Sen. Edward Kennedy (D-Mass.) introduced legislation in May that would
authorize federal grants, loans, and technical assistance to health care
providers to increase their use of information technology.
Eligible health care providers are defined in the legislation as federally
qualified health centers, nonprofit hospitals, health care clinics, community
health centers, skilled nursing facilities, and physician group practices.
According to Kennedy's remarks in the May 13 Congressional Record,
information technology such as "automated patient record keeping can
help bring real coordination to what is often a frighteningly fragmented
health care system."
The Health Care Modernization, Cost Reduction, and Quality Improvement Act
(S 2421) would authorize the secretary of Health and Human Services (HHS) to
award grants to health care providers to implement computerized clinical
The legislation requires the grantees to implement computerized systems
that have the capacity to do the following:
Those receiving the federal grants would be required to match between 10
percent and 20 percent of the total grant amounts awarded by HHS and conduct
research on the systems' ability to improve quality of patient care and cut
The HHS secretary would also be required to develop technical standards by
January 2006 and provide technical assistance to grantees in consultation with
the director of the Agency for Healthcare Research and Quality.
The HHS technical standards would address operational compatibility between
systems, security, and the protection of confidentiality consistent with the
Health Insurance Portability and Accountability Act (HIPAA), according to the
The HHS secretary would also be required to ensure that federal health
programs use information technology to process claims and reimburse providers
and require the electronic submission of claims for payment.
Health insurers and group health plans would be required to have
computerized claims-processing systems by December 2008 that can also detect
fraud and abuse.
The HHS secretary could increase federal program reimbursement to providers
who use the qualified computerized systems for five years beginning next year,
according to the bill.
Starting in 2010, HHS could decrease federal health program reimbursement
rates for health care providers who fail to use the specified computerized
The Health Care Modernization, Cost Reduction, and Quality
Improvement Act can be accessed online at<http://thomas.loc.gov>
by entering the bill number, S 2421. ▪