Section 2AAA. There shall be established and set up on the books of the commonwealth a separate fund to be known as the Health Insurance Portability and Accountability Act Fund. The fund shall provide agencies under the executive office of health and human services with funding to meet the costs of compliance with the federal Health Insurance Portability and Accountability Act of 1996, HIPAA. There shall be credited to said fund revenues from federal reimbursements from Title XIX and Title XXI of the Social Security Act attributable to funds spent for HIPAA compliance and any other federal reimbursements, grants, premiums, gifts or other contributions received for HIPAA compliance. Amounts credited to the fund shall be held as an expendable trust and shall not be subject to further appropriation. No expenditure made from the fund shall cause the fund to be in deficit at the close of any fiscal year.

The secretary of health and human services may allocate amounts in said fund to agencies within said executive office to meet the costs of compliance with HIPAA if the amounts otherwise available are insufficient for such purpose, in accordance with an allocation plan to be filed in advance with the secretary of administration and finance and the house and senate committees on ways and means. The secretary of health and human services shall also file a quarterly report with the house and senate committees on ways and means containing detailed information on each agency under the executive office of health and human services including, but not limited to, the following: (a) year-to-date expenditures from said fund and estimated year-end expenditures; (b) the status of HIPAA compliance; (c) steps necessary to attain full compliance with HIPAA and the estimated associated costs; and (d) year-to-date revenues credited to said fund and estimated year-end receipts.