Wednesday, June 11, 2014

The Original 1996 HIPAA law, Subtitle F, "Administrative Simplification"

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Full text of the original 1996 HIPAA Law Subtitle F


 
SEC. 261.  PURPOSE.

    It is the purpose of this subtitle to improve the Medicare program
under title XVIII of the Social Security Act, the medicaid program under
title XIX of such Act, and the efficiency and effectiveness of the
health care system, by encouraging the development of a health
information system through the establishment of standards and
requirements for the electronic transmission of certain health
information.

SEC. 262. ADMINISTRATIVE SIMPLIFICATION.

    (a) In General.--Title XI (42 U.S.C. 1301 et seq.) is amended by
adding at the end the following:

                 ``Part C--Administrative Simplification

                              ``definitions

    ``Sec. 1171. For purposes of this part:
            ``(1) Code set.--The term `code set' means any set of codes
        used for encoding data elements, such as tables of terms,
        medical concepts, medical diagnostic codes, or medical procedure
        codes.
            ``(2) Health care clearinghouse.--The term `health care
        clearinghouse' means a public or private entity that processes
        or facilitates the processing of nonstandard data elements of
        health information into standard data elements.
            ``(3) Health care provider.--The term `health care provider'
        includes a provider of services (as defined in section 1861(u)),
        a provider of medical or other health services (as defined in
        section 1861(s)), and any other person furnishing health care
        services or supplies.
            ``(4) Health information.--The term `health information'
        means any information, whether oral or recorded in any form or
        medium, that--
                    ``(A) is created or received by a health care
                provider, health plan, public health authority,
                employer, life insurer, school or university, or health
                care clearinghouse; and
                    ``(B) relates to the past, present, or future
                physical or mental health or condition of an individual,
                the provision of health care to an individual, or the
                past, present, or future payment for the provision of
                health care to an individual.
            ``(5) Health plan.--The term `health plan' means an
        individual or group plan that provides, or pays the cost of,
        medical care (as such term is defined in section 2791 of the
        Public Health Service Act). Such term includes the following,
        and any combination thereof:
                    ``(A) A group health plan (as defined in section
                2791(a) of the Public Health Service Act), but only if
                the plan--
                          ``(i) has 50 or more participants (as defined
                      in section 3(7) of the Employee Retirement Income
                      Security Act of 1974); or
                          ``(ii) is administered by an entity other than
                      the employer who established and maintains the
                      plan.
                    ``(B) A health insurance issuer (as defined in
                section 2791(b) of the Public Health Service Act).
                    ``(C) A health maintenance organization (as defined
                in section 2791(b) of the Public Health Service Act).
                    ``(D) Part A or part B of the Medicare program under
                title XVIII.
                    ``(E) The medicaid program under title XIX.
                    ``(F) A Medicare supplemental policy (as defined in
                section 1882(g)(1)).
                    ``(G) A long-term care policy, including a nursing
                home fixed indemnity policy (unless the Secretary
                determines that such a policy does not provide
                sufficiently comprehensive coverage of a benefit so that
                the policy should be treated as a health plan).
                    ``(H) An employee welfare benefit plan or any other
                arrangement which is established or maintained for the
                purpose of offering or providing health benefits to the
                employees of 2 or more employers.
                    ``(I) The health care program for active military
                personnel under title 10, United States Code.
                    ``(J) The veterans health care program under chapter
                17 of title 38, United States Code.
                    ``(K) The Civilian Health and Medical Program of the
                Uniformed Services (CHAMPUS), as defined in section
                1072(4) of title 10, United States Code.
                    ``(L) The Indian health service program under the
                Indian Health Care Improvement Act (25 U.S.C. 1601 et
                seq.).
                    ``(M) The Federal Employees Health Benefit Plan
                under chapter 89 of title 5, United States Code.
            ``(6) Individually identifiable health information.--The
        term `individually identifiable health information' means any
        information, including demographic information collected from an
        individual, that--
                    ``(A) is created or received by a health care
                provider, health plan, employer, or health care
                clearinghouse; and
                    ``(B) relates to the past, present, or future
                physical or mental health or condition of an individual,
                the provision of health care to an individual, or the
                past, present, or future payment for the provision of
                health care to an individual, and--
                          ``(i) identifies the individual; or
                          ``(ii) with respect to which there is a
                      reasonable basis to believe that the information
                      can be used to identify the individual.
            ``(7) Standard.--The term `standard', when used with
        reference to a data element of health information or a
        transaction referred to in section 1173(a)(1), means any such
        data element or transaction that meets each of the standards and
        implementation specifications adopted or established by the
        Secretary with respect to the data element or transaction under
        sections 1172 through 1174.
            ``(8) Standard setting organization.--The term `standard
        setting organization' means a standard setting organization
        accredited by the American National Standards Institute,
        including the National Council for Prescription Drug Programs,
        that develops standards for information transactions, data
        elements, or any other standard that is necessary to, or will
        facilitate, the implementation of this part.

            ``general requirements for adoption of standards

    ``Sec. 1172. (a) Applicability.--Any standard adopted under this part shall apply, in whole or in part, to
the following persons:
            ``(1) A health plan.
            ``(2) A health care clearinghouse.
            ``(3) A health care provider who transmits any health
        information in electronic form in connection with a transaction
        referred to in section 1173(a)(1).

    ``(b) Reduction of Costs.--Any standard adopted under this part
shall be consistent with the objective of reducing the administrative
costs of providing and paying for health care.
    ``(c) Role of Standard Setting Organizations.--
            ``(1) In general.--Except as provided in paragraph (2), any
        standard adopted under this part shall be a standard that has
        been developed, adopted, or modified by a standard setting
        organization.
            ``(2) Special rules.--
                    ``(A) Different standards.--The Secretary may adopt
                a standard that is different from any standard
                developed, adopted, or modified by a standard setting
                organization, if--
                          ``(i) the different standard will
                      substantially reduce administrative costs to
                      health care providers and health plans compared to
                      the alternatives; and
                          ``(ii) the standard is promulgated in
                      accordance with the rulemaking procedures of
                      subchapter III of chapter 5 of title 5, United
                      States Code.
                    ``(B) No standard by standard setting
                organization.--If no standard setting organization has
                developed, adopted, or modified any standard relating to
                a standard that the Secretary is authorized or required
                to adopt under this part--
                          ``(i) paragraph (1) shall not apply; and
                          ``(ii) subsection (f) shall apply.
            ``(3) Consultation requirement.--
                    ``(A) In general.--A standard may not be adopted
                under this part unless--
                          ``(i) in the case of a standard that has been
                      developed, adopted, or modified by a standard
                      setting organization, the organization consulted
                      with each of the organizations described in
                      subparagraph (B) in the course of such
                      development, adoption, or modification; and
                          ``(ii) in the case of any other standard, the
                      Secretary, in complying with the requirements of
                      subsection (f), consulted with each of the
                      organizations described in subparagraph (B) before
                      adopting the standard.
                    ``(B) Organizations described.--The organizations
                referred to in subparagraph (A) are the following:
                          ``(i) The National Uniform Billing Committee.
                          ``(ii) The National Uniform Claim Committee.
                          ``(iii) The Workgroup for Electronic Data
                      Interchange.
                          ``(iv) The American Dental Association.

    ``(d) Implementation Specifications.--The Secretary shall establish
specifications for implementing each of the standards adopted under this
part.
    ``(e) Protection of Trade Secrets.--Except as otherwise required by
law, a standard adopted under this part shall not require disclosure of
trade secrets or confidential commercial information by a person
required to comply with this part.
    ``(f) Assistance to the Secretary.--In complying with the
requirements of this part, the Secretary shall rely on the
recommendations of the National Committee on Vital and Health Statistics
established under section 306(k) of the Public Health Service Act (42
U.S.C. 242k(k)), and shall consult with appropriate Federal and State
agencies and private organizations. The Secretary shall publish in the Federal Register any recommendation of the National Committee on Vital and Health Statistics regarding the adoption of a standard under this part.

    ``(g) Application to Modifications of Standards.--This section shall
apply to a modification to a standard (including an addition to a
standard) adopted under section 1174(b) in the same manner as it applies
to an initial standard adopted under section 1174(a).

       ``standards for information transactions and data elements

    ``Sec. 1173. (a) Standards To Enable Electronic Exchange.--
            ``(1) In general.--The Secretary shall adopt standards for
        transactions, and data elements for such transactions, to enable
        health information to be exchanged electronically, that are
        appropriate for--
                    ``(A) the financial and administrative transactions
                described in paragraph (2); and
                    ``(B) other financial and administrative
                transactions determined appropriate by the Secretary,
                consistent with the goals of improving the operation of
                the health care system and reducing administrative
                costs.
            ``(2) Transactions.--The transactions referred to in
        paragraph (1)(A) are transactions with respect to the following:
                    ``(A) Health claims or equivalent encounter
                information.
                    ``(B) Health claims attachments.
                    ``(C) Enrollment and disenrollment in a health plan.
                    ``(D) Eligibility for a health plan.
                    ``(E) Health care payment and remittance advice.
                    ``(F) Health plan premium payments.
                    ``(G) First report of injury.
                    ``(H) Health claim status.
                    ``(I) Referral certification and authorization.
            ``(3) Accommodation of specific providers.--The
        standards adopted by the Secretary under paragraph (1) shall
        accommodate the needs of different types of health care
        providers.

    ``(b) Unique Health Identifiers.--
            ``(1) In general.--The Secretary shall adopt standards
        providing for a standard unique health identifier for each
        individual, employer, health plan, and health care provider for
        use in the health care system. In carrying out the preceding
        sentence for each health plan and health care provider, the
        Secretary shall take into account multiple uses for identifiers
        and multiple locations and specialty classifications for health
        care providers.
            ``(2) Use of identifiers.--The standards adopted under
        paragraph (1) shall specify the purposes for which a unique
        health identifier may be used.

    ``(c) Code Sets.--
            ``(1) In general.--The Secretary shall adopt standards
        that--
                    ``(A) select code sets for appropriate data elements
                for the transactions referred to in subsection (a)(1)
                from among the code sets that have been developed by
                private and public entities; or
                    ``(B) establish code sets for such data elements if
                no code sets for the data elements have been developed.
            ``(2) Distribution.--The Secretary shall establish efficient
        and low-cost procedures for distribution (including electronic
        distribution) of code sets and modifications made to such code
        sets under section 1174(b).

    ``(d) Security Standards for Health Information.--
            ``(1) Security standards.--The Secretary shall adopt
        security standards that--
                    ``(A) take into account--
                          ``(i) the technical capabilities of record
                      systems used to maintain health information;
                          ``(ii) the costs of security measures;
                          ``(iii) the need for training persons who have
                      access to health information;
                          ``(iv) the value of audit trails in
                      computerized record systems; and
                          ``(v) the needs and capabilities of small
                      health care providers and rural health care
                      providers (as such providers are defined by the
                      Secretary); and
                    ``(B) ensure that a health care clearinghouse, if it
                is part of a larger organization, has policies and
                security procedures which isolate the activities of the
                health care clearinghouse with respect to processing
                information in a manner that prevents unauthorized
                access to such information by such larger organization.
            ``(2) Safeguards.--Each person described in section 1172(a)
        who maintains or transmits health information shall maintain
        reasonable and appropriate administrative, technical, and
        physical safeguards--
                    ``(A) to ensure the integrity and confidentiality of
                the information;
                    ``(B) to protect against any reasonably
                anticipated--
                          ``(i) threats or hazards to the security or
                      integrity of the information; and
                          ``(ii) unauthorized uses or disclosures of the
                      information; and
                    ``(C) otherwise to ensure compliance with this part
                by the officers and employees of such person.

    ``(e) Electronic Signature.--
            ``(1) Standards.--The Secretary, in coordination with the
        Secretary of Commerce, shall adopt standards specifying
        procedures for the electronic transmission and authentication of
        signatures with respect to the transactions referred to in
        subsection (a)(1).
            ``(2) Effect of compliance.--Compliance with the standards
        adopted under paragraph (1) shall be deemed to satisfy Federal
        and State statutory requirements for written signatures with
        respect to the transactions referred to in subsection (a)(1).

    ``(f) Transfer of Information Among Health Plans.--The Secretary
shall adopt standards for transferring among health plans appropriate
standard data elements needed for the coordination of benefits, the
sequential processing of claims, and other data elements for individuals
who have more than one health plan.

                 ``timetables for adoption of standards

    ``Sec. 1174. (a) Initial  Standards.--The
Secretary shall carry out section 1173 not later than 18 months after
the date of the enactment of the Health Insurance Portability and
Accountability Act of 1996, except that standards relating to claims
attachments shall be adopted not later than 30 months after such date.

    ``(b) Additions and Modifications to Standards.--
            ``(1) In general.--Except as provided in paragraph (2), the
        Secretary shall review the standards adopted under section 1173,
        and shall adopt modifications to the standards (including
        additions to the standards), as determined appropriate, but not
        more frequently than once every 12 months. Any addition or
        modification to a standard shall be completed in a manner which
        minimizes the disruption and cost of compliance.
            ``(2) Special rules.--
                    ``(A) First 12-month period.--Except with respect to
                additions and modifications to code sets under
                subparagraph (B), the Secretary may not adopt any
                modification to a standard adopted under this part
                during the 12-month period beginning on the date the
                standard is initially adopted, unless the Secretary
                determines that the modification is necessary in order
                to permit compliance with the standard.
                    ``(B) Additions and modifications to code sets.--
                          ``(i) In general.--The Secretary shall ensure
                      that procedures exist for the routine maintenance,
                      testing, enhancement, and expansion of code sets.
                          ``(ii) Additional rules.--If a code set is
                      modified under this subsection, the modified code
                      set shall include instructions on how data
                      elements of health information that were encoded
                      prior to the modification may be converted or
                      translated so as to preserve the informational
                      value of the data elements that existed before the
                      modification. Any modification to a code set under
                      this subsection shall be implemented in a manner
                      that minimizes the disruption and cost of
                      complying with such modification.

                             ``requirements

    ``Sec. 1175. (a) Conduct of Transactions
by Plans.--
            ``(1) In general.--If a person desires to conduct a
        transaction referred to in section 1173(a)(1) with a health plan
        as a standard transaction--
                    ``(A) the health plan may not refuse to conduct such
                transaction as a standard transaction;
                    ``(B) the insurance plan may not delay such
                transaction, or otherwise adversely affect, or attempt
                to adversely affect, the person or the transaction on
                the ground that the transaction is a standard
                transaction; and
                    ``(C) the information transmitted and received in
                connection with the transaction shall be in the form of
                standard data elements of health information.
            ``(2) Satisfaction of requirements.--A health plan may
        satisfy the requirements under paragraph (1) by--
                    ``(A) directly transmitting and receiving standard
                data elements of health information; or
                    ``(B) submitting nonstandard data elements to a
                health care clearinghouse for processing into standard
                data elements and transmission by the health care
                clearinghouse, and receiving standard data elements
                through the health care clearinghouse.
            ``(3) Timetable for compliance.--Paragraph (1) shall not be
        construed to require a health plan to comply with any standard,
        implementation specification, or modification to a standard or
        specification adopted or established by the Secretary under
        sections 1172 through 1174 at any time prior to the date on
        which the plan is required to comply with the standard or
        specification under subsection (b).

    ``(b) Compliance With Standards.--
            ``(1) Initial compliance.--
                    ``(A) In general.--Not later than 24 months after
                the date on which an initial standard or implementation
                specification is adopted or established under sections
                1172 and 1173, each person to whom the standard or
                implementation specification applies shall comply with
                the standard or specification.
                    ``(B) Special rule for small health plans.--In the
                case of a small health plan, paragraph (1) shall be
                applied by substituting `36 months' for `24 months'. For
                purposes of this subsection, the Secretary shall
                determine the plans that qualify as small health plans.
            ``(2) Compliance with modified standards.--If the Secretary
        adopts a modification to a standard or implementation
        specification under this part, each person to whom the standard
        or implementation specification applies shall comply with the
        modified standard or implementation specification at such time
        as the Secretary determines appropriate, taking into account the
        time needed to comply due to the nature and extent of the
        modification. The time determined appropriate under the
        preceding sentence may not be earlier than the last day of the
        180-day period beginning on the date such modification is
        adopted. The Secretary may extend the time for compliance for
        small health plans, if the Secretary determines that such
        extension is appropriate.
            ``(3) Construction.--Nothing in this subsection shall be
        construed to prohibit any person from complying with a standard
        or specification by--
                    ``(A) submitting nonstandard data elements to a
                health care clearinghouse for processing into standard
                data elements and transmission by the health care
                clearing-
                house; or
                    ``(B) receiving standard data elements through a
                health care clearinghouse.

 ``general penalty for failure to comply with requirements and standards

    ``Sec. 1176. (a) General Penalty.--
            ``(1) In general.--Except as provided in subsection (b), the
        Secretary shall impose on any person who violates a provision of
        this part a penalty of not more than $100 for each such
        violation, except that the total amount imposed on the person
        for all violations of an identical requirement or prohibition
        during a calendar year may not exceed $25,000.
            ``(2) Procedures.--The provisions of section 1128A (other
        than subsections (a) and (b) and the second sentence of
        subsection (f)) shall apply to the imposition of a civil money
        penalty under this subsection in the same manner as such
        provisions apply to the imposition of a penalty under such
        section 1128A.

    ``(b) Limitations.--
            ``(1) Offenses otherwise punishable.--A penalty may not be
        imposed under subsection (a) with respect to an act if the act
        constitutes an offense punishable under section 1177.
            ``(2) Noncompliance not discovered.--A penalty may not be
        imposed under subsection (a) with respect to a provision of this
        part if it is established to the satisfaction of the Secretary
        that the person liable for the penalty did not know, and by
        exercising reasonable diligence would not have known, that such
        person violated the provision.
            ``(3) Failures due to reasonable cause.--
                    ``(A) In general.--Except as provided in
                subparagraph (B), a penalty may not be imposed under
                subsection
                (a) if--
                          ``(i) the failure to comply was due to
                      reasonable cause and not to willful neglect; and
                          ``(ii) the failure to comply is corrected
                      during the 30-day period beginning on the first
                      date the person liable for the penalty knew, or by
                      exercising reasonable diligence would have known,
                      that the failure to comply occurred.
                    ``(B) Extension of period.--
                          ``(i) No penalty.--The period referred to in
                      subparagraph (A)(ii) may be extended as determined
                      appropriate by the Secretary based on the nature
                      and extent of the failure to comply.
                          ``(ii) Assistance.--If the Secretary
                      determines that a person failed to comply because
                      the person was unable to comply, the Secretary may
                      provide technical assistance to the person during
                      the period described in subparagraph (A)(ii). Such
                      assistance shall be provided in any manner
                      determined appropriate by the Secretary.
            ``(4) Reduction.--In the case of a failure to comply which
        is due to reasonable cause and not to willful neglect, any
        penalty under subsection (a) that is not entirely waived under
        paragraph (3) may be waived to the extent that the payment of
        such penalty would be excessive relative to the compliance
        failure involved.

  ``wrongful disclosure of individually identifiable health information

    ``Sec. 1177. (a) Offense.--A person who
knowingly and in violation of this part--
            ``(1) uses or causes to be used a unique health identifier;
            ``(2) obtains individually identifiable health information
        relating to an individual; or
            ``(3) discloses individually identifiable health information
        to another person,

shall be punished as provided in subsection (b).
    ``(b) Penalties.--A person described in subsection (a) shall--
            ``(1) be fined not more than $50,000, imprisoned not more
        than 1 year, or both;
            ``(2) if the offense is committed under false pretenses, be
        fined not more than $100,000, imprisoned not more than 5 years,
        or both; and
            ``(3) if the offense is committed with intent to sell,
        transfer, or use individually identifiable health information
        for commercial advantage, personal gain, or malicious harm, be
        fined not more than $250,000, imprisoned not more than 10 years,
                                    or both.

    ``Sec. 1178. (a) General Effect.--
            ``(1) General rule.--Except as provided in paragraph (2), a
        provision or requirement under this part, or a standard or
        implementation specification adopted or established under
        sections 1172 through 1174, shall supersede any contrary
        provision of State law, including a provision of State law that
        requires medical or health plan records (including billing
        information) to be maintained or transmitted in written rather
        than electronic form.
            ``(2) Exceptions.--A provision or requirement under this
        part, or a standard or implementation specification adopted or
        established under sections 1172 through 1174, shall not
        supersede a contrary provision of State law, if the provision of
        State law--
                    ``(A) is a provision the Secretary determines--
                          ``(i) is necessary--
                                    ``(I) to prevent fraud and abuse;
                                    ``(II) to ensure appropriate State
                                regulation of insurance and health
                                plans;
                                    ``(III) for State reporting on
                                health care delivery or costs; or
                                    ``(IV) for other purposes; or
                          ``(ii) addresses controlled substances; or
                    ``(B) subject to section 264(c)(2) of the Health
                Insurance Portability and Accountability Act of 1996,
                relates to the privacy of individually identifiable
                health information.

    ``(b) Public Health.--Nothing in this part shall be construed to
invalidate or limit the authority, power, or procedures established
under any law providing for the reporting of disease or injury, child
abuse, birth, or death, public health surveillance, or public health
investigation or intervention.
    ``(c) State Regulatory Reporting.--Nothing in this part shall limit
the ability of a State to require a health plan to report, or to provide
access to, information for management audits, financial audits, program
monitoring and evaluation, facility licensure or certification, or
individual licensure or certification.

       ``processing payment transactions by financial institutions

    ``Sec. 1179. To the extent that an entity
is engaged in activities of a financial institution (as defined in
section 1101 of the Right to Financial Privacy Act of 1978), or is
engaged in authorizing, processing, clearing, settling, billing,
transferring, reconciling, or collecting payments, for a financial
institution, this part, and any standard adopted under this part, shall
not apply to the entity with respect to such activities, including the
following:
            ``(1) The use or disclosure of information by the entity for
        authorizing, processing, clearing, settling, billing,
        transferring, reconciling or collecting, a payment for, or
        related to, health plan premiums or health care, where such
        payment is made by any means, including a credit, debit, or
        other payment card, an account, check, or electronic funds
        transfer.
            ``(2) The request for, or the use or disclosure of,
        information by the entity with respect to a payment described in
        para-
        graph (1)--
                    ``(A) for transferring receivables;
                    ``(B) for auditing;
                    ``(C) in connection with--
                          ``(i) a customer dispute; or
                          ``(ii) an inquiry from, or to, a customer;
                    ``(D) in a communication to a customer of the entity
                regarding the customer's transactions, payment card,
                account, check, or electronic funds transfer;
                    ``(E) for reporting to consumer reporting agencies;
                or
                    ``(F) for complying with--
                          ``(i) a civil or criminal subpoena; or
                          ``(ii) a Federal or State law regulating the
                      entity.''.

    (b) Conforming Amendments.--
            (1) Requirement for medicare providers.--Section 1866(a)(1)
        (42 U.S.C. 1395cc(a)(1)) is amended--
                    (A) by striking ``and'' at the end of subparagraph
                (P);
                    (B) by striking the period at the end of
                subparagraph (Q) and inserting ``; and''; and
                    (C) by inserting immediately after subparagraph (Q)
                the following new subparagraph:
            ``(R) to contract only with a health care clearinghouse (as
        defined in section 1171) that meets each standard and
        implementation specification adopted or established under part C
        of title XI on or after the date on which the health care
        clearinghouse is required to comply with the standard or
        specification.''.
            (2) Title heading.--Title XI (42 U.S.C. 1301 et seq.) is
        amended by striking the title heading and inserting the
        following:

    ``TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE  SIMPLIFICATION''.

SEC. 263. CHANGES IN MEMBERSHIP AND DUTIES OF NATIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS.

    Section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k))
is amended--
            (1) in paragraph (1), by striking ``16'' and inserting
        ``18'';
            (2) by amending paragraph (2) to read as follows:

    ``(2) The members of the Committee shall be appointed from among
persons who have distinguished themselves in the fields of health
statistics, electronic interchange of health care information, privacy
and security of electronic information, population-based public health,
purchasing or financing health care services, integrated computerized
health information systems, health services research, consumer interests
in health information, health data standards, epidemiology, and the
provision of health services. Members of the Committee shall be
appointed for terms of 4 years.'';
            (3) by redesignating paragraphs (3) through (5) as
        paragraphs (4) through (6), respectively, and inserting after
        paragraph (2) the following:

    ``(3) Of the members of the Committee--
            ``(A) 1 shall be appointed, not later than 60 days after the
        date of the enactment of the Health Insurance Portability and
        Accountability Act of 1996, by the Speaker of the House of
        Representatives after consultation with the Minority Leader of
        the House of Representatives;
            ``(B) 1 shall be appointed, not later than 60 days after the
        date of the enactment of the Health Insurance Portability and
        Accountability Act of 1996, by the President pro tempore of the
        Senate after consultation with the Minority Leader of the
        Senate; and
            ``(C) 16 shall be appointed by the Secretary.'';
            (4) by amending paragraph (5) (as so redesignated) to read
        as follows:

    ``(5) The Committee--
            ``(A) shall assist and advise the Secretary--
                    ``(i) to delineate statistical problems bearing on
                health and health services which are of national or
                international interest;
                    ``(ii) to stimulate studies of such problems by
                other organizations and agencies whenever possible or to
                make investigations of such problems through
                subcommittees;
                    ``(iii) to determine, approve, and revise the terms,
                definitions, classifications, and guidelines for
                assessing health status and health services, their
                distribution and costs, for use (I) within the
                Department of Health and Human Services, (II) by all
                programs administered or funded by the Secretary,
                including the Federal-State-local cooperative health
                statistics system referred to in subsection (e), and
                (III) to the extent possible as determined by the head
                of the agency involved, by the Department of Veterans
                Affairs, the Department of Defense, and other Federal
                agencies concerned with health and health services;
                    ``(iv) with respect to the design of and approval of
                health statistical and health information systems
                concerned with the collection, processing, and
                tabulation of health statistics within the Department of
                Health and Human Services, with respect to the
                Cooperative Health Statistics System established under
                subsection (e), and with respect to the standardized
                means for the collection of health information and
                statistics to be established by the Secretary under
                subsection (j)(1);
                    ``(v) to review and comment on findings and
                proposals developed by other organizations and agencies
                and to make recommendations for their adoption or
                implementation by local, State, national, or
                international agencies;
                    ``(vi) to cooperate with national committees of
                other countries and with the World Health Organization
                and other national agencies in the studies of problems
                of mutual interest;
                    ``(vii) to issue <<NOTE: Reports.>>  an annual
                report on the state of the Nation's health, its health
                services, their costs and distributions, and to make
                proposals for improvement of the Nation's health
                statistics and health information systems; and
                    ``(viii) in complying with the requirements imposed
                on the Secretary under part C of title XI of the Social
                Security Act;
            ``(B) shall study the issues related to the adoption of
        uniform data standards for patient medical record information
        and the electronic exchange of such information;
            ``(C) shall <<NOTE: Reports.>>  report to the Secretary not
        later than 4 years after the date of the enactment of the Health
        Insurance Portability and Accountability Act of 1996
        recommendations and legislative proposals for such standards and
        electronic exchange; and
            ``(D) shall be responsible generally for advising the
        Secretary and the Congress on the status of the implementation
        of part C of title XI of the Social Security Act.''; and
            (5) by adding at the end the following:

    ``(7)Not later than 1 year after the date of
the enactment of the Health Insurance Portability and Accountability Act
of 1996, and annually thereafter, the Committee shall submit to the
Congress, and make public, a report regarding the implementation of part
C of title XI of the Social Security Act. Such report shall address the
following subjects, to the extent that the Committee determines
appropriate:
            ``(A) The extent to which persons required to comply with
        part C of title XI of the Social Security Act are cooperating in
        implementing the standards adopted under such part.
            ``(B) The extent to which such entities are meeting the
        security standards adopted under such part and the types of
        penalties assessed for noncompliance with such standards.
            ``(C) Whether the Federal and State Governments are
        receiving information of sufficient quality to meet their
        responsibilities under such part.
            ``(D) Any problems that exist with respect to implementation
        of such part.
            ``(E) The extent to which timetables under such part are
        being met.''.

SEC. 264. RECOMMENDATIONS WITH RESPECT TO PRIVACY OF CERTAIN HEALTH INFORMATION.

    (a) In General.--Not later than the date that is 12 months after the
date of the enactment of this Act, the Secretary of
Health and Human Services shall submit to the Committee on Labor and
Human Resources and the Committee on Finance of the Senate and the
Committee on Commerce and the Committee on Ways and Means of the House
of Representatives detailed
recommendations on standards with respect to the privacy of individually
identifiable health information.
    (b) Subjects for Recommendations.--The recommendations under
subsection (a) shall address at least the following:
            (1) The rights that an individual who is a subject of
        individually identifiable health information should have.
            (2) The procedures that should be established for the
        exercise of such rights.
            (3) The uses and disclosures of such information that should
        be authorized or required.

    (c) Regulations.--
            (1) In general.--If legislation
        governing standards with respect to the privacy of individually
        identifiable health information transmitted in connection with
        the transactions described in section 1173(a) of the Social
        Security Act (as added by section 262) is not enacted by the
        date that is 36 months after the date of the enactment of this
        Act, the Secretary of Health and Human Services shall promulgate
        final regulations containing such standards not later than the
        date that is 42 months after the date of the enactment of this
        Act. Such regulations shall address at least the subjects
        described in subsection (b).
            (2) Preemption.--A regulation promulgated under paragraph
        (1) shall not supercede a contrary provision of State law, if
        the provision of State law imposes requirements, standards, or
        implementation specifications that are more stringent than the
        requirements, standards, or implementation specifications
        imposed under the regulation.

    (d) Consultation.--In carrying out this section, the Secretary of
Health and Human Services shall consult with--
            (1) the National Committee on Vital and Health Statistics
        established under section 306(k) of the Public Health Service
        Act (42 U.S.C. 242k(k)); and
            (2) the Attorney General.

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