buyer offered an amendment to require the FCC to 
revise the definitions of ``unserved'' and ``underserved.'' It 
would require the FCC to also review the percentage 
distribution currently allocated to unserved and underserved 
areas. The amendment was defeated on a 21-to-33 vote.
    Ranking Member Barton offered an amendment to disqualify 
applicants that have received or are scheduled to receive 
Universal Service Fund under its high-cost program or from the 
Rural Utilities Service within 12 months of the date of its 
application for the grant programs. The amendment was defeated 
on a voice vote.

                                 ENERGY

    An amendment in the nature of a substitute offered by Mr. 
Waxman was adopted by a voice vote. The Chairman's amendment in 
the nature of a substitute included the following changes:
    
 Adding a condition to smart-grid grants for 
demonstration projects and qualifying smart-grid investments 
that requires grantees to utilize open internet-based protocols 
and standards, if available.
    
 Allowing the Weatherization Assistance Program to 
proceed separately if cost-effective on separate elements of 
weatherizing eligible homes, such as attic insulation.
    
 Elaboration of the categories of eligible 
recipients of loan guarantees to limit awardees to renewable 
energy systems that generate electricity and that favor 
electric power transmission system projects, including 
upgrading and reconductoring, that require such guarantees to 
be viable and that serve reliability and environmental 
objectives.
    
 Elaboration of what became Section 2005 of H.R. 
629, to assure that assumptions and projections made in the 
study will be fully explained.
    An amendment offered by Mr. Upton was adopted by a voice 
vote. This amendment required the Secretary of Energy to 
analyze the extent to which legal challenges are delaying 
construction of transmission lines necessary to access 
renewable energy.
    An amendment offered by Mr. Upton was defeated by a 
recorded vote, 21-33. This amendment would have expanded the 
category of eligible projects for loan guarantees to include 
zero-emission technologies.
    An amendment offered by Ms. Baldwin was adopted by a voice 
vote. This amendment allowed leading edge biofuels to be 
eligible for loan guarantees.
    An amendment offered by Mr. Shadegg was adopted by a voice 
vote. This amendment clarified that incremental hydropower 
projects were eligible for loan guarantees.
    An amendment offered by Mr. Inslee was adopted by a voice 
vote. This amendment ensured that prior to receiving funds for 
state energy programs; governors would notify the Secretary of 
Energy that to the extent practicable they would seek to 
prioritize funding for existing energy efficiency and renewable 
energy programs.
    An amendment offered by Mr. Barton was defeated by a 
recorded vote, 20-33. This amendment sought to eliminate the 
requirement that governors notify the Secretary of Energy that 
they would seek to modify utility policies in favor of allowing 
utilities to promote energy efficiency.
    An amendment offered by Mr. Shimkus was defeated on a 
recorded vote, 19-34. This amendment would have made forestry 
projects and other carbon sequestration projects eligible for 
loan guarantees.
    An amendment offered by Mr. Stearns was defeated by a 
division vote, 15-29. This amendment would have eliminated the 
requirement that governors notify the Secretary of Energy that 
they would seek to update their state building energy codes.
    An amendment offered by Mr. Walden was ruled non germane. 
This amendment would have amended the Clean Air Act.
    An amendment offered by Mr. Gingrey was withdrawn. This 
amendment would have amended a governmentwide contracting 
standard.
    An amendment offered by Mr. Terry was ruled non germane. 
This amendment would have amended the Federal Power Act to 
create a new program for the promotion of transmission lines.

                  HEALTH INSURANCE FOR THE UNEMPLOYED

    An amendment in the nature of a substitute offered by Mr. 
Waxman was agreed to as amended by a voice vote. This amendment 
made a minor change in the Medicaid assistance provided for 
those affected by the economic downturn. It consolidated two 
Medicaid eligibility categories--individuals who are receiving 
unemployment benefits, and individuals who have exhausted those 
benefits--into one optional category. It also made conforming 
technical changes.
    An amendment offered by Mr. Barton was not agreed to by a 
vote of 14 to 30. This amendment would have required 
individuals seeking temporary assistance for COBRA coverage to 
meet an income test of $100,000 and an asset test of $1,000,000 
to qualify for the COBRA coverage option.
    An amendment offered by Mr. Stearns was agreed to by voice 
vote. This amendment imposed an income limit of $1,000,000 on 
individuals seeking temporary assistance under the COBRA 
coverage option.
    An amendment offered by Mr. Rogers was not agreed to by 
voice vote. The amendment would have required states that 
provide coverage through Medicaid to those affected by the 
economic downturn to offer premium assistance through a voucher 
to purchase coverage in the individual market as part of that 
option.
    An amendment offered by Mr. Deal was not agreed to by a 
vote of 13 to 27. This amendment would have imposed a limit of 
$1,000,000 for those seeking temporary assistance under the 
Medicaid coverage option.

                     HEALTH INFORMATION TECHNOLOGY

    An amendment in the nature of a substitute offered by Rep. 
Waxman made certain technical corrections to title IV of the 
Committee print relating to health information technology, 
including a clarification that Medicare measures of clinical 
quality should be selected in parallel fashion for hospitals 
and eligible professionals. The amendment was further amended 
to clarify that certain grant activities would be directed 
towards expanding the use of health information technology. The 
amendment was adopted, amended, by a voice vote.
    An amendment offered by Rep. Whitfield would have modified 
Medicare's sustainable growth rate formula for updating the 
Medicare physician fee schedule to require an annual increase 
in fees equal to the Medicare Economic Index. The amendment was 
defeated by a recorded vote of 15-31.
    An amendment offered by Rep. Burgess would have modified 
Medicare's sustainable growth rate formula for updating the 
Medicare physician fee schedule. The amendment was defeated by 
a recorded vote of 15-34.
    An amendment offered by Rep. Gingrey would have set the 
update for 2010 to Medicare's physician fee schedule to 0 
percent. The amendment was defeated by a division vote of 13-
27.
    An amendment offered by Rep. Barton would have created an 
exception to self-referral prohibitions in the case of a 
physician owning an interest in a whole hospital. The amendment 
was defeated by a division vote of 10-30.
    An amendment offered by Rep. Rogers would have prohibited 
enforcement of federal privacy and security laws by state 
attorneys general. The amendment was defeated by a recorded 
vote of 15-32.
    An amendment offered by Rep. Blunt provided that nothing in 
the privacy subtitle of the HITECH Act shall prevent a 
pharmacist from collecting and sharing information with a 
patient in order to improve patient safety. The amendment was 
withdrawn without prejudice.
    An amendment offered by Rep. Rogers would allow providers 
and health plans to market to individuals using their personal 
health information so long as any remuneration was disclosed 
and there was notice of a toll-free number patients could call 
to opt out of the communications. The amendment was withdrawn 
without prejudice.
    An amendment offered by Rep. Markey would require 
individually identifiable health information be secured by 
technology to render it unusable, unreadable, or 
indecipherable. The amendment was adopted by unanimous consent.
    An amendment offered by Rep. Murphy of Pennsylvania 
required all funds made available pursuant to the HITECH Act 
for health information technology only purchase technology that 
is manufactured, engineered, programmed in the United States 
and made substantially from articles, materials, or supplies 
mined, produced, or manufactured in the United States. The 
amendment was adopted by a voice vote.
    An amendment offered by Rep. Christensen required that one 
of the purposes of the Office of the National Coordinator for 
Health Information Technology and Health Information Technology 
Policy Committee be to reduce health disparities through the 
use of health information technology. The amendment was adopted 
by a voice vote.
    An amendment offered by Rep. Burgess would permit the 
donation of health information technology from one provider to 
another by rolling back anti-fraud protections that currently 
exist under Medicare. The amendment was defeated by a recorded 
vote of 16-32.
    An amendment offered by Rep. Rogers would require covered 
entities to only account for disclosures made for health care 
operations. The underlying bill requires covered entities to 
account for disclosures made for treatment, payment and health 
care operations. The amendment was defeated by a voice vote.
    An amendment offered by Rep. Burgess would have prohibited 
incentives payments to eligible professionals for the use of 
certified electronic health records in Medicare until the 
sustainable growth rate formula relating to the physician fee 
schedule remains is repealed. The amendment was defeated by a 
voice vote.
    An amendment offered by Rep. Gingrey would have accelerated 
the depreciation of health IT expenses for tax purposes. The 
amendment was ruled non-germane and withdrawn.
    An amendment offered by Mr. Gingrey would accelerate the 
date in which Medicare incentive payments are made for 
physicians to acquire and use health information technology and 
delayed the date in which penalties were applied to physician 
payments for noncompliance. The amendment was defeated by voice 
vote.
    An amendment offered by Mr. Burgess would have accelerated 
the date in which Medicare incentive payments are made for 
physicians to acquire and use health information technology to 
June 2009. The amendment was defeated by a voice vote.
    An amendment offered by Rep. Blunt clarifies that nothing 
in the privacy subtitle of the HITECH Act shall prevent a 
pharmacist from collecting and sharing information with a 
patient in order to reduce medication errors and improve 
patient safety so long as any remuneration received for making 
such communication is reasonable and cost based. The amendment 
was adopted by unanimous consent.

                                MEDICAID

    An amendment in the nature of a substitute offered by Mr. 
Waxman was agreed to by voice vote. This amendment contained a 
minor change to the text of the Committee print. It added a 
section that would temporarily raise the Medicaid DSH 
allotments for all States in Fiscal Years 2009 and 2010 by 2.5 
percent each year.
    An amendment offered by Mr. Buyer was withdrawn. This 
amendment would have imposed stricter requirements on state 
Medicaid programs relating to formularies and prior 
authorization for single source drugs within six protected 
classes.
    An amendment offered by Mr. Pitts was not agreed to by a 
recorded vote of 14 to 29. This amendment would have required 
any entity determining a minor presumptively eligible for 
family planning services provide parental notification before 
providing any services.
    An amendment offered by Mr. Deal was not agreed to by a 
recorded vote of 11 to 32. This amendment would have required 
states under title XIX to require providers to report prices 
charged to self-paying (non-Medicaid) patients to the state to 
report to the Secretary of Health and Human Services. The 
Secretary would then publish these prices on a publicly 
available website.
    An amendment offered by Mr. Deal was not agreed to by a 
recorded vote of 11 to 32. This amendment would have required 
states, as a condition of receiving enhanced federal assistance 
under title XIX beginning with FY 2010, to pay pharmacies a 
minimum of $9 per prescription dispensed under XIX.
    An amendment offered by Mr. Shadegg was not agreed to by a 
division vote of 9 to 26. This amendment would have mandated 
that a state offer a premium assistance program under title XIX 
to allow individuals to use Medicaid funding to purchase health 
coverage in the individual market or employer coverage as a 
condition of receiving enhanced federal assistance under 
section 5001.
    An amendment offered by Mr. Rush was withdrawn. This 
amendment would have expanded the number of entities that 
receive federally mandated 340B prices.
    An amendment offered by Mr. Stupak was withdrawn. This 
amendment would have required that managed care organizations 
providing outpatient prescription drugs to individuals under 
title XIX receive the same rebate from drug manufacturers as 
the state receives for such covered drugs, without meeting the 
same statutory protections relating to formularies and prior 
authorization as the state must follow.
    An amendment offered by Mr. Deal was not agreed to by a 
recorded vote of 11 to 31. This amendment would have prevented 
states from receiving certain enhanced federal assistance if 
the state provided coverage to legal immigrants, such as legal 
immigrant pregnant women and children.

                        Committee Consideration

    On Thursday, January 22, 2009, the Committee met in open 
session and ordered H.R. 629 to be favorably reported to the 
House by a voice vote.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Waxman to order H.R. 629 favorably reported to 
the House, amended, by a voice vote. The following is the 
recorded votes taken during Committee consideration, including 
the names of those Members voting for and against:
[GRAPHIC] [TIFF OMITTED] TR7P1.001

[GRAPHIC] [TIFF OMITTED] TR7P1.002

[GRAPHIC] [TIFF OMITTED] TR7P1.003

[GRAPHIC] [TIFF OMITTED] TR7P1.004

[GRAPHIC] [TIFF OMITTED] TR7P1.005

[GRAPHIC] [TIFF OMITTED] TR7P1.006

[GRAPHIC] [TIFF OMITTED] TR7P1.007

[GRAPHIC] [TIFF OMITTED] TR7P1.008

[GRAPHIC] [TIFF OMITTED] TR7P1.009

[GRAPHIC] [TIFF OMITTED] TR7P1.010

[GRAPHIC] [TIFF OMITTED] TR7P1.011

[GRAPHIC] [TIFF OMITTED] TR7P1.012

[GRAPHIC] [TIFF OMITTED] TR7P1.013

[GRAPHIC] [TIFF OMITTED] TR7P1.014

[GRAPHIC] [TIFF OMITTED] TR7P1.015

[GRAPHIC] [TIFF OMITTED] TR7P1.016

[GRAPHIC] [TIFF OMITTED] TR7P1.017

[GRAPHIC] [TIFF OMITTED] TR7P1.018

[GRAPHIC] [TIFF OMITTED] TR7P1.019

[GRAPHIC] [TIFF OMITTED] TR7P1.020

[GRAPHIC] [TIFF OMITTED] TR7P1.021

              Application of Law to the Legislative Branch

    Section 102(b)(3) of P.L. 104-1 requires a description of 
the application of this bill to the legislative branch where 
the bill relates to terms and conditions of employment or 
access to public services and accommodations. H.R. 629 is a 
generally applicable measure that does not have provisions that 
uniquely apply to the legislative branch.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 629. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                      Unfunded Mandates Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement on 
whether the provisions of the report include unfunded mandates. 
The Congressional Budget Office is conducting the analysis of 
this matter as part of its review of H.R. 1, which incorporates 
provisions of H.R. 629.

                         Earmark Identification

    H.R. 629 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 629. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act. CBO is 
conducting a cost estimate of H.R. 1, which incorporates 
provisions of H.R. 629.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, Congressional Budget Office 
is conducting a cost estimate of H.R. 1, which incorporates 
provisions of H.R. 629.

                             Minority Views

                          [TITLE I] BROADBAND

    This title throws nearly $3 billion into the air and hopes 
the right people catch it when it falls out of the sky more 
like manna from heaven than money taken away from working 
families. If the point of this exercise was to meet the 
President's call for bipartisan ideas that stimulate broadband 
deployment and the economy, we do not believe that the 
inclusion of controversial provisions on open access, minimum 
speeds, and build-out requirements meets such goals. These 
provisions are not bipartisan, and they harm rather than 
advance the stated goal. ``Open access'' is not even defined in 
the legislation. The speed requirements are unrealistic at 
best, and at worst they are neither competitively nor 
technologically neutral. Possibly worst of all, these 
conditions combine to discourage companies from participating 
in the stimulus plan.
    This title has its priorities upside down. Why else would 
it send 75 percent of the grants to ``underserved areas'' and 
give totally ``unserved areas'' the leftovers. Most people know 
what some service is, and what no service is, and they know the 
difference. This bill either doesn't know the difference, or 
gets it exactly backwards. In fact, the fair case can be made 
that all the money should go to unserved areas. Those are the 
places that need the most help, since there is apparently no 
market-based business case to deploy there yet. At least in 
underserved areas, a market appears to be developing. Moreover, 
sending money to underserved areas simply subsidizes one set of 
providers as they compete against others. Government's role is 
not to put fingers on the scale. The Majority rejected an 
amendment offered by Mr. Blunt that would have addressed this 
disparity on a party line vote.
    Lastly, this title cedes far too much discretion over a $3 
billion program to unelected officials at the Federal 
Communications Commission (FCC). Not only does the public not 
know who they are, Congress doesn't know who they are. At the 
moment, only three of the five seats on the Commission are 
filled, and two of the sitting members must leave if they are 
not renominated and reconfirmed in short order. Yet the bill 
leaves it to the FCC to define what ``unserved' and 
``underserved'' areas are. It is irresponsible for Congress to 
allocate $3 billion in this fashion.
    Elsewhere in the stimulus package Congress is apparently 
considering allocating $650 million to pay for the disaster 
that delaying the digital television transition will cause. 
Delaying the transition is not necessary, and will cause more 
harm than good by confusing consumers and jeopardizing spectrum 
earmarked for public safety and wireless broadband services. It 
will also cost government and industry millions of more dollars 
to change five years worth of previous planning. Ensuring that 
the DTV transition goes forward on February 17, 2009, is 
perhaps the nation's quickest, most realistic chance of 
creating a broadband stimulus and creating jobs. To top it off, 
legislation delaying the DTV transition has not even passed, so 
we may be allocating $650 million with nothing to spend it on.

                      [TITLE II] ENERGY PROVISIONS

    The most egregious provision in the energy title is one 
that attempts to promulgate a policy to preserve utility 
profits at the expense of energy-saving consumers. In order for 
a state to receive energy efficiency grants, a governor would 
have to notify the Secretary of Energy that his state is trying 
to institute a system in which utilities' fixed costs are 
covered by consumers, independent of energy usage. Under this 
concept, consumers who follow our persistent advice to consume 
less energy will see their bills either stay the same or 
actually rise. Families who buy appliances rated high for 
energy stinginess will be punished for their good intentions 
and expensive investments. We believe that consumers should be 
rewarded when they save energy, not penalized so that electric 
utility companies can be supported in the luxe style to which 
they have become accustomed. Mr. Barton proposed an amendment 
to remedy this injustice; it was rejected on a party-line vote 
by the Majority.
    The energy title fails to address important sources of 
energy that are essential to stimulating our economy. This 
title--which authorizes $22.1 billion in spending for renewable 
energy, transmission projects, and increased energy 
efficiency--completely neglects almost 70 percent of our 
country's electricity supply. Mr. Upton proposed an amendment 
designed to stimulate zero-emissions energy which did not pass. 
Mr. Shimkus's amendment to add carbon capture and sequestration 
for coal-fired generation to the list of energy project 
categories to the proposed temporary program for rapid 
deployment of energy projects also was rejected. Republican 
Members' position is that a true stimulus should stimulate all 
American energy, a suggestion that the Majority rebuffed as too 
wide-ranging for the narrow focus of the $22.1 billion in 
stimulus dollars. The Majority totally failed to address energy 
from America's most abundant source--coal--and its cleanest--
nuclear. The Majority's energy mark-up resulted in a package 
that overstimulates a small area of our economy and neglects 
the energy sources that provide the most jobs right now, that 
ensure energy security, and that will provide clean energy for 
years to come.
    Smart-grid technology is extremely promising. It holds the 
possibility of increasing efficiency throughout the electricity 
system and giving consumers more control over their own 
electricity use. However, language was added in Chairman 
Waxman's substitute which would limit the grants only to 
recipients using open internet-based protocols and standards, 
when available. This language, if passed, would result in 
Congress picking technology winners and losers, without any 
hearings or discussions. Smart-grid technology is still 
developing, and there is more than one standard being tested. 
Forget about paper versus plastic or VHS versus Betamax--the 
ramifications of determining the industry standards and 
protocols for deployment of smart grid technology are 
monumental in comparison. Given the importance of this issue, 
the one thing that is clear is that smart-grid standards and 
protocols should be carefully considered and not added as a 
last-minute afterthought to the Chairman's substitute with 
absolutely no discussion or consideration.
    The Majority is equally misguided in their position that 
stimulating the economy should involve micro-managing state and 
local building codes. The majority proposes $8.4 billion in 
energy efficiency grants and loans. Rather than funding states 
and localities to enforce the currently existing energy 
efficiency codes, the Majority insists on micro-managing states 
and localities by mandating adoption of the most recently 
published version of the International Energy Conservation Code 
or its equivalent for residential buildings, and the ANSI/
ASHRAE/IESNA Standard 90.1-2007 or equivalent for commercial 
buildings. Mr. Stearns proposed an amendment that would provide 
grant funding to empower states and localities to enforce the 
codes that they have chosen in the best interests of their 
states. The choices for cost-effective energy efficiency 
technology should be determined by those closest to the 
building site, not a wide-sweeping federal code. Nevertheless, 
the Majority insists that states should be forced to conform to 
a model code to receive the grants.
    The mark-up highlighted the need for changes to the Energy 
Independence and Security Act of 2007 (``EISA''), as evidenced 
by the rejection of all Minority-offered amendments, including: 
Mr. Walden's amendment to correct the definition of renewable 
biomass so advanced biofuels derived from woody material 
gathered from federal lands and other private lands can be 
counted towards the renewable fuels standard; Mr. Gingrey's 
proposed amendment to strike Section 526 of EISA, which 
restricts procurement and acquisition of alternative fuels; and 
Mr. Shadegg's proposed amendment to remove the Davis-Bacon 
provisions from Section 545 of EISA. While the Majority members 
agreed with the need for an all-encompassing revision to EISA, 
they stopped short of actually supporting any of the Minority 
amendments to make improvements to EISA. We hope the Majority 
lives up to its commitments to revisit EISA and look forward to 
working with them, when that time comes.

            [TITLE III] HEALTH INSURANCE FOR THE UNEMPLOYED

    This title permanently extends COBRA coverage to any person 
55 or older who loses their job or to any person that has 
worked for a company for at least 10 years. This will lead to 
greater cost for the employers that currently provide health 
care coverage to their employees and a reduction in employer 
sponsored health care.
    In addition to the change in length to COBRA eligibility, 
this title establishes a new government subsidy of 65 percent 
of COBRA premium costs for the first 12 months of coverage. 
Unfortunately, the bill lacks the thoughtful approach of 
legislation that results from regular order. The new program 
for COBRA subsidies does not contain an income test or an asset 
test. In tough economic times it is unconscionable that we 
would ask the average American to have their tax dollars 
transferred to the wealthiest in this country. An amendment was 
rejected that would have capped eligibility for the government 
subsidy at $100,000 in annual income and a total of $1 million 
in assets on a party line vote.
    We are pleased that the Majority accepted an amendment that 
would have capped eligibility for the new government subsidy at 
$1 million in annual income. We believe this level is still too 
high, but as previously mentioned, efforts to impose a lower 
income threshold were rejected.
    The legislation expands the Medicaid program to new groups 
of individuals. The ``temporary'' Medicaid option is funded 100 
percent by the Federal Government and has no regard to a 
person's income or asset levels. An amendment to limit the 
program to individuals with incomes below $1 million in the 
previous year was rejected.
    Medicaid has historically been administered by the states 
and funded jointly by the states and the Federal Government. 
Although there are significant reports of persistent fraud and 
abuse in the Medicaid program, as reiterated in a recently 
released study by the Government Accountability Office (GAO), 
states had the incentive to protect their investments in the 
program, and they succeeded in getting more money with less 
reform. The new Medicaid expansion would provide 100 percent of 
the financing for the program not just for medical services but 
also for administrative costs. This is a dangerous precedent 
that will undermine the already unsustainable Medicaid program. 
Unless there is significant state investment in the program, 
there will be little or no incentive for the state to govern 
the program efficiently and ensure that federal taxpayer 
dollars are being spent responsibly.
    An amendment also was rejected that would have provided a 
premium subsidy for individuals in the new Medicaid expansion 
so they could enroll in a health plan of their choice. 
Individuals in Medicaid should have the same options to receive 
better heath care as those receiving the new COBRA subsidy. The 
Committee has repeatedly heard of instances where Medicaid 
fails patients. Many doctors will not participate in the 
program. Patients must linger on waiting lists or drive miles 
to find a doctor who takes Medicaid patients.

                [TITLE IV] HEALTH INFORMATION TECHNOLOGY

    We support the adoption of health information technology 
and believe its increased adoption will lead to reduced medical 
errors and improved patient outcomes. However rushed adoption 
of non-interoperable health information technology could 
actually impede its deployment.
    Although the legislation purports to be an economic 
stimulus package, the bonus payments for using electronic 
health records do not go out until 2011 with penalties for not 
using electronic health records going into effect in 2016. How 
these are supposed to stimulate a cure for the present 
recession is a medical mystery. Given that payment incentives 
are not distributed until 2011, the legislation should have 
been considered through regular order to ensure that health 
information technology is disseminated efficiently and 
effectively.

                     [TITLE V] MEDICAID PROVISIONS

    In what may be considered a fitting coincidence, on the 
same day that legislation designed to increase the federal 
share of the costs of the Medicaid program by $98.5 billion 
over the next two years was favorably reported by the Energy 
and Commerce Committee, the Government Accountability Office 
released a report stating that the Medicaid program remained on 
GAO's list of ``high-risk'' programs because of ``growing 
concerns about the quality of fiscal oversight, which is 
necessary to prevent inappropriate program spending.'' 
Unfortunately, GAO's concern about the future stability of the 
Medicaid program is directly contrasted by the provisions in 
Title V of the American Recovery and Reinvestment Act of 2009 
which, other than expanding taxpayer coverage of family 
planning items and services, only serves to temporarily prop up 
an unsustainable, broken program.
    When Senator Mark Warner (D-VA) was the governor of 
Virginia and the chairman of the National Governors 
Association, he correctly stated that the unsustainable growth 
of Medicaid spending has every state and the Federal Government 
``on the road to a meltdown.'' His solution was to update the 
severely outdated rules and regulations and allow state 
governments the flexibility to run their programs with 
increased levels of innovation, efficiency, and accountability. 
The Republican Members of the Committee on Energy and Commerce 
believe that Senator Warner was correct in both his assessment 
of the problem facing Medicaid as well as its solution. In 
contrast, the proposed solution put forward by the Majority 
ignores the impending meltdown of the Medicaid system and 
places a finger in the leaking dam with a proposal to 
temporarily shift more of the costs of the Medicaid program 
onto the federal government in exchange for a commitment from 
the states that they will not reduce their eligibility criteria 
below where they were on July 1, 2008. While, states retain the 
flexibility to cut payment rates to the rapidly decreasing 
number of health care providers that still participate in the 
Medicaid program and the flexibility to reduce the number of 
items and services that are covered in Medicaid, states 
accepting any of the temporarily increased reimbursement rates 
are prohibited from reforming their eligibility criteria, 
unless--of course--a state would like to expand its 
eligibility.
    Proponents of this legislation like to claim that it is 
necessary because states cannot afford the expenses of their 
current Medicaid programs. However, simply dumping more federal 
dollars into an unsustainable status quo is not the answer. 
State officials must be held accountable for the performance of 
their programs, and states that continue to administer their 
programs in the same inefficient manner that created the 
current crisis should not be rewarded with additional federal 
funds.
    The Republicans on the Energy and Commerce Committee are 
deeply concerned that this legislation will create a very 
troubling situation on January 1, 2011, when the temporary 
increases in reimbursement expire. Under the legislation 
reported out of the Committee, states will be prevented from 
making certain necessary reforms to their programs and will 
have additional federal dollars with which to expand their 
Medicaid enrollment to new populations. As a result, short-
sighted state officials may take the bait 5 and expand their 
Medicaid program while blissfully ignoring the fact that the 
billions of dollars worth of increased reimbursement rates will 
come to an abrupt halt on December 31, 2010. Clearly, if a 
state cannot afford its Medicaid program today, it is 
reasonable to assume that this same state will not be able to 
afford an even larger, more expensive Medicaid program on 
January 1, 2011. This is why the Republican approach of 
reforming the Medicaid program and demanding accountability 
from state officials is the better approach for the American 
taxpayers, health care providers, and the current and future 
generations of Medicaid beneficiaries.
    The Minority was disappointed that an amendment offered by 
Dr. Gingrey requiring all states to verify the identity of all 
applicants for Medicaid coverage was defeated by the Majority. 
Given the tens of billions of dollars of state and federal 
Medicaid funds that are lost each year to criminally fraudulent 
claims and fraudulently enrolled beneficiaries, this amendment 
would have been an important provision to enable states to 
continue their current Medicaid program without making cuts to 
benefits or eligibility.

                                   Joe Barton.
                                   Steve Buyer.
                                   Joe Pitts.
                                   Greg Walden.
                                   Mike Rogers.
                                   Michael Burgess.
                                   Phil Gingrey.
                                   Nathan Deal.
                                   Roy Blunt.
                                   George Radanovich.
                                   Mary Bono Mack.
                                   Lee Terry.
                                   John Sullivan.
                                   Marsha Blackburn.
                                   Steve Scalise.

                            Dissenting Views

    In addition to the Minority Views expressed by Ranking 
Member Barton and our Republican colleagues on the Committee, 
we have some additional concerns that this legislation fails to 
address. Several Republican Members offered amendments to 
ensure Medicare beneficiaries continue to have access to their 
doctors and that new Medicare beneficiaries would be able to 
find a doctor that would accept Medicare. Unfortunately, these 
amendments were all rejected on a party-line vote by the 
Majority.
    Over the last several years, the Sustainable Growth Rate 
(SGR), the formula that controls Medicare physician payment, 
has forecast deep cuts to Medicare Part B reimbursement. This 
has created a high-degree of instability for doctors and 
threatens the viability of their practices. Including a 
permanent fix to Medicare physician payment rates would have a 
profound impact on stimulating the health care sector of the 
U.S. economy, which constitutes 16.2% of GDP, and ensuring 
vulnerable seniors have access to their doctors.

                                   Phil Gingrey.
                                   Michael Burgess.