---
kind: "range"
citation: "42 U.S.C. §§ 1320d–1–1320d–3"
title: "42"
from: "1320d–1"
to: "1320d–3"
count: 3
release: "119-102"
url: "https://uscodex.org/usc/42/1320d-1..1320d-3"
---

# §1320d–1. General requirements for adoption of standards

- (a) **Applicability—** Any [standard](/usc/42/1320d.md?p=7) adopted under this part shall apply, in whole or in part, to the following [persons](/usc/42/1301.md?p=a-3):
  - (1) A [health plan](/usc/42/300jj.md?p=6).
  - (2) A [health care clearinghouse](/usc/42/1320d.md?p=2).
  - (3) A [health care provider](/usc/42/300jj.md?p=3) who transmits any [health information](/usc/42/1320d.md?p=4) in electronic form in connection with a transaction referred to in [section 1320d–2(a)(1) of this title](/usc/42/1320d–2.md?p=a-1).
- (b) **Reduction of costs—** Any [standard](/usc/42/1320d.md?p=7) 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)](#c-2), any [standard](/usc/42/1320d.md?p=7) adopted under this part shall be a [standard](/usc/42/1320d.md?p=7) that has been developed, adopted, or [modified](/usc/42/7501.md?p=4) by a [standard setting organization](/usc/42/1320d.md?p=8).
  - (2) **Special rules—**
    - (A) **Different standards—** The [Secretary](/usc/42/1301.md?p=a-6) may adopt a [standard](/usc/42/1320d.md?p=7) that is different from any [standard](/usc/42/1320d.md?p=7) developed, adopted, or [modified](/usc/42/7501.md?p=4) by a [standard setting organization](/usc/42/1320d.md?p=8), if—
      - (i) the different [standard](/usc/42/1320d.md?p=7) will substantially reduce administrative costs to [health care providers](/usc/42/300jj.md?p=3) and [health plans](/usc/42/300jj.md?p=6) compared to the alternatives; and
      - (ii) the [standard](/usc/42/1320d.md?p=7) is promulgated in accordance with the rulemaking procedures of subchapter III of [chapter 5](/usc/5/chptI-ch5.md) of title 5.
    - (B) **No standard by standard setting organization—** If no [standard setting organization](/usc/42/1320d.md?p=8) has developed, adopted, or [modified](/usc/42/7501.md?p=4) any [standard](/usc/42/1320d.md?p=7) relating to a [standard](/usc/42/1320d.md?p=7) that the [Secretary](/usc/42/1301.md?p=a-6) is authorized or required to adopt under this part—
      - (i) [paragraph (1)](#c-1) shall not apply; and
      - (ii) [subsection (f)](#f) shall apply.
  - (3) **Consultation requirement—**
    - (A) **In general—** A [standard](/usc/42/1320d.md?p=7) may not be adopted under this part unless—
      - (i) in the case of a [standard](/usc/42/1320d.md?p=7) that has been developed, adopted, or [modified](/usc/42/7501.md?p=4) by a [standard setting organization](/usc/42/1320d.md?p=8), the organization consulted with each of the organizations described in [subparagraph (B)](#c-3-B) in the course of such development, adoption, or [modification](/usc/42/7501.md?p=4); and
      - (ii) in the case of any other [standard](/usc/42/1320d.md?p=7), the [Secretary](/usc/42/1301.md?p=a-6), in complying with the requirements of [subsection (f)](#f), consulted with each of the organizations described in [subparagraph (B)](#c-3-B) before adopting the [standard](/usc/42/1320d.md?p=7).
    - (B) **Organizations described—** The organizations referred to in [subparagraph (A)](#c-3-A) are the following:
      - (i) The National Uniform Billing Committee.
      - (ii) The National Uniform [Claim](/usc/42/1320a–7a.md?p=i-2) Committee.
      - (iii) The Workgroup for Electronic Data Interchange.
      - (iv) The American Dental Association.
- (d) **Implementation specifications—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish specifications for implementing each of the [standards](/usc/42/1320d.md?p=7) adopted under this part.
- (e) **Protection of trade secrets—** Except as otherwise required by law, a [standard](/usc/42/1320d.md?p=7) adopted under this part shall not require disclosure of trade secrets or confidential commercial information by a [person](/usc/42/1301.md?p=a-3) required to comply with this part.
- (f) **Assistance to Secretary—** In complying with the requirements of this part, the [Secretary](/usc/42/1301.md?p=a-6) shall rely on the recommendations of the National Committee on Vital and Health Statistics established under [section 242k(k) of this title](/usc/42/242k.md?p=k), and shall consult with appropriate Federal and [State agencies](/usc/42/1320a–7a.md?p=i-1) and private organizations. The [Secretary](/usc/42/1301.md?p=a-6) shall publish in the Federal Register any recommendation of the National Committee on Vital and Health Statistics regarding the adoption of a [standard](/usc/42/1320d.md?p=7) under this part.
- (g) **Application to modifications of standards—** This section shall apply to a [modification](/usc/42/7501.md?p=4) to a [standard](/usc/42/1320d.md?p=7) ([including](/usc/42/1301.md?p=b) an addition to a [standard](/usc/42/1320d.md?p=7)) adopted under [section 1320d–3(b) of this title](/usc/42/1320d–3.md?p=b) in the same manner as it applies to an initial [standard](/usc/42/1320d.md?p=7) adopted under [section 1320d–3(a) of this title](/usc/42/1320d–3.md?p=a).

# §1320d–2. Standards for information transactions and data elements

- (a) **Standards to enable electronic exchange—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt [standards](/usc/42/1320d.md?p=7) for transactions, and data elements for such transactions, to enable [health information](/usc/42/1320d.md?p=4) to be exchanged electronically, that are appropriate for—
    - (A) the financial and administrative transactions described in [paragraph (2)](#a-2); and
    - (B) other financial and administrative transactions determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6), consistent with the goals of improving the operation of the health care system and reducing administrative costs, and subject to the requirements under [paragraph (5)](#a-5).
  - (2) **Transactions—** The transactions referred to in [paragraph (1)(A)](#a-1-A) are transactions with respect to the following:
    - (A) Health [claims](/usc/42/1320a–7a.md?p=i-2) or equivalent encounter information.
    - (B) Health [claims](/usc/42/1320a–7a.md?p=i-2) attachments.
    - (C) Enrollment and disenrollment in a [health plan](/usc/42/300jj.md?p=6).
    - (D) Eligibility for a [health plan](/usc/42/300jj.md?p=6).
    - (E) Health care payment and remittance advice.
    - (F) [Health plan](/usc/42/300jj.md?p=6) premium payments.
    - (G) First report of injury.
    - (H) Health [claim](/usc/42/1320a–7a.md?p=i-2) status.
    - (I) Referral certification and [authorization](/usc/42/4370m.md?p=3).
    - (J) Electronic [funds](/usc/42/12854.md?p=3) transfers.
  - (3) **Accommodation of specific providers—** The [standards](/usc/42/1320d.md?p=7) adopted by the [Secretary](/usc/42/1301.md?p=a-6) under [paragraph (1)](#a-1) shall accommodate the needs of different types of [health care providers](/usc/42/300jj.md?p=3).
  - (4) **Requirements for financial and administrative transactions—**
    - (A) **In general—** The [standards](/usc/42/1320d.md?p=7) and associated [operating rules](/usc/42/1320d.md?p=9) adopted by the [Secretary](/usc/42/1301.md?p=a-6) shall—
      - (i) to the extent feasible and appropriate, enable determination of an individual’s eligibility and financial responsibility for specific services prior to or at the point of care;
      - (ii) be comprehensive, requiring minimal augmentation by paper or other communications;
      - (iii) provide for timely acknowledgment, response, and status reporting that supports a transparent [claims](/usc/42/1320a–7a.md?p=i-2) and denial management process ([including](/usc/42/1301.md?p=b) adjudication and appeals); and
      - (iv) describe all data elements ([including](/usc/42/1301.md?p=b) reason and remark codes) in unambiguous terms, require that such data elements be required or conditioned upon set values in other fields, and prohibit additional conditions (except where necessary to implement [State](/usc/42/1301.md?p=a-1) or Federal law, or to protect against fraud and [abuse](/usc/42/1397j.md?p=1)).
    - (B) **Reduction of clerical burden—** In adopting [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) for the transactions referred to under [paragraph (1)](#a-1), the [Secretary](/usc/42/1301.md?p=a-6) shall seek to reduce the number and complexity of forms ([including](/usc/42/1301.md?p=b) paper and electronic forms) and data entry required by patients and providers.
  - (5) **Consideration of standardization of activities and items—**
    - (A) **In general—** For purposes of carrying out [paragraph (1)(B)](#a-1-B), the [Secretary](/usc/42/1301.md?p=a-6) shall solicit, not later than January 1, 2012, and not less than every 3 years thereafter, input from entities described in [subparagraph (B)](#a-5-B) on—
      - (i) whether there could be greater uniformity in financial and administrative activities and items, as determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6); and
      - (ii) whether such activities should be considered financial and administrative transactions (as described in [paragraph (1)(B)](#a-1-B)) for which the adoption of [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) would improve the operation of the health care system and reduce administrative costs.
    - (B) **Solicitation of input—** For purposes of [subparagraph (A)](#a-5-A), the [Secretary](/usc/42/1301.md?p=a-6) shall seek input from—
      - (i) the National Committee on Vital and Health Statistics, the [Health Information](/usc/42/1320d.md?p=4) Technology Policy Committee, and the [Health Information](/usc/42/1320d.md?p=4) Technology [Standards](/usc/42/1320d.md?p=7) Committee; and
      - (ii) [standard setting organizations](/usc/42/1320d.md?p=8) and stakeholders, as determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6).
- (b) **Unique health identifiers—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt [standards](/usc/42/1320d.md?p=7) providing for a [standard](/usc/42/1320d.md?p=7) unique health identifier for each individual, employer, [health plan](/usc/42/300jj.md?p=6), and [health care provider](/usc/42/300jj.md?p=3) for use in the health care system. In carrying out the preceding sentence for each [health plan](/usc/42/300jj.md?p=6) and [health care provider](/usc/42/300jj.md?p=3), the [Secretary](/usc/42/1301.md?p=a-6) shall take into account multiple uses for identifiers and multiple locations and specialty classifications for [health care providers](/usc/42/300jj.md?p=3).
  - (2) **Use of identifiers—** The [standards](/usc/42/1320d.md?p=7) adopted under [paragraph (1)](#b-1) shall specify the purposes for which a unique health identifier may be used.
- (c) **Code sets—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt [standards](/usc/42/1320d.md?p=7) that—
    - (A) select [code sets](/usc/42/1320d.md?p=1) for appropriate data elements for the transactions referred to in [subsection (a)(1)](#a-1) from among the [code sets](/usc/42/1320d.md?p=1) that have been developed by private and public entities; or
    - (B) establish [code sets](/usc/42/1320d.md?p=1) for such data elements if no [code sets](/usc/42/1320d.md?p=1) for the data elements have been developed.
  - (2) **Distribution—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish efficient and low-cost procedures for distribution ([including](/usc/42/1301.md?p=b) electronic distribution) of [code sets](/usc/42/1320d.md?p=1) and [modifications](/usc/42/7501.md?p=4) made to such [code sets](/usc/42/1320d.md?p=1) under [section 1320d–3(b) of this title](/usc/42/1320d–3.md?p=b).
- (d) **Security standards for health information—**
  - (1) **Security standards—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt security [standards](/usc/42/1320d.md?p=7) that—
    - (A) take into account—
      - (i) the technical capabilities of record systems used to maintain [health information](/usc/42/1320d.md?p=4);
      - (ii) the costs of security measures;
      - (iii) the need for [training](/usc/42/285e–2.md?p=b-2) [persons](/usc/42/1301.md?p=a-3) who have access to [health information](/usc/42/1320d.md?p=4);
      - (iv) the value of audit trails in computerized record systems; and
      - (v) the needs and capabilities of small [health care providers](/usc/42/300jj.md?p=3) and rural [health care providers](/usc/42/300jj.md?p=3) (as such providers are defined by the [Secretary](/usc/42/1301.md?p=a-6)); and
    - (B) ensure that a [health care clearinghouse](/usc/42/1320d.md?p=2), if it is part of a larger organization, has policies and security procedures which isolate the activities of the [health care clearinghouse](/usc/42/1320d.md?p=2) with respect to processing information in a manner that prevents unauthorized access to such information by such larger organization.
  - (2) **Safeguards—** Each [person](/usc/42/1301.md?p=a-3) described in [section 1320d–1(a) of this title](/usc/42/1320d–1.md?p=a) who maintains or transmits [health information](/usc/42/1320d.md?p=4) 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](/usc/42/5165f.md?p=a-3) 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](/usc/42/1320a–7h.md?p=e-7) of such [person](/usc/42/1301.md?p=a-3).
- (e) **Electronic signature—**
  - (1) **Standards—** The [Secretary](/usc/42/1301.md?p=a-6), in coordination with the [Secretary](/usc/42/1301.md?p=a-6) of [Commerce](/usc/42/6311.md?p=7), shall adopt [standards](/usc/42/1320d.md?p=7) specifying procedures for the electronic transmission and authentication of signatures with respect to the transactions referred to in [subsection (a)(1)](#a-1).
  - (2) **Effect of compliance—** Compliance with the [standards](/usc/42/1320d.md?p=7) adopted under [paragraph (1)](#e-1) shall be deemed to satisfy Federal and [State](/usc/42/1301.md?p=a-1) statutory requirements for written signatures with respect to the transactions referred to in [subsection (a)(1)](#a-1).
- (f) **Transfer of information among health plans—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt [standards](/usc/42/1320d.md?p=7) for transferring among [health plans](/usc/42/300jj.md?p=6) appropriate [standard](/usc/42/1320d.md?p=7) data elements needed for the coordination of benefits, the sequential processing of [claims](/usc/42/1320a–7a.md?p=i-2), and other data elements for individuals who have more than one [health plan](/usc/42/300jj.md?p=6).
- (g) **Operating rules—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt a [single](/usc/42/2304.md?p=m) set of [operating rules](/usc/42/1320d.md?p=9) for each transaction referred to under [subsection (a)(1)](#a-1) with the goal of creating as much uniformity in the implementation of the electronic [standards](/usc/42/1320d.md?p=7) as possible. Such [operating rules](/usc/42/1320d.md?p=9) shall be consensus-based and reflect the necessary business rules affecting [health plans](/usc/42/300jj.md?p=6) and [health care providers](/usc/42/300jj.md?p=3) and the manner in which they operate pursuant to [standards](/usc/42/1320d.md?p=7) issued under Health Insurance Portability and Accountability Act of 1996.
  - (2) **Operating rules development—** In adopting [operating rules](/usc/42/1320d.md?p=9) under this subsection, the [Secretary](/usc/42/1301.md?p=a-6) shall consider recommendations for [operating rules](/usc/42/1320d.md?p=9) developed by a qualified nonprofit entity that meets the following requirements:
    - (A) The entity focuses its mission on administrative simplification.
    - (B) The entity demonstrates a multi-stakeholder and consensus-based process for development of [operating rules](/usc/42/1320d.md?p=9), [including](/usc/42/1301.md?p=b) representation by or participation from [health plans](/usc/42/300jj.md?p=6), [health care providers](/usc/42/300jj.md?p=3), vendors, relevant Federal [agencies](/usc/42/1397n–12.md?p=1), and other [standard](/usc/42/1320d.md?p=7) development organizations.
    - (C) The entity has a public set of guiding principles that ensure the [operating rules](/usc/42/1320d.md?p=9) and process are open and transparent, and supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory [practices](/usc/42/17061.md?p=19).
    - (D) The entity builds on the transaction [standards](/usc/42/1320d.md?p=7) issued under Health Insurance Portability and Accountability Act of 1996.
    - (E) The entity allows for public review and updates of the [operating rules](/usc/42/1320d.md?p=9).
  - (3) **Review and recommendations—** The National Committee on Vital and Health Statistics shall—
    - (A) advise the [Secretary](/usc/42/1301.md?p=a-6) as to whether a nonprofit entity meets the requirements under [paragraph (2)](#g-2);
    - (B) review the [operating rules](/usc/42/1320d.md?p=9) developed and recommended by such nonprofit entity;
    - (C) determine whether such [operating rules](/usc/42/1320d.md?p=9) represent a consensus view of the health care stakeholders and are consistent with and do not conflict with other existing [standards](/usc/42/1320d.md?p=7);
    - (D) evaluate whether such [operating rules](/usc/42/1320d.md?p=9) are consistent with electronic [standards](/usc/42/1320d.md?p=7) adopted for [health information](/usc/42/1320d.md?p=4) technology; and
    - (E) submit to the [Secretary](/usc/42/1301.md?p=a-6) a recommendation as to whether the [Secretary](/usc/42/1301.md?p=a-6) should adopt such [operating rules](/usc/42/1320d.md?p=9).
  - (4) **Implementation—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt [operating rules](/usc/42/1320d.md?p=9) under this subsection, by regulation in accordance with [subparagraph (C)](#g-4-C), following consideration of the [operating rules](/usc/42/1320d.md?p=9) developed by the non-profit entity described in [paragraph (2)](#g-2) and the recommendation submitted by the National Committee on Vital and Health Statistics under [paragraph (3)(E)](#g-3-E) and having ensured consultation with providers.
    - (B) **Adoption requirements; effective dates—**
      - (i) **Eligibility for a health plan and health claim status—** The set of [operating rules](/usc/42/1320d.md?p=9) for eligibility for a [health plan](/usc/42/300jj.md?p=6) and health [claim](/usc/42/1320a–7a.md?p=i-2) status transactions shall be adopted not later than July 1, 2011, in a manner ensuring that such [operating rules](/usc/42/1320d.md?p=9) are effective not later than January 1, 2013, and may allow for the use of a machine readable identification card.
      - (ii) **Electronic funds transfers and health care payment and remittance advice—** The set of [operating rules](/usc/42/1320d.md?p=9) for electronic [funds](/usc/42/12854.md?p=3) transfers and health care payment and remittance advice transactions shall—
        - (I) allow for automated reconciliation of the electronic payment with the remittance advice; and
        - (II) be adopted not later than July 1, 2012, in a manner ensuring that such [operating rules](/usc/42/1320d.md?p=9) are effective not later than January 1, 2014.
      - (iii) **Health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, referral certification and authorization—** The set of [operating rules](/usc/42/1320d.md?p=9) for health [claims](/usc/42/1320a–7a.md?p=i-2) or equivalent encounter information, enrollment and disenrollment in a [health plan](/usc/42/300jj.md?p=6), [health plan](/usc/42/300jj.md?p=6) premium payments, and referral certification and [authorization](/usc/42/4370m.md?p=3) transactions shall be adopted not later than July 1, 2014, in a manner ensuring that such [operating rules](/usc/42/1320d.md?p=9) are effective not later than January 1, 2016.
    - (C) **Expedited rulemaking—** The [Secretary](/usc/42/1301.md?p=a-6) shall promulgate an interim final rule applying any [standard](/usc/42/1320d.md?p=7) or operating rule recommended by the National Committee on Vital and Health Statistics pursuant to [paragraph (3)](#g-3). The [Secretary](/usc/42/1301.md?p=a-6) shall accept and consider public comments on any interim final rule published under this subparagraph for 60 days after the date of such publication.
- (h) **Compliance—**
  - (1) **Health plan certification—**
    - (A) **Eligibility for a health plan, health claim status, electronic funds transfers, health care payment and remittance advice—** Not later than December 31, 2013, a [health plan](/usc/42/300jj.md?p=6) shall file a statement with the [Secretary](/usc/42/1301.md?p=a-6), in such form as the [Secretary](/usc/42/1301.md?p=a-6) may require, certifying that the data and information systems for such plan are in compliance with any applicable [standards](/usc/42/1320d.md?p=7) (as described under paragraph (7) of [section 1320d of this title](/usc/42/1320d.md)) and associated [operating rules](/usc/42/1320d.md?p=9) (as described under [paragraph (9)](/usc/42/1320d.md?p=9) of such section) for electronic [funds](/usc/42/12854.md?p=3) transfers, eligibility for a [health plan](/usc/42/300jj.md?p=6), health [claim](/usc/42/1320a–7a.md?p=i-2) status, and health care payment and remittance advice, respectively.
    - (B) **Health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, health claims attachments, referral certification and authorization—** Not later than December 31, 2015, a [health plan](/usc/42/300jj.md?p=6) shall file a statement with the [Secretary](/usc/42/1301.md?p=a-6), in such form as the [Secretary](/usc/42/1301.md?p=a-6) may require, certifying that the data and information systems for such plan are in compliance with any applicable [standards](/usc/42/1320d.md?p=7) and associated [operating rules](/usc/42/1320d.md?p=9) for health [claims](/usc/42/1320a–7a.md?p=i-2) or equivalent encounter information, enrollment and disenrollment in a [health plan](/usc/42/300jj.md?p=6), [health plan](/usc/42/300jj.md?p=6) premium payments, health [claims](/usc/42/1320a–7a.md?p=i-2) attachments, and referral certification and [authorization](/usc/42/4370m.md?p=3), respectively. A [health plan](/usc/42/300jj.md?p=6) shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in [subparagraph (A)](#h-1-A).
  - (2) **Documentation of compliance—** A [health plan](/usc/42/300jj.md?p=6) shall provide the [Secretary](/usc/42/1301.md?p=a-6), in such form as the [Secretary](/usc/42/1301.md?p=a-6) may require, with adequate documentation of compliance with the [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) described under [paragraph (1)](#h-1). A [health plan](/usc/42/300jj.md?p=6) shall not be considered to have provided adequate documentation and shall not be certified as being in compliance with such [standards](/usc/42/1320d.md?p=7), unless the [health plan](/usc/42/300jj.md?p=6)—
    - (A) demonstrates to the [Secretary](/usc/42/1301.md?p=a-6) that the plan conducts the electronic transactions specified in [paragraph (1)](#h-1) in a manner that fully complies with the regulations of the [Secretary](/usc/42/1301.md?p=a-6); and
    - (B) provides documentation showing that the plan has completed end-to-end testing for such transactions with their partners, such as [hospitals](/usc/42/1395dd.md?p=e-5) and [physicians](/usc/42/1395cc–4.md?p=a-2-E).
  - (3) **Service contracts—** A [health plan](/usc/42/300jj.md?p=6) shall be required to ensure that any entities that provide services pursuant to a contract with such [health plan](/usc/42/300jj.md?p=6) shall comply with any applicable certification and compliance requirements (and provide the [Secretary](/usc/42/1301.md?p=a-6) with adequate documentation of such compliance) under this subsection.
  - (4) **Certification by outside entity—** The [Secretary](/usc/42/1301.md?p=a-6) may designate independent, outside entities to certify that a [health plan](/usc/42/300jj.md?p=6) has complied with the requirements under this subsection, provided that the certification [standards](/usc/42/1320d.md?p=7) employed by such entities are in accordance with any [standards](/usc/42/1320d.md?p=7) or [operating rules](/usc/42/1320d.md?p=9) issued by the [Secretary](/usc/42/1301.md?p=a-6).
  - (5) **Compliance with revised standards and operating rules—**
    - (A) **In general—** A [health plan](/usc/42/300jj.md?p=6) ([including](/usc/42/1301.md?p=b) entities described under [paragraph (3)](#h-3)) shall file a statement with the [Secretary](/usc/42/1301.md?p=a-6), in such form as the [Secretary](/usc/42/1301.md?p=a-6) may require, certifying that the data and information systems for such plan are in compliance with any applicable revised [standards](/usc/42/1320d.md?p=7) and associated [operating rules](/usc/42/1320d.md?p=9) under this subsection for any interim final rule promulgated by the [Secretary](/usc/42/1301.md?p=a-6) under [subsection (i)](#i) that—
      - (i) amends any [standard](/usc/42/1320d.md?p=7) or operating rule described under paragraph (1) of this subsection; or
      - (ii) establishes a [standard](/usc/42/1320d.md?p=7) (as described under [subsection (a)(1)(B)](#a-1-B)) or associated [operating rules](/usc/42/1320d.md?p=9) (as described under [subsection (i)(5)](#i-5)) for any other financial and administrative transactions.
    - (B) **Date of compliance—** A [health plan](/usc/42/300jj.md?p=6) shall comply with such requirements not later than the effective date of the applicable [standard](/usc/42/1320d.md?p=7) or operating rule.
  - (6) **Audits of health plans—** The [Secretary](/usc/42/1301.md?p=a-6) shall conduct periodic audits to ensure that [health plans](/usc/42/300jj.md?p=6) ([including](/usc/42/1301.md?p=b) entities described under [paragraph (3)](#h-3)) are in compliance with any [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) that are described under [paragraph (1)](#h-1) or [subsection (i)(5)](#i-5).
- (i) **Review and amendment of standards and operating rules—**
  - (1) **Establishment—** Not later than January 1, 2014, the [Secretary](/usc/42/1301.md?p=a-6) shall establish a [review committee](#i-4-A) (as described under [paragraph (4)](#i-4)).
  - (2) **Evaluations and reports—**
    - (A) **Hearings—** Not later than April 1, 2014, and not less than biennially thereafter, the [Secretary](/usc/42/1301.md?p=a-6), acting through the [review committee](#i-4-A), shall conduct hearings to evaluate and review the adopted [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) established under this section.
    - (B) **Report—** Not later than July 1, 2014, and not less than biennially thereafter, the [review committee](#i-4-A) shall provide recommendations for updating and improving such [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9). The [review committee](#i-4-A) shall recommend a [single](/usc/42/2304.md?p=m) set of [operating rules](/usc/42/1320d.md?p=9) per transaction [standard](/usc/42/1320d.md?p=7) and maintain the goal of creating as much uniformity as possible in the implementation of the electronic [standards](/usc/42/1320d.md?p=7).
  - (3) **Interim final rulemaking—**
    - (A) **In general—** Any recommendations to amend adopted [standards](/usc/42/1320d.md?p=7) and [operating rules](/usc/42/1320d.md?p=9) that have been approved by the [review committee](#i-4-A) and reported to the [Secretary](/usc/42/1301.md?p=a-6) under [paragraph (2)(B)](#i-2-B) shall be adopted by the [Secretary](/usc/42/1301.md?p=a-6) through promulgation of an interim final rule not later than 90 days after receipt of the committee’s report.
    - (B) **Public comment—**
      - (i) **Public comment period—** The [Secretary](/usc/42/1301.md?p=a-6) shall accept and consider public comments on any interim final rule published under this paragraph for 60 days after the date of such publication.
      - (ii) **Effective date—** The effective date of any amendment to existing [standards](/usc/42/1320d.md?p=7) or [operating rules](/usc/42/1320d.md?p=9) that is adopted through an interim final rule published under this paragraph shall be 25 months following the close of such public comment period.
  - (4) **Review committee—**
    - (A) **Definition—** For the purposes of this subsection, the term “review committee’ means a committee chartered by or within the Department of Health and Human services that has been designated by the [Secretary](/usc/42/1301.md?p=a-6) to carry out this subsection, [including](/usc/42/1301.md?p=b)—
      - (i) the National Committee on Vital and Health Statistics; or
      - (ii) any appropriate committee as determined by the [Secretary](/usc/42/1301.md?p=a-6).
    - (B) **Coordination of HIT standards—** In developing recommendations under this subsection, the [review committee](#i-4-A) shall ensure coordination, as appropriate, with the [standards](/usc/42/1320d.md?p=7) that support the certified electronic health record technology approved by the [Office](/usc/42/3058f.md?p=1) of the [National Coordinator](/usc/42/300jj.md?p=11) for [Health Information](/usc/42/1320d.md?p=4) Technology.
  - (5) **Operating rules for other standards adopted by the Secretary—** The [Secretary](/usc/42/1301.md?p=a-6) shall adopt a [single](/usc/42/2304.md?p=m) set of [operating rules](/usc/42/1320d.md?p=9) (pursuant to the process described under [subsection (g)](#g)) for any transaction for which a [standard](/usc/42/1320d.md?p=7) had been adopted pursuant to [subsection (a)(1)(B)](#a-1-B).
- (j) **Penalties—**
  - (1) **Penalty fee—**
    - (A) **In general—** Not later than April 1, 2014, and annually thereafter, the [Secretary](/usc/42/1301.md?p=a-6) shall assess a penalty fee (as determined under [subparagraph (B)](#j-1-B)) against a [health plan](/usc/42/300jj.md?p=6) that has failed to meet the requirements under [subsection (h)](#h) with respect to certification and documentation of compliance with—
      - (i) the [standards](/usc/42/1320d.md?p=7) and associated [operating rules](/usc/42/1320d.md?p=9) described under [paragraph (1)](#j-1) of such subsection; and
      - (ii) a [standard](/usc/42/1320d.md?p=7) (as described under [subsection (a)(1)(B)](#a-1-B)) and associated [operating rules](/usc/42/1320d.md?p=9) (as described under [subsection (i)(5)](#i-5)) for any other financial and administrative transactions.
    - (B) **Fee amount—** Subject to subparagraphs [(C)](#j-1-C), [(D)](#j-1-D), and [(E)](#j-1-E), the [Secretary](/usc/42/1301.md?p=a-6) shall assess a penalty fee against a [health plan](/usc/42/300jj.md?p=6) in the amount of $1 per covered life until certification is complete. The penalty shall be assessed per [person](/usc/42/1301.md?p=a-3) covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the [health plan](/usc/42/300jj.md?p=6) for each day that the plan is not in compliance with the requirements under [subsection (h)](#h).
    - (C) **Additional penalty for misrepresentation—** A [health plan](/usc/42/300jj.md?p=6) that knowingly provides inaccurate or incomplete information in a statement of certification or documentation of compliance under [subsection (h)](#h) shall be subject to a penalty fee that is double the amount that would otherwise be imposed under this subsection.
    - (D) **Annual fee increase—** The amount of the penalty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in total national health care expenditures, as determined by the [Secretary](/usc/42/1301.md?p=a-6).
    - (E) **Penalty limit—** A penalty fee assessed against a [health plan](/usc/42/300jj.md?p=6) under this subsection shall not exceed, on an annual basis—
      - (i) an amount equal to $20 per covered life under such plan; or
      - (ii) an amount equal to $40 per covered life under the plan if such plan has knowingly provided inaccurate or incomplete information (as described under [subparagraph (C)](#j-1-C)).
    - (F) **Determination of covered individuals—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine the number of covered lives under a [health plan](/usc/42/300jj.md?p=6) based upon the most recent statements and filings that have been submitted by such plan to the Securities and [Exchange](/usc/42/300gg–91.md?p=d-21) [Commission](/usc/42/2000ff.md?p=1).
  - (2) **Notice and dispute procedure—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a procedure for assessment of penalty fees under this subsection that provides a [health plan](/usc/42/300jj.md?p=6) with reasonable notice and a dispute resolution procedure prior to provision of a notice of assessment by the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury (as described under [paragraph (4)(B)](#j-4-B)).
  - (3) **Penalty fee report—** Not later than May 1, 2014, and annually thereafter, the [Secretary](/usc/42/1301.md?p=a-6) shall provide the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury with a report identifying those [health plans](/usc/42/300jj.md?p=6) that have been assessed a penalty fee under this subsection.
  - (4) **Collection of penalty fee—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) of the Treasury, acting through the Financial Management Service, shall administer the collection of penalty fees from [health plans](/usc/42/300jj.md?p=6) that have been identified by the [Secretary](/usc/42/1301.md?p=a-6) in the penalty fee report provided under [paragraph (3)](#j-3).
    - (B) **Notice—** Not later than August 1, 2014, and annually thereafter, the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury shall provide notice to each [health plan](/usc/42/300jj.md?p=6) that has been assessed a penalty fee by the [Secretary](/usc/42/1301.md?p=a-6) under this subsection. Such notice shall include the amount of the penalty fee assessed by the [Secretary](/usc/42/1301.md?p=a-6) and the due date for payment of such fee to the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury (as described in [subparagraph (C)](#j-4-C)).
    - (C) **Payment due date—** Payment by a [health plan](/usc/42/300jj.md?p=6) for a penalty fee assessed under this subsection shall be made to the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury not later than November 1, 2014, and annually thereafter.
    - (D) **Unpaid penalty fees—** Any amount of a penalty fee assessed against a [health plan](/usc/42/300jj.md?p=6) under this subsection for which payment has not been made by the due date provided under [subparagraph (C)](#j-4-C) shall be—
      - (i) increased by the interest accrued on such amount, as determined pursuant to the underpayment rate established under section 6621 of the Internal Revenue Code of 1986; and
      - (ii) treated as a past-due, legally enforceable debt owed to a Federal [agency](/usc/42/1397n–12.md?p=1) for purposes of section 6402(d) of the Internal Revenue Code of 1986.
    - (E) **Administrative fees—** Any fee charged or allocated for collection activities conducted by the Financial Management Service will be passed on to a [health plan](/usc/42/300jj.md?p=6) on a pro-rata basis and added to any penalty fee collected from the plan.

# §1320d–3. Timetables for adoption of standards

- (a) **Initial standards—** The [Secretary](/usc/42/1301.md?p=a-6) shall carry out [section 1320d–2 of this title](/usc/42/1320d–2.md) not later than 18 months after August 21, 1996, except that [standards](/usc/42/1320d.md?p=7) relating to [claims](/usc/42/1320a–7a.md?p=i-2) attachments shall be adopted not later than 30 months after August 21, 1996.
- (b) **Additions and modifications to standards—**
  - (1) **In general—** Except as provided in [paragraph (2)](#b-2), the [Secretary](/usc/42/1301.md?p=a-6) shall review the [standards](/usc/42/1320d.md?p=7) adopted under [section 1320d–2 of this title](/usc/42/1320d–2.md), and shall adopt [modifications](/usc/42/7501.md?p=4) to the [standards](/usc/42/1320d.md?p=7) ([including](/usc/42/1301.md?p=b) additions to the [standards](/usc/42/1320d.md?p=7)), as determined appropriate, but not more frequently than once every 12 months. Any addition or [modification](/usc/42/7501.md?p=4) to a [standard](/usc/42/1320d.md?p=7) 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](/usc/42/7501.md?p=4) to [code sets](/usc/42/1320d.md?p=1) under [subparagraph (B)](#b-2-B), the [Secretary](/usc/42/1301.md?p=a-6) may not adopt any [modification](/usc/42/7501.md?p=4) to a [standard](/usc/42/1320d.md?p=7) adopted under this part during the 12-month period beginning on the date the [standard](/usc/42/1320d.md?p=7) is initially adopted, unless the [Secretary](/usc/42/1301.md?p=a-6) determines that the [modification](/usc/42/7501.md?p=4) is necessary in order to permit compliance with the [standard](/usc/42/1320d.md?p=7).
    - (B) **Additions and modifications to code sets—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall ensure that procedures exist for the routine maintenance, testing, enhancement, and expansion of [code sets](/usc/42/1320d.md?p=1).
      - (ii) **Additional rules—** If a [code set](/usc/42/1320d.md?p=1) is [modified](/usc/42/7501.md?p=4) under this subsection, the modified [code set](/usc/42/1320d.md?p=1) shall include instructions on how data elements of [health information](/usc/42/1320d.md?p=4) that were encoded prior to the [modification](/usc/42/7501.md?p=4) may be converted or translated so as to preserve the informational value of the data elements that existed before the [modification](/usc/42/7501.md?p=4). Any [modification](/usc/42/7501.md?p=4) to a [code set](/usc/42/1320d.md?p=1) under this subsection shall be implemented in a manner that minimizes the disruption and cost of complying with such [modification](/usc/42/7501.md?p=4).