II 116TH CONGRESS 1ST SESSION S. 1260 To amend the Public Health Service Act to provide for grants to enable States to carry out activities to reduce administrative costs and burdens in health care. IN THE SENATE OF THE UNITED STATES MAY 1, 2019 Ms. SMITH (for herself and Mr. CASSIDY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Public Health Service Act to provide for grants to enable States to carry out activities to reduce administrative costs and burdens in health care. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Reducing Administra- 4 tive Costs and Burdens in Health Care Act of 2019’’. 5 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 2 •S 1260 IS SEC. 2. REDUCING ADMINISTRATIVE COSTS AND BURDENS 1 IN HEALTH CARE. 2 Title II of the Public Health Service Act (42 U.S.C. 3 202 et seq.) is amended by adding at the end the fol- 4 lowing: 5 ‘‘PART E—REDUCING ADMINISTRATIVE COSTS 6 AND BURDENS IN HEALTH CARE 7 ‘‘SEC. 281. ELIMINATING UNNECESSARY ADMINISTRATIVE 8 BURDENS AND COSTS. 9 ‘‘(a) REDUCING ADMINISTRATIVE BURDENS AND 10 COSTS.—The Secretary, in consultation with providers of 11 health services, health care suppliers of services, health 12 care payers, health professional societies, health vendors 13 and developers, health care standard development organi- 14 zations and operating rule entities, health care quality or- 15 ganizations, health care accreditation organizations, public 16 health entities, States, patients, and other appropriate en- 17 tities, shall, in accordance with subsection (b)— 18 ‘‘(1) establish a goal of reducing unnecessary 19 costs and administrative burdens across the health 20 care system, including the Medicare program under 21 title XVIII of the Social Security Act, the Medicaid 22 program under title XIX of such Act, and the pri- 23 vate health insurance market, by at least half over 24 a period of 10 years from the date of enactment of 25 this section; 26 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 3 •S 1260 IS ‘‘(2) develop strategies and benchmarks for 1 meeting the goal established under paragraph (1); 2 ‘‘(3) develop recommendations for meeting the 3 goal established under paragraph (1); and 4 ‘‘(4) take action to reduce unnecessary costs 5 and administrative burdens based on recommenda- 6 tions identified in this subsection. 7 ‘‘(b) STRATEGIES, RECOMMENDATIONS, AND AC- 8 TIONS.— 9 ‘‘(1) IN GENERAL.—To achieve the goal estab- 10 lished under subsection (a)(1), the Secretary, in con- 11 sultation with the entities described in such sub- 12 section, shall not later than 1 year after the date of 13 enactment of this section, develop strategies and rec- 14 ommendations and take actions to meet such goal in 15 accordance with this subsection. No strategies, rec- 16 ommendation, or action shall undermine the quality 17 of patient care or patient health outcomes. 18 ‘‘(2) STRATEGIES.—The strategies developed 19 under paragraph (1) shall address unnecessary costs 20 and administrative burdens. Such strategies shall in- 21 clude broad public comment and shall prioritize— 22 ‘‘(A) recommendations identified as a re- 23 sult of efforts undertaken to implement section 24 3001; 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 4 •S 1260 IS ‘‘(B) recommendations and best practices 1 identified as a result of efforts undertaken 2 under this part; 3 ‘‘(C) a review of regulations, rules, and re- 4 quirements of the Department of Health and 5 Human Services that could be modified or 6 eliminated to reduce unnecessary costs and ad- 7 ministrative burden imposed on patients, pro- 8 viders, payers, and other stakeholders across 9 the health care system; and 10 ‘‘(D) feedback from stakeholders in rural 11 or frontier areas on how to reduce unnecessary 12 costs and administrative burdens on the health 13 care system in those areas. 14 ‘‘(3) RECOMMENDATIONS.—The recommenda- 15 tions developed under paragraph (1) shall include— 16 ‘‘(A) actions that improve the standardiza- 17 tion and automation of administrative trans- 18 actions; 19 ‘‘(B) actions that integrate clinical and ad- 20 ministrative functions; 21 ‘‘(C) actions that improve patient care and 22 reduce unnecessary costs and administrative 23 burdens borne by patients, their families, and 24 other caretakers; 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 5 •S 1260 IS ‘‘(D) actions that advance the development 1 and adoption of open application programming 2 interfaces and other emerging technologies to 3 increase transparency and interoperability, em- 4 power patients, and facilitate better integration 5 of clinical and administrative functions; 6 ‘‘(E) actions to be taken by the Secretary 7 and actions that need to be taken by other enti- 8 ties; and 9 ‘‘(F) other areas, as the Secretary deter- 10 mines appropriate, to reduce unnecessary costs 11 and administrative burdens required of health 12 care providers. 13 ‘‘(4) CONSISTENCY.—Any improvements in 14 electronic processes proposed by the Secretary under 15 this section should leverage existing information 16 technology definitions under Federal Law. Specifi- 17 cally, any electronic processes should not be con- 18 strued to include a facsimile, a proprietary payer 19 portal that does not meet standards specified by the 20 Secretary, or an electronic form image. 21 ‘‘(5) ACTIONS.—The Secretary shall take action 22 to achieve the goal established under subsection 23 (a)(1), and, not later than 1 year after the date of 24 enactment of this section, and biennially thereafter, 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 6 •S 1260 IS submit to Congress and make publically available, a 1 report describing the actions taken by the Secretary 2 pursuant to goals, strategies, and recommendations 3 described in this subsection. 4 ‘‘(6) FACA.—The Federal Advisory Committee 5 Act (5 U.S.C. App.) shall not apply to the develop- 6 ment of the goal, strategies, recommendations, or 7 actions described in this section. 8 ‘‘(7) RULE OF CONSTRUCTION.—Nothing in 9 this subsection shall be construed to authorize, or be 10 used by, the Federal Government to inhibit or other- 11 wise restrain efforts made to reduce waste, fraud, 12 and abuse across the health care system. 13 ‘‘SEC. 282. GRANTS TO STATES TO DEVELOP AND IMPLE- 14 MENT RECOMMENDATIONS TO ACCELERATE 15 STATE INNOVATION TO REDUCE HEALTH 16 CARE ADMINISTRATIVE COSTS. 17 ‘‘(a) GRANTS.— 18 ‘‘(1) IN GENERAL.—Not later than 6 months 19 after the date of enactment of this section, the Sec- 20 retary shall award grants to at least 15 States, and 21 one coordinating entity designated as provided for 22 under subsection (e), to enable such States to estab- 23 lish and administer private-public multi-stakeholder 24 commissions for the purpose of reducing health care 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 7 •S 1260 IS administrative costs and burden within and across 1 States. Not less than 3 of such grants shall be 2 awarded to States that are primarily rural, frontier, 3 or a combination thereof, in nature. 4 ‘‘(2) ENTITIES.—For purposes of this section, 5 the term ‘State’ means a State, a State designated 6 entity, or a multi-State collaborative (as defined by 7 the Secretary). 8 ‘‘(3) PRIORITY.—In awarding grants under this 9 section, the Secretary shall give priority to applica- 10 tions submitted by States that propose to carry out 11 a pilot program or support the adoption of electronic 12 health care transactions and operating rules. 13 ‘‘(b) APPLICATION.— 14 ‘‘(1) IN GENERAL.—To be eligible to receive a 15 grant under subsection (a) a State shall submit to 16 the Secretary an application in such a manner and 17 containing such information as the Secretary may 18 reasonably require, including the information de- 19 scribed in paragraph (2). 20 ‘‘(2) REQUIRED INFORMATION.—In addition to 21 any additional information required by the Secretary 22 under this subsection, an application shall include a 23 description of— 24 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 8 •S 1260 IS ‘‘(A) the size and composition of the com- 1 mission to be established under the grant, in- 2 cluding the stakeholders represented and the 3 degree to which the commission reflects impor- 4 tant geographic and population characteristics 5 of the State; 6 ‘‘(B) the relationship of the commission to 7 the State official responsible for coordinating 8 and implementing the recommendations result- 9 ing from the commission, and the role and re- 10 sponsibilities of the State with respect to the 11 commission, including any participation, review, 12 oversight, implementation or other related func- 13 tions; 14 ‘‘(C) the history and experience of the 15 State in addressing health care administrative 16 costs, and any experience similar to the purpose 17 of the commission to improve health care ad- 18 ministrative processes and the exchange of 19 health care administrative data; 20 ‘‘(D) the resources and expertise that will 21 be made available to the commission by com- 22 mission members or other possible sources, and 23 how Federal funds will be used to leverage and 24 complement these resources; 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 9 •S 1260 IS ‘‘(E) the governance structure and proce- 1 dures that the commission will follow to make, 2 implement, and pilot recommendations; 3 ‘‘(F) the proposed objectives relating to the 4 simplification of administrative transactions 5 and operating rules, increased standardization, 6 and the efficiency and effectiveness of the 7 transmission of health information; 8 ‘‘(G) potential cost savings and other im- 9 provements in meeting the objectives described 10 in subparagraph (F); and 11 ‘‘(H) the method or methods by which the 12 recommendations described in subsection (c) 13 will be reviewed, tested, adopted, implemented, 14 and updated as needed. 15 ‘‘(c) MULTI-STAKEHOLDER COMMISSION.— 16 ‘‘(1) IN GENERAL.—Not later than 90 days 17 after the date on which a grant is awarded to a 18 State under this section, the State official described 19 in subsection (b)(2)(B), the State insurance commis- 20 sioner, or other appropriate State official shall con- 21 vene a multi-stakeholder commission, in accordance 22 with this subsection. 23 ‘‘(2) MEMBERSHIP.—The commission convened 24 under paragraph (1) shall include representatives 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 10 •S 1260 IS from health plans, health care providers, health ven- 1 dors, relevant State agencies, health care standard 2 development organizations, and operating rule enti- 3 ties, relevant professional and trade associations, pa- 4 tients, and other entities determined appropriate by 5 the State. 6 ‘‘(3) RECOMMENDATIONS.—Not later than one 7 year after the date on which a grant is awarded to 8 a State under this section, the commission shall 9 make recommendations and plans, consistent with 10 the application submitted by the State under sub- 11 section (b), and intended to meet the objectives de- 12 fined in the application. Such recommendations shall 13 comply with, and build upon, all relevant Federal re- 14 quirements and regulations, and may include— 15 ‘‘(A) common, uniform specifications, best 16 practices, and conventions, for the efficient, ef- 17 fective exchange of administrative transactions 18 adopted pursuant to the Health Insurance Port- 19 ability and Accountability Act of 1996 (Public 20 Law 104–191); 21 ‘‘(B) the development of streamlined busi- 22 ness processes for the exchange and use of 23 health care administrative data; and 24 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 11 •S 1260 IS ‘‘(C) specifications, incentives, require- 1 ments, tools, mechanisms, and resources to im- 2 prove— 3 ‘‘(i) the access, exchange, and use of 4 health care administrative information 5 through electronic means; 6 ‘‘(ii) the implementation of utilization 7 management protocols; and 8 ‘‘(iii) compliance with Federal and 9 State laws. 10 ‘‘(d) USE OF FUNDS FOR IMPLEMENTATION.—A 11 State may use amounts received under a grant under this 12 section for one or more of the following: 13 ‘‘(1) The development, implementation, and 14 best use of shared data infrastructure that supports 15 the electronic transmission of administrative data. 16 ‘‘(2) The development and provision of training 17 and educational materials, forums, and activities as 18 well as technical assistance to effectively implement, 19 use, and benefit from electronic health care trans- 20 actions and operating rules. 21 ‘‘(3) To accelerate the early adoption and im- 22 plementation of administrative transactions and op- 23 erating rules designated by the Secretary and that 24 have been adopted pursuant to the Health Insurance 25 VerDate Sep 11 2014 19:48 May 07, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1260.IS S1260 pbinns on DSK79D2C42PROD with BILLS 12 •S 1260 IS Portability and Accountability Act of 1996 (Public 1 Law 104–191), including transactions and operating 2 rules described in section 1173(a)(2) of the Social 3 Security Act. 4 ‘‘(4) To accelerate the early adoption and im- 5 plementation of additional or updated administrative 6 transactions, operating rules, and related data ex- 7 change standards that are being considered for 8 adoption under the Health Insurance Portability and 9 Accountability Act of 1996 or are adopted pursuant 10 to such Act, or as designated by the Secretary, in- 11 cluding the electronic claim attachment. 12 ‘‘(5) To conduct pilot projects to test ap- 13 proaches t [Text truncated for display. 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