Sec. 303. Designation of a nongovernmental, nonprofit transparency organization to lower Americans’ health care costs
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Subpart C of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1191 et seq.) is amended by adding at the end the following: The Secretary, in consultation with the Secretary of Health and Human Services, not later than 6 months after the date of enactment of the Lower Health Care Costs Act , shall have in effect a contract with a nonprofit entity to support the establishment and maintenance of a database that receives and utilizes health care claims information and related information and issues reports that are available to the public and authorized users, and are submitted to the Department of Labor. The database established under subsection
(a)shall— improve transparency by using de-identified health care data to— inform patients about the cost, quality, and value of their care; assist providers and hospitals, as they work with patients, to make informed choices about care; enable providers, hospitals, and communities to improve services and outcomes for patients by benchmarking their performance against that of other providers, hospitals, and communities; enable purchasers, including employers, employee organizations, and health plans, to develop value-based purchasing models, improve quality, and reduce the cost of health care and insurance coverage for enrollees; enable employers and employee organizations to evaluate network design and construction, and the cost of care for enrollees; facilitate State-led initiatives to lower health care costs and improve quality; and promote competition based on quality and cost; collect medical claims, prescription drug claims, and remittance data consistent with the protections and requirements of subsection (d); be established in such a manner that allows the data collected pursuant to subparagraph
(B)to be shared with any State all-payer claims database or regional database operated with authorization from States, at cost, using a standardized format, if such State or regional database also submits claims data to the database established under this section; and be available to— the Director of the Congressional Budget Office, the Comptroller General of the United States, the Executive Director of the Medicare Payment Advisory Commission, and the Executive Director of the Medicaid and CHIP Payment Advisory Commission, upon request, subject to the privacy and security requirements of authorized users under subsection (e)(2); and authorized users, including employers, employee organizations, providers, researchers, and policymakers, subject to subsection (e). The entity receiving a contract under subsection
(a)shall— be subject to the breach notification rule under subpart D of part 164 of title 45, Code of Federal Regulations (or any successor regulations), the security rule under part 160 and subparts A and C of part 164 of title 45, Code of Federal Regulations (or any successor regulations), and the privacy rule under part 160 and subparts A and E of part 164 of title 45, Code of Federal Regulations (or any successor regulations); and consistent with the requirements and prohibitions in the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996— ensure that the database under subsection
(a)is capable of— receiving data under subsection (d); providing data access to authorized users; and storing data on secure servers in a manner that is consistent with the privacy, security, and breach notification requirements under section 13402 of the HITECH Act and under the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996; not disclose to the public any individually identifiable health information or proprietary financial information; strictly limit staff access to the data to staff with appropriate training, clearance, and background checks and require regular privacy and security training; maintain effective security standards for transferring data or making data available to authorized users; develop a process for providing access to data to authorized users, in a secure manner that maintains privacy and confidentiality of data; adhere to current best security practices with respect to the management and use of such data for health services research, in accordance with applicable Federal privacy law; and report on the security methods of the entity to the Secretary, the Committee on Health, Education, Labor, and Pensions of the Senate, and the Committee on Education and Labor of the House of Representatives. Not later than 180 days after the date of enactment of the Lower Health Care Costs Act , the Secretary shall convene an Advisory Committee (referred to in this section as the Committee ), consisting of 11 members, to advise the Secretary, the contracting entity, and Congress on the establishment, operations, and use of the database established under this section. In accordance with clause (ii), the Secretary, in consultation with the Secretary of Health and Human Services, and the Comptroller General of the United States shall, not later than 1 year after the date of enactment of the Lower Health Care Costs Act , appoint members to the Committee who have distinguished themselves in the fields of health services research, health economics, health informatics, or the governance of State all-payer claims databases, or who represent organizations likely to submit data to or use the database, including patients, employers, or employee organizations that sponsor group health plans, health care providers, health insurance issuers, and third-party administrators of group health plans. Such members shall serve 3-year terms on a staggered basis. Vacancies on the Committee shall be filled by appointment consistent with this subsection not later than 3 months after the vacancy arises. In accordance with clause (i)— the Secretary, in consultation with the Secretary of Health and Human Services, shall appoint to the Committee— 1 member selected by the Secretary, in coordination with the Secretary of Health and Human Services, to serve as the chair of the Committee; the Assistant Secretary for Planning and Evaluation of the Department of Health and Human Services; 1 representative of the Centers for Medicare & Medicaid Services; 1 representative of the Agency for Health Research and Quality; 1 representative of the Office for Civil Rights of the Department of Health and Human Services with expertise in data privacy and security; and 1 representative of the National Center for Health Statistics; and the Comptroller General of the United States shall appoint to the Committee— 1 representative of an employer that sponsors a group health plan; 1 representative of an employee organization that sponsors a group health plan; 1 academic researcher with expertise in health economics or health services research; 1 patient advocate; and 2 additional members. The Committee shall— assist and advise the Secretary on the management of the contract under subsection (a); assist and advise the entity receiving the contract under subsection
(a)in establishing— the scope and format of the data to be submitted under subsection (d); the appropriate uses of data by authorized users, including developing standards for the approval of requests by organizations to access and use the data; and the appropriate formats and methods for making reports and analyses based on the database to the public; conduct an annual review of whether data was used according to the appropriate uses as described in clause (ii)(II), and advise the designated entity on using the data for authorized purposes; report, as appropriate, to the Secretary and Congress on the operation of the database and opportunities to better achieve the objectives of this section; establish additional restrictions on researchers who receive compensation from entities described in subsection (e)(2)(B)(ii), in order to protect proprietary financial information; and establish objectives for research and public reporting. A State may require health insurance issuers and other payers to submit claims data to the database established under this section, provided that such data is submitted in a form and manner established by the Secretary, and pursuant to subsection (d)(4)(B). The Secretary shall take appropriate action to sanction users who attempt to re-identify data accessed pursuant to paragraph (1)(D). The Secretary shall enter into the contract under subsection
(a)using full and open competition procedures pursuant to chapter 33 of title 41, United States Code. To be eligible to enter into a contract described in subsection (a), an entity shall— be a private nonprofit entity governed by a board that includes representatives of the academic research community and individuals with expertise in employer-sponsored insurance, research using health care claims data and actuarial analysis; conduct its business in an open and transparent manner that provides the opportunity for public comment on its activities; and agree to maintain an active certification as a qualified entity under section 1874(e) of the Social Security Act (or any successor program) throughout the contract period. In awarding the contract under subsection (a), the Secretary shall consider an entity’s experience in— health care claims data collection, aggregation, quality assurance, analysis, and security; supporting academic research on health costs, spending, and utilization for and by privately insured patients; working with large health insurance issuers and third-party administrators to assemble a national claims database; effectively collaborating with and engaging stakeholders to develop reports; meeting budgets and timelines, including in connection with report generation; and facilitating the creation of, or supporting, State all-payer claims databases. A contract awarded under this section shall be for a period of 5 years, and may be renewed after a subsequent competitive bidding process under this section. If the Secretary, following a competitive process at the end of the contract period, selects a new entity to maintain the database, all data shall be transferred to the new entity according to a schedule and process to be determined by the Secretary. Upon termination of a contract, no entity may keep data held by the database or disclose such data to any entity other than the entity so designated by the Secretary. The Secretary shall include enforcement terms in any contract with an organization chosen under this section, to ensure the timely transfer of all data to a new entity in the event of contract termination. An applicable self-insured group health plan shall, through its health insurance issuer, third-party administrator, pharmacy benefit manager, or other entity designated by the group health plan, electronically submit all claims data with respect to the plan, pursuant to subparagraph (B). The entity awarded the contract under subsection (a), in consultation with the Committee described in subsection (b)(3), and pursuant to the privacy and security requirements of subsection (b)(2), shall— specify the data elements required to be submitted under subparagraph (A), which shall include all data related to transactions described in subparagraphs
(A)and
(E)of section 1173(a)(2) of the Social Security Act, including all data elements normally present in such transactions when adjudicated, and enrollment information; specify the form and manner for such submissions, and the historical period to be included in the initial submission; and offer an automated submission option to minimize administrative burdens for entities required to submit data. The entity awarded the contract under subsection
(a)shall— establish a process under which data is de-identified in accordance with section 164.514(a) of title 45, Code of Federal Regulations (or any successor regulations), while retaining the ability to link data longitudinally for the purposes of research on cost and quality, and the ability to complete risk adjustment and geographic analysis; ensure that any third-party subcontractors who perform the de-identification process described in clause
(i)retain the minimum necessary information to perform such a process, and adhere to effective security and encryption practices in data storage and transmission; store claims and other data collected under this subsection only in de-identified form, in accordance with section 164.514(a) of title 45, Code of Federal Regulations (or any successor regulations); and ensure that data is encrypted, in accordance with the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996. For purposes of paragraph (1), a self-insured group health plan is an applicable self-insured group health plan if such plan is self-administered, or is administered by a health insurance issuer or third-party administrator that meets one or both of the following criteria: Administers health benefits for more than 50,000 enrollees. Is one of the 5 largest administrators or issuers of self-insured group health plans in a State in which such administrator operates, as measured by the number of enrollees. In the case of a health insurance issuer or third-party administrator that is required under this subsection to submit claims data with respect to an applicable self-insured group health plan, such issuer or administrator shall submit claims data with respect to all self-insured group health plans that the issuer or administrator administers, including such plans that are not applicable self-insured group health plans, as described in paragraph (2). The entity awarded the contract under subsection
(a)shall maintain active certification as a qualified entity pursuant to section 1874(e) of the Social Security Act for the term of the contract awarded under subsection (a). The entity awarded the contract under subsection
(a)shall collect data from State all-payer claims databases that seek access to the database established under this section. An entity required to submit data under this subsection may not place any restrictions on the use of such data by authorized users. The entity awarded the contract under subsection
(a)shall make the database available to users who are authorized under this subsection, at cost, and reports and analyses based on the data available to the public with no charge. An entity may request authorization by the entity awarded the contract under subsection
(a)for access to the database in accordance with this paragraph. An entity desiring authorization under this paragraph shall submit to the entity awarded the contract an application for such access, which shall include— in the case of an entity requesting access for research purposes— a description of the uses and methodologies for evaluating health system performance using such data; and documentation of approval of the research by an institutional review board, if applicable for a particular plan of research; or in the case of an entity such as an employer, health insurance issuer, third-party administrator, or health care provider, requesting access for the purpose of quality improvement or cost-containment, a description of the intended uses for such data. Upon approval of an application for research purposes under subparagraph (B)(i), the authorized user shall enter into a data use and confidentiality agreement with the entity awarded the contract under subsection (a), which shall include a prohibition on attempts to reidentify and disclose protected health information and proprietary financial information. In consultation with the Committee described in subsection (b)(3), the Secretary shall, through rulemaking, establish the form and manner in which authorized users described in subparagraph (B)(ii) may access data. Data provided to such authorized users shall be provided in a form and manner such that users may not obtain individually identifiable price information with respect to direct competitors. Upon approval, such authorized user shall enter into a data use and confidentiality agreement with the entity. Employers and employer organizations may request customized reports from the entity awarded the contract under subsection (a), at cost, subject to the requirements of this section with respect to privacy, security, and proprietary financial information. The entity awarded the contract under subsection (a), in consultation with the Committee, shall make available to all authorized users aggregate data sets, free of charge. There are authorized to be appropriated, and there are appropriated, out of monies in the Treasury not otherwise appropriated, $20,000,000 for fiscal year 2020, for the implementation of the initial contract and establishment of the database under this section. There are authorized to be appropriated $15,000,000 for each of fiscal years 2021 through 2025, for purposes of carrying out this section (other than the grant program under subsection (h)). Not later than March 1, 2021, and March 1 of each year thereafter, the entity receiving the contract under subsection
(a)shall submit to Congress, the Secretary of Labor, and the Secretary of Health and Human Services, and publish online for access by the general public, a report containing a description of— trends in the price, utilization, and total spending on health care services, including a geographic analysis of differences in such trends; limitations in the data set; progress towards the objectives of this section; and the performance by the entity of the duties required under such contract. The entity receiving a contract under subsection
(a)shall, in coordination with authorized users, make analyses and research available to the public on an ongoing basis to promote the objectives of this section. The Secretary, in consultation with the Secretary of Health and Human Services, may award grants to States for the purpose of establishing and maintaining State all-payer claims databases that improve transparency of data in order to meet the goals of subsection (a)(1). To be eligible to receive the funding under paragraph (1), a State shall submit data to the database as described in subsection (b)(1)(C), using the format described in subsection (d)(1). There is authorized to be appropriated $100,000,000 for the period of fiscal years 2020 through 2029 for the purpose of awarding grants to States under this subsection. Claims data provided to the database, and the database itself shall not be considered public records and shall be exempt from public disclosure requirements. Data disclosed to authorized users shall not be subject to discovery or admission as public information, or evidence in judicial or administrative proceedings without consent of the affected parties. The term protected health information has the meaning given such term in section 160.103 of title 45, Code of Federal Regulations (or any successor regulations). The term proprietary financial information means data that would disclose the terms of a specific contract between an individual health care provider or facility and a specific group health plan, Medicaid managed care organization or other managed care entity, or health insurance issuer offering group or individual coverage. Nothing in this section shall be construed to affect or modify enforcement of the privacy, security, or breach notification rules promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (or successor regulations). . The Comptroller General of the United States shall conduct a study on— the performance of the entity awarded a contract under section 735(a) of the Employee Retirement Income Security Act of 1974, as added by subsection (a), under such contract; the privacy and security of the information reported to the entity; and the costs incurred by such entity in performing such duties. Not later than 2 years after the effective date of the first contract entered into under section 735(a) of the Employee Retirement Income Security Act of 1974, as added by subsection (a), and again not later than 4 years after such effective date, the Comptroller General of the United States shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by inserting after the item relating to section 734 the following new item: Sec. 735. Designation of a nongovernmental, nonprofit transparency organization to lower Americans’ health care costs. .
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Sec. 303
Designation of a nongovernmental, nonprofit transparency organization to lower Americans’ health care costs
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