S1418NOV18

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Week Ending November 18, 2005

S 1418 Wired for Health Care Quality Act. A bill to enhance the adoption of a nationwide inter operable health information technology system and to improve the quality and reduce the costs of health care in the United States.

BRIEF

This bill is the result of an executive order from President Bush in early 2005 that directed the Secretary of Health and Human Services to investigate the feasibility of creating an interoperable computer network that would provide to healthcare providers, for example, access to any patient’s medical records. The purpose of the system as expressed by the President and other supporters is to prevent medical errors due to a lack of patient information. Supporters hold that a reduction in medical errors will ultimately lower malpractice insurance rates and then lower the cost of healthcare.

The position created to handle the job of centralizing patient information is the National Health Information Technology Coordinator who would advise the President and the Secretary on health related information technologies. The position would require the development and implementation of a plan to guide the nation’s health records to an electronic database combining both public and private healthcare entities; oversee federal spending for health information technology programs and to coordinate outreach to private industry and facilitate information technology changes there.

The bill also would provide for grants to states and healthcare providers for regional information systems, to smooth the transition to the technology and to develop academic curricula that would educate medical students on the use of the technologies. healthcare providers receiving grants must match funds at a rate of $2 for every $3 granted. The funds could be used to acquire technology and train personnel to use it. States receiving grants much match the funds dollar for dollar.

Also in the bill is the creation of a Center for Best Practices that would provide assistance to setting up and using the system.

Privacy of information was touched on briefly and would be addressed through existing privacy provisions in the Healthcare Portability and Accountability Act of 1997, the Social Security Act and other regulations currently in effect. The private sector is an anticipated participant in the program through the public-private American Health Information Collaborative.

Sponsor: Senator Michael B. Enzi (R-WY)

Vote: Passed Senate by Unanimous Consent November 18, 2005

Cost to the taxpayers: $280 million through 2007, such sums as may be necessary thereafter.

MORE INFORMATION

II. BACKGROUND AND NEED FOR LEGISLATION-From the committee report accompanying the bill.

The Institute of Medicine estimates that medical errors kill 45,000 to 98,000 Americans each year in hospitals. Additionally, a Rand study stated that adult Americans receive recommended care only 55 percent of the time. Nearly 30 percent of health care spending is for treatments that may not improve health status, may be redundant, or may be inappropriate for the patient's condition according to Dartmouth University researchers.

Some of the most serious challenges facing healthcare today--medical errors, inconsistent quality, and rising costs--can be addressed through the effective application of available health information technology linking all elements of the health care system and using the system to report performance against quality measures. Information sharing networks have the potential to enable decision support any where at any time, thus improving the quality of health care and reducing costs.

In April 2004, the President signed an Executive Order announcing his commitment to the promotion of health information technology to lower costs, reduce medical errors, improve quality of care, and provide better information for patients and physicians. In particular, the President called for widespread adoption of electronic health records and for health information to follow patients throughout their care in a seamless and secure manner.

This committee agrees that if we move from a paper-based health care system to secure electronic health records, we will reduce mistakes and save lives, time and money. This legislation will bring the government and the private sector together to make healthcare better, safer and more efficient by accelerating the widespread adoption of interoperable health information technology and quality measurement across our healthcare system.

Interoperability is a shared goal across the health care industry by payers, providers, vendors, and consumers. The national strategy for achieving interoperability of digital health information calls for Federal agencies--who pay more than one-third of all health care costs--to collaborate with private entities in developing and adopting an architecture, standards, certification process, and a method of governance for ongoing implementation of health IT. Once the market has structure, patients, providers, medical professionals, and vendors will be better able to innovate, create efficiencies, and improve care.

The legislation formalizes involvement of private entities in the-standards and policy-setting process by directing the Secretary to establish and chair the public-private American Health Information Collaborative, which shall be composed of representatives of the public and private sectors.

The committee aims to facilitate the development and national implementation of an interoperable health IT infrastructure that ensures patients' individually identifiable health information is secure and protected; improves health care quality, reduces medical errors, and advances the delivery of appropriate, evidence-based medical care; reduces health care costs resulting from inefficiency, medical errors, inappropriate care, and incomplete information; ensures appropriate information to guide medical decisions is available at the time and place of care; promotes a more effective marketplace, greater competition, and increased choice through the wider availability of accurate information on health care costs, quality, and outcomes; improves the coordination of care and information among hospitals, laboratories, physician offices, and other ambulatory care providers through an effective infrastructure for the secure and authorized exchange of health care information; improves public health reporting and facilitates the early identification and rapid response to public health threats and emergencies, including bioterror events and infectious disease outbreaks; and promotes prevention of chronic diseases.

IV. EXPLANATION OF BILL AND COMMITTEE VIEWS

In April 2004, by Executive Order, President George W. Bush established the Office of the National Coordinator for Health Information Technology, operating from the Office of the Secretary at the Department of Health and Human Services. The Office is charged with developing a blueprint for a nationwide interoperable health information technology infrastructure and coordinating health information technology policies and programs across the Federal Government.

This bill will permanently establish the Office in the Department. The duties of the Office include serving as a member of the public-private American Health Information Collaborative, serving as the primary advisor to the Secretary and the President on the health information technology policies and programs of the Federal Government, ensuring the adoption of standards for the electronic exchange of health information, and interacting with public and private stakeholders. In carrying out the activities of the Office, the National Coordinator shall work to ensure the security of patient health information and the electronic exchange of health information.

The Office will report to Congress on actions taken by the Federal Government and private entities to facilitate the electronic exchange of health information and describe barriers to the adoption of, and make recommendations to achieve full implementation of, a nationwide electronic health information system. The bill allows the Office to accept the detail of Federal employees from other Federal agencies to assist in their activities.

The bill also specifies that an additional purpose of the Office is to coordinate and develop a nationwide interoperable health information technology infrastructure that promotes the prevention of chronic disease. The committee believes the United States cannot address rising health care costs without preventing chronic disease. According to the Centers for Disease Control, the medical care costs of people with chronic diseases account for more than 75 percent of the Nation's $1.4 trillion medical care costs. In addition, chronic disease accounts for 70 percent of all death in the United States. The committee believes adoption and promotion of health information technology can lead to innovative interventions to prevent disease and reduce health care costs.

The legislation authorizes $5 million for each of fiscal years 2006 and 2007 for personnel compensation for the Office.

The Secretary has begun undertaking the activities outlined in this section of the legislation. It is the committee's intent not to require the duplication of Federal efforts with respect to the establishment of the Office.

The committee believes that the inclusion of decision support in an interoperable health information technology system is critical to reducing medical errors and improving the quality of care patients receive. For that reason, the committee included the incorporation of decision support in the definition of qualified health information technology. The definition clearly states that qualified health information technology means a computerized system and it is the intent of the committee that decision support be included in that system, but the committee recognizes that each potential component (hardware or software) of a comprehensive interoperable health information technology system may not include a decision support feature. It is not the intention of the committee to restrict these components from participation in an interoperable qualified health information technology system, but rather to require that decision support be integrated within the system and available to any user.

The legislation formalizes involvement of private entities in the standards-setting process by directing the Secretary to establish and chair the public-private American Health Information Collaborative, which the bill specifies be composed of representatives of the public and private sectors.

It is the purpose of the Collaborative to advise the Secretary and recommend specific actions to achieve a nationwide interoperable health information technology infrastructure, and to serve as a forum for the participation of a broad range of stakeholders to provide input on achieving the interoperability of health information technology.

It is the intent of the committee to ensure that the Collaborative serve a dual purpose of recommending standards for the electronic exchange of health information and ongoing modifications to these standards and recommending uniform national policies facilitating the widespread adoption of interoperable health information. Given the unusually sensitive nature of health information and the complexity of the technical standards and policies needed to guide its use, it is imperative that a single entity be responsible for decisions related to both domains so they can be closely integrated. The Collaborative's policy recommendations are essential to the success of widespread adoption of interoperable health information technology. While the Collaborative will be the authority regarding matters in both domains, it may establish working groups within the Collaborative.

The Collaborative shall, among other things, advance and develop recommendations for the following issues: Protection of health information through appropriate privacy and security

practices; measures to prevent unauthorized access to health information; methods to facilitate secure patient access to health information; the ongoing harmonization of industry-wide health information technology standards; recommendations for a nationwide health information technology infrastructure; the identification and prioritization of specific use cases for which health information technology is valuable, beneficial, and feasible; recommendations for the establishment of an entity to ensure the continuation of the functions of the Collaborative; and other policies determined appropriate by the Collaborative.

The committee finds great value for patients in viewing their own health records. In developing uniform, interoperable standards for health information, the Collaborative should examine standards for patient review and secure access of their health information. This would enhance the ability of patients to manage their own health care. It would reduce duplication of services and allow patients to be better health care consumers. Patients can play an important role in reducing medical errors, preventing over utilization of services, and improving quality.

The Collaborative shall strive for maximum cost-effectiveness by building on existing standards and policy work, establishing efficient processes and minimizing the negative economic impact of any new requirements it defines. As a general principle, the Collaborative should seek existing solutions and minimal modifications, creating new solutions only as a last resort. Even so, some change will be required to ensure interoperability. The extent of such change must be determined using a defined process. To do so effectively requires close and continuous interaction with standards development organizations and other potential sources of relevant models for its own work.

The process to identify and specify these standards and policies must engage all affected stakeholders, as the credibility and compliance with the decisions of the Collaborative will ultimately depend on whether those who are affected by standards and policies were able to participate in the decision-making process. It is the intent of the committee to ensure a balance among all stakeholders, so that no member organization unduly influences recommendations from the Collaborative.

The Collaborative shall be composed of the Secretary (who shall serve as the chairperson), the Secretary of Defense, the Secretary of Veterans Affairs, the Secretary of Commerce, the National Coordinator for Health Information Technology, and representatives of other relevant agencies, as determined appropriate by the Secretary. Representatives from each of the following categories shall be appointed by the Secretary from nominations submitted by the public: consumer and patient organizations, experts in health information privacy and security, health care providers, health insurance plans or other third-party payers, standards development organizations, information technology vendors, purchasers and employers, and State or local government agencies or Indian tribes or tribal organizations.

In appointing members, the Secretary shall select individuals with expertise in health information privacy, health information security, health care quality and patient safety, data exchange and health information technology standards. Each representative should be a key decision-maker in his or her field and should have broad support from peers and related professional organizations.

Members shall serve 2-year terms, and those who are not considered full-time Federal employees will be paid a daily rate plus per diem. Private-sector members who serve as special government employees will be subject to financial disclosure and conflict of interest requirements. Some private-sector members may serve as industry representatives and will not be special government employees.

Because the legislation specifies that the Federal Advisory Committee Act (FACA) shall apply to the Collaborative (except that the term provided shall be 5 years), the Collaborative governance and administration will be transparent and accountable. The bill deems recommended by the Collaborative the standards adopted by the Consolidated Health Informatics Initiative. The bill also directs the Collaborative, on an ongoing basis, to recommend new standards for the electronic exchange of health information and modifications to existing standards, identify deficiencies and omissions in existing standards, and identify duplication and overlap in existing standards.

The bill directs the Secretary to provide for the adoption by the Federal Government of any standard or standards recommended by the Collaborative within 60 days after the issuance of such recommendation. The bill specifies the Secretary of Health and Human Services, the Secretary of Veterans Affairs, and the Secretary of Defense, in collaboration with representatives of other relevant Federal agencies, jointly review such recommendations.

The committee believes that when private entities contract with the government to provide healthcare services, as in the Federal Employee Health Benefits Plan or Medicare Advantage Plans, those entities should be able to exchange interoperable information with the Federal Government. To accomplish this under their contracts, private entities must adopt the same standards as the Federal Government. However, this requirement only applies to the external exchange of information. The committee does not intend for private entities to have to adopt the government's standards for their internal business processes, even if those processes ultimately support the exchange of information under the contract.

Not later than 1 year after the adoption by the Federal Government of a recommended standard, no Federal agency shall expend Federal funds for the purchase of any form of health information technology system for clinical care or for the electronic retrieval, storage, or exchange of health information that is not consistent with applicable standards adopted by the Federal Government. The committee believes it is critical that the Federal Government comply with the data standards recommended by the Collaborative in order to create a nationwide interoperable health information technology infrastructure.

The legislation requires the Secretary of HHS to implement procedures to enable the Department to accept the electronic submission of data. Participation in the electronic submission of reports utilizing standards is voluntary for private entities, but the Department shall permit such submission. The provision is intended to provide private entities the option of submitting data electronically so that reporting becomes simply another function of an interoperable health information technology system.

The bill requires the Secretary annually to submit a report to Congress that describes actions taken to achieve a nationwide system for the exchange of health information, describes barriers to the adoption of such a nationwide system, contains recommendations to achieve full implementation of a nationwide system, and contains a plan for the establishment of an entity to ensure the continuation of the functions of the Collaborative.

The legislation authorizes $4 million for each of fiscal years 2006 and 2007 for operating the Collaborative.

The adoption of standards is an important component of establishing consistent and common content and communication between health information technology systems. However, consistent and common use of adopted standards is another vital piece of establishing a nationwide interoperable health information system. This bill directs the Secretary or his designee, based upon the recommendation of the Collaborative, to establish criteria for the implementation and certification of standards adopted by the Federal Government. Additionally, the bill authorizes the Secretary to recognize a private entity to assist with the development of criteria for the implementation of the standards and certification of products for compliance with the standards.

The committee believes there are significant barriers to widespread adoption of interoperable health information technology. One of the primary barriers is the current lack of agreed-upon standards and common implementation guides and a certification process. This committee believes this bill addresses those factors in a way that appropriately incorporates involvement of both the public and private sectors.

The committee recognizes that the other major barrier to widespread adoption of health information technology in the U.S. health care system is the high cost of such technology. The typical cost of purchasing a robust health information technology system for a solo or group practitioner is estimated to be thousands of dollars per provider. In addition to this, there are typically ongoing system maintenance and management costs that must be borne. In the hospital setting, costs vary widely. Nonetheless, purchasing a robust health information technology system, conducting training of personnel, integrating a new health information technology system into legacy computerized systems, and purchasing technical support services can cost millions of dollars for community hospital of average size.

Most experts estimate that the widespread adoption of health information technology will result in a substantial cost savings over time in our health care system. While providers must bear the full cost of acquiring these systems, a large part of these economic savings will accrue to health insurers and large integrated health care systems, rather than to physicians in office practices or smaller community hospitals.

Many physicians and community hospitals, community health centers and other provider organizations operate with small financial margins and have difficulty affording modern health information technology systems for use in these clinical settings.

Because of the current cost and segmented reimbursement, rates of adoption of modern health information technology in the United States are very low. Less than 20 percent of physicians in office practice and of hospitals currently use simple electronic health records.

In order to address the health information technology `adoption gap' in the United States, S. 1418 authorizes three grant programs that will carefully target financial support to health care providers and consortia for the purpose of facilitating the adoption of interoperable health information technology. The bill leaves to the discretion of the Secretary the allocation of the authorization among the three programs.

In addition, the greatest improvements in quality of health care and cost savings will be realized when all elements of the health care system are electronically connected and speak a common technical language--that is they are interoperable. For this reason, each grant program requires that each grant recipient acquire only qualified health information technology systems that are capable of supporting common technical standards and full interoperability and reporting performance on quality measures adopted by the Federal Government under this legislation.

The first grant program will award grants, on a competitive basis, to health care providers to facilitate the purchase and enhance the utilization of qualified health information technology systems to improve the quality and efficiency of health care. Awards will be made by the Secretary of the Department of Health and Human Services. Grant recipients must provide matching funds equal to $1 for each $3 of Federal funds provided under the grant.

The bill defines health care providers as hospitals, skilled nursing facilities, home health entities, health care clinics, federally qualified health centers, group practices, pharmacists, pharmacies, laboratories, physicians, health facilities operated by or pursuant to a contract with the Indian Health Service, rural health clinics, and other entities determined appropriate by the Secretary.

Because the committee recognizes the importance of targeting scarce Federal resources where they are most needed, this grant program will give preference to providers that may be least likely to have the capital to acquire health information technology in the absence of a grant--those that are located in rural, frontier and other underserved areas. The committee also recognizes that while there are immediate improvements in quality of care and error reduction with the use of health information technology such as electronic health records, the full benefits of implementing such systems will only be realized when individual provider's systems are all interconnected and patient information will be available when and where it is needed. Thus, this grant program will also give preference to providers that will link, to the extent practicable, their health information system to local or regional health information systems.

In order to maximize the utility of health information technology systems acquired under this grant program in improving and measuring quality of care, grant recipients will be required to

report their performance on a set of quality-of-care measures to be adopted by the Federal Government under this bill.

The second program will award grants on a competitive basis to States for the establishment of State programs that will offer loans to health care providers to facilitate the purchase and enhance the utilization of qualified health information technology. To be eligible to receive such a grant, States must establish a State loan fund and submit an application to the Secretary of the Department of Health and Human Services with a strategic plan that criteria for awarding loans to eligible entities. State loan programs will be required to stipulate that preference in awarding loans will be given to providers who will link, to the extent practicable, their health information system to local or regional health information systems. States will be required to match $1 dollar for every $1 of Federal funds provided under the grant. The Secretary may give preference to States that adopt value-based purchasing programs to improve health care quality.

To maximize the likelihood that scarce Federal resources will be spent on projects with the greatest likelihood of success, recipients of loans will also be required to consult with the Health Information Technology Resource Center--established in this bill--that will provide technical assistance and develop best practices to support and accelerate efforts to adopt, implement, and use effectively interoperable health information technology.

To maximize the utility of health information technology systems acquired under this loan program in improving and measuring quality of care, loan recipients will be required to report their performance on a set of quality-of-care measures to be adopted by the Federal Government under this bill.

States may use grant funds to make loans directly to providers or may use funds to securitize additional loans or bonds, thereby augmenting the total amount of capital available in the program to loan to providers. In addition, State programs may accept voluntary contributions from private entities that may have a strong interest in expanding adoption of health information technology among health care providers in their State or local area. An incentive for private entities to contribute voluntarily to the loan program in their State is that programs may publicize the names of private entities that make contributions. The committee sees a positive marketing value associated with this public recognition of responsible corporate citizenship.

The third program allows the Secretary to award competitive grants to implement regional or local health information technology plans that improve healthcare quality and efficiency through the use of interoperable health information technology compliant with technology standards and the quality measurement system. To receive a grant, eligible entities must be comprised of a consortium of community stakeholders that demonstrate financial need, adopt policies that demonstrate a commitment to open and fair participation, and demonstrate a commitment to improving the quality of healthcare through the use of interoperable health information technology.

The committee finds that the development and implementation of regional or local health information technology plans is a critical strategy in the Nation's efforts to build a nationwide interoperable health information technology infrastructure. Community exchange of health information through regional or local health information technology plans compliant with standards will maximize the benefits that patients experience from system-wide use of health IT and minimize costly technology links and retrofitting that would be necessary if healthcare stakeholders adopt health IT independent of an interoperable regional or local health information technology plan.

However, the committee recognizes that there may be instances in which inclusion of all required stakeholders outlined may not be possible and the legislation provides the Secretary some flexibility in such cases. However, the committee believes that only applications that demonstrate the strongest commitment to a community-wide collaboration through the most extensive partnering feasible be provided funding.

The legislation provides for one non-renewable local or regional health information technology plan grant per entity. The Federal Government must lead the effort to develop and implement a nationwide interoperable health information technology infrastructure through the adoption, certification, and implementation of standards in conjunction with, and inextricably linked to, the adoption and reporting of quality measures integrated into the technology infrastructure. While it is the intent of the committee that Federal resources provided through these non-renewable grants be used to jump-start local or regional health information technology plans that can demonstrate sustainability beyond the grant period, it is not the intention of the committee that these non-renewable grants be limited to a single year or that the Secretary's authority to negotiate the timeframe or grant amount be restricted.

The legislation authorizes $116 million in fiscal year 2006 and $141 million for fiscal year 2007 for the three grant sections. The bill leaves to the discretion of the Secretary the allocation of the authorization among the three programs. The committee is dedicated to fiscal responsibility.

Another barrier to widespread adoption of interoperable health information is cultural. The committee recognizes that many physicians and hospitals are hesitant to move from paper-based systems to electronic systems. Some physicians have been writing prescriptions by hand for many years and may resist changing to electronic prescribing for instance.

This committee believes that one way to address this cultural barrier to the widespread adoption of health information technology is to support teaching hospitals and continuing education programs that integrate health information technology in the clinical education of health care professionals. The committee believes that exposing students and residents to effective everyday uses of health IT will lead to a greater adoption by these students and residents when they graduate and begin practicing on their own. The bill authorizes the Secretary to award demonstration grants to health professions centers and academic health centers to integrate health IT into clinical education in community settings. To be eligible, grantees must submit a strategic plan and provide matching funds of at least $1 for every $2 of Federal funding. The Secretary is required to evaluate the program and disseminate the results, and to report annually to Congress. The legislation authorizes 5 million dollars for fiscal year 2007 for this section.

State laws and regulatory bodies determine the requirements for licensure of health professionals that seek to practice within their jurisdiction. The committee strongly believes that the licensure

of health professionals should remain within the jurisdiction of States. Thirty-four [34] states have laws or regulations in place which speak to the treatment of patients remotely, usually through telemedicine. Yet most existing licensure requirements do not speak to the full range of issues presented through telemedicine and similar technologies. Therefore, this bill directs the Secretary to conduct a review of the licensure requirements of States and the related issues that licensure bodies confront as a nationwide interoperable electronic health information system is developed.

The bill also reauthorizes Telemedicine Incentive Grants through 2010. These grants were established to encourage state licensure bodies to address remote treatment issues.

This legislation directs the Secretary of Health and Human Services, in consultation with the Secretary of Defense, Secretary of Veterans Affairs, and the heads of other relevant Federal agencies to develop or adopt a quality measurement system that includes measures to assess the effectiveness, timeliness, patient self-management, patient centeredness, efficiency, and safety of care received by patients, as recommended by the Institute of Medicine. In developing the quality measurement system, the legislation requires the Secretary to give priority to measures with the greatest impact for improving quality and efficiency, measures that may be rapidly implemented, and measures that help consumers and patients make informed decisions about their care.

The Rand Institute reports that patients receive care that is appropriate to their condition only 55 percent of the time and best clinical practices take, on average, 17 years to reach the bedside. The committee finds that the development and adoption of a quality measurement system and its integration with the interoperable health information technology system under this legislation is a critical step in eradicating these deficiencies and improving the quality of health care that all Americans receive.

In developing and updating the quality measurement system, the Secretary shall enter an arrangement with a private entity to receive advice and recommendations with regard to the development and updating of the quality measurement system. The committee intends the development and updating of the quality measurement system to recognize those established measurement sets that have gone through a multi-stakeholder, open and accountable process and are currently in use by both the Secretary and the private sector, including the Health Plan Employer Data and Information Set and the Consumer Assessment of Health Plans. It is the intention of the committee to avoid the duplication of these established measures and expects that the Secretary will adopt these measure sets and additions to them.

The committee intends the widespread adoption and use of measures adopted through the development and updating of the quality measurement system. To that end, the legislation allows the Secretary to establish collaborative agreements with private entities to encourage the use of the measures adopted by the Secretary and to foster uniformity between measures utilized by the Federal Government and private entities to minimize administrative burden on healthcare providers.

The legislation also requires reporting of quality measures by entities receiving grants and loans and allows the Secretary to aggregate, analyze and disseminate quality data for the purposes of providing information to consumers, professionals, officials and researchers.

Because the committee believes that protecting the privacy and security of health information is the most important aspect of creating an interoperable health information infrastructure, the bill clarifies that the Health Insurance Portability and Accountability Act of 1996 privacy and security laws and regulations that apply to health information also apply to health information stored or transmitted in electronic format.

The bill also directs the Secretary to study reimbursement incentives for improving the quality of care at Federally qualified health centers and other sites where reimbursement is paid primarily on a cost basis, rather than through a prospective payment system.

The bill also amends the Public Health Service Act and directs the Secretary, acting through the Director of the Agency for Health Care Research and Quality, to develop a Health Information Technology Resource Center to provide technical assistance and develop best practices to support and accelerate the efforts of States and health care providers to adopt, implement, and use effectively health information technology that complies with the standards and quality measurement system adopted by the Federal Government. The committee believes it is important to provide a forum for the exchange of knowledge and experience, accelerate the transfer of lessons learned from existing public and private sector initiatives, and assemble, analyze, and widely disseminate evidence and experience related to the adoption, implementation, and effective use of interoperable health information technology. The legislation requires the Secretary to establish a health IT technical assistance toll-free telephone number or Internet site.

The committee believes this legislation integrates technology and quality to create a seamless, efficient health care system for the 21st century.

This legislation will help facilitate the widespread adoption of electronic health records to ultimately result in fewer mistakes, lower costs, better care, and greater patient participation in their health and well being.

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