S.O.S. Score Optimization Systems utilizes the following laws and statutes to our client's advantage for the purpose of disputing various trade-lines in order to successfully Optimize their Credit Score.
A study by the U.S. Public Interest Research Group found that 79 percent of all credit reports contained errors. These black marks in your credit history can have devastating consequences:
This is the PIRGs' sixth study on credit report accuracy and privacy issues since 1991. The PIRGs have also participated in state and federal legislative battles to improve credit reporting laws. This report is our first investigation of credit report accuracy since 1996 Congressional changes to the federal Fair Credit Reporting Act (FCRA), designed to improve the accuracy and ease of access to reports, took effect in September 1997. The findings of Mistakes Can Happen are troubling. An alarming number of credit reports contain serious errors that could cause the denial of credit, a loan, or even a job.
Among the major credit report accuracy findings of the survey:
To read the full story, click here http://uspirg.org/uspirg.asp?id2=5970&id3=USPIRG&
To download .pdf of the report, click here Mistakes Do Happen 2004 PDF (zipped file)
THE FAIR DEBT COLLECTION PRACTICES ACT
As amended by Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996)
To amend the Consumer Credit Protection Act to prohibit abusive practices by debt collectors.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at the end thereof the following new title:
TITLE VIII - DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]
§ 801. Short Title [15 USC 1601 note]
This title may be cited as the "Fair Debt Collection Practices Act."
§ 802. Congressional findings and declarations of purpose [15 USC 1692]
(a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
(d) Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.
(e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
§ 803. Definitions [15 USC 1692a]
As used in this title --
§ 804. Acquisition of location information [15 USC 1692b]
Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall --
§ 805. Communication in connection with debt collection [15 USC 1692c]
(a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt --
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --
If such notice from the consumer is made by mail, notification shall be complete upon receipt.
(d) For the purpose of this section, the term "consumer" includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator.
§ 806. Harassment or abuse [15 USC 1692d]
A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
§ 807. False or misleading representations [15 USC 1692e]
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
§ 808. Unfair practices [15 USC 1692f]
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
§ 809. Validation of debts [15 USC 1692g]
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.
§ 810. Multiple debts [15 USC 1692h]
If any consumer owes multiple debts and makes any single payment to any debt collector with respect to such debts, such debt collector may not apply such payment to any debt which is disputed by the consumer and, where applicable, shall apply such payment in accordance with the consumer's directions.
§ 811. Legal actions by debt collectors [15 USC 1692i]
(a) Any debt collector who brings any legal action on a debt against any consumer shall --
(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors.
§ 812. Furnishing certain deceptive forms [15 USC 1692j]
(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.
(b) Any person who violates this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 813 for failure to comply with a provision of this title.
§ 813. Civil liability [15 USC 1692k]
(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of --
(b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors --
(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
(d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.
(e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
§ 814. Administrative enforcement [15 USC 1692l]
(a) Compliance with this title shall be enforced by the Commission, except to the extend that enforcement of the requirements imposed under this title is specifically committed to another agency under subsection (b). For purpose of the exercise by the Commission of its functions and powers under the Federal Trade Commission Act, a violation of this title shall be deemed an unfair or deceptive act or practice in violation of that Act. All of the functions and powers of the Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act, including the power to enforce the provisions of this title in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.
(b) Compliance with any requirements imposed under this title shall be enforced under --
(c) For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this title any other authority conferred on it by law, except as provided in subsection (d).
(d) Neither the Commission nor any other agency referred to in subsection (b) may promulgate trade regulation rules or other regulations with respect to the collection of debts by debt collectors as defined in this title.
§ 815. Reports to Congress by the Commission [15 USC 1692m]
(a) Not later than one year after the effective date of this title and at one-year intervals thereafter, the Commission shall make reports to the Congress concerning the administration of its functions under this title, including such recommendations as the Commission deems necessary or appropriate. In addition, each report of the Commission shall include its assessment of the extent to which compliance with this title is being achieved and a summary of the enforcement actions taken by the Commission under section 814 of this title.
(b) In the exercise of its functions under this title, the Commission may obtain upon request the views of any other Federal agency which exercises enforcement functions under section 814 of this title.
§ 816. Relation to State laws [15 USC 1692n]
This title does not annul, alter, or affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this title if the protection such law affords any consumer is greater than the protection provided by this title.
§ 817. Exemption for State regulation [15 USC 1692o]
The Commission shall by regulation exempt from the requirements of this title any class of debt collection practices within any State if the Commission determines that under the law of that State that class of debt collection practices is subject to requirements substantially similar to those imposed by this title, and that there is adequate provision for enforcement.
§ 818. Effective date [15 USC 1692 note]
This title takes effect upon the expiration of six months after the date of its enactment, but section 809 shall apply only with respect to debts for which the initial attempt to collect occurs after such effective date.
Approved September 20, 1977
1. So in original; however, should read "604(a)(3)."
Public Law 95-109 [H.R. 5294]
HOUSE REPORT No. 95-131 (Comm. on Banking, Finance, and Urban Affairs).
SENATE REPORT No. 95-382 (Comm. on Banking, Housing, and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 123 (1977):
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 39:
SECTION 621, SUBSECTIONS (b)(3), (b)(4) and (b)(5) were amended to transfer certain administrative enforcement responsibilities, pursuant to Pub. L. 95-473, 3(b), Oct. 17, 1978. 92 Stat. 166; Pub. L. 95-630, Title V. 501, November 10, 1978, 92 Stat. 3680; Pub. L. 98-443, 9(h), Oct. 4, 1984, 98 Stat. 708.
SECTION 803, SUBSECTION (6), defining "debt collector," was amended to repeal the attorney at law exemption at former Section (6)(F) and to redesignate Section 803(6)(G) pursuant to Pub. L. 99-361, July 9, 1986, 100 Stat. 768. For legislative history, see H.R. 237, HOUSE REPORT No. 99-405 (Comm. on Banking, Finance and Urban Affairs). CONGRESSIONAL RECORD: Vol. 131 (1985): Dec. 2, considered and passed House. Vol. 132 (1986): June 26, considered and passed Senate.
SECTION 807, SUBSECTION (11), was amended to affect when debt collectors must state (a) that they are attempting to collect a debt and (b) that information obtained will be used for that purpose, pursuant to Pub. L. 104-208 § 2305, 110 Stat. 3009 (Sept. 30, 1996).
THE FAIR AND ACCURATE CREDIT TRANSACTION ACT
(The FACT Act)
As Passed by the House Financial Services Committee
September 12, 2003
On Thursday December 4th the President signed into law the Fair and Accurate Credit
Transaction Act of 2003, Public Law 108-159 (FACT Act). The purpose of this new law
is to extend the provisions of the Fair Credit Reporting Act which are intended to
establish uniform national standards in a number of key areas (thus preempting states
from acting in these areas). In addition the law is intended to provide consumers
additional tools to fight identity theft and to ensure the accuracy of their credit reports.
The Federal Reserve Board and the Federal Trade Commission put out interim final rules
and proposed rules to establish effective dates for certain provisions (release date
December 16, 2003). The rules establish December 31, 2003 as the effective date for the
preemption provisions which is intended to insure there is no break in the preemptive
provisions in the underlying act which are set to expire on January 1st, 2004. The rule
also establishes March 31st, 2004 for the provisions of the FACT Act that do not require
significant changes to business procedures and December 1, 2004 for the provisions that
would likely entail significant changes to business procedures.
Congress proved that when it wants to preempt state laws it can do so explicitly in
legislation. The Fair Credit Reporting Act clearly states that except for the explicitly
named provisions in the legislation, the FCRA is not intended to preempt state law except
to the extent that state law is inconsistent with the provisions of the Act and then only to
the extent of the inconsistency. In addition to extending the explicit preemptions
contained in the 1996 amendments to the FCRA which were scheduled to expire at the
end of this year, Congress added several new provisions to the list concerning the
prevention or mitigation of identity theft. All of the provisions that explicitly preempt
state law noted below are referenced to the specific provisions of the Fair Credit
Reporting Act (not the sections of the Public Law).
Title I. Identity Theft Prevention and Credit History Restoration
•Requires a credit reporting agency (CRA) to put a fraud alert or an active duty
alert in a consumer’s file upon the request of a consumer under a three tiered
system. Users of the credit report with a fraud/active duty alert then cannot
provide credit to anyone other then the consumer unless it first attempts to comply
with the fraud alert’s authorization procedure. [Preemption Explicitly Applies—
•Prohibits companies from printing credit/debit card expiration dates or account
numbers (other then the last 5 digits) on electronically printed customer receipts.
Exemptions for imprinted receipts or handwritten receipts. Contains a 3 year
phase in period for older cash registers/machines in use before Jan. 1, 2005.
[Preemption Explicitly Applies—Section 605(g)]
•Directs the Federal banking regulators (includes the NCUA for the purposes of
this summary) to establish guidelines for financial institutions to identify and
“red-flag” suspicious activity or patterns that might indicate identity theft.
[Preemption Explicitly Applies—Section 615(e)]
oThe Federal banking agencies are to consider “red-flag” guidelines for
credit or deposit accounts that have been inactive for more then two years
requiring financial institutions to give consumer notice of any new
transactions on the account.
oRequires credit/debit card companies that receive a request for additional
or replacement cards on an existing account shortly after receiving a
change of address form to notify the cardholder or use other means of
validating the address change as required by regulation (“red-flag
guidelines” and regulations on identity theft required by this legislation).
•Authorizes the Credit Reporting Agencies to truncate the first 5 digits of the
social security number of a consumer at the request of that consumer in
disclosures to that consumer. [Preemption Explicitly Applies—Section
•Directs the FTC (in consultation with the Federal banking agencies) to prepare a
model summary of rights for consumers who believe they may be victims of fraud
or ID theft and requires CRAs to provide consumers with the model and
information on contacting the FTC for more information. [Preemption Explicitly
•Creates an obligation for a business entity to hand over records related to an
identity theft incident (not to keep or create them) to the victim or the law
enforcement agency of their choice within 30 days of the victim of the identity
theft’s request. No civil liability applies to violations of this subsection.
[Preemption Explicitly Applies—Section 609(e)]
•Requires CRAs to block related fraudulent information on a consumer’s credit
report when the consumer files a police report alleging fraud. Requires the CRA
to notify the furnisher of the information that the information provided may be the
result of identity theft. [Preemption Explicitly Applies—Section 605B]
•Requires greater coordination between nationwide CRAs in sharing consumer
complaints of identity theft and fraud alerts. Requires CRAs to provide the FTC
with annual summary of the complaints. FTC is directed to develop model forms
and model standards for identity theft victims to report fraud to creditors and
CRAs. [Preemption Explicitly Applies—Section 621(f)]
•Prevention of re-pollution of consumer reports. Furnishers that receive a police
report from a consumer are prohibited from reporting information to CRAs that
the consumer alleged in the report resulted from identity theft, unless the furnisher
subsequently knows the information is correct. [Preemption Explicitly Applies—
•Prohibits the sale, transfer or the placement for collection a debt that has resulted
from identity theft (some exceptions apply for repurchase; securitization; or sale
of substantially all of the assets of an entity) [Preemption Explicitly Applies—
•Debt collectors who learn that information in a consumer report is the result of
identity theft or otherwise fraudulent must notify the relevant third party for
whom they are collecting the debt, and provide information regarding disputing
the debt to the victim of identity theft upon request. [Preemption Explicitly
•Statute of limitations for violations of the FCRA is extended from 2 years from
the violation to 2 years from discovery of the violation but no more then FIVE
Title II—Improvements in the Use of and Consumer Access to Credit Information
•Consumers may request a free credit report annually from consumer reporting
agencies. If a reinvestigation is requested by a consumer after receiving a free
credit report, the CRA shall complete the investigation not later then 45 days after
the request is received (an additional 15 days over the time allowed if the request
is received after a consumer gets a credit report for being turned down for credit).
[Preemption Explicitly Applies—Section 612(a) Grandfather for specific laws in
CO, GA, ME, MD, MA, NJ and VT]
•Requires the Commission to come up with a model summary of the rights of
consumers under this title. Requires CRAs to provide a consumer with the
summary of rights, a toll-free number at which personnel are accessible to
consumers during normal business hours, a list of Federal agencies responsible for
enforcing this title, a statement that consumers may have additional rights under
State law. [Preemption Explicitly Applies—Section 609(c)]
•Requires CRAs to make available to consumers, at a reasonable fee, their most
recently calculated credit score, the range of scores possible as well as the key
negative factors used (up to four, but must include use of enquiries as a key factor
if applicable). If the consumer only requests a credit report and not a credit score,
the CRA is required to disclose that the consumer may request a credit score.
[Preemption Explicitly Applies—Section 609(f) Grandfather for specific laws in
CA, CO and laws in any state regulating the use in an insurance activity or of
credit-based insurance scores used by any person engaged in the business of
•Mortgage lenders are required to provide the consumer with a free copy of the
consumer’s credit score, if it was used, along with the key factors involved and
contact information for the credit bureaus. [Preemption Explicitly Applies—
•Improves disclosures required to explain to consumers that they may opt-out of
being included on prescreened lists generated by CRAs and extends the opt-out
period from two to five years. [Preemption Explicitly Applies—Section
•Prohibits the use for marketing purposes of a consumer’s information received by
an affiliate unless the consumer is provided an opportunity to opt-out of receiving
such solicitations or there is a pre-existing business relationship with that
consumer or the solicitation is in response to a request by the consumer. The optout
remains in effect for 5 years and then the consumer must be given an
opportunity to opt-out for an additional 5 years. This provision does not limit the
ability to share information with an affiliate, it just limits the ability to use that
information for marketing purposes. [Preemption Explicitly Applies—Section
•The Federal banking agencies and the FTC are required to conduct regular studies
of consumer information sharing practices by financial institutions. The FTC and
the Federal Reserve Board are required to study the use of credit scores on the
availability and affordability of financial products and services.
•The Federal banking agencies, the SEC and the FTC are supposed to issue
regulations requiring the proper destruction of consumer information or consumer
reports by any person that possesses or maintains them for a business purpose.
•Financial companies have to notify a consumer prior to, or no later then 30 days
after furnishing negative information on that consumer to a CRA. The FRB is
directed to create a brief model disclosure. [Preemption Explicitly Applies—
Title III—Enhancing the Accuracy of Consumer Report Information
•Requirement that creditors provide customers with new risk based pricing notices
where the customer does not receive the best terms available based on information
in a consumer report. The terms offered must be materially less favorable then
the most favorable terms offered to a substantial portion of the users customers
for this provision to apply. [Preemption Explicitly Applies—Section 615(h)]
•The Federal banking agencies and the FTC are to establish guidelines for entities
under their jurisdiction that furnish information to CRAs regarding the accuracy
and integrity of the information furnished. [Preemption Explicitly Applies—
•Changes the standard for furnishers of information from “knows or consciously
avoids knowing” the information is inaccurate to “knows or has reasonable cause
to believe the information is inaccurate”…meaning having specific knowledge,
other then solely allegations by the consumer, that would cause a reasonable
person to have substantial doubts about the accuracy of the information”
[Preemption Explicitly Applies—Section 623]
•Allows the consumer to dispute the accuracy of the credit report directly with the
furnisher of the disputed information and requires the furnisher to investigate in
the same time frame that the CRA would have had (30 to 45 days) if the dispute
was taken up directly with the CRA. (This section does not apply to consumers
being assisted by credit repair organizations) [Preemption Explicitly Applies—
•Clarifies liability and enforcement under FCRA for furnishers of information
limiting civil liability (other then the reinvestigation provision) and makes the
new provisions only subject to administrative enforcement. [Preemption
Explicitly Applies—Section 623]
•The FTC must compile all complaints that it receives and transmit the complaints
to each CRA involved. Each CRA involved must review each such complaint to
determine if all legal obligations were followed and provide reports back to the
FTC on a regular basis. The FTC is to submit an annual report to the House and
Senate Banking Committees on this issue.
•Upon finding that information furnished is incomplete or inaccurate a CRA is
required to promptly delete the item of information from the file of the consumer
(or modify it as appropriate) and promptly notify the furnisher of that information
that the information has been modified or deleted.
•Upon finding that information furnished is inaccurate or incomplete a furnisher
must modify or delete that item of information and permanently block the
reporting of that item of information (to avoid re-pollution of the consumer’s
credit report) [Preemption Explicitly Applies—Section 623]
•CRAs are required to notify a requester of a consumer report of any discrepancy
between the address for the consumer in the request and the addresses in the file
of the consumer. Requires the Federal banking agencies to come up with
regulations on what a user of a consumer report should do when they have
received notice of a discrepancy. [Preemption Explicitly Applies—Section 605]
•Resellers (such as intermediaries who consolidate reports for mortgage lenders)
upon notice by a consumer of a dispute, are required to determine if the
information is inaccurate as a result of an act or omission by the reseller and fix
any error they caused within 20 business days or if not through their own error,
forward all information received on a consumer dispute to each CRA involved.
Requires reinvestigations to be free of charge and reasonable.
Title IV—Limiting the Use and Sharing of Medical Information
•With some limited exceptions (needing specific affirmative consent of the
consumer), CRAs are prohibited from providing credit reports that contain
medical information. Medical information shared among affiliates will no longer
be exempted from the definition of a consumer report. With limited exceptions,
creditors are not allowed to use medical information for credit granting purposes.
Companies that receive medical information in a consumer report or through
affiliate sharing are prohibited from further disclosing the information.
•Requires the use of codes for medical information and restricts the dissemination
of medical contact information. . [Preemption Explicitly Applies—Section 605
Title V—Financial Literacy and Education Improvement
•Establishes the Financial Literacy and Education Commission that has 18 months
to develop and implement a national strategy to promote financial literacy and
education among all Americans.
Title VI—Protecting Employee Misconduct Investigations
•Reports by outside third parties hired to investigate employee misconduct are
excluded from the definition of consumer reports, but if any adverse action is
taken based on the communication, the employer has to disclose to the consumer
a summary of the nature and substance of the communication.
Title VII—Relation to State Laws
The Fair Credit Reporting Act clearly states that except for the explicitly named
provisions in the legislation, the FCRA is not intended to preempt state law except to the
extent that state law is inconsistent with the provisions of the Act and then only to the
extent of the inconsistency. In addition to extending the explicit preemptions contained
in the 1996 amendments to the FCRA which were scheduled to expire at the end of this
year, Congress added several new provisions to the list concerning the prevention or
mitigation of identity theft. Congress used the terms “with respect to the conduct
required by the specific provisions of” which is definitely subject to interpretation and
may result in the courts making the ultimate decision on how far the preemption goes.
PUBLIC LAW 104-191
AUG. 21, 1996
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996
Public Law 104-191
To amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.--This Act may be cited as the "Health Insurance Portability and Accountability Act of 1996".
(b) TABLE OF CONTENTS.--The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY
TITLE II--PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM
Subtitle F--Administrative Simplification
Subtitle F--Administrative Simplification
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
"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.
"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
"(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).
"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.
"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.
"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 clearinghouse; or
"(B) receiving standard data elements through a health care clearinghouse.
"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.
"(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.
"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.
"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 paragraph (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))
(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 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 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.
(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.