103d Congress 1 HOUSE OF REPRESENTATIVES fKept. 103-601 2d Session \ | 5 HEALTH SECURITY ACT — August 12, 1994. Orderedtobeprinted Mr. CONYERS, from the Committee on Grovernment Operations, submitted the following REPORT [To accompany H.R. 3600 which on November 20, 1993, was referredjointly to the Committee on Energy and Commerce, to the Committee on Ways and Means, and to the Committee on Education and Labor for consideration ofsuch provisions in titles I, III, VI, VIII, X, and XI and part 1 ofsubtitle C oftitle V as fall within its jurisdiction pursuant to clause Kg) ofrule X; and concurrently, for a period ending not later than two weeks after all three committees ofjoint referral report to the House (or a later time ifthe Speaker so designates), to the Committee on Armed Services for consideration of subtitle A of title VIII and such provisions of title I as fall within its jurisdiction pursuant to clause 1(c) of rule X, to the Committee on Veterans' Affairs for consideration of subtitle B of title VIII and such provisions oftitle I as fall within itsjurisdiction pursuant to clause l(u) of ruleX, to the Committee on Post Office and Civil Service forconsideration ofsub- title C oftitleVIII and such provisions oftitle I as fall within itsjurisdiction pur- suant to clause l(o) ofrule X, to the Committee on Natural Resources for consid- eration ofsubtitle D oftitle VIII and such provisions oftitle I as fall within its jurisdiction pursuant to clause l(n) ofrule X, to the Committee on the Judiciary for consideration ofsubtitles C through F oftitle V and such other provisions as fall within itsjurisdiction pursuant to clause 1(1) ofrule X, to the Committee on Rules for consideration of sections 1432(d), 6006(f), and 9102(e)(5), and to the Committee on Government Operations for consideration of subtitle B of title V and section 5401] The Committee on Government Operations, to whom was re- ferred the bill (H.R. 3600) to ensure individual and family security through health care coverage for all Americans in a manner that contains the rate of growth in health care costs and promotes re- sponsible health insurance practices, to promote choice in health care, and to ensure and protect the health care of all Americans, 82-256 2 having considered the same, report favorably thereon with amend- ments and recommend that the bill as amended do pass. CONTENTS Page The amendments 2 Reporton subtitleB oftitleV 66 Reportonsection5401 oftitleV 156 Committeeoversightfindings 162 Committeecostestimate 162 Inflationaryimpactstatement 163 Changesinexistinglawmadebythebill, asreported 163 Page 859, strike lines 16 through 18 and insert the following (and conform the table ofcontents oftitle V accordingly): — B Subtitle ^Administrative Sim- plification and Fair Health Infor- mation Practices Amend part 1 of subtitle B oftitle V (page 859, line 19, through page 870, line 23) to read as follows (and redesignate provisions and conform the table ofcontents oftitle V accordingly): PART 1—ADMINISTRATIVE SIMPLIFICATION STANDARDS SEC.5101. PURPOSE. It is the purpose of this part to improve the efficiency and effectiveness ofthe health care system by encouraging the development of a health information network through the establishment of standards and requirements for the electronic transmission ofcertain health information. SEC.5102.DEFINITIONS. For purposes oft—his part: (1) Carrier. ^The term "carrier" means a licensed insurance company, a hospital or medical service cor- poration (including an existing Blue Cross or Blue Shield organization, within the meaning of section 833(c)(2) of the Internal Revenue Code of 1986), a health maintenance organization, or other entity li- censed or certified by a State to provide health insur- ance or health be—nefits. (2) Code set. ^The term "code set" means any set of codes used for encoding data elements of health in- formation, including tables ofterms, medical concepts, medical diagnostic codes, or medic—al procedure codes. (3) Coordination of benefits. The term "coordi- nation of benefits" means determining and coordinat- ing the financial obligations ofhealth information plan — —— 3 sponsors when health care benefits are payable under two or more such plans. — (4) Health information. ^The term "health infor- mation" means any information that relates to the past, present, or future physical or mental health or condition or functional status ofan individual, the pro- vision of health care to an individual, or payment for the provision ofhealth care to an individual. (5) Health information network.—The term "health information network" means the health infor- mation system that is formed through the application of the requirements of, and the standards established under, this part. (6) Health information network service.—The term "health information network service" (A) means a private entity or an entity operated by a State that enters into contracts (i) to process or facilitate the processing of nonstandard health information into standard health information; (ii) to provide the means by which persons are connected to the health information net- work for purposes of meeting the require- ments ofthis part; (iii) to provide authorized access to health information through the health information network; or (iv) to provide specific information process- ing services, such as automated coordination of benefits and claims transaction routing; and (B) includes a health information protection or- ganization. — (7) Health informat—ion plan. (A) In general. ^The term "health information plan" means (i) any contract of health insurance, includ- ing any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization group contract, that is provided by a carrier; and (ii) an employee welfare benefit plan or other arrangement insofar as the plan or ar- rangement provides health benefits and is funded in a manner other than through the purchase of one or more policies or contracts described in clause (i). (B) Exception.—The term "health information plan" does not include any ofthe following (or any combination thereof): (i) Coverage issued as a supplement to li- ability insurance. — 4 (ii) Liability insurance, including general li- ability insurance and automobile liability in- surance. (iii) Worker's compensation or similar insur- ance. (iv) Automobile medical-payment—insurance. (8) Health information plan sponsor. ^The term "health information plan sponsor" means (A) a carrier or an eligible sponsor (as defined in section 1311(b)) providing a health plan; and (B) a carrier or other person providing any other health information plsm, including any public en- tity that provides pajrments for health care items and services under a health information plan that are equivalent to payments provided by a private person under such a plan. (9)—Health information protection organiza- tion. ^The term "health information protection orga- nization" means a private entity or an entity operated by a State that accesses standard health information through the health information network and processes such information into standard non-identifiable health information. (10) Health service provider.—The term "health service provider" means a provider of services (as de- fined in section 186l(u) of the Social Security Act), a physician, a laboratory (as defined in section 353(a) of the Public Health Service Act), a supplier, and any other person furnishing health care. Such term in- cludes a Federal or State program that directly pro- vides items or services that constitute health care to beneficiaries. (11) Non-identifiable health information.—The term "non-identifiable health information" means health information that is not protected health infor- mation. (12) Patient medical record information.—The term "patient medical record information" means health information derived from a clinical encounter that relates to the past, present, or future physical or mental health or condition or functional status of an individual. — (13) Protected health information. ^The term "protected health information" has the meaning given such term in section 5120(a)(3). (14) Standard.—The term "standard", when used with reference to health information or a transaction involving such information, means that the informa- tion or transaction meets any standard established by the Secretary under section 5103 that applies to the information or transaction. — — 5 Subpart A—Standards and Requirements With Respect to Health Information, In- formation Transactions, and Health Infor- mation Network Services SEC. 5103. STANDARDS FOR HEALTH INFORMATION AND IN- FORMATIONTRANSACTIONS. (a)—Standards to Ensure Comparability of Informa- tion. (1) In GENERAL.—The Secretary shall estabUsh standards necessary to make a set of health informa- tion described in subsection (b) that is created by a health information plan sponsor or a health service provider comparable with the same set of information created by another such sponsor or provider. (2) Data elements.—The standards shall specifi- cally define the data elements that comprise each set ofhealth information described in subsection (b). (3) Format.—The standards shall include uniform presentation and format requirements for the arrange- ment ofdata elements. (4) Electronic—The standards shall require that health information be in electronic or magnetic form. (5) Unique identifiers.—The Secretary shall estab- lish a system to provide for a unique identifier for each eligible individual, employer, health information plan, health information plan sponsor, and health service provider. — (6) Code sets. ^The Secretary, in consultation with experts from the private sector and Federal agencies (A) shall select code sets for appropriate data elements from among the code sets that have been developed by private and public entities; or (B) shall establish code sets for appropriate data elements if no code set for the data elements has been developed by such entities. (b) Sets of Health Information.— (1) Plan and provider transactions.—The Sec- retary shall establish a separate set ofhealth informa- tion that is appropriate for transmission in connection with each transaction described in subsections (a) and (b) ofsection 5104. (2) Encounter information.—The Secretary shall establish a set of encounter information (including pa- tient medical record information) derived from inpa- tient and outpatient clinical encounters that the Sec- retary determines (A) is appropriate for creation by a health serv- ice provider to the extent the sponsor does not file claims for reimbursement for items and services with health information plan sponsors; and (B) is necessary to provide information regard- ing the operation of such a health service pro- — 6 vider, and health-related items and services pro- vided by the provider, that is equivalent to infor- mation derived from claims. (3) Patient medical record information.—The Secretary shall establish a set of patient medical record information. — (4) Additions to sets. ^The Secretary may make additions to a set of health information established under paragraph (1), (2), or (3) as the Secretary deter- mines appropriate in a manner that minimizes the disruption to, and costs of compliance incurred by, a health information plan sponsor or a health service provider that is required to comply with section 5104. Standards for Information Transactions.—The (c) Secretary shall establish standards relating to technical aspects of the procedure, method, and mode by which a health information plan sponsor or a health service pro- vider that is required to comply with section 5104 may transmit electronically under section 5104 health informa- tion that is included in a set of health information de- scribed in subsection (b). The standards shall include standards with respect to the format in which such infor- mation shall be transmitted und—er such section. (d) General Requirements. In establishing standards under this section, the Secretary shall, to the maximum extent practicable (1) require the use of information that is verifiable, timely, accurate, reliable, useful, and relevant; (2) establish standards that are consistent with the objective ofreducing the costs ofproviding and paying for health care; (3) incorporate standards that are in use and gen- erally accepted, or developed, by standard setting or standard development organizations, including the American National Standard Institute Federation and the Healthcare Informatics Standards Planning Panel; and (4) rely on and cooperate with organizations de- scribed in paragraph (3). — (e) Timetables for Standards. (1) Initial standards—.— (A) In general. ^The Secretary shall develop an expedited process for the establishment of ini- tial standards under this section. (B) Standa—rds to ensure comparability of information. — (i) In general. ^Except as provided in clause (ii), not later than 9 months after the date of the enactment of this Act, the Sec- retary shall establish standards under sub- section (a) with respect to each set of health information descri—bed in subsection (b). (ii) Exceptions. ^Not later than 24 months after the date of the enactment of this Act, 7 the Secretary shall establish standards under subsection (a) with respect to health informa- tion that is appropriate for transmission in connection with the submission of a claim at- tachment and the set of patient medical record information established under sub- section (b)(3). The Secretary shall establish standards under subsection (a) with respect to health information that is added to a set of health information under subsection (b)(4) in conjunction with making such addition. (C) S—tandards for information trans- actions. — (i) In general. Except as provided in clause (ii), the Secretary shall establish stand- ards under subsection (c) not later than 9 months after the date ofthe enactment ofthis Act. — (ii) Exception. Not later than 24 months after the date of the enactment of this Act, the Secretary shall establish standards under subsection (c) with respect to the submission ofa claim attachment. (2) Modifications to—standards.— (A) In general. Except as provided in sub- paragraph (B), the Secretary shall review the standards established under this section and shall modify such standards as determined appropriate, but not more frequently than once every 6 months. Any modification under this subpara- graph shall be made in a manner that minimizes the disruption to, and costs ofcompliance incurred by, a health information plan sponsor or a health service provider that is required to comply with section 5104. — (B) Special rules. (i) Mo—difications during first i2-month PERIOD. ^The Secretary may not modify a standard established under this section dur- ing the 12-month period beginning on the date the standard is established unless the Secretary determines that a modification is necessary in order to permit a health informa- tion plan sponsor or a health service provider to comply with section 5104. (ii) Additions and modifications to code SETS.— — (I) In general. The Secretary shall ensure that procedures exist for the rou- tine maintenance, testing, enhancement, and expansion of code sets to accommo- date changes in biomedical science and health care delivery. 8 — (II) Additional rules. Ifa code set is modified under this clause, the modified code set shall include instructions on how data elements that were encoded prior to the modification are to be converted or translated so as to preserve the value of the data elements. Any modification to a code set under this subsection shall be implemented in a manner that minimizes the disruption to, and costs of compliance incurred by, a health information plan sponsor or a health service provider that is required to comply with section 5104. Evaluation of Standards.—The Secretary may es- (f) tablish a process to measure or verify the consistency of standards established or modified under this section. The process may include demonstration projects and analysis of the cost of implementing such standards and modifica- tions. — (g) Distribution of Code Sets. ^The Secretary shall establish efficient and low-cost procedures for the distribu- tion ofcode sets that are selected, established, or modified under this section. SEC.5104. REQUIREMENTSONPLANSANDPROVT—OERS. (a) Transactions by—Plans and Providers. (1) In general. If a health information plan spon- sor conducts any ofthe transactions described in para- graph (2) with a health service provider, the trans- action shall be a standard transaction and the health information transmitted or received in connection with the transaction shall—be standard health information. (2) Transactions. ^The transactions referred to in paragraph (1) are the following: (A) Claim submission. (B) Submission ofclaim attachments. (C) Coordination ofbenefits. (D) Such other transactions required under this Act or determined appropriate by the Secretary as the Secretary may specify consistent with the goal ofreducing administrative costs. (b) Transactions by—Plans.— (1) In general. If a health information plan spon- sor conducts any ofthe transactions described in para- graph (2) with any person (other than an individual acting in the capacity of an eligible individual or a consumer of health care services), the transaction shall be a standard transaction and the health infor- mation transmitted or received by the sponsor in con- nection with the transaction shall be standard health information. — (2) Transactions. ^The transactions referred to in paragraph (1) are the following: (A) Enrollment and disenrollment. (B) Eligibility verification. — 9 (C) Payment and remittance advice. (D) Claims status verification. (E) Certification or authorization ofa referral to a health service provider who is not a member of a provider network ofthe health information plan provided or sponsored by the sponsor. (F) Such other transactions required under this Act or determined appropriate by the Secretary as the Secretary may specify consistent with the goal ofreducing administrative costs. (c) Disclosure of Information.— (1) In general.~A health information plan sponsor or a health service provider shall have the capacity to make the standard health information transmitted or received by the sponsor or provider in connection with standard transactions described in subsections (a)(2) and (b)(2), or acquired by the sponsor or provider pur- suant to section 5108(a), available for disclosure as au- thorized under section 5105 and part 2. (2) Special rule.—To the extent that a health serv- ice provider does not file claims for reimbursement for items and services with health information plan spon- sors, the provider shall have the capacity to make standard health information regarding the items and services that is included in the set of encounter data established by the Secretary under section 5103(b)(2) available for disclosure as authorized under section 5105 and part 2. — (d) Use of Health Information Network Services. A health information plan sponsor or a health service pro- vider may comply with any provision ofthis section by en- tering into an agreement or other arrangement with a health information network service certified under section 5107 pursuant to which the service undertakes the duties applicable to the—sponsor or provider under the provision. A (e) Timeliness. health information plan sponsor or a health service provider shall be considered to have satis- fied a requirement under this section only ifany action re- quired to be taken by the sponsor or provider under the re- quirement is completed in a timely manner, as determined under standards established by the Secretary. In setting standards under this subsection, the Secretary shall take into consideration (1) the age and amount ofthe health information to which the requirement pertains; and (2) the ability of a sponsor or provider to comply with the requirement. Timetables for Compliance.— (f) (1) Initial compliance.— (A) In general.—Not later than 12 months after the date on which standards are established under section 5103 with respect to a transaction referred to in subsection (a)(1) or (b)(1) or a set of health information described in section 5103(b), a — — 10 i health information plan sponsor or health service provider shall comply with the requirements of this section with respect to the transaction or in- formation. — (B) Additional health information. ^Not later than 12 months after the date on which the Secretary makes an addition to a set ofhealth in- formation under section 5103(b), a health informa- tion plan sponsor or health service provider shall comply with the requirements of this section with respect to the additional information. — (2) Compliance with—modified standards. (A) In general. If the Secretary modifies a standard established under section 5103, a health information plan sponsor or health service pro- vider shall com^ply with the modified standard at such time as the Secretary determines appro- priate, taking into account the nature and intent ofthe modification. — (B) Special rule. ^In the case ofa modification to a standard under subparagraph (A) that does not occur within the 12-month period beginning on the date the standard is established, the time determined appropriate by the Secretary under subparagraph (A) may not be (i) earlier than the last day of the 90-day period beginning on the date the modified standard is established; or (ii) later than the last day of the 12-month period beginning on the date the standard is established. SEC.5105.ACCESSINGHEALTHINFORMATION. (a) Access for Authorized Purposes.—The Secretary shall establish standards under which appropriate persons, including health information plan sponsors, health service providers, health information network services, and Fed- eral and State agencies, may locate and access standard health information described in section 5104(c) through the health information network. The standards shall in- clude safeguards to ensure that a person requesting health information is authorized under part 2 to receive the infor- mation. (b) Access by Federal and State Agencies.—A health information protection organization that is certified under section 5107 shall make available to a Federal or State agency pursuant to a cost-t5rpe contract (as defined under the Federal Acquisition Regulation) any standard health information described in section 5104(c) that (1) is requested by the agency; and (2) both the agency and the organization are author- ized to receive under part 2. (c) Acces—s by Health Information Protection Orga- nizations. If a health information protection organiza- tion that is certified under section 5107 requires health in-