[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3590 Enrolled Bill (ENR)]

        H.R.3590

                      One Hundred Eleventh Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the fifth day of January, two thousand and ten


                                 An Act


 
        Entitled The Patient Protection and Affordable Care Act.

    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 ``Patient Protection 
and Affordable Care Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:
Sec. 1. Short title; table of contents.

       TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

   Subtitle A--Immediate Improvements in Health Care Coverage for All 
                                Americans

Sec. 1001. Amendments to the Public Health Service Act.

              ``PART A--Individual and Group Market Reforms

                    ``subpart ii--improving coverage

    ``Sec. 2711. No lifetime or annual limits.
    ``Sec. 2712. Prohibition on rescissions.
    ``Sec. 2713. Coverage of preventive health services.
    ``Sec. 2714. Extension of dependent coverage.
    ``Sec. 2715. Development and utilization of uniform explanation of 
              coverage documents and standardized definitions.
    ``Sec. 2716. Prohibition of discrimination based on salary.
    ``Sec. 2717. Ensuring the quality of care.
    ``Sec. 2718. Bringing down the cost of health care coverage.
    ``Sec. 2719. Appeals process.
Sec. 1002. Health insurance consumer information.
Sec. 1003. Ensuring that consumers get value for their dollars.
Sec. 1004. Effective dates.

      Subtitle B--Immediate Actions to Preserve and Expand Coverage

Sec. 1101. Immediate access to insurance for uninsured individuals with 
          a preexisting condition.
Sec. 1102. Reinsurance for early retirees.
Sec. 1103. Immediate information that allows consumers to identify 
          affordable coverage options.
Sec. 1104. Administrative simplification.
Sec. 1105. Effective date.

     Subtitle C--Quality Health Insurance Coverage for All Americans

                 PART I--Health Insurance Market Reforms

Sec. 1201. Amendment to the Public Health Service Act.

                       ``subpart i--general reform

    ``Sec. 2704. Prohibition of preexisting condition exclusions or 
              other discrimination based on health status.
    ``Sec. 2701. Fair health insurance premiums.
    ``Sec. 2702. Guaranteed availability of coverage.
    ``Sec. 2703. Guaranteed renewability of coverage.
    ``Sec. 2705. Prohibiting discrimination against individual 
              participants and beneficiaries based on health status.
    ``Sec. 2706. Non-discrimination in health care.
    ``Sec. 2707. Comprehensive health insurance coverage.
    ``Sec. 2708. Prohibition on excessive waiting periods.

                        PART II--Other Provisions

Sec. 1251. Preservation of right to maintain existing coverage.
Sec. 1252. Rating reforms must apply uniformly to all health insurance 
          issuers and group health plans.
Sec. 1253. Effective dates.

        Subtitle D--Available Coverage Choices for All Americans

             PART I--Establishment of Qualified Health Plans

Sec. 1301. Qualified health plan defined.
Sec. 1302. Essential health benefits requirements.
Sec. 1303. Special rules.
Sec. 1304. Related definitions.

   PART II--Consumer Choices and Insurance Competition Through Health 
                            Benefit Exchanges

Sec. 1311. Affordable choices of health benefit plans.
Sec. 1312. Consumer choice.
Sec. 1313. Financial integrity.

            PART III--State Flexibility Relating to Exchanges

Sec. 1321. State flexibility in operation and enforcement of Exchanges 
          and related requirements.
Sec. 1322. Federal program to assist establishment and operation of 
          nonprofit, member-run health insurance issuers.
Sec. 1323. Community health insurance option.
Sec. 1324. Level playing field.

      PART IV--State Flexibility to Establish Alternative Programs

Sec. 1331. State flexibility to establish basic health programs for low-
          income individuals not eligible for Medicaid.
Sec. 1332. Waiver for State innovation.
Sec. 1333. Provisions relating to offering of plans in more than one 
          State.

                 PART V--Reinsurance and Risk Adjustment

Sec. 1341. Transitional reinsurance program for individual and small 
          group markets in each State.
Sec. 1342. Establishment of risk corridors for plans in individual and 
          small group markets.
Sec. 1343. Risk adjustment.

        Subtitle E--Affordable Coverage Choices for All Americans

         PART I--Premium Tax Credits and Cost-sharing Reductions

       subpart a--premium tax credits and cost-sharing reductions

Sec. 1401. Refundable tax credit providing premium assistance for 
          coverage under a qualified health plan.
Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified 
          health plans.

                  subpart b--eligibility determinations

Sec. 1411. Procedures for determining eligibility for Exchange 
          participation, premium tax credits and reduced cost-sharing, 
          and individual responsibility exemptions.
Sec. 1412. Advance determination and payment of premium tax credits and 
          cost-sharing reductions.
Sec. 1413. Streamlining of procedures for enrollment through an exchange 
          and State Medicaid, CHIP, and health subsidy programs.
Sec. 1414. Disclosures to carry out eligibility requirements for certain 
          programs.
Sec. 1415. Premium tax credit and cost-sharing reduction payments 
          disregarded for Federal and Federally-assisted programs.

                   PART II--Small Business Tax Credit

Sec. 1421. Credit for employee health insurance expenses of small 
          businesses.

            Subtitle F--Shared Responsibility for Health Care

                    PART I--Individual Responsibility

Sec. 1501. Requirement to maintain minimum essential coverage.
Sec. 1502. Reporting of health insurance coverage.

                   PART II--Employer Responsibilities

Sec. 1511. Automatic enrollment for employees of large employers.
Sec. 1512. Employer requirement to inform employees of coverage options.
Sec. 1513. Shared responsibility for employers.
Sec. 1514. Reporting of employer health insurance coverage.
Sec. 1515. Offering of Exchange-participating qualified health plans 
          through cafeteria plans.

                  Subtitle G--Miscellaneous Provisions

Sec. 1551. Definitions.
Sec. 1552. Transparency in government.
Sec. 1553. Prohibition against discrimination on assisted suicide.
Sec. 1554. Access to therapies.
Sec. 1555. Freedom not to participate in Federal health insurance 
          programs.
Sec. 1556. Equity for certain eligible survivors.
Sec. 1557. Nondiscrimination.
Sec. 1558. Protections for employees.
Sec. 1559. Oversight.
Sec. 1560. Rules of construction.
Sec. 1561. Health information technology enrollment standards and 
          protocols.
Sec. 1562. Conforming amendments.
Sec. 1563. Sense of the Senate promoting fiscal responsibility.

                    TITLE II--ROLE OF PUBLIC PROGRAMS

                 Subtitle A--Improved Access to Medicaid

Sec. 2001. Medicaid coverage for the lowest income populations.
Sec. 2002. Income eligibility for nonelderly determined using modified 
          gross income.
Sec. 2003. Requirement to offer premium assistance for employer-
          sponsored insurance.
Sec. 2004. Medicaid coverage for former foster care children.
Sec. 2005. Payments to territories.
Sec. 2006. Special adjustment to FMAP determination for certain States 
          recovering from a major disaster.
Sec. 2007. Medicaid Improvement Fund rescission.

Subtitle B--Enhanced Support for the Children's Health Insurance Program

Sec. 2101. Additional federal financial participation for CHIP.
Sec. 2102. Technical corrections.

         Subtitle C--Medicaid and CHIP Enrollment Simplification

Sec. 2201. Enrollment Simplification and coordination with State Health 
          Insurance Exchanges.
Sec. 2202. Permitting hospitals to make presumptive eligibility 
          determinations for all Medicaid eligible populations.

              Subtitle D--Improvements to Medicaid Services

Sec. 2301. Coverage for freestanding birth center services.
Sec. 2302. Concurrent care for children.
Sec. 2303. State eligibility option for family planning services.
Sec. 2304. Clarification of definition of medical assistance.

  Subtitle E--New Options for States to Provide Long-Term Services and 
                                Supports

Sec. 2401. Community First Choice Option.
Sec. 2402. Removal of barriers to providing home and community-based 
          services.
Sec. 2403. Money Follows the Person Rebalancing Demonstration.
Sec. 2404. Protection for recipients of home and community-based 
          services against spousal impoverishment.
Sec. 2405. Funding to expand State Aging and Disability Resource 
          Centers.
Sec. 2406. Sense of the Senate regarding long-term care.

             Subtitle F--Medicaid Prescription Drug Coverage

Sec. 2501. Prescription drug rebates.
Sec. 2502. Elimination of exclusion of coverage of certain drugs.
Sec. 2503. Providing adequate pharmacy reimbursement.

   Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments

Sec. 2551. Disproportionate share hospital payments.

    Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

Sec. 2601. 5-year period for demonstration projects.
Sec. 2602. Providing Federal coverage and payment coordination for dual 
          eligible beneficiaries.

Subtitle I--Improving the Quality of Medicaid for Patients and Providers

Sec. 2701. Adult health quality measures.
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
Sec. 2703. State option to provide health homes for enrollees with 
          chronic conditions.
Sec. 2704. Demonstration project to evaluate integrated care around a 
          hospitalization.
Sec. 2705. Medicaid Global Payment System Demonstration Project.
Sec. 2706. Pediatric Accountable Care Organization Demonstration 
          Project.
Sec. 2707. Medicaid emergency psychiatric demonstration project.

  Subtitle J--Improvements to the Medicaid and CHIP Payment and Access 
                           Commission (MACPAC)

Sec. 2801. MACPAC assessment of policies affecting all Medicaid 
          beneficiaries.

     Subtitle K--Protections for American Indians and Alaska Natives

Sec. 2901. Special rules relating to Indians.
Sec. 2902. Elimination of sunset for reimbursement for all medicare part 
          B services furnished by certain indian hospitals and clinics.

             Subtitle L--Maternal and Child Health Services

Sec. 2951. Maternal, infant, and early childhood home visiting programs.
Sec. 2952. Support, education, and research for postpartum depression.
Sec. 2953. Personal responsibility education.
Sec. 2954. Restoration of funding for abstinence education.
Sec. 2955. Inclusion of information about the importance of having a 
          health care power of attorney in transition planning for 
          children aging out of foster care and independent living 
          programs.

     TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE

        Subtitle A--Transforming the Health Care Delivery System

 PART I--Linking Payment to Quality Outcomes Under the Medicare Program

Sec. 3001. Hospital Value-Based purchasing program.
Sec. 3002. Improvements to the physician quality reporting system.
Sec. 3003. Improvements to the physician feedback program.
Sec. 3004. Quality reporting for long-term care hospitals, inpatient 
          rehabilitation hospitals, and hospice programs.
Sec. 3005. Quality reporting for PPS-exempt cancer hospitals.
Sec. 3006. Plans for a Value-Based purchasing program for skilled 
          nursing facilities and home health agencies.
Sec. 3007. Value-based payment modifier under the physician fee 
          schedule.
Sec. 3008. Payment adjustment for conditions acquired in hospitals.

        PART II--National Strategy to Improve Health Care Quality

Sec. 3011. National strategy.
Sec. 3012. Interagency Working Group on Health Care Quality.
Sec. 3013. Quality measure development.
Sec. 3014. Quality measurement.
Sec. 3015. Data collection; public reporting.

      PART III--Encouraging Development of New Patient Care Models

Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation 
          within CMS.
Sec. 3022. Medicare shared savings program.
Sec. 3023. National pilot program on payment bundling.
Sec. 3024. Independence at home demonstration program.
Sec. 3025. Hospital readmissions reduction program.
Sec. 3026. Community-Based Care Transitions Program.
Sec. 3027. Extension of gainsharing demonstration.

        Subtitle B--Improving Medicare for Patients and Providers

PART I--Ensuring Beneficiary Access to Physician Care and Other Services

Sec. 3101. Increase in the physician payment update.
Sec. 3102. Extension of the work geographic index floor and revisions to 
          the practice expense geographic adjustment under the Medicare 
          physician fee schedule.
Sec. 3103. Extension of exceptions process for Medicare therapy caps.
Sec. 3104. Extension of payment for technical component of certain 
          physician pathology services.
Sec. 3105. Extension of ambulance add-ons.
Sec. 3106. Extension of certain payment rules for long-term care 
          hospital services and of moratorium on the establishment of 
          certain hospitals and facilities.
Sec. 3107. Extension of physician fee schedule mental health add-on.
Sec. 3108. Permitting physician assistants to order post-Hospital 
          extended care services.
Sec. 3109. Exemption of certain pharmacies from accreditation 
          requirements.
Sec. 3110. Part B special enrollment period for disabled TRICARE 
          beneficiaries.
Sec. 3111. Payment for bone density tests.
Sec. 3112. Revision to the Medicare Improvement Fund.
Sec. 3113. Treatment of certain complex diagnostic laboratory tests.
Sec. 3114. Improved access for certified nurse-midwife services.

                       PART II--Rural Protections

Sec. 3121. Extension of outpatient hold harmless provision.
Sec. 3122. Extension of Medicare reasonable costs payments for certain 
          clinical diagnostic laboratory tests furnished to hospital 
          patients in certain rural areas.
Sec. 3123. Extension of the Rural Community Hospital Demonstration 
          Program.
Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 3125. Temporary improvements to the Medicare inpatient hospital 
          payment adjustment for low-volume hospitals.
Sec. 3126. Improvements to the demonstration project on community health 
          integration models in certain rural counties.
Sec. 3127. MedPAC study on adequacy of Medicare payments for health care 
          providers serving in rural areas.
Sec. 3128. Technical correction related to critical access hospital 
          services.
Sec. 3129. Extension of and revisions to Medicare rural hospital 
          flexibility program.

                  PART III--Improving Payment Accuracy

Sec. 3131. Payment adjustments for home health care.
Sec. 3132. Hospice reform.
Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) 
          payments.
Sec. 3134. Misvalued codes under the physician fee schedule.
Sec. 3135. Modification of equipment utilization factor for advanced 
          imaging services.
Sec. 3136. Revision of payment for power-driven wheelchairs.
Sec. 3137. Hospital wage index improvement.
Sec. 3138. Treatment of certain cancer hospitals.
Sec. 3139. Payment for biosimilar biological products.
Sec. 3140. Medicare hospice concurrent care demonstration program.
Sec. 3141. Application of budget neutrality on a national basis in the 
          calculation of the Medicare hospital wage index floor.
Sec. 3142. HHS study on urban Medicare-dependent hospitals.
Sec. 3143. Protecting home health benefits.

                Subtitle C--Provisions Relating to Part C

Sec. 3201. Medicare Advantage payment.
Sec. 3202. Benefit protection and simplification.
Sec. 3203. Application of coding intensity adjustment during MA payment 
          transition.
Sec. 3204. Simplification of annual beneficiary election periods.
Sec. 3205. Extension for specialized MA plans for special needs 
          individuals.
Sec. 3206. Extension of reasonable cost contracts.
Sec. 3207. Technical correction to MA private fee-for-service plans.
Sec. 3208. Making senior housing facility demonstration permanent.
Sec. 3209. Authority to deny plan bids.
Sec. 3210. Development of new standards for certain Medigap plans.

Subtitle D--Medicare Part D Improvements for Prescription Drug Plans and 
                               MA-PD Plans

Sec. 3301. Medicare coverage gap discount program.
Sec. 3302. Improvement in determination of Medicare part D low-income 
          benchmark premium.
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals 
          under prescription drug plans and MA-PD plans.
Sec. 3304. Special rule for widows and widowers regarding eligibility 
          for low-income assistance.
Sec. 3305. Improved information for subsidy eligible individuals 
          reassigned to prescription drug plans and MA-PD plans.
Sec. 3306. Funding outreach and assistance for low-income programs.
Sec. 3307. Improving formulary requirements for prescription drug plans 
          and MA-PD plans with respect to certain categories or classes 
          of drugs.
Sec. 3308. Reducing part D premium subsidy for high-income 
          beneficiaries.
Sec. 3309. Elimination of cost sharing for certain dual eligible 
          individuals.
Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs 
          in long-term care facilities under prescription drug plans and 
          MA-PD plans.
Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan 
          complaint system.
Sec. 3312. Uniform exceptions and appeals process for prescription drug 
          plans and MA-PD plans.
Sec. 3313. Office of the Inspector General studies and reports.
Sec. 3314. Including costs incurred by AIDS drug assistance programs and 
          Indian Health Service in providing prescription drugs toward 
          the annual out-of-pocket threshold under part D.
Sec. 3315. Immediate reduction in coverage gap in 2010.

              Subtitle E--Ensuring Medicare Sustainability

Sec. 3401. Revision of certain market basket updates and incorporation 
          of productivity improvements into market basket updates that 
          do not already incorporate such improvements.
Sec. 3402. Temporary adjustment to the calculation of part B premiums.
Sec. 3403. Independent Medicare Advisory Board.

              Subtitle F--Health Care Quality Improvements

Sec. 3501. Health care delivery system research; Quality improvement 
          technical assistance.
Sec. 3502. Establishing community health teams to support the patient-
          centered medical home.
Sec. 3503. Medication management services in treatment of chronic 
          disease.
Sec. 3504. Design and implementation of regionalized systems for 
          emergency care.
Sec. 3505. Trauma care centers and service availability.
Sec. 3506. Program to facilitate shared decisionmaking.
Sec. 3507. Presentation of prescription drug benefit and risk 
          information.
Sec. 3508. Demonstration program to integrate quality improvement and 
          patient safety training into clinical education of health 
          professionals.
Sec. 3509. Improving women's health.
Sec. 3510. Patient navigator program.
Sec. 3511. Authorization of appropriations.

    Subtitle G--Protecting and Improving Guaranteed Medicare Benefits

Sec. 3601. Protecting and improving guaranteed Medicare benefits.
Sec. 3602. No cuts in guaranteed benefits.

   TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

Sec. 4001. National Prevention, Health Promotion and Public Health 
          Council.
Sec. 4002. Prevention and Public Health Fund.
Sec. 4003. Clinical and community preventive services.
Sec. 4004. Education and outreach campaign regarding preventive 
          benefits.

      Subtitle B--Increasing Access to Clinical Preventive Services

Sec. 4101. School-based health centers.
Sec. 4102. Oral healthcare prevention activities.
Sec. 4103. Medicare coverage of annual wellness visit providing a 
          personalized prevention plan.
Sec. 4104. Removal of barriers to preventive services in Medicare.
Sec. 4105. Evidence-based coverage of preventive services in Medicare.
Sec. 4106. Improving access to preventive services for eligible adults 
          in Medicaid.
Sec. 4107. Coverage of comprehensive tobacco cessation services for 
          pregnant women in Medicaid.
Sec. 4108. Incentives for prevention of chronic diseases in medicaid.

               Subtitle C--Creating Healthier Communities

Sec. 4201. Community transformation grants.
Sec. 4202. Healthy aging, living well; evaluation of community-based 
          prevention and wellness programs for Medicare beneficiaries.
Sec. 4203. Removing barriers and improving access to wellness for 
          individuals with disabilities.
Sec. 4204. Immunizations.
Sec. 4205. Nutrition labeling of standard menu items at chain 
          restaurants.
Sec. 4206. Demonstration project concerning individualized wellness 
          plan.
Sec. 4207. Reasonable break time for nursing mothers.

     Subtitle D--Support for Prevention and Public Health Innovation

Sec. 4301. Research on optimizing the delivery of public health 
          services.
Sec. 4302. Understanding health disparities: data collection and 
          analysis.
Sec. 4303. CDC and employer-based wellness programs.
Sec. 4304. Epidemiology-Laboratory Capacity Grants.
Sec. 4305. Advancing research and treatment for pain care management.
Sec. 4306. Funding for Childhood Obesity Demonstration Project.

                  Subtitle E--Miscellaneous Provisions

Sec. 4401. Sense of the Senate concerning CBO scoring.
Sec. 4402. Effectiveness of Federal health and wellness initiatives.

                     TITLE V--HEALTH CARE WORKFORCE

                   Subtitle A--Purpose and Definitions

Sec. 5001. Purpose.
Sec. 5002. Definitions.

          Subtitle B--Innovations in the Health Care Workforce

Sec. 5101. National health care workforce commission.
Sec. 5102. State health care workforce development grants.
Sec. 5103. Health care workforce assessment.

     Subtitle C--Increasing the Supply of the Health Care Workforce

Sec. 5201. Federally supported student loan funds.
Sec. 5202. Nursing student loan program.
Sec. 5203. Health care workforce loan repayment programs.
Sec. 5204. Public health workforce recruitment and retention programs.
Sec. 5205. Allied health workforce recruitment and retention programs.
Sec. 5206. Grants for State and local programs.
Sec. 5207. Funding for National Health Service Corps.
Sec. 5208. Nurse-managed health clinics.
Sec. 5209. Elimination of cap on commissioned corps.
Sec. 5210. Establishing a Ready Reserve Corps.

   Subtitle D--Enhancing Health Care Workforce Education and Training

Sec. 5301. Training in family medicine, general internal medicine, 
          general pediatrics, and physician assistantship.
Sec. 5302. Training opportunities for direct care workers.
Sec. 5303. Training in general, pediatric, and public health dentistry.
Sec. 5304. Alternative dental health care providers demonstration 
          project.
Sec. 5305. Geriatric education and training; career awards; 
          comprehensive geriatric education.
Sec. 5306. Mental and behavioral health education and training grants.
Sec. 5307. Cultural competency, prevention, and public health and 
          individuals with disabilities training.
Sec. 5308. Advanced nursing education grants.
Sec. 5309. Nurse education, practice, and retention grants.
Sec. 5310. Loan repayment and scholarship program.
Sec. 5311. Nurse faculty loan program.
Sec. 5312. Authorization of appropriations for parts B through D of 
          title VIII.
Sec. 5313. Grants to promote the community health workforce.
Sec. 5314. Fellowship training in public health.
Sec. 5315. United States Public Health Sciences Track.

        Subtitle E--Supporting the Existing Health Care Workforce

Sec. 5401. Centers of excellence.
Sec. 5402. Health care professionals training for diversity.
Sec. 5403. Interdisciplinary, community-based linkages.
Sec. 5404. Workforce diversity grants.
Sec. 5405. Primary care extension program.

 Subtitle F--Strengthening Primary Care and Other Workforce Improvements

Sec. 5501. Expanding access to primary care services and general surgery 
          services.
Sec. 5502. Medicare Federally qualified health center improvements.
Sec. 5503. Distribution of additional residency positions.
Sec. 5504. Counting resident time in nonprovider settings.
Sec. 5505. Rules for counting resident time for didactic and scholarly 
          activities and other activities.
Sec. 5506. Preservation of resident cap positions from closed hospitals.
Sec. 5507. Demonstration projects To address health professions 
          workforce needs; extension of family-to-family health 
          information centers.
Sec. 5508. Increasing teaching capacity.
Sec. 5509. Graduate nurse education demonstration.

          Subtitle G--Improving Access to Health Care Services

Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs).
Sec. 5602. Negotiated rulemaking for development of methodology and 
          criteria for designating medically underserved populations and 
          health professions shortage areas.
Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services 
          for Children Program.
Sec. 5604. Co-locating primary and specialty care in community-based 
          mental health settings.
Sec. 5605. Key National indicators.

                     Subtitle H--General Provisions

Sec. 5701. Reports.

              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

         Subtitle A--Physician Ownership and Other Transparency

Sec. 6001. Limitation on Medicare exception to the prohibition on 
          certain physician referrals for hospitals.
Sec. 6002. Transparency reports and reporting of physician ownership or 
          investment interests.
Sec. 6003. Disclosure requirements for in-office ancillary services 
          exception to the prohibition on physician self-referral for 
          certain imaging services.
Sec. 6004. Prescription drug sample transparency.
Sec. 6005. Pharmacy benefit managers transparency requirements.

          Subtitle B--Nursing Home Transparency and Improvement

              PART I--Improving Transparency of Information

Sec. 6101. Required disclosure of ownership and additional disclosable 
          parties information.
Sec. 6102. Accountability requirements for skilled nursing facilities 
          and nursing facilities.
Sec. 6103. Nursing home compare Medicare website.
Sec. 6104. Reporting of expenditures.
Sec. 6105. Standardized complaint form.
Sec. 6106. Ensuring staffing accountability.
Sec. 6107. GAO study and report on Five-Star Quality Rating System.

                     PART II--Targeting Enforcement

Sec. 6111. Civil money penalties.
Sec. 6112. National independent monitor demonstration project.
Sec. 6113. Notification of facility closure.
Sec. 6114. National demonstration projects on culture change and use of 
          information technology in nursing homes.

                   PART III--Improving Staff Training

Sec. 6121. Dementia and abuse prevention training.

Subtitle C--Nationwide Program for National and State Background Checks 
  on Direct Patient Access Employees of Long-term Care Facilities and 
                                Providers

Sec. 6201. Nationwide program for National and State background checks 
          on direct patient access employees of long-term care 
          facilities and providers.

             Subtitle D--Patient-Centered Outcomes Research

Sec. 6301. Patient-Centered Outcomes Research.
Sec. 6302. Federal coordinating council for comparative effectiveness 
          research.

  Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions

Sec. 6401. Provider screening and other enrollment requirements under 
          Medicare, Medicaid, and CHIP.
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions.
Sec. 6403. Elimination of duplication between the Healthcare Integrity 
          and Protection Data Bank and the National Practitioner Data 
          Bank.
Sec. 6404. Maximum period for submission of Medicare claims reduced to 
          not more than 12 months.
Sec. 6405. Physicians who order items or services required to be 
          Medicare enrolled physicians or eligible professionals.
Sec. 6406. Requirement for physicians to provide documentation on 
          referrals to programs at high risk of waste and abuse.
Sec. 6407. Face to face encounter with patient required before 
          physicians may certify eligibility for home health services or 
          durable medical equipment under Medicare.
Sec. 6408. Enhanced penalties.
Sec. 6409. Medicare self-referral disclosure protocol.
Sec. 6410. Adjustments to the Medicare durable medical equipment, 
          prosthetics, orthotics, and supplies competitive acquisition 
          program.
Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program.

      Subtitle F--Additional Medicaid Program Integrity Provisions

Sec. 6501. Termination of provider participation under Medicaid if 
          terminated under Medicare or other State plan.
Sec. 6502. Medicaid exclusion from participation relating to certain 
          ownership, control, and management affiliations.
Sec. 6503. Billing agents, clearinghouses, or other alternate payees 
          required to register under Medicaid.
Sec. 6504. Requirement to report expanded set of data elements under 
          MMIS to detect fraud and abuse.
Sec. 6505. Prohibition on payments to institutions or entities located 
          outside of the United States.
Sec. 6506. Overpayments.
Sec. 6507. Mandatory State use of national correct coding initiative.
Sec. 6508. General effective date.

           Subtitle G--Additional Program Integrity Provisions

Sec. 6601. Prohibition on false statements and representations.
Sec. 6602. Clarifying definition.
Sec. 6603. Development of model uniform report form.
Sec. 6604. Applicability of State law to combat fraud and abuse.
Sec. 6605. Enabling the Department of Labor to issue administrative 
          summary cease and desist orders and summary seizures orders 
          against plans that are in financially hazardous condition.
Sec. 6606. MEWA plan registration with Department of Labor.
Sec. 6607. Permitting evidentiary privilege and confidential 
          communications.

                      Subtitle H--Elder Justice Act

Sec. 6701. Short title of subtitle.
Sec. 6702. Definitions.
Sec. 6703. Elder Justice.

      Subtitle I--Sense of the Senate Regarding Medical Malpractice

Sec. 6801. Sense of the Senate regarding medical malpractice.

       TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

         Subtitle A--Biologics Price Competition and Innovation

Sec. 7001. Short title.
Sec. 7002. Approval pathway for biosimilar biological products.
Sec. 7003. Savings.

   Subtitle B--More Affordable Medicines for Children and Underserved 
                               Communities

Sec. 7101. Expanded participation in 340B program.
Sec. 7102. Improvements to 340B program integrity.
Sec. 7103. GAO study to make recommendations on improving the 340B 
          program.

                          TITLE VIII--CLASS ACT

Sec. 8001. Short title of title.
Sec. 8002. Establishment of national voluntary insurance program for 
          purchasing community living assistance services and support.

                      TITLE IX--REVENUE PROVISIONS

                  Subtitle A--Revenue Offset Provisions

Sec. 9001. Excise tax on high cost employer-sponsored health coverage.
Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W-
          2.
Sec. 9003. Distributions for medicine qualified only if for prescribed 
          drug or insulin.
Sec. 9004. Increase in additional tax on distributions from HSAs and 
          Archer MSAs not used for qualified medical expenses.
Sec. 9005. Limitation on health flexible spending arrangements under 
          cafeteria plans.
Sec. 9006. Expansion of information reporting requirements.
Sec. 9007. Additional requirements for charitable hospitals.
Sec. 9008. Imposition of annual fee on branded prescription 
          pharmaceutical manufacturers and importers.
Sec. 9009. Imposition of annual fee on medical device manufacturers and 
          importers.
Sec. 9010. Imposition of annual fee on health insurance providers.
Sec. 9011. Study and report of effect on veterans health care.
Sec. 9012. Elimination of deduction for expenses allocable to Medicare 
          Part D subsidy.
Sec. 9013. Modification of itemized deduction for medical expenses.
Sec. 9014. Limitation on excessive remuneration paid by certain health 
          insurance providers.
Sec. 9015. Additional hospital insurance tax on high-income taxpayers.
Sec. 9016. Modification of section 833 treatment of certain health 
          organizations.
Sec. 9017. Excise tax on elective cosmetic medical procedures.

                      Subtitle B--Other Provisions

Sec. 9021. Exclusion of health benefits provided by Indian tribal 
          governments.
Sec. 9022. Establishment of simple cafeteria plans for small businesses.
Sec. 9023. Qualifying therapeutic discovery project credit.

TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

               Subtitle A--Provisions Relating to Title I

Sec. 10101. Amendments to subtitle A.
Sec. 10102. Amendments to subtitle B.
Sec. 10103. Amendments to subtitle C.
Sec. 10104. Amendments to subtitle D.
Sec. 10105. Amendments to subtitle E.
Sec. 10106. Amendments to subtitle F.
Sec. 10107. Amendments to subtitle G.
Sec. 10108. Free choice vouchers.
Sec. 10109. Development of standards for financial and administrative 
          transactions.

               Subtitle B--Provisions Relating to Title II

                        PART I--Medicaid and CHIP

Sec. 10201. Amendments to the Social Security Act and title II of this 
          Act.
Sec. 10202. Incentives for States to offer home and community-based 
          services as a long-term care alternative to nursing homes.
Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and 
          other CHIP-related provisions.

       PART II--Support for Pregnant and Parenting Teens and Women

Sec. 10211. Definitions.
Sec. 10212. Establishment of pregnancy assistance fund.
Sec. 10213. Permissible uses of Fund.
Sec. 10214. Appropriations.

                PART III--Indian Health Care Improvement

Sec. 10221. Indian health care improvement.

              Subtitle C--Provisions Relating to Title III

Sec. 10301. Plans for a Value-Based purchasing program for ambulatory 
          surgical centers.
Sec. 10302. Revision to national strategy for quality improvement in 
          health care.
Sec. 10303. Development of outcome measures.
Sec. 10304. Selection of efficiency measures.
Sec. 10305. Data collection; public reporting.
Sec. 10306. Improvements under the Center for Medicare and Medicaid 
          Innovation.
Sec. 10307. Improvements to the Medicare shared savings program.
Sec. 10308. Revisions to national pilot program on payment bundling.
Sec. 10309. Revisions to hospital readmissions reduction program.
Sec. 10310. Repeal of physician payment update.
Sec. 10311. Revisions to extension of ambulance add-ons.
Sec. 10312. Certain payment rules for long-term care hospital services 
          and moratorium on the establishment of certain hospitals and 
          facilities.
Sec. 10313. Revisions to the extension for the rural community hospital 
          demonstration program.
Sec. 10314. Adjustment to low-volume hospital provision.
Sec. 10315. Revisions to home health care provisions.
Sec. 10316. Medicare DSH.
Sec. 10317. Revisions to extension of section 508 hospital provisions.
Sec. 10318. Revisions to transitional extra benefits under Medicare 
          Advantage.
Sec. 10319. Revisions to market basket adjustments.
Sec. 10320. Expansion of the scope of, and additional improvements to, 
          the Independent Medicare Advisory Board.
Sec. 10321. Revision to community health teams.
Sec. 10322. Quality reporting for psychiatric hospitals.
Sec. 10323. Medicare coverage for individuals exposed to environmental 
          health hazards.
Sec. 10324. Protections for frontier States.
Sec. 10325. Revision to skilled nursing facility prospective payment 
          system.
Sec. 10326. Pilot testing pay-for-performance programs for certain 
          Medicare providers.
Sec. 10327. Improvements to the physician quality reporting system.
Sec. 10328. Improvement in part D medication therapy management (MTM) 
          programs.
Sec. 10329. Developing methodology to assess health plan value.
Sec. 10330. Modernizing computer and data systems of the Centers for 
          Medicare & Medicaid services to support improvements in care 
          delivery.
Sec. 10331. Public reporting of performance information.
Sec. 10332. Availability of medicare data for performance measurement.
Sec. 10333. Community-based collaborative care networks.
Sec. 10334. Minority health.
Sec. 10335. Technical correction to the hospital value-based purchasing 
          program.
Sec. 10336. GAO study and report on Medicare beneficiary access to high-
          quality dialysis services.

               Subtitle D--Provisions Relating to Title IV

Sec. 10401. Amendments to subtitle A.
Sec. 10402. Amendments to subtitle B.
Sec. 10403. Amendments to subtitle C.
Sec. 10404. Amendments to subtitle D.
Sec. 10405. Amendments to subtitle E.
Sec. 10406. Amendment relating to waiving coinsurance for preventive 
          services.
Sec. 10407. Better diabetes care.
Sec. 10408. Grants for small businesses to provide comprehensive 
          workplace wellness programs.
Sec. 10409. Cures Acceleration Network.
Sec. 10410. Centers of Excellence for Depression.
Sec. 10411. Programs relating to congenital heart disease.
Sec. 10412. Automated Defibrillation in Adam's Memory Act.
Sec. 10413. Young women's breast health awareness and support of young 
          women diagnosed with breast cancer.

               Subtitle E--Provisions Relating to Title V

Sec. 10501. Amendments to the Public Health Service Act, the Social 
          Security Act, and title V of this Act.
Sec. 10502. Infrastructure to Expand Access to Care.
Sec. 10503. Community Health Centers and the National Health Service 
          Corps Fund.
Sec. 10504. Demonstration project to provide access to affordable care.

               Subtitle F--Provisions Relating to Title VI

Sec. 10601. Revisions to limitation on medicare exception to the 
          prohibition on certain physician referrals for hospitals.
Sec. 10602. Clarifications to patient-centered outcomes research.
Sec. 10603. Striking provisions relating to individual provider 
          application fees.
Sec. 10604. Technical correction to section 6405.
Sec. 10605. Certain other providers permitted to conduct face to face 
          encounter for home health services.
Sec. 10606. Health care fraud enforcement.
Sec. 10607. State demonstration programs to evaluate alternatives to 
          current medical tort litigation.
Sec. 10608. Extension of medical malpractice coverage to free clinics.
Sec. 10609. Labeling changes.

              Subtitle G--Provisions Relating to Title VIII

Sec. 10801. Provisions relating to title VIII.

               Subtitle H--Provisions Relating to Title IX

Sec. 10901. Modifications to excise tax on high cost employer-sponsored 
          health coverage.
Sec. 10902. Inflation adjustment of limitation on health flexible 
          spending arrangements under cafeteria plans.
Sec. 10903. Modification of limitation on charges by charitable 
          hospitals.
Sec. 10904. Modification of annual fee on medical device manufacturers 
          and importers.
Sec. 10905. Modification of annual fee on health insurance providers.
Sec. 10906. Modifications to additional hospital insurance tax on high-
          income taxpayers.
Sec. 10907. Excise tax on indoor tanning services in lieu of elective 
          cosmetic medical procedures.
Sec. 10908. Exclusion for assistance provided to participants in State 
          student loan repayment programs for certain health 
          professionals.
Sec. 10909. Expansion of adoption credit and adoption assistance 
          programs.

       TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
  Subtitle A--Immediate Improvements in Health Care Coverage for All 
                               Americans

SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    Part A of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.) is amended--
        (1) by striking the part heading and inserting the following:

            ``PART A--INDIVIDUAL AND GROUP MARKET REFORMS'';

        (2) by redesignating sections 2704 through 2707 as sections 
    2725 through 2728, respectively;
        (3) by redesignating sections 2711 through 2713 as sections 
    2731 through 2733, respectively;
        (4) by redesignating sections 2721 through 2723 as sections 
    2735 through 2737, respectively; and
        (5) by inserting after section 2702, the following:

                    ``Subpart II--Improving Coverage

``SEC. 2711. NO LIFETIME OR ANNUAL LIMITS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
establish--
        ``(1) lifetime limits on the dollar value of benefits for any 
    participant or beneficiary; or
        ``(2) unreasonable annual limits (within the meaning of section 
    223 of the Internal Revenue Code of 1986) on the dollar value of 
    benefits for any participant or beneficiary.
    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be 
construed to prevent a group health plan or health insurance coverage 
that is not required to provide essential health benefits under section 
1302(b) of the Patient Protection and Affordable Care Act from placing 
annual or lifetime per beneficiary limits on specific covered benefits 
to the extent that such limits are otherwise permitted under Federal or 
State law.

``SEC. 2712. PROHIBITION ON RESCISSIONS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall not rescind such plan or 
coverage with respect to an enrollee once the enrollee is covered under 
such plan or coverage involved, except that this section shall not 
apply to a covered individual who has performed an act or practice that 
constitutes fraud or makes an intentional misrepresentation of material 
fact as prohibited by the terms of the plan or coverage. Such plan or 
coverage may not be cancelled except with prior notice to the enrollee, 
and only as permitted under section 2702(c) or 2742(b).

``SEC. 2713. COVERAGE OF PREVENTIVE HEALTH SERVICES.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage shall, at 
a minimum provide coverage for and shall not impose any cost sharing 
requirements for--
        ``(1) evidence-based items or services that have in effect a 
    rating of `A' or `B' in the current recommendations of the United 
    States Preventive Services Task Force;
        ``(2) immunizations that have in effect a recommendation from 
    the Advisory Committee on Immunization Practices of the Centers for 
    Disease Control and Prevention with respect to the individual 
    involved; and
        ``(3) with respect to infants, children, and adolescents, 
    evidence-informed preventive care and screenings provided for in 
    the comprehensive guidelines supported by the Health Resources and 
    Services Administration.
        ``(4) with respect to women, such additional preventive care 
    and screenings not described in paragraph (1) as provided for in 
    comprehensive guidelines supported by the Health Resources and 
    Services Administration for purposes of this paragraph.
        ``(5) for the purposes of this Act, and for the purposes of any 
    other provision of law, the current recommendations of the United 
    States Preventive Service Task Force regarding breast cancer 
    screening, mammography, and prevention shall be considered the most 
    current other than those issued in or around November 2009.
Nothing in this subsection shall be construed to prohibit a plan or 
issuer from providing coverage for services in addition to those 
recommended by United States Preventive Services Task Force or to deny 
coverage for services that are not recommended by such Task Force.
    ``(b) Interval.--
        ``(1) In general.--The Secretary shall establish a minimum 
    interval between the date on which a recommendation described in 
    subsection (a)(1) or (a)(2) or a guideline under subsection (a)(3) 
    is issued and the plan year with respect to which the requirement 
    described in subsection (a) is effective with respect to the 
    service described in such recommendation or guideline.
        ``(2) Minimum.--The interval described in paragraph (1) shall 
    not be less than 1 year.
    ``(c) Value-based Insurance Design.--The Secretary may develop 
guidelines to permit a group health plan and a health insurance issuer 
offering group or individual health insurance coverage to utilize 
value-based insurance designs.

``SEC. 2714. EXTENSION OF DEPENDENT COVERAGE.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage that 
provides dependent coverage of children shall continue to make such 
coverage available for an adult child (who is not married) until the 
child turns 26 years of age. Nothing in this section shall require a 
health plan or a health insurance issuer described in the preceding 
sentence to make coverage available for a child of a child receiving 
dependent coverage.
    ``(b) Regulations.--The Secretary shall promulgate regulations to 
define the dependents to which coverage shall be made available under 
subsection (a).
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to modify the definition of `dependent' as used in the 
Internal Revenue Code of 1986 with respect to the tax treatment of the 
cost of coverage.

``SEC. 2715. DEVELOPMENT AND UTILIZATION OF UNIFORM EXPLANATION OF 
              COVERAGE DOCUMENTS AND STANDARDIZED DEFINITIONS.

    ``(a) In General.--Not later than 12 months after the date of 
enactment of the Patient Protection and Affordable Care Act, the 
Secretary shall develop standards for use by a group health plan and a 
health insurance issuer offering group or individual health insurance 
coverage, in compiling and providing to enrollees a summary of benefits 
and coverage explanation that accurately describes the benefits and 
coverage under the applicable plan or coverage. In developing such 
standards, the Secretary shall consult with the National Association of 
Insurance Commissioners (referred to in this section as the `NAIC'), a 
working group composed of representatives of health insurance-related 
consumer advocacy organizations, health insurance issuers, health care 
professionals, patient advocates including those representing 
individuals with limited English proficiency, and other qualified 
individuals.
    ``(b) Requirements.--The standards for the summary of benefits and 
coverage developed under subsection (a) shall provide for the 
following:
        ``(1) Appearance.--The standards shall ensure that the summary 
    of benefits and coverage is presented in a uniform format that does 
    not exceed 4 pages in length and does not include print smaller 
    than 12-point font.
        ``(2) Language.--The standards shall ensure that the summary is 
    presented in a culturally and linguistically appropriate manner and 
    utilizes terminology understandable by the average plan enrollee.
        ``(3) Contents.--The standards shall ensure that the summary of 
    benefits and coverage includes--
            ``(A) uniform definitions of standard insurance terms and 
        medical terms (consistent with subsection (g)) so that 
        consumers may compare health insurance coverage and understand 
        the terms of coverage (or exception to such coverage);
            ``(B) a description of the coverage, including cost sharing 
        for--
                ``(i) each of the categories of the essential health 
            benefits described in subparagraphs (A) through (J) of 
            section 1302(b)(1) of the Patient Protection and Affordable 
            Care Act; and
                ``(ii) other benefits, as identified by the Secretary;
            ``(C) the exceptions, reductions, and limitations on 
        coverage;
            ``(D) the cost-sharing provisions, including deductible, 
        coinsurance, and co-payment obligations;
            ``(E) the renewability and continuation of coverage 
        provisions;
            ``(F) a coverage facts label that includes examples to 
        illustrate common benefits scenarios, including pregnancy and 
        serious or chronic medical conditions and related cost sharing, 
        such scenarios to be based on recognized clinical practice 
        guidelines;
            ``(G) a statement of whether the plan or coverage--
                ``(i) provides minimum essential coverage (as defined 
            under section 5000A(f) of the Internal Revenue Code 1986); 
            and
                ``(ii) ensures that the plan or coverage share of the 
            total allowed costs of benefits provided under the plan or 
            coverage is not less than 60 percent of such costs;
            ``(H) a statement that the outline is a summary of the 
        policy or certificate and that the coverage document itself 
        should be consulted to determine the governing contractual 
        provisions; and
            ``(I) a contact number for the consumer to call with 
        additional questions and an Internet web address where a copy 
        of the actual individual coverage policy or group certificate 
        of coverage can be reviewed and obtained.
    ``(c) Periodic Review and Updating.--The Secretary shall 
periodically review and update, as appropriate, the standards developed 
under this section.
    ``(d) Requirement To Provide.--
        ``(1) In general.--Not later than 24 months after the date of 
    enactment of the Patient Protection and Affordable Care Act, each 
    entity described in paragraph (3) shall provide, prior to any 
    enrollment restriction, a summary of benefits and coverage 
    explanation pursuant    to the standards developed by the Secretary 
    under subsection (a) to--
            ``(A) an applicant at the time of application;
            ``(B) an enrollee prior to the time of enrollment or 
        reenrollment, as applicable; and
            ``(C) a policyholder or certificate holder at the time of 
        issuance of the policy or delivery of the certificate.
        ``(2) Compliance.--An entity described in paragraph (3) is 
    deemed to be in compliance with this section if the summary of 
    benefits and coverage described in subsection (a) is provided in 
    paper or electronic form.
        ``(3) Entities in general.--An entity described in this 
    paragraph is--
            ``(A) a health insurance issuer (including a group health 
        plan that is not a self-insured plan) offering health insurance 
        coverage within the United States; or
            ``(B) in the case of a self-insured group health plan, the 
        plan sponsor or designated administrator of the plan (as such 
        terms are defined in section 3(16) of the Employee Retirement 
        Income Security Act of 1974).
        ``(4) Notice of modifications.--If a group health plan or 
    health insurance issuer makes any material modification in any of 
    the terms of the plan or coverage involved (as defined for purposes 
    of section 102 of the Employee Retirement Income Security Act of 
    1974) that is not reflected in the most recently provided summary 
    of benefits and coverage, the plan or issuer shall provide notice 
    of such modification to enrollees not later than 60 days prior to 
    the date on which such modification will become effective.
    ``(e) Preemption.--The standards developed under subsection (a) 
shall preempt any related State standards that require a summary of 
benefits and coverage that provides less information to consumers than 
that required to be provided under this section, as determined by the 
Secretary.
    ``(f) Failure To Provide.--An entity described in subsection (d)(3) 
that willfully fails to provide the information required under this 
section shall be subject to a fine of not more than $1,000 for each 
such failure. Such failure with respect to each enrollee shall 
constitute a separate offense for purposes of this subsection.
    ``(g) Development of Standard Definitions.--
        ``(1) In general.--The Secretary shall, by regulation, provide 
    for the development of standards for the definitions of terms used 
    in health insurance coverage, including the insurance-related terms 
    described in paragraph (2) and the medical terms described in 
    paragraph (3).
        ``(2) Insurance-related terms.--The insurance-related terms 
    described in this paragraph are premium, deductible, co-insurance, 
    co-payment, out-of-pocket limit, preferred provider, non-preferred 
    provider, out-of-network co-payments, UCR (usual, customary and 
    reasonable) fees, excluded services, grievance and appeals, and 
    such other terms as the Secretary determines are important to 
    define so that consumers may compare health insurance coverage and 
    understand the terms of their coverage.
        ``(3) Medical terms.--The medical terms described in this 
    paragraph are hospitalization, hospital outpatient care, emergency 
    room care, physician services, prescription drug coverage, durable 
    medical equipment, home health care, skilled nursing care, 
    rehabilitation services, hospice services, emergency medical 
    transportation, and such other terms as the Secretary determines 
    are important to define so that consumers may compare the medical 
    benefits offered by health insurance and understand the extent of 
    those medical benefits (or exceptions to those benefits).

``SEC. 2716. PROHIBITION OF DISCRIMINATION BASED ON SALARY.

    ``(a) In General.--The plan sponsor of a group health plan (other 
than a self-insured plan) may not establish rules relating to the 
health insurance coverage eligibility (including continued eligibility) 
of any full-time employee under the terms of the plan that are based on 
the total hourly or annual salary of the employee or otherwise 
establish eligibility rules that have the effect of discriminating in 
favor of higher wage employees.
    ``(b) Limitation.--Subsection (a) shall not be construed to 
prohibit a plan sponsor from establishing contribution requirements for 
enrollment in the plan or coverage that provide for the payment by 
employees with lower hourly or annual compensation of a lower dollar or 
percentage contribution than the payment required of similarly situated 
employees with a higher hourly or annual compensation.

``SEC. 2717. ENSURING THE QUALITY OF CARE.

    ``(a) Quality Reporting.--
        ``(1) In general.--Not later than 2 years after the date of 
    enactment of the Patient Protection and Affordable Care Act, the 
    Secretary, in consultation with experts in health care quality and 
    stakeholders, shall develop reporting requirements for use by a 
    group health plan, and a health insurance issuer offering group or 
    individual health insurance coverage, with respect to plan or 
    coverage benefits and health care provider reimbursement structures 
    that--
            ``(A) improve health outcomes through the implementation of 
        activities such as quality reporting, effective case 
        management, care coordination, chronic disease management, and 
        medication and care compliance initiatives, including through 
        the use of the medical homes model as defined for purposes of 
        section 3602 of the Patient Protection and Affordable Care Act, 
        for treatment or services under the plan or coverage;
            ``(B) implement activities to prevent hospital readmissions 
        through a comprehensive program for hospital discharge that 
        includes patient-centered education and counseling, 
        comprehensive discharge planning, and post discharge 
        reinforcement by an appropriate health care professional;
            ``(C) implement activities to improve patient safety and 
        reduce medical errors through the appropriate use of best 
        clinical practices, evidence based medicine, and health 
        information technology under the plan or coverage; and
            ``(D) implement wellness and health promotion activities.
        ``(2) Reporting requirements.--
            ``(A) In general.--A group health plan and a health 
        insurance issuer offering group or individual health insurance 
        coverage shall annually submit to the Secretary, and to 
        enrollees under the plan or coverage, a report on whether the 
        benefits under the plan or coverage satisfy the elements 
        described in subparagraphs (A) through (D) of paragraph (1).
            ``(B) Timing of reports.--A report under subparagraph (A) 
        shall be made available to an enrollee under the plan or 
        coverage during each open enrollment period.
            ``(C) Availability of reports.--The Secretary shall make 
        reports submitted under subparagraph (A) available to the 
        public through an Internet website.
            ``(D) Penalties.--In developing the reporting requirements 
        under paragraph (1), the Secretary may develop and impose 
        appropriate penalties for non-compliance with such 
        requirements.
            ``(E) Exceptions.--In developing the reporting requirements 
        under paragraph (1), the Secretary may provide for exceptions 
        to such requirements for group health plans and health 
        insurance issuers that substantially meet the goals of this 
        section.
    ``(b) Wellness and Prevention Programs.--For purposes of subsection 
(a)(1)(D), wellness and health promotion activities may include 
personalized wellness and prevention services, which are coordinated, 
maintained or delivered by a health care provider, a wellness and 
prevention plan manager, or a health, wellness or prevention services 
organization that conducts health risk assessments or offers ongoing 
face-to-face, telephonic or web-based intervention efforts for each of 
the program's participants, and which may include the following 
wellness and prevention efforts:
        ``(1) Smoking cessation.
        ``(2) Weight management.
        ``(3) Stress management.
        ``(4) Physical fitness.
        ``(5) Nutrition.
        ``(6) Heart disease prevention.
        ``(7) Healthy lifestyle support.
        ``(8) Diabetes prevention.
    ``(c) Regulations.--Not later than 2 years after the date of 
enactment of the Patient Protection and Affordable Care Act, the 
Secretary shall promulgate regulations that provide criteria for 
determining whether a reimbursement structure is described in 
subsection (a).
    ``(d) Study and Report.--Not later than 180 days after the date on 
which regulations are promulgated under subsection (c), the Government 
Accountability Office shall review such regulations and conduct a study 
and submit to the Committee on Health, Education, Labor, and Pensions 
of the Senate and the Committee on Energy and Commerce of the House of 
Representatives a report regarding the impact the activities under this 
section have had on the quality and cost of health care.

``SEC. 2718. BRINGING DOWN THE COST OF HEALTH CARE COVERAGE.

    ``(a) Clear Accounting for Costs.--A health insurance issuer 
offering group or individual health insurance coverage shall, with 
respect to each plan year, submit to the Secretary a report concerning 
the percentage of total premium revenue that such coverage expends--
        ``(1) on reimbursement for clinical services provided to 
    enrollees under such coverage;
        ``(2) for activities that improve health care quality; and
        ``(3) on all other non-claims costs, including an explanation 
    of the nature of such costs, and excluding State taxes and 
    licensing or regulatory fees.
The Secretary shall make reports received under this section available 
to the public on the Internet website of the Department of Health and 
Human Services.
    ``(b) Ensuring That Consumers Receive Value for Their Premium 
Payments.--
        ``(1) Requirement to provide value for premium payments.--A 
    health insurance issuer offering group or individual health 
    insurance coverage shall, with respect to each plan year, provide 
    an annual rebate to each enrollee under such coverage, on a pro 
    rata basis, in an amount that is equal to the amount by which 
    premium revenue expended by the issuer on activities described in 
    subsection (a)(3) exceeds--
            ``(A) with respect to a health insurance issuer offering 
        coverage in the group market, 20 percent, or such lower 
        percentage as a State may by regulation determine; or
            ``(B) with respect to a health insurance issuer offering 
        coverage in the individual market, 25 percent, or such lower 
        percentage as a State may by regulation determine, except that 
        such percentage shall be adjusted to the extent the Secretary 
        determines that the application of such percentage with a State 
        may destabilize the existing individual market in such State.
        ``(2) Consideration in setting percentages.--In determining the 
    percentages under paragraph (1), a State shall seek to ensure 
    adequate participation by health insurance issuers, competition in 
    the health insurance market in the State, and value for consumers 
    so that premiums are used for clinical services and quality 
    improvements.
        ``(3) Termination.--The provisions of this subsection shall 
    have no force or effect after December 31, 2013.
    ``(c) Standard Hospital Charges.--Each hospital operating within 
the United States shall for each year establish (and update) and make 
public (in accordance with guidelines developed by the Secretary) a 
list of the hospital's standard charges for items and services provided 
by the hospital, including for diagnosis-related groups established 
under section 1886(d)(4) of the Social Security Act.
    ``(d) Definitions.--The Secretary, in consultation with the 
National Association of Insurance Commissions, shall establish uniform 
definitions for the activities reported under subsection (a).

``SEC. 2719. APPEALS PROCESS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall implement an effective 
appeals process for appeals of coverage determinations and claims, 
under which the plan or issuer shall, at a minimum--
        ``(1) have in effect an internal claims appeal process;
        ``(2) provide notice to enrollees, in a culturally and 
    linguistically appropriate manner, of available internal and 
    external appeals processes, and the availability of any applicable 
    office of health insurance consumer assistance or ombudsman 
    established under section 2793 to assist such enrollees with the 
    appeals processes;
        ``(3) allow an enrollee to review their file, to present 
    evidence and testimony as part of the appeals process, and to 
    receive continued coverage pending the outcome of the appeals 
    process; and
        ``(4) provide an external review process for such plans and 
    issuers that, at a minimum, includes the consumer protections set 
    forth in the Uniform External Review Model Act promulgated by the 
    National Association of Insurance Commissioners and is binding on 
    such plans.''.

SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.) is amended by adding at the end the following:

``SEC. 2793. HEALTH INSURANCE CONSUMER INFORMATION.

    ``(a) In General.--The Secretary shall award grants to States to 
enable such States (or the Exchanges operating in such States) to 
establish, expand, or provide support for--
        ``(1) offices of health insurance consumer assistance; or
        ``(2) health insurance ombudsman programs.
    ``(b) Eligibility.--
        ``(1) In general.--To be eligible to receive a grant, a State 
    shall designate an independent office of health insurance consumer 
    assistance, or an ombudsman, that, directly or in coordination with 
    State health insurance regulators and consumer assistance 
    organizations, receives and responds to inquiries and complaints 
    concerning health insurance coverage with respect to Federal health 
    insurance requirements and under State law.
        ``(2) Criteria.--A State that receives a grant under this 
    section shall comply with criteria established by the Secretary for 
    carrying out activities under such grant.
    ``(c) Duties.--The office of health insurance consumer assistance 
or health insurance ombudsman shall--
        ``(1) assist with the filing of complaints and appeals, 
    including filing appeals with the internal appeal or grievance 
    process of the group health plan or health insurance issuer 
    involved and providing information about the external appeal 
    process;
        ``(2) collect, track, and quantify problems and inquiries 
    encountered by consumers;
        ``(3) educate consumers on their rights and responsibilities 
    with respect to group health plans and health insurance coverage;
        ``(4) assist consumers with enrollment in a group health plan 
    or health insurance coverage by providing information, referral, 
    and assistance; and
        ``(5) resolve problems with obtaining premium tax credits under 
    section 36B of the Internal Revenue Code of 1986.
    ``(d) Data Collection.--As a condition of receiving a grant under 
subsection (a), an office of health insurance consumer assistance or 
ombudsman program shall be required to collect and report data to the 
Secretary on the types of problems and inquiries encountered by 
consumers. The Secretary shall utilize such data to identify areas 
where more enforcement action is necessary and shall share such 
information with State insurance regulators, the Secretary of Labor, 
and the Secretary of the Treasury for use in the enforcement activities 
of such agencies.
    ``(e) Funding.--
        ``(1) Initial funding.--There is hereby appropriated to the 
    Secretary, out of any funds in the Treasury not otherwise 
    appropriated, $30,000,000 for the first fiscal year for which this 
    section applies to carry out this section. Such amount shall remain 
    available without fiscal year limitation.
        ``(2) Authorization for subsequent years.--There is authorized 
    to be appropriated to the Secretary for each fiscal year following 
    the fiscal year described in paragraph (1), such sums as may be 
    necessary to carry out this section.''.

SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.), as amended by section 1002, is further amended by 
adding at the end the following:

``SEC. 2794. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

    ``(a) Initial Premium Review Process.--
        ``(1) In general.--The Secretary, in conjunction with States, 
    shall establish a process for the annual review, beginning with the 
    2010 plan year and subject to subsection (b)(2)(A), of unreasonable 
    increases in premiums for health insurance coverage.
        ``(2) Justification and disclosure.--The process established 
    under paragraph (1) shall require health insurance issuers to 
    submit to the Secretary and the relevant State a justification for 
    an unreasonable premium increase prior to the implementation of the 
    increase. Such issuers shall prominently post such information on 
    their Internet websites. The Secretary shall ensure the public 
    disclosure of information on such increases and justifications for 
    all health insurance issuers.
    ``(b) Continuing Premium Review Process.--
        ``(1) Informing secretary of premium increase patterns.--As a 
    condition of receiving a grant under subsection (c)(1), a State, 
    through its Commissioner of Insurance, shall--
            ``(A) provide the Secretary with information about trends 
        in premium increases in health insurance coverage in premium 
        rating areas in the State; and
            ``(B) make recommendations, as appropriate, to the State 
        Exchange about whether particular health insurance issuers 
        should be excluded from participation in the Exchange based on 
        a pattern or practice of excessive or unjustified premium 
        increases.
        ``(2) Monitoring by secretary of premium increases.--
            ``(A) In general.--Beginning with plan years beginning in 
        2014, the Secretary, in conjunction with the States and 
        consistent with the provisions of subsection (a)(2), shall 
        monitor premium increases of health insurance coverage offered 
        through an Exchange and outside of an Exchange.
            ``(B) Consideration in opening exchange.--In determining 
        under section 1312(f)(2)(B) of the Patient Protection and 
        Affordable Care Act whether to offer qualified health plans in 
        the large group market through an Exchange, the State shall 
        take into account any excess of premium growth outside of the 
        Exchange as compared to the rate of such growth inside the 
        Exchange.
    ``(c) Grants in Support of Process.--
        ``(1) Premium review grants during 2010 through 2014.--The 
    Secretary shall carry out a program to award grants to States 
    during the 5-year period beginning with fiscal year 2010 to assist 
    such States in carrying out subsection (a), including--
            ``(A) in reviewing and, if appropriate under State law, 
        approving premium increases for health insurance coverage; and
            ``(B) in providing information and recommendations to the 
        Secretary under subsection (b)(1).
        ``(2) Funding.--
            ``(A) In general.--Out of all funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        $250,000,000, to be available for expenditure for grants under 
        paragraph (1) and subparagraph (B).
            ``(B) Further availability for insurance reform and 
        consumer protection.--If the amounts appropriated under 
        subparagraph (A) are not fully obligated under grants under 
        paragraph (1) by the end of fiscal year 2014, any remaining 
        funds shall remain available to the Secretary for grants to 
        States for planning and implementing the insurance reforms and 
        consumer protections under part A.
            ``(C) Allocation.--The Secretary shall establish a formula 
        for determining the amount of any grant to a State under this 
        subsection. Under such formula--
                ``(i) the Secretary shall consider the number of plans 
            of health insurance coverage offered in each State and the 
            population of the State; and
                ``(ii) no State qualifying for a grant under paragraph 
            (1) shall receive less than $1,000,000, or more than 
            $5,000,000 for a grant year.''.

SEC. 1004. EFFECTIVE DATES.

    (a) In General.--Except as provided for in subsection (b), this 
subtitle (and the amendments made by this subtitle) shall become 
effective for plan years beginning on or after the date that is 6 
months after the date of enactment of this Act, except that the 
amendments made by sections 1002 and 1003 shall become effective for 
fiscal years beginning with fiscal year 2010.
    (b) Special Rule.--The amendments made by sections 1002 and 1003 
shall take effect on the date of enactment of this Act.

     Subtitle B--Immediate Actions to Preserve and Expand Coverage

SEC. 1101. IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED INDIVIDUALS WITH 
              A PREEXISTING CONDITION.

    (a) In General.--Not later than 90 days after the date of enactment 
of this Act, the Secretary shall establish a temporary high risk health 
insurance pool program to provide health insurance coverage for 
eligible individuals during the period beginning on the date on which 
such program is established and ending on January 1, 2014.
    (b) Administration.--
        (1) In general.--The Secretary may carry out the program under 
    this section directly or through contracts to eligible entities.
        (2) Eligible entities.--To be eligible for a contract under 
    paragraph (1), an entity shall--
            (A) be a State or nonprofit private entity;
            (B) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require; and
            (C) agree to utilize contract funding to establish and 
        administer a qualified high risk pool for eligible individuals.
        (3) Maintenance of effort.--To be eligible to enter into a 
    contract with the Secretary under this subsection, a State shall 
    agree not to reduce the annual amount the State expended for the 
    operation of one or more State high risk pools during the year 
    preceding the year in which such contract is entered into.
    (c) Qualified High Risk Pool.--
        (1) In general.--Amounts made available under this section 
    shall be used to establish a qualified high risk pool that meets 
    the requirements of paragraph (2).
        (2) Requirements.--A qualified high risk pool meets the 
    requirements of this paragraph if such pool--
            (A) provides to all eligible individuals health insurance 
        coverage that does not impose any preexisting condition 
        exclusion with respect to such coverage;
            (B) provides health insurance coverage--
                (i) in which the issuer's share of the total allowed 
            costs of benefits provided under such coverage is not less 
            than 65 percent of such costs; and
                (ii) that has an out of pocket limit not greater than 
            the applicable amount described in section 223(c)(2) of the 
            Internal Revenue Code of 1986 for the year involved, except 
            that the Secretary may modify such limit if necessary to 
            ensure the pool meets the actuarial value limit under 
            clause (i);
            (C) ensures that with respect to the premium rate charged 
        for health insurance coverage offered to eligible individuals 
        through the high risk pool, such rate shall--
                (i) except as provided in clause (ii), vary only as 
            provided for under section 2701 of the Public Health 
            Service Act (as amended by this Act and notwithstanding the 
            date on which such amendments take effect);
                (ii) vary on the basis of age by a factor of not 
            greater than 4 to 1; and
                (iii) be established at a standard rate for a standard 
            population; and
            (D) meets any other requirements determined appropriate by 
        the Secretary.
    (d) Eligible Individual.--An individual shall be deemed to be an 
eligible individual for purposes of this section if such individual--
        (1) is a citizen or national of the United States or is 
    lawfully present in the United States (as determined in accordance 
    with section 1411);
        (2) has not been covered under creditable coverage (as defined 
    in section 2701(c)(1) of the Public Health Service Act as in effect 
    on the date of enactment of this Act) during the 6-month period 
    prior to the date on which such individual is applying for coverage 
    through the high risk pool; and
        (3) has a pre-existing condition, as determined in a manner 
    consistent with guidance issued by the Secretary.
    (e) Protection Against Dumping Risk by Insurers.--
        (1) In general.--The Secretary shall establish criteria for 
    determining whether health insurance issuers and employment-based 
    health plans have discouraged an individual from remaining enrolled 
    in prior coverage based on that individual's health status.
        (2) Sanctions.--An issuer or employment-based health plan shall 
    be responsible for reimbursing the program under this section for 
    the medical expenses incurred by the program for an individual who, 
    based on criteria established by the Secretary, the Secretary finds 
    was encouraged by the issuer to disenroll from health benefits 
    coverage prior to enrolling in coverage through the program. The 
    criteria shall include at least the following circumstances:
            (A) In the case of prior coverage obtained through an 
        employer, the provision by the employer, group health plan, or 
        the issuer of money or other financial consideration for 
        disenrolling from the coverage.
            (B) In the case of prior coverage obtained directly from an 
        issuer or under an employment-based health plan--
                (i) the provision by the issuer or plan of money or 
            other financial consideration for disenrolling from the 
            coverage; or
                (ii) in the case of an individual whose premium for the 
            prior coverage exceeded the premium required by the program 
            (adjusted based on the age factors applied to the prior 
            coverage)--

                    (I) the prior coverage is a policy that is no 
                longer being actively marketed (as defined by the 
                Secretary) by the issuer; or
                    (II) the prior coverage is a policy for which 
                duration of coverage form issue or health status are 
                factors that can be considered in determining premiums 
                at renewal.

        (3) Construction.--Nothing in this subsection shall be 
    construed as constituting exclusive remedies for violations of 
    criteria established under paragraph (1) or as preventing States 
    from applying or enforcing such paragraph or other provisions under 
    law with respect to health insurance issuers.
    (f) Oversight.--The Secretary shall establish--
        (1) an appeals process to enable individuals to appeal a 
    determination under this section; and
        (2) procedures to protect against waste, fraud, and abuse.
    (g) Funding; Termination of Authority.--
        (1) In general.--There is appropriated to the Secretary, out of 
    any moneys in the Treasury not otherwise appropriated, 
    $5,000,000,000 to pay claims against (and the administrative costs 
    of) the high risk pool under this section that are in excess of the 
    amount of premiums collected from eligible individuals enrolled in 
    the high risk pool. Such funds shall be available without fiscal 
    year limitation.
        (2) Insufficient funds.--If the Secretary estimates for any 
    fiscal year that the aggregate amounts available for the payment of 
    the expenses of the high risk pool will be less than the actual 
    amount of such expenses, the Secretary shall make such adjustments 
    as are necessary to eliminate such deficit.
        (3) Termination of authority.--
            (A) In general.--Except as provided in subparagraph (B), 
        coverage of eligible individuals under a high risk pool in a 
        State shall terminate on January 1, 2014.
            (B) Transition to exchange.--The Secretary shall develop 
        procedures to provide for the transition of eligible 
        individuals enrolled in health insurance coverage offered 
        through a high risk pool established under this section into 
        qualified health plans offered through an Exchange. Such 
        procedures shall ensure that there is no lapse in coverage with 
        respect to the individual and may extend coverage after the 
        termination of the risk pool involved, if the Secretary 
        determines necessary to avoid such a lapse.
        (4) Limitations.--The Secretary has the authority to stop 
    taking applications for participation in the program under this 
    section to comply with the funding limitation provided for in 
    paragraph (1).
        (5) Relation to state laws.--The standards established under 
    this section shall supersede any State law or regulation (other 
    than State licensing laws or State laws relating to plan solvency) 
    with respect to qualified high risk pools which are established in 
    accordance with this section.

SEC. 1102. REINSURANCE FOR EARLY RETIREES.

    (a) Administration.--
        (1) In general.--Not later than 90 days after the date of 
    enactment of this Act, the Secretary shall establish a temporary 
    reinsurance program to provide reimbursement to participating 
    employment-based plans for a portion of the cost of providing 
    health insurance coverage to early retirees (and to the eligible 
    spouses, surviving spouses, and dependents of such retirees) during 
    the period beginning on the date on which such program is 
    established and ending on January 1, 2014.
        (2) Reference.--In this section:
            (A) Health benefits.--The term ``health benefits'' means 
        medical, surgical, hospital, prescription drug, and such other 
        benefits as shall be determined by the Secretary, whether self-
        funded, or delivered through the purchase of insurance or 
        otherwise.
            (B) Employment-based plan.--The term ``employment-based 
        plan'' means a group health benefits plan that--
                (i) is--

                    (I) maintained by one or more current or former 
                employers (including without limitation any State or 
                local government or political subdivision thereof), 
                employee organization, a voluntary employees' 
                beneficiary association, or a committee or board of 
                individuals appointed to administer such plan; or
                    (II) a multiemployer plan (as defined in section 
                3(37) of the Employee Retirement Income Security Act of 
                1974); and

                (ii) provides health benefits to early retirees.
            (C) Early retirees.--The term ``early retirees'' means 
        individuals who are age 55 and older but are not eligible for 
        coverage under title XVIII of the Social Security Act, and who 
        are not active employees of an employer maintaining, or 
        currently contributing to, the employment-based plan or of any 
        employer that has made substantial contributions to fund such 
        plan.
    (b) Participation.--
        (1) Employment-based plan eligibility.--A participating 
    employment-based plan is an employment-based plan that--
            (A) meets the requirements of paragraph (2) with respect to 
        health benefits provided under the plan; and
            (B) submits to the Secretary an application for 
        participation in the program, at such time, in such manner, and 
        containing such information as the Secretary shall require.
        (2) Employment-based health benefits.--An employment-based plan 
    meets the requirements of this paragraph if the plan--
            (A) implements programs and procedures to generate cost-
        savings with respect to participants with chronic and high-cost 
        conditions;
            (B) provides documentation of the actual cost of medical 
        claims involved; and
            (C) is certified by the Secretary.
    (c) Payments.--
        (1) Submission of claims.--
            (A) In general.--A participating employment-based plan 
        shall submit claims for reimbursement to the Secretary which 
        shall contain documentation of the actual costs of the items 
        and services for which each claim is being submitted.
            (B) Basis for claims.--Claims submitted under subparagraph 
        (A) shall be based on the actual amount expended by the 
        participating employment-based plan involved within the plan 
        year for the health benefits provided to an early retiree or 
        the spouse, surviving spouse, or dependent of such retiree. In 
        determining the amount of a claim for purposes of this 
        subsection, the participating employment-based plan shall take 
        into account any negotiated price concessions (such as 
        discounts, direct or indirect subsidies, rebates, and direct or 
        indirect remunerations) obtained by such plan with respect to 
        such health benefit. For purposes of determining the amount of 
        any such claim, the costs paid by the early retiree or the 
        retiree's spouse, surviving spouse, or dependent in the form of 
        deductibles, co-payments, or co-insurance shall be included in 
        the amounts paid by the participating employment-based plan.
        (2) Program payments.--If the Secretary determines that a 
    participating employment-based plan has submitted a valid claim 
    under paragraph (1), the Secretary shall reimburse such plan for 80 
    percent of that portion of the costs attributable to such claim 
    that exceed $15,000, subject to the limits contained in paragraph 
    (3).
        (3) Limit.--To be eligible for reimbursement under the program, 
    a claim submitted by a participating employment-based plan shall 
    not be less than $15,000 nor greater than $90,000. Such amounts 
    shall be adjusted each fiscal year based on the percentage increase 
    in the Medical Care Component of the Consumer Price Index for all 
    urban consumers (rounded to the nearest multiple of $1,000) for the 
    year involved.
        (4) Use of payments.--Amounts paid to a participating 
    employment-based plan under this subsection shall be used to lower 
    costs for the plan. Such payments may be used to reduce premium 
    costs for an entity described in subsection (a)(2)(B)(i) or to 
    reduce premium contributions, co-payments, deductibles, co-
    insurance, or other out-of-pocket costs for plan participants. Such 
    payments shall not be used as general revenues for an entity 
    described in subsection (a)(2)(B)(i). The Secretary shall develop a 
    mechanism to monitor the appropriate use of such payments by such 
    entities.
        (5) Payments not treated as income.--Payments received under 
    this subsection shall not be included in determining the gross 
    income of an entity described in subsection (a)(2)(B)(i) that is 
    maintaining or currently contributing to a participating 
    employment-based plan.
        (6) Appeals.--The Secretary shall establish--
            (A) an appeals process to permit participating employment-
        based plans to appeal a determination of the Secretary with 
        respect to claims submitted under this section; and
            (B) procedures to protect against fraud, waste, and abuse 
        under the program.
    (d) Audits.--The Secretary shall conduct annual audits of claims 
data submitted by participating employment-based plans under this 
section to ensure that such plans are in compliance with the 
requirements of this section.
    (e) Funding.--There is appropriated to the Secretary, out of any 
moneys in the Treasury not otherwise appropriated, $5,000,000,000 to 
carry out the program under this section. Such funds shall be available 
without fiscal year limitation.
    (f) Limitation.--The Secretary has the authority to stop taking 
applications for participation in the program based on the availability 
of funding under subsection (e).

SEC. 1103. IMMEDIATE INFORMATION THAT ALLOWS CONSUMERS TO IDENTIFY 
              AFFORDABLE COVERAGE OPTIONS.

    (a) Internet Portal to Affordable Coverage Options.--
        (1) Immediate establishment.--Not later than July 1, 2010, the 
    Secretary, in consultation with the States, shall establish a 
    mechanism, including an Internet website, through which a resident 
    of any State may identify affordable health insurance coverage 
    options in that State.
        (2) Connecting to affordable coverage.--An Internet website 
    established under paragraph (1) shall, to the extent practicable, 
    provide ways for residents of any State to receive information on 
    at least the following coverage options:
            (A) Health insurance coverage offered by health insurance 
        issuers, other than coverage that provides reimbursement only 
        for the treatment or mitigation of--
                (i) a single disease or condition; or
                (ii) an unreasonably limited set of diseases or 
            conditions (as determined by the Secretary);
            (B) Medicaid coverage under title XIX of the Social 
        Security Act.
            (C) Coverage under title XXI of the Social Security Act.
            (D) A State health benefits high risk pool, to the extent 
        that such high risk pool is offered in such State; and
            (E) Coverage under a high risk pool under section 1101.
    (b) Enhancing Comparative Purchasing Options.--
        (1) In general.--Not later than 60 days after the date of 
    enactment of this Act, the Secretary shall develop a standardized 
    format to be used for the presentation of information relating to 
    the coverage options described in subsection (a)(2). Such format 
    shall, at a minimum, require the inclusion of information on the 
    percentage of total premium revenue expended on nonclinical costs 
    (as reported under section 2718(a) of the Public Health Service 
    Act), eligibility, availability, premium rates, and cost sharing 
    with respect to such coverage options and be consistent with the 
    standards adopted for the uniform explanation of coverage as 
    provided for in section 2715 of the Public Health Service Act.
        (2) Use of format.--The Secretary shall utilize the format 
    developed under paragraph (1) in compiling information concerning 
    coverage options on the Internet website established under 
    subsection (a).
    (c) Authority To Contract.--The Secretary may carry out this 
section through contracts entered into with qualified entities.

SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.

    (a) Purpose of Administrative Simplification.--Section 261 of the 
Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 
1320d note) is amended--
        (1) by inserting ``uniform'' before ``standards''; and
        (2) by inserting ``and to reduce the clerical burden on 
    patients, health care providers, and health plans'' before the 
    period at the end.
    (b) Operating Rules for Health Information Transactions.--
        (1) Definition of operating rules.--Section 1171 of the Social 
    Security Act (42 U.S.C. 1320d) is amended by adding at the end the 
    following:
        ``(9) Operating rules.--The term `operating rules' means the 
    necessary business rules and guidelines for the electronic exchange 
    of information that are not defined by a standard or its 
    implementation specifications as adopted for purposes of this 
    part.''.
        (2) Transaction standards; operating rules and compliance.--
    Section 1173 of the Social Security Act (42 U.S.C. 1320d-2) is 
    amended--
            (A) in subsection (a)(2), by adding at the end the 
        following new subparagraph:
            ``(J) Electronic funds transfers.'';
            (B) in subsection (a), by adding at the end the following 
        new paragraph:
        ``(4) Requirements for financial and administrative 
    transactions.--
            ``(A) In general.--The standards and associated operating 
        rules adopted by the Secretary 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 and 
            denial management process (including adjudication and 
            appeals); and
                ``(iv) describe all data elements (including 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 or Federal law, or to 
            protect against fraud and abuse).
            ``(B) Reduction of clerical burden.--In adopting standards 
        and operating rules for the transactions referred to under 
        paragraph (1), the Secretary shall seek to reduce the number 
        and complexity of forms (including paper and electronic forms) 
        and data entry required by patients and providers.''; and
            (C) by adding at the end the following new subsections:
    ``(g) Operating Rules.--
        ``(1) In general.--The Secretary shall adopt a single set of 
    operating rules for each transaction referred to under subsection 
    (a)(1) with the goal of creating as much uniformity in the 
    implementation of the electronic standards as possible. Such 
    operating rules shall be consensus-based and reflect the necessary 
    business rules affecting health plans and health care providers and 
    the manner in which they operate pursuant to standards issued under 
    Health Insurance Portability and Accountability Act of 1996.
        ``(2) Operating rules development.--In adopting operating rules 
    under this subsection, the Secretary shall consider recommendations 
    for operating rules 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, 
        including representation by or participation from health plans, 
        health care providers, vendors, relevant Federal agencies, and 
        other standard development organizations.
            ``(C) The entity has a public set of guiding principles 
        that ensure the operating rules and process are open and 
        transparent, and supports nondiscrimination and conflict of 
        interest policies that demonstrate a commitment to open, fair, 
        and nondiscriminatory practices.
            ``(D) The entity builds on the transaction standards issued 
        under Health Insurance Portability and Accountability Act of 
        1996.
            ``(E) The entity allows for public review and updates of 
        the operating rules.
        ``(3) Review and recommendations.--The National Committee on 
    Vital and Health Statistics shall--
            ``(A) advise the Secretary as to whether a nonprofit entity 
        meets the requirements under paragraph (2);
            ``(B) review the operating rules developed and recommended 
        by such nonprofit entity;
            ``(C) determine whether such operating rules represent a 
        consensus view of the health care stakeholders and are 
        consistent with and do not conflict with other existing 
        standards;
            ``(D) evaluate whether such operating rules are consistent 
        with electronic standards adopted for health information 
        technology; and
            ``(E) submit to the Secretary a recommendation as to 
        whether the Secretary should adopt such operating rules.
        ``(4) Implementation.--
            ``(A) In general.--The Secretary shall adopt operating 
        rules under this subsection, by regulation in accordance with 
        subparagraph (C), following consideration of the operating 
        rules developed by the non-profit entity described in paragraph 
        (2) and the recommendation submitted by the National Committee 
        on Vital and Health Statistics under paragraph (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 for eligibility for a 
            health plan and health claim status transactions shall be 
            adopted not later than July 1, 2011, in a manner ensuring 
            that such operating rules 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 
            for electronic funds 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 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 for health 
            claims or equivalent encounter information, enrollment and 
            disenrollment in a health plan, health plan premium 
            payments, and referral certification and authorization 
            transactions shall be adopted not later than July 1, 2014, 
            in a manner ensuring that such operating rules are 
            effective not later than January 1, 2016.
            ``(C) Expedited rulemaking.--The Secretary shall promulgate 
        an interim final rule applying any standard or operating rule 
        recommended by the National Committee on Vital and Health 
        Statistics pursuant to paragraph (3). The Secretary 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 shall 
        file a statement with the Secretary, in such form as the 
        Secretary may require, certifying that the data and information 
        systems for such plan are in compliance with any applicable 
        standards (as described under paragraph (7) of section 1171) 
        and associated operating rules (as described under paragraph 
        (9) of such section) for electronic funds transfers, 
        eligibility for a health plan, health claim 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 shall file a statement with the Secretary, 
        in such form as the Secretary may require, certifying that the 
        data and information systems for such plan are in compliance 
        with any applicable standards and associated operating rules 
        for health claims or equivalent encounter information, 
        enrollment and disenrollment in a health plan, health plan 
        premium payments, health claims attachments, and referral 
        certification and authorization, respectively. A health plan 
        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).
        ``(2) Documentation of compliance.--A health plan shall provide 
    the Secretary, in such form as the Secretary may require, with 
    adequate documentation of compliance with the standards and 
    operating rules described under paragraph (1). A health plan shall 
    not be considered to have provided adequate documentation and shall 
    not be certified as being in compliance with such standards, unless 
    the health plan--
            ``(A) demonstrates to the Secretary that the plan conducts 
        the electronic transactions specified in paragraph (1) in a 
        manner that fully complies with the regulations of the 
        Secretary; and
            ``(B) provides documentation showing that the plan has 
        completed end-to-end testing for such transactions with their 
        partners, such as hospitals and physicians.
        ``(3) Service contracts.--A health plan shall be required to 
    ensure that any entities that provide services pursuant to a 
    contract with such health plan shall comply with any applicable 
    certification and compliance requirements (and provide the 
    Secretary with adequate documentation of such compliance) under 
    this subsection.
        ``(4) Certification by outside entity.--The Secretary may 
    designate independent, outside entities to certify that a health 
    plan has complied with the requirements under this subsection, 
    provided that the certification standards employed by such entities 
    are in accordance with any standards or operating rules issued by 
    the Secretary.
        ``(5) Compliance with revised standards and operating rules.--
            ``(A) In general.--A health plan (including entities 
        described under paragraph (3)) shall file a statement with the 
        Secretary, in such form as the Secretary may require, 
        certifying that the data and information systems for such plan 
        are in compliance with any applicable revised standards and 
        associated operating rules under this subsection for any 
        interim final rule promulgated by the Secretary under 
        subsection (i) that--
                ``(i) amends any standard or operating rule described 
            under paragraph (1) of this subsection; or
                ``(ii) establishes a standard (as described under 
            subsection (a)(1)(B)) or associated operating rules (as 
            described under subsection (i)(5)) for any other financial 
            and administrative transactions.
            ``(B) Date of compliance.--A health plan shall comply with 
        such requirements not later than the effective date of the 
        applicable standard or operating rule.
        ``(6) Audits of health plans.--The Secretary shall conduct 
    periodic audits to ensure that health plans (including entities 
    described under paragraph (3)) are in compliance with any standards 
    and operating rules that are described under paragraph (1) or 
    subsection (i)(5).
    ``(i) Review and Amendment of Standards and Operating Rules.--
        ``(1) Establishment.--Not later than January 1, 2014, the 
    Secretary shall establish a review committee (as described under 
    paragraph (4)).
        ``(2) Evaluations and reports.--
            ``(A) Hearings.--Not later than April 1, 2014, and not less 
        than biennially thereafter, the Secretary, acting through the 
        review committee, shall conduct hearings to evaluate and review 
        the adopted standards and operating rules established under 
        this section.
            ``(B) Report.--Not later than July 1, 2014, and not less 
        than biennially thereafter, the review committee shall provide 
        recommendations for updating and improving such standards and 
        operating rules. The review committee shall recommend a single 
        set of operating rules per transaction standard and maintain 
        the goal of creating as much uniformity as possible in the 
        implementation of the electronic standards.
        ``(3) Interim final rulemaking.--
            ``(A) In general.--Any recommendations to amend adopted 
        standards and operating rules that have been approved by the 
        review committee and reported to the Secretary under paragraph 
        (2)(B) shall be adopted by the Secretary 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 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 or operating rules 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 to carry out this subsection, 
        including--
                ``(i) the National Committee on Vital and Health 
            Statistics; or
                ``(ii) any appropriate committee as determined by the 
            Secretary.
            ``(B) Coordination of hit standards.--In developing 
        recommendations under this subsection, the review committee 
        shall ensure coordination, as appropriate, with the standards 
        that support the certified electronic health record technology 
        approved by the Office of the National Coordinator for Health 
        Information Technology.
        ``(5) Operating rules for other standards adopted by the 
    secretary.--The Secretary shall adopt a single set of operating 
    rules (pursuant to the process described under subsection (g)) for 
    any transaction for which a standard had been adopted pursuant to 
    subsection (a)(1)(B).
    ``(j) Penalties.--
        ``(1) Penalty fee.--
            ``(A) In general.--Not later than April 1, 2014, and 
        annually thereafter, the Secretary shall assess a penalty fee 
        (as determined under subparagraph (B)) against a health plan 
        that has failed to meet the requirements under subsection (h) 
        with respect to certification and documentation of compliance 
        with--
                ``(i) the standards and associated operating rules 
            described under paragraph (1) of such subsection; and
                ``(ii) a standard (as described under subsection 
            (a)(1)(B)) and associated operating rules (as described 
            under subsection (i)(5)) for any other financial and 
            administrative transactions.
            ``(B) Fee amount.--Subject to subparagraphs (C), (D), and 
        (E), the Secretary shall assess a penalty fee against a health 
        plan in the amount of $1 per covered life until certification 
        is complete. The penalty shall be assessed per person 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 for each day that the plan is not in compliance 
        with the requirements under subsection (h).
            ``(C) Additional penalty for misrepresentation.--A health 
        plan that knowingly provides inaccurate or incomplete 
        information in a statement of certification or documentation of 
        compliance under subsection (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.
            ``(E) Penalty limit.--A penalty fee assessed against a 
        health plan 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)).
            ``(F) Determination of covered individuals.--The Secretary 
        shall determine the number of covered lives under a health plan 
        based upon the most recent statements and filings that have 
        been submitted by such plan to the Securities and Exchange 
        Commission.
        ``(2) Notice and dispute procedure.--The Secretary shall 
    establish a procedure for assessment of penalty fees under this 
    subsection that provides a health plan with reasonable notice and a 
    dispute resolution procedure prior to provision of a notice of 
    assessment by the Secretary of the Treasury (as described under 
    paragraph (4)(B)).
        ``(3) Penalty fee report.--Not later than May 1, 2014, and 
    annually thereafter, the Secretary shall provide the Secretary of 
    the Treasury with a report identifying those health plans that have 
    been assessed a penalty fee under this subsection.
        ``(4) Collection of penalty fee.--
            ``(A) In general.--The Secretary of the Treasury, acting 
        through the Financial Management Service, shall administer the 
        collection of penalty fees from health plans that have been 
        identified by the Secretary in the penalty fee report provided 
        under paragraph (3).
            ``(B) Notice.--Not later than August 1, 2014, and annually 
        thereafter, the Secretary of the Treasury shall provide notice 
        to each health plan that has been assessed a penalty fee by the 
        Secretary under this subsection. Such notice shall include the 
        amount of the penalty fee assessed by the Secretary and the due 
        date for payment of such fee to the Secretary of the Treasury 
        (as described in subparagraph (C)).
            ``(C) Payment due date.--Payment by a health plan for a 
        penalty fee assessed under this subsection shall be made to the 
        Secretary 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 under this subsection for which 
        payment has not been made by the due date provided under 
        subparagraph (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 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 on a pro-rata basis 
        and added to any penalty fee collected from the plan.''.
    (c) Promulgation of Rules.--
        (1) Unique health plan identifier.--The Secretary shall 
    promulgate a final rule to establish a unique health plan 
    identifier (as described in section 1173(b) of the Social Security 
    Act (42 U.S.C. 1320d-2(b))) based on the input of the National 
    Committee on Vital and Health Statistics. The Secretary may do so 
    on an interim final basis and such rule shall be effective not 
    later than October 1, 2012.
        (2) Electronic funds transfer.--The Secretary shall promulgate 
    a final rule to establish a standard for electronic funds transfers 
    (as described in section 1173(a)(2)(J) of the Social Security Act, 
    as added by subsection (b)(2)(A)). The Secretary may do so on an 
    interim final basis and shall adopt such standard not later than 
    January 1, 2012, in a manner ensuring that such standard is 
    effective not later than January 1, 2014.
        (3) Health claims attachments.--The Secretary shall promulgate 
    a final rule to establish a transaction standard and a single set 
    of associated operating rules for health claims attachments (as 
    described in section 1173(a)(2)(B) of the Social Security Act (42 
    U.S.C. 1320d-2(a)(2)(B))) that is consistent with the X12 Version 
    5010 transaction standards. The Secretary may do so on an interim 
    final basis and shall adopt a transaction standard and a single set 
    of associated operating rules not later than January 1, 2014, in a 
    manner ensuring that such standard is effective not later than 
    January 1, 2016.
    (d) Expansion of Electronic Transactions in Medicare.--Section 
1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
        (1) in paragraph (23), by striking the ``or'' at the end;
        (2) in paragraph (24), by striking the period and inserting ``; 
    or''; and
        (3) by inserting after paragraph (24) the following new 
    paragraph:
        ``(25) not later than January 1, 2014, for which the payment is 
    other than by electronic funds transfer (EFT) or an electronic 
    remittance in a form as specified in ASC X12 835 Health Care 
    Payment and Remittance Advice or subsequent standard.''.

SEC. 1105. EFFECTIVE DATE.

    This subtitle shall take effect on the date of enactment of this 
Act.

    Subtitle C--Quality Health Insurance Coverage for All Americans

                PART I--HEALTH INSURANCE MARKET REFORMS

SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

    Part A of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.), as amended by section 1001, is further amended--
        (1) by striking the heading for subpart 1 and inserting the 
    following:

                     ``Subpart I--General Reform'';

        (2)(A) in section 2701 (42 U.S.C. 300gg), by striking the 
    section heading and subsection (a) and inserting the following:

``SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER 
              DISCRIMINATION BASED ON HEALTH STATUS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
impose any preexisting condition exclusion with respect to such plan or 
coverage.''; and
        (B) by transferring such section (as amended by subparagraph 
    (A)) so as to appear after the section 2703 added by paragraph (4);
        (3)(A) in section 2702 (42 U.S.C. 300gg-1)--
            (i) by striking the section heading and all that follows 
        through subsection (a);
            (ii) in subsection (b)--
                (I) by striking ``health insurance issuer offering 
            health insurance coverage in connection with a group health 
            plan'' each place that such appears and inserting ``health 
            insurance issuer offering group or individual health 
            insurance coverage''; and
                (II) in paragraph (2)(A)--

                    (aa) by inserting ``or individual'' after 
                ``employer''; and
                    (bb) by inserting ``or individual health coverage, 
                as the case may be'' before the semicolon; and

            (iii) in subsection (e)--
                (I) by striking ``(a)(1)(F)'' and inserting ``(a)(6)'';
                (II) by striking ``2701'' and inserting ``2704''; and
                (III) by striking ``2721(a)'' and inserting 
            ``2735(a)''; and
            (B) by transferring such section (as amended by 
        subparagraph (A)) to appear after section 2705(a) as added by 
        paragraph (4); and
        (4) by inserting after the subpart heading (as added by 
    paragraph (1)) the following:

``SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS.

    ``(a) Prohibiting Discriminatory Premium Rates.--
        ``(1) In general.--With respect to the premium rate charged by 
    a health insurance issuer for health insurance coverage offered in 
    the individual or small group market--
            ``(A) such rate shall vary with respect to the particular 
        plan or coverage involved only by--
                ``(i) whether such plan or coverage covers an 
            individual or family;
                ``(ii) rating area, as established in accordance with 
            paragraph (2);
                ``(iii) age, except that such rate shall not vary by 
            more than 3 to 1 for adults (consistent with section 
            2707(c)); and
                ``(iv) tobacco use, except that such rate shall not 
            vary by more than 1.5 to 1; and
            ``(B) such rate shall not vary with respect to the 
        particular plan or coverage involved by any other factor not 
        described in subparagraph (A).
        ``(2) Rating area.--
            ``(A) In general.--Each State shall establish 1 or more 
        rating areas within that State for purposes of applying the 
        requirements of this title.
            ``(B) Secretarial review.--The Secretary shall review the 
        rating areas established by each State under subparagraph (A) 
        to ensure the adequacy of such areas for purposes of carrying 
        out the requirements of this title. If the Secretary determines 
        a State's rating areas are not adequate, or that a State does 
        not establish such areas, the Secretary may establish rating 
        areas for that State.
        ``(3) Permissible age bands.--The Secretary, in consultation 
    with the National Association of Insurance Commissioners, shall 
    define the permissible age bands for rating purposes under 
    paragraph (1)(A)(iii).
        ``(4) Application of variations based on age or tobacco use.--
    With respect to family coverage under a group health plan or health 
    insurance coverage, the rating variations permitted under clauses 
    (iii) and (iv) of paragraph (1)(A) shall be applied based on the 
    portion of the premium that is attributable to each family member 
    covered under the plan or coverage.
        ``(5) Special rule for large group market.--If a State permits 
    health insurance issuers that offer coverage in the large group 
    market in the State to offer such coverage through the State 
    Exchange (as provided for under section 1312(f)(2)(B) of the 
    Patient Protection and Affordable Care Act), the provisions of this 
    subsection shall apply to all coverage offered in such market in 
    the State.

``SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.

    ``(a) Guaranteed Issuance of Coverage in the Individual and Group 
Market.--Subject to subsections (b) through (e), each health insurance 
issuer that offers health insurance coverage in the individual or group 
market in a State must accept every employer and individual in the 
State that applies for such coverage.
    ``(b) Enrollment.--
        ``(1) Restriction.--A health insurance issuer described in 
    subsection (a) may restrict enrollment in coverage described in 
    such subsection to open or special enrollment periods.
        ``(2) Establishment.--A health insurance issuer described in 
    subsection (a) shall, in accordance with the regulations 
    promulgated under paragraph (3), establish special enrollment 
    periods for qualifying events (under section 603 of the Employee 
    Retirement Income Security Act of 1974).
        ``(3) Regulations.--The Secretary shall promulgate regulations 
    with respect to enrollment periods under paragraphs (1) and (2).

``SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE.

    ``(a) In General.--Except as provided in this section, if a health 
insurance issuer offers health insurance coverage in the individual or 
group market, the issuer must renew or continue in force such coverage 
at the option of the plan sponsor or the individual, as applicable.

``SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
              AND BENEFICIARIES BASED ON HEALTH STATUS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
establish rules for eligibility (including continued eligibility) of 
any individual to enroll under the terms of the plan or coverage based 
on any of the following health status-related factors in relation to 
the individual or a dependent of the individual:
        ``(1) Health status.
        ``(2) Medical condition (including both physical and mental 
    illnesses).
        ``(3) Claims experience.
        ``(4) Receipt of health care.
        ``(5) Medical history.
        ``(6) Genetic information.
        ``(7) Evidence of insurability (including conditions arising 
    out of acts of domestic violence).
        ``(8) Disability.
        ``(9) Any other health status-related factor determined 
    appropriate by the Secretary.
    ``(j) Programs of Health Promotion or Disease Prevention.--
        ``(1) General provisions.--
            ``(A) General rule.--For purposes of subsection (b)(2)(B), 
        a program of health promotion or disease prevention (referred 
        to in this subsection as a `wellness program') shall be a 
        program offered by an employer that is designed to promote 
        health or prevent disease that meets the applicable 
        requirements of this subsection.
            ``(B) No conditions based on health status factor.--If none 
        of the conditions for obtaining a premium discount or rebate or 
        other reward for participation in a wellness program is based 
        on an individual satisfying a standard that is related to a 
        health status factor, such wellness program shall not violate 
        this section if participation in the program is made available 
        to all similarly situated individuals and the requirements of 
        paragraph (2) are complied with.
            ``(C) Conditions based on health status factor.--If any of 
        the conditions for obtaining a premium discount or rebate or 
        other reward for participation in a wellness program is based 
        on an individual satisfying a standard that is related to a 
        health status factor, such wellness program shall not violate 
        this section if the requirements of paragraph (3) are complied 
        with.
        ``(2) Wellness programs not subject to requirements.--If none 
    of the conditions for obtaining a premium discount or rebate or 
    other reward under a wellness program as described in paragraph 
    (1)(B) are based on an individual satisfying a standard that is 
    related to a health status factor (or if such a wellness program 
    does not provide such a reward), the wellness program shall not 
    violate this section if participation in the program is made 
    available to all similarly situated individuals. The following 
    programs shall not have to comply with the requirements of 
    paragraph (3) if participation in the program is made available to 
    all similarly situated individuals:
            ``(A) A program that reimburses all or part of the cost for 
        memberships in a fitness center.
            ``(B) A diagnostic testing program that provides a reward 
        for participation and does not base any part of the reward on 
        outcomes.
            ``(C) A program that encourages preventive care related to 
        a health condition through the waiver of the copayment or 
        deductible requirement under group health plan for the costs of 
        certain items or services related to a health condition (such 
        as prenatal care or well-baby visits).
            ``(D) A program that reimburses individuals for the costs 
        of smoking cessation programs without regard to whether the 
        individual quits smoking.
            ``(E) A program that provides a reward to individuals for 
        attending a periodic health education seminar.
        ``(3) Wellness programs subject to requirements.--If any of the 
    conditions for obtaining a premium discount, rebate, or reward 
    under a wellness program as described in paragraph (1)(C) is based 
    on an individual satisfying a standard that is related to a health 
    status factor, the wellness program shall not violate this section 
    if the following requirements are complied with:
            ``(A) The reward for the wellness program, together with 
        the reward for other wellness programs with respect to the plan 
        that requires satisfaction of a standard related to a health 
        status factor, shall not exceed 30 percent of the cost of 
        employee-only coverage under the plan. If, in addition to 
        employees or individuals, any class of dependents (such as 
        spouses or spouses and dependent children) may participate 
        fully in the wellness program, such reward shall not exceed 30 
        percent of the cost of the coverage in which an employee or 
        individual and any dependents are enrolled. For purposes of 
        this paragraph, the cost of coverage shall be determined based 
        on the total amount of employer and employee contributions for 
        the benefit package under which the employee is (or the 
        employee and any dependents are) receiving coverage. A reward 
        may be in the form of a discount or rebate of a premium or 
        contribution, a waiver of all or part of a cost-sharing 
        mechanism (such as deductibles, copayments, or coinsurance), 
        the absence of a surcharge, or the value of a benefit that 
        would otherwise not be provided under the plan. The Secretaries 
        of Labor, Health and Human Services, and the Treasury may 
        increase the reward available under this subparagraph to up to 
        50 percent of the cost of coverage if the Secretaries determine 
        that such an increase is appropriate.
            ``(B) The wellness program shall be reasonably designed to 
        promote health or prevent disease. A program complies with the 
        preceding sentence if the program has a reasonable chance of 
        improving the health of, or preventing disease in, 
        participating individuals and it is not overly burdensome, is 
        not a subterfuge for discriminating based on a health status 
        factor, and is not highly suspect in the method chosen to 
        promote health or prevent disease.
            ``(C) The plan shall give individuals eligible for the 
        program the opportunity to qualify for the reward under the 
        program at least once each year.
            ``(D) The full reward under the wellness program shall be 
        made available to all similarly situated individuals. For such 
        purpose, among other things:
                ``(i) The reward is not available to all similarly 
            situated individuals for a period unless the wellness 
            program allows--

                    ``(I) for a reasonable alternative standard (or 
                waiver of the otherwise applicable standard) for 
                obtaining the reward for any individual for whom, for 
                that period, it is unreasonably difficult due to a 
                medical condition to satisfy the otherwise applicable 
                standard; and
                    ``(II) for a reasonable alternative standard (or 
                waiver of the otherwise applicable standard) for 
                obtaining the reward for any individual for whom, for 
                that period, it is medically inadvisable to attempt to 
                satisfy the otherwise applicable standard.

                ``(ii) If reasonable under the circumstances, the plan 
            or issuer may seek verification, such as a statement from 
            an individual's physician, that a health status factor 
            makes it unreasonably difficult or medically inadvisable 
            for the individual to satisfy or attempt to satisfy the 
            otherwise applicable standard.
            ``(E) The plan or issuer involved shall disclose in all 
        plan materials describing the terms of the wellness program the 
        availability of a reasonable alternative standard (or the 
        possibility of waiver of the otherwise applicable standard) 
        required under subparagraph (D). If plan materials disclose 
        that such a program is available, without describing its terms, 
        the disclosure under this subparagraph shall not be required.
    ``(k) Existing Programs.--Nothing in this section shall prohibit a 
program of health promotion or disease prevention that was established 
prior to the date of enactment of this section and applied with all 
applicable regulations, and that is operating on such date, from 
continuing to be carried out for as long as such regulations remain in 
effect.
    ``(l) Wellness Program Demonstration Project.--
        ``(1) In general.--Not later than July 1, 2014, the Secretary, 
    in consultation with the Secretary of the Treasury and the 
    Secretary of Labor, shall establish a 10-State demonstration 
    project under which participating States shall apply the provisions 
    of subsection (j) to programs of health promotion offered by a 
    health insurance issuer that offers health insurance coverage in 
    the individual market in such State.
        ``(2) Expansion of demonstration project.--If the Secretary, in 
    consultation with the Secretary of the Treasury and the Secretary 
    of Labor, determines that the demonstration project described in 
    paragraph (1) is effective, such Secretaries may, beginning on July 
    1, 2017 expand such demonstration project to include additional 
    participating States.
        ``(3) Requirements.--
            ``(A) Maintenance of coverage.--The Secretary, in 
        consultation with the Secretary of the Treasury and the 
        Secretary of Labor, shall not approve the participation of a 
        State in the demonstration project under this section unless 
        the Secretaries determine that the State's project is designed 
        in a manner that--
                ``(i) will not result in any decrease in coverage; and
                ``(ii) will not increase the cost to the Federal 
            Government in providing credits under section 36B of the 
            Internal Revenue Code of 1986 or cost-sharing assistance 
            under section 1402 of the Patient Protection and Affordable 
            Care Act.
            ``(B) Other requirements.--States that participate in the 
        demonstration project under this subsection--
                ``(i) may permit premium discounts or rebates or the 
            modification of otherwise applicable copayments or 
            deductibles for adherence to, or participation in, a 
            reasonably designed program of health promotion and disease 
            prevention;
                ``(ii) shall ensure that requirements of consumer 
            protection are met in programs of health promotion in the 
            individual market;
                ``(iii) shall require verification from health 
            insurance issuers that offer health insurance coverage in 
            the individual market of such State that premium 
            discounts--

                    ``(I) do not create undue burdens for individuals 
                insured in the individual market;
                    ``(II) do not lead to cost shifting; and
                    ``(III) are not a subterfuge for discrimination;

                ``(iv) shall ensure that consumer data is protected in 
            accordance with the requirements of section 264(c) of the 
            Health Insurance Portability and Accountability Act of 1996 
            (42 U.S.C. 1320d-2 note); and
                ``(v) shall ensure and demonstrate to the satisfaction 
            of the Secretary that the discounts or other rewards 
            provided under the project reflect the expected level of 
            participation in the wellness program involved and the 
            anticipated effect the program will have on utilization or 
            medical claim costs.
    ``(m) Report.--
        ``(1) In general.--Not later than 3 years after the date of 
    enactment of the Patient Protection and Affordable Care Act, the 
    Secretary, in consultation with the Secretary of the Treasury and 
    the Secretary of Labor, shall submit a report to the appropriate 
    committees of Congress concerning--
            ``(A) the effectiveness of wellness programs (as defined in 
        subsection (j)) in promoting health and preventing disease;
            ``(B) the impact of such wellness programs on the access to 
        care and affordability of coverage for participants and non-
        participants of such programs;
            ``(C) the impact of premium-based and cost-sharing 
        incentives on participant behavior and the role of such 
        programs in changing behavior; and
            ``(D) the effectiveness of different types of rewards.
        ``(2) Data collection.--In preparing the report described in 
    paragraph (1), the Secretaries shall gather relevant information 
    from employers who provide employees with access to wellness 
    programs, including State and Federal agencies.
    ``(n) Regulations.--Nothing in this section shall be construed as 
prohibiting the Secretaries of Labor, Health and Human Services, or the 
Treasury from promulgating regulations in connection with this section.

``SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE.

    ``(a) Providers.--A group health plan and a health insurance issuer 
offering group or individual health insurance coverage shall not 
discriminate with respect to participation under the plan or coverage 
against any health care provider who is acting within the scope of that 
provider's license or certification under applicable State law. This 
section shall not require that a group health plan or health insurance 
issuer contract with any health care provider willing to abide by the 
terms and conditions for participation established by the plan or 
issuer. Nothing in this section shall be construed as preventing a 
group health plan, a health insurance issuer, or the Secretary from 
establishing varying reimbursement rates based on quality or 
performance measures.
    ``(b) Individuals.--The provisions of section 1558 of the Patient 
Protection and Affordable Care Act (relating to non-discrimination) 
shall apply with respect to a group health plan or health insurance 
issuer offering group or individual health insurance coverage.

``SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COVERAGE.

    ``(a) Coverage for Essential Health Benefits Package.--A health 
insurance issuer that offers health insurance coverage in the 
individual or small group market shall ensure that such coverage 
includes the essential health benefits package required under section 
1302(a) of the Patient Protection and Affordable Care Act.
    ``(b) Cost-sharing Under Group Health Plans.--A group health plan 
shall ensure that any annual cost-sharing imposed under the plan does 
not exceed the limitations provided for under paragraphs (1) and (2) of 
section 1302(c).
    ``(c) Child-only Plans.--If a health insurance issuer offers health 
insurance coverage in any level of coverage specified under section 
1302(d) of the Patient Protection and Affordable Care Act, the issuer 
shall also offer such coverage in that level as a plan in which the 
only enrollees are individuals who, as of the beginning of a plan year, 
have not attained the age of 21.
    ``(d) Dental Only.--This section shall not apply to a plan 
described in section 1302(d)(2)(B)(ii)(I).

``SEC. 2708. PROHIBITION ON EXCESSIVE WAITING PERIODS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall not apply any waiting 
period (as defined in section 2704(b)(4)) that exceeds 90 days.''.

                       PART II--OTHER PROVISIONS

SEC. 1251. PRESERVATION OF RIGHT TO MAINTAIN EXISTING COVERAGE.

    (a) No Changes to Existing Coverage.--
        (1) In general.--Nothing in this Act (or an amendment made by 
    this Act) shall be construed to require that an individual 
    terminate coverage under a group health plan or health insurance 
    coverage in which such individual was enrolled on the date of 
    enactment of this Act.
        (2) Continuation of coverage.--With respect to a group health 
    plan or health insurance coverage in which an individual was 
    enrolled on the date of enactment of this Act, this subtitle and 
    subtitle A (and the amendments made by such subtitles) shall not 
    apply to such plan or coverage, regardless of whether the 
    individual renews such coverage after such date of enactment.
    (b) Allowance for Family Members To Join Current Coverage.--With 
respect to a group health plan or health insurance coverage in which an 
individual was enrolled on the date of enactment of this Act and which 
is renewed after such date, family members of such individual shall be 
permitted to enroll in such plan or coverage if such enrollment is 
permitted under the terms of the plan in effect as of such date of 
enactment.
    (c) Allowance for New Employees To Join Current Plan.--A group 
health plan that provides coverage on the date of enactment of this Act 
may provide for the enrolling of new employees (and their families) in 
such plan, and this subtitle and subtitle A (and the amendments made by 
such subtitles) shall not apply with respect to such plan and such new 
employees (and their families).
    (d) Effect on Collective Bargaining Agreements.--In the case of 
health insurance coverage maintained pursuant to one or more collective 
bargaining agreements between employee representatives and one or more 
employers that was ratified before the date of enactment of this Act, 
the provisions of this subtitle and subtitle A (and the amendments made 
by such subtitles) shall not apply until the date on which the last of 
the collective bargaining agreements relating to the coverage 
terminates. Any coverage amendment made pursuant to a collective 
bargaining agreement relating to the coverage which amends the coverage 
solely to conform to any requirement added by this subtitle or subtitle 
A (or amendments) shall not be treated as a termination of such 
collective bargaining agreement.
    (e) Definition.--In this title, the term ``grandfathered health 
plan'' means any group health plan or health insurance coverage to 
which this section applies.

SEC. 1252. RATING REFORMS MUST APPLY UNIFORMLY TO ALL HEALTH INSURANCE 
              ISSUERS AND GROUP HEALTH PLANS.

    Any standard or requirement adopted by a State pursuant to this 
title, or any amendment made by this title, shall be applied uniformly 
to all health plans in each insurance market to which the standard and 
requirements apply. The preceding sentence shall also apply to a State 
standard or requirement relating to the standard or requirement 
required by this title (or any such amendment) that is not the same as 
the standard or requirement but that is not preempted under section 
1321(d).

SEC. 1253. EFFECTIVE DATES.

    This subtitle (and the amendments made by this subtitle) shall 
become effective for plan years beginning on or after January 1, 2014.

        Subtitle D--Available Coverage Choices for All Americans

            PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS

SEC. 1301. QUALIFIED HEALTH PLAN DEFINED.

    (a) Qualified Health Plan.--In this title:
        (1) In general.--The term ``qualified health plan'' means a 
    health plan that--
            (A) has in effect a certification (which may include a seal 
        or other indication of approval) that such plan meets the 
        criteria for certification described in section 1311(c) issued 
        or recognized by each Exchange through which such plan is 
        offered;
            (B) provides the essential health benefits package 
        described in section 1302(a); and
            (C) is offered by a health insurance issuer that--
                (i) is licensed and in good standing to offer health 
            insurance coverage in each State in which such issuer 
            offers health insurance coverage under this title;
                (ii) agrees to offer at least one qualified health plan 
            in the silver level and at least one plan in the gold level 
            in each such Exchange;
                (iii) agrees to charge the same premium rate for each 
            qualified health plan of the issuer without regard to 
            whether the plan is offered through an Exchange or whether 
            the plan is offered directly from the issuer or through an 
            agent; and
                (iv) complies with the regulations developed by the 
            Secretary under section 1311(d) and such other requirements 
            as an applicable Exchange may establish.
        (2) Inclusion of co-op plans and community health insurance 
    option.--Any reference in this title to a qualified health plan 
    shall be deemed to include a qualified health plan offered through 
    the CO-OP program under section 1322 or a community health 
    insurance option under section 1323, unless specifically provided 
    for otherwise.
    (b) Terms Relating to Health Plans.--In this title:
        (1) Health plan.--
            (A) In general.--The term ``health plan'' means health 
        insurance coverage and a group health plan.
            (B) Exception for self-insured plans and mewas.--Except to 
        the extent specifically provided by this title, the term 
        ``health plan'' shall not include a group health plan or 
        multiple employer welfare arrangement to the extent the plan or 
        arrangement is not subject to State insurance regulation under 
        section 514 of the Employee Retirement Income Security Act of 
        1974.
        (2) Health insurance coverage and issuer.--The terms ``health 
    insurance coverage'' and ``health insurance issuer'' have the 
    meanings given such terms by section 2791(b) of the Public Health 
    Service Act.
        (3) Group health plan.--The term ``group health plan'' has the 
    meaning given such term by section 2791(a) of the Public Health 
    Service Act.

SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS.

    (a) Essential Health Benefits Package.--In this title, the term 
``essential health benefits package'' means, with respect to any health 
plan, coverage that--
        (1) provides for the essential health benefits defined by the 
    Secretary under subsection (b);
        (2) limits cost-sharing for such coverage in accordance with 
    subsection (c); and
        (3) subject to subsection (e), provides either the bronze, 
    silver, gold, or platinum level of coverage described in subsection 
    (d).
    (b) Essential Health Benefits.--
        (1) In general.--Subject to paragraph (2), the Secretary shall 
    define the essential health benefits, except that such benefits 
    shall include at least the following general categories and the 
    items and services covered within the categories:
            (A) Ambulatory patient services.
            (B) Emergency services.
            (C) Hospitalization.
            (D) Maternity and newborn care.
            (E) Mental health and substance use disorder services, 
        including behavioral health treatment.
            (F) Prescription drugs.
            (G) Rehabilitative and habilitative services and devices.
            (H) Laboratory services.
            (I) Preventive and wellness services and chronic disease 
        management.
            (J) Pediatric services, including oral and vision care.
        (2) Limitation.--
            (A) In general.--The Secretary shall ensure that the scope 
        of the essential health benefits under paragraph (1) is equal 
        to the scope of benefits provided under a typical employer 
        plan, as determined by the Secretary. To inform this 
        determination, the Secretary of Labor shall conduct a survey of 
        employer-sponsored coverage to determine the benefits typically 
        covered by employers, including multiemployer plans, and 
        provide a report on such survey to the Secretary.
            (B) Certification.--In defining the essential health 
        benefits described in paragraph (1), and in revising the 
        benefits under paragraph (4)(H), the Secretary shall submit a 
        report to the appropriate committees of Congress containing a 
        certification from the Chief Actuary of the Centers for 
        Medicare & Medicaid Services that such essential health 
        benefits meet the limitation described in paragraph (2).
        (3) Notice and hearing.--In defining the essential health 
    benefits described in paragraph (1), and in revising the benefits 
    under paragraph (4)(H), the Secretary shall provide notice and an 
    opportunity for public comment.
        (4) Required elements for consideration.--In defining the 
    essential health benefits under paragraph (1), the Secretary 
    shall--
            (A) ensure that such essential health benefits reflect an 
        appropriate balance among the categories described in such 
        subsection, so that benefits are not unduly weighted toward any 
        category;
            (B) not make coverage decisions, determine reimbursement 
        rates, establish incentive programs, or design benefits in ways 
        that discriminate against individuals because of their age, 
        disability, or expected length of life;
            (C) take into account the health care needs of diverse 
        segments of the population, including women, children, persons 
        with disabilities, and other groups;
            (D) ensure that health benefits established as essential 
        not be subject to denial to individuals against their wishes on 
        the basis of the individuals' age or expected length of life or 
        of the individuals' present or predicted disability, degree of 
        medical dependency, or quality of life;
            (E) provide that a qualified health plan shall not be 
        treated as providing coverage for the essential health benefits 
        described in paragraph (1) unless the plan provides that--
                (i) coverage for emergency department services will be 
            provided without imposing any requirement under the plan 
            for prior authorization of services or any limitation on 
            coverage where the provider of services does not have a 
            contractual relationship with the plan for the providing of 
            services that is more restrictive than the requirements or 
            limitations that apply to emergency department services 
            received from providers who do have such a contractual 
            relationship with the plan; and
                (ii) if such services are provided out-of-network, the 
            cost-sharing requirement (expressed as a copayment amount 
            or coinsurance rate) is the same requirement that would 
            apply if such services were provided in-network;
            (F) provide that if a plan described in section 
        1311(b)(2)(B)(ii) (relating to stand-alone dental benefits 
        plans) is offered through an Exchange, another health plan 
        offered through such Exchange shall not fail to be treated as a 
        qualified health plan solely because the plan does not offer 
        coverage of benefits offered through the stand-alone plan that 
        are otherwise required under paragraph (1)(J); and
            (G) periodically review the essential health benefits under 
        paragraph (1), and provide a report to Congress and the public 
        that contains--
                (i) an assessment of whether enrollees are facing any 
            difficulty accessing needed services for reasons of 
            coverage or cost;
                (ii) an assessment of whether the essential health 
            benefits needs to be modified or updated to account for 
            changes in medical evidence or scientific advancement;
                (iii) information on how the essential health benefits 
            will be modified to address any such gaps in access or 
            changes in the evidence base;
                (iv) an assessment of the potential of additional or 
            expanded benefits to increase costs and the interactions 
            between the addition or expansion of benefits and 
            reductions in existing benefits to meet actuarial 
            limitations described in paragraph (2); and
            (H) periodically update the essential health benefits under 
        paragraph (1) to address any gaps in access to coverage or 
        changes in the evidence base the Secretary identifies in the 
        review conducted under subparagraph (G).
        (5) Rule of construction.--Nothing in this title shall be 
    construed to prohibit a health plan from providing benefits in 
    excess of the essential health benefits described in this 
    subsection.
    (c) Requirements Relating to Cost-Sharing.--
        (1) Annual limitation on cost-sharing.--
            (A) 2014.--The cost-sharing incurred under a health plan 
        with respect to self-only coverage or coverage other than self-
        only coverage for a plan year beginning in 2014 shall not 
        exceed the dollar amounts in effect under section 
        223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-
        only and family coverage, respectively, for taxable years 
        beginning in 2014.
            (B) 2015 and later.--In the case of any plan year beginning 
        in a calendar year after 2014, the limitation under this 
        paragraph shall--
                (i) in the case of self-only coverage, be equal to the 
            dollar amount under subparagraph (A) for self-only coverage 
            for plan years beginning in 2014, increased by an amount 
            equal to the product of that amount and the premium 
            adjustment percentage under paragraph (4) for the calendar 
            year; and
                (ii) in the case of other coverage, twice the amount in 
            effect under clause (i).
        If the amount of any increase under clause (i) is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.
        (2) Annual limitation on deductibles for employer-sponsored 
    plans.--
            (A) In general.--In the case of a health plan offered in 
        the small group market, the deductible under the plan shall not 
        exceed--
                (i) $2,000 in the case of a plan covering a single 
            individual; and
                (ii) $4,000 in the case of any other plan.
        The amounts under clauses (i) and (ii) may be increased by the 
        maximum amount of reimbursement which is reasonably available 
        to a participant under a flexible spending arrangement 
        described in section 106(c)(2) of the Internal Revenue Code of 
        1986 (determined without regard to any salary reduction 
        arrangement).
            (B) Indexing of limits.--In the case of any plan year 
        beginning in a calendar year after 2014--
                (i) the dollar amount under subparagraph (A)(i) shall 
            be increased by an amount equal to the product of that 
            amount and the premium adjustment percentage under 
            paragraph (4) for the calendar year; and
                (ii) the dollar amount under subparagraph (A)(ii) shall 
            be increased to an amount equal to twice the amount in 
            effect under subparagraph (A)(i) for plan years beginning 
            in the calendar year, determined after application of 
            clause (i).
        If the amount of any increase under clause (i) is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.
            (C) Actuarial value.--The limitation under this paragraph 
        shall be applied in such a manner so as to not affect the 
        actuarial value of any health plan, including a plan in the 
        bronze level.
            (D) Coordination with preventive limits.--Nothing in this 
        paragraph shall be construed to allow a plan to have a 
        deductible under the plan apply to benefits described in 
        section 2713 of the Public Health Service Act.
        (3) Cost-sharing.--In this title--
            (A) In general.--The term ``cost-sharing'' includes--
                (i) deductibles, coinsurance, copayments, or similar 
            charges; and
                (ii) any other expenditure required of an insured 
            individual which is a qualified medical expense (within the 
            meaning of section 223(d)(2) of the Internal Revenue Code 
            of 1986) with respect to essential health benefits covered 
            under the plan.
            (B) Exceptions.--Such term does not include premiums, 
        balance billing amounts for non-network providers, or spending 
        for non-covered services.
        (4) Premium adjustment percentage.--For purposes of paragraphs 
    (1)(B)(i) and (2)(B)(i), the premium adjustment percentage for any 
    calendar year is the percentage (if any) by which the average per 
    capita premium for health insurance coverage in the United States 
    for the preceding calendar year (as estimated by the Secretary no 
    later than October 1 of such preceding calendar year) exceeds such 
    average per capita premium for 2013 (as determined by the 
    Secretary).
    (d) Levels of Coverage.--
        (1) Levels of coverage defined.--The levels of coverage 
    described in this subsection are as follows:
            (A) Bronze level.--A plan in the bronze level shall provide 
        a level of coverage that is designed to provide benefits that 
        are actuarially equivalent to 60 percent of the full actuarial 
        value of the benefits provided under the plan.
            (B) Silver level.--A plan in the silver level shall provide 
        a level of coverage that is designed to provide benefits that 
        are actuarially equivalent to 70 percent of the full actuarial 
        value of the benefits provided under the plan.
            (C) Gold level.--A plan in the gold level shall provide a 
        level of coverage that is designed to provide benefits that are 
        actuarially equivalent to 80 percent of the full actuarial 
        value of the benefits provided under the plan.
            (D) Platinum level.--A plan in the platinum level shall 
        provide a level of coverage that is designed to provide 
        benefits that are actuarially equivalent to 90 percent of the 
        full actuarial value of the benefits provided under the plan.
        (2) Actuarial value.--
            (A) In general.--Under regulations issued by the Secretary, 
        the level of coverage of a plan shall be determined on the 
        basis that the essential health benefits described in 
        subsection (b) shall be provided to a standard population (and 
        without regard to the population the plan may actually provide 
        benefits to).
            (B) Employer contributions.--The Secretary may issue 
        regulations under which employer contributions to a health 
        savings account (within the meaning of section 223 of the 
        Internal Revenue Code of 1986) may be taken into account in 
        determining the level of coverage for a plan of the employer.
            (C) Application.--In determining under this title, the 
        Public Health Service Act, or the Internal Revenue Code of 1986 
        the percentage of the total allowed costs of benefits provided 
        under a group health plan or health insurance coverage that are 
        provided by such plan or coverage, the rules contained in the 
        regulations under this paragraph shall apply.
        (3) Allowable variance.--The Secretary shall develop guidelines 
    to provide for a de minimis variation in the actuarial valuations 
    used in determining the level of coverage of a plan to account for 
    differences in actuarial estimates.
        (4) Plan reference.--In this title, any reference to a bronze, 
    silver, gold, or platinum plan shall be treated as a reference to a 
    qualified health plan providing a bronze, silver, gold, or platinum 
    level of coverage, as the case may be.
    (e) Catastrophic Plan.--
        (1) In general.--A health plan not providing a bronze, silver, 
    gold, or platinum level of coverage shall be treated as meeting the 
    requirements of subsection (d) with respect to any plan year if--
            (A) the only individuals who are eligible to enroll in the 
        plan are individuals described in paragraph (2); and
            (B) the plan provides--
                (i) except as provided in clause (ii), the essential 
            health benefits determined under subsection (b), except 
            that the plan provides no benefits for any plan year until 
            the individual has incurred cost-sharing expenses in an 
            amount equal to the annual limitation in effect under 
            subsection (c)(1) for the plan year (except as provided for 
            in section 2713); and
                (ii) coverage for at least three primary care visits.
        (2) Individuals eligible for enrollment.--An individual is 
    described in this paragraph for any plan year if the individual--
            (A) has not attained the age of 30 before the beginning of 
        the plan year; or
            (B) has a certification in effect for any plan year under 
        this title that the individual is exempt from the requirement 
        under section 5000A of the Internal Revenue Code of 1986 by 
        reason of--
                (i) section 5000A(e)(1) of such Code (relating to 
            individuals without affordable coverage); or
                (ii) section 5000A(e)(5) of such Code (relating to 
            individuals with hardships).
        (3) Restriction to individual market.--If a health insurance 
    issuer offers a health plan described in this subsection, the 
    issuer may only offer the plan in the individual market.
    (f) Child-only Plans.--If a qualified health plan is offered 
through the Exchange in any level of coverage specified under 
subsection (d), the issuer shall also offer that plan through the 
Exchange in that level as a plan in which the only enrollees are 
individuals who, as of the beginning of a plan year, have not attained 
the age of 21, and such plan shall be treated as a qualified health 
plan.

SEC. 1303. SPECIAL RULES.

    (a) Special Rules Relating to Coverage of Abortion Services.--
        (1) Voluntary choice of coverage of abortion services.--
            (A) In general.--Notwithstanding any other provision of 
        this title (or any amendment made by this title), and subject 
        to subparagraphs (C) and (D)--
                (i) nothing in this title (or any amendment made by 
            this title), shall be construed to require a qualified 
            health plan to provide coverage of services described in 
            subparagraph (B)(i) or (B)(ii) as part of its essential 
            health benefits for any plan year; and
                (ii) the issuer of a qualified health plan shall 
            determine whether or not the plan provides coverage of 
            services described in subparagraph (B)(i) or (B)(ii) as 
            part of such benefits for the plan year.
            (B) Abortion services.--
                (i) Abortions for which public funding is prohibited.--
            The services described in this clause are abortions for 
            which the expenditure of Federal funds appropriated for the 
            Department of Health and Human Services is not permitted, 
            based on the law as in effect as of the date that is 6 
            months before the beginning of the plan year involved.
                (ii) Abortions for which public funding is allowed.--
            The services described in this clause are abortions for 
            which the expenditure of Federal funds appropriated for the 
            Department of Health and Human Services is permitted, based 
            on the law as in effect as of the date that is 6 months 
            before the beginning of the plan year involved.
            (C) Prohibition on federal funds for abortion services in 
        community health insurance option.--
                (i) Determination by secretary.--The Secretary may not 
            determine, in accordance with subparagraph (A)(ii), that 
            the community health insurance option established under 
            section 1323 shall provide coverage of services described 
            in subparagraph (B)(i) as part of benefits for the plan 
            year unless the Secretary--

                    (I) assures compliance with the requirements of 
                paragraph (2);
                    (II) assures, in accordance with applicable 
                provisions of generally accepted accounting 
                requirements, circulars on funds management of the 
                Office of Management and Budget, and guidance on 
                accounting of the Government Accountability Office, 
                that no Federal funds are used for such coverage; and
                    (III) notwithstanding section 1323(e)(1)(C) or any 
                other provision of this title, takes all necessary 
                steps to assure that the United States does not bear 
                the insurance risk for a community health insurance 
                option's coverage of services described in subparagraph 
                (B)(i).

                (ii) State requirement.--If a State requires, in 
            addition to the essential health benefits required under 
            section 1323(b)(3) (A), coverage of services described in 
            subparagraph (B)(i) for enrollees of a community health 
            insurance option offered in such State, the State shall 
            assure that no funds flowing through or from the community 
            health insurance option, and no other Federal funds, pay or 
            defray the cost of providing coverage of services described 
            in subparagraph (B)(i). The United States shall not bear 
            the insurance risk for a State's required coverage of 
            services described in subparagraph (B)(i).
                (iii) Exceptions.--Nothing in this subparagraph shall 
            apply to coverage of services described in subparagraph 
            (B)(ii) by the community health insurance option. Services 
            described in subparagraph (B)(ii) shall be covered to the 
            same extent as such services are covered under title XIX of 
            the Social Security Act.
            (D) Assured availability of varied coverage through 
        exchanges.--
                (i) In general.--The Secretary shall assure that with 
            respect to qualified health plans offered in any Exchange 
            established pursuant to this title--

                    (I) there is at least one such plan that provides 
                coverage of services described in clauses (i) and (ii) 
                of subparagraph (B); and
                    (II) there is at least one such plan that does not 
                provide coverage of services described in subparagraph 
                (B)(i).

                (ii) Special rules.--For purposes of clause (i)--

                    (I) a plan shall be treated as described in clause 
                (i)(II) if the plan does not provide coverage of 
                services described in either subparagraph (B)(i) or 
                (B)(ii); and
                    (II) if a State has one Exchange covering more than 
                1 insurance market, the Secretary shall meet the 
                requirements of clause (i) separately with respect to 
                each such market.

        (2) Prohibition on the use of federal funds.--
            (A) In general.--If a qualified health plan provides 
        coverage of services described in paragraph (1)(B)(i), the 
        issuer of the plan shall not use any amount attributable to any 
        of the following for purposes of paying for such services:
                (i) The credit under section 36B of the Internal 
            Revenue Code of 1986 (and the amount (if any) of the 
            advance payment of the credit under section 1412 of the 
            Patient Protection and Affordable Care Act).
                (ii) Any cost-sharing reduction under section 1402 of 
            thePatient Protection and Affordable Care Act (and the 
            amount (if any) of the advance payment of the reduction 
            under section 1412 of the Patient Protection and Affordable 
            Care Act).
            (B) Segregation of funds.--In the case of a plan to which 
        subparagraph (A) applies, the issuer of the plan shall, out of 
        amounts not described in subparagraph (A), segregate an amount 
        equal to the actuarial amounts determined under subparagraph 
        (C) for all enrollees from the amounts described in 
        subparagraph (A).
            (C) Actuarial value of optional service coverage.--
                (i) In general.--The Secretary shall estimate the basic 
            per enrollee, per month cost, determined on an average 
            actuarial basis, for including coverage under a qualified 
            health plan of the services described in paragraph 
            (1)(B)(i).
                (ii) Considerations.--In making such estimate, the 
            Secretary--

                    (I) may take into account the impact on overall 
                costs of the inclusion of such coverage, but may not 
                take into account any cost reduction estimated to 
                result from such services, including prenatal care, 
                delivery, or postnatal care;
                    (II) shall estimate such costs as if such coverage 
                were included for the entire population covered; and
                    (III) may not estimate such a cost at less than $1 
                per enrollee, per month.

        (3) Provider conscience protections.--No individual health care 
    provider or health care facility may be discriminated against 
    because of a willingness or an unwillingness, if doing so is 
    contrary to the religious or moral beliefs of the provider or 
    facility, to provide, pay for, provide coverage of, or refer for 
    abortions.
    (b) Application of State and Federal Laws Regarding Abortion.--
        (1) No preemption of state laws regarding abortion.--Nothing in 
    this Act shall be construed to preempt or otherwise have any effect 
    on State laws regarding the prohibition of (or requirement of) 
    coverage, funding, or procedural requirements on abortions, 
    including parental notification or consent for the performance of 
    an abortion on a minor.
        (2) No effect on federal laws regarding abortion.--
            (A) In general.--Nothing in this Act shall be construed to 
        have any effect on Federal laws regarding--
                (i) conscience protection;
                (ii) willingness or refusal to provide abortion; and
                (iii) discrimination on the basis of the willingness or 
            refusal to provide, pay for, cover, or refer for abortion 
            or to provide or participate in training to provide 
            abortion.
        (3) No effect on federal civil rights law.--Nothing in this 
    subsection shall alter the rights and obligations of employees and 
    employers under title VII of the Civil Rights Act of 1964.
    (c) Application of Emergency Services Laws.--Nothing in this Act 
shall be construed to relieve any health care provider from providing 
emergency services as required by State or Federal law, including 
section 1867 of the Social Security Act (popularly known as 
``EMTALA'').

SEC. 1304. RELATED DEFINITIONS.

    (a) Definitions Relating to Markets.--In this title:
        (1) Group market.--The term ``group market'' means the health 
    insurance market under which individuals obtain health insurance 
    coverage (directly or through any arrangement) on behalf of 
    themselves (and their dependents) through a group health plan 
    maintained by an employer.
        (2) Individual market.--The term ``individual market'' means 
    the market for health insurance coverage offered to individuals 
    other than in connection with a group health plan.
        (3) Large and small group markets.--The terms ``large group 
    market'' and ``small group market'' mean the health insurance 
    market under which individuals obtain health insurance coverage 
    (directly or through any arrangement) on behalf of themselves (and 
    their dependents) through a group health plan maintained by a large 
    employer (as defined in subsection (b)(1)) or by a small employer 
    (as defined in subsection (b)(2)), respectively.
    (b) Employers.--In this title:
        (1) Large employer.--The term ``large employer'' means, in 
    connection with a group health plan with respect to a calendar year 
    and a plan year, an employer who employed an average of at least 
    101 employees on business days during the preceding calendar year 
    and who employs at least 1 employee on the first day of the plan 
    year.
        (2) Small employer.--The term ``small employer'' means, in 
    connection with a group health plan with respect to a calendar year 
    and a plan year, an employer who employed an average of at least 1 
    but not more than 100 employees on business days during the 
    preceding calendar year and who employs at least 1 employee on the 
    first day of the plan year.
        (3) State option to treat 50 employees as small.--In the case 
    of plan years beginning before January 1, 2016, a State may elect 
    to apply this subsection by substituting ``51 employees'' for ``101 
    employees'' in paragraph (1) and by substituting ``50 employees'' 
    for ``100 employees'' in paragraph (2).
        (4) Rules for determining employer size.--For purposes of this 
    subsection--
            (A) Application of aggregation rule for employers.--All 
        persons treated as a single employer under subsection (b), (c), 
        (m), or (o) of section 414 of the Internal Revenue Code of 1986 
        shall be treated as 1 employer.
            (B) Employers not in existence in preceding year.--In the 
        case of an employer which was not in existence throughout the 
        preceding calendar year, the determination of whether such 
        employer is a small or large employer shall be based on the 
        average number of employees that it is reasonably expected such 
        employer will employ on business days in the current calendar 
        year.
            (C) Predecessors.--Any reference in this subsection to an 
        employer shall include a reference to any predecessor of such 
        employer.
            (D) Continuation of participation for growing small 
        employers.--If--
                (i) a qualified employer that is a small employer makes 
            enrollment in qualified health plans offered in the small 
            group market available to its employees through an 
            Exchange; and
                (ii) the employer ceases to be a small employer by 
            reason of an increase in the number of employees of such 
            employer;
        the employer shall continue to be treated as a small employer 
        for purposes of this subtitle for the period beginning with the 
        increase and ending with the first day on which the employer 
        does not make such enrollment available to its employees.
    (c) Secretary.--In this title, the term ``Secretary'' means the 
Secretary of Health and Human Services.
    (d) State.--In this title, the term ``State'' means each of the 50 
States and the District of Columbia.

  PART II--CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH 
                           BENEFIT EXCHANGES

SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS.

    (a) Assistance to States to Establish American Health Benefit 
Exchanges.--
        (1) Planning and establishment grants.--There shall be 
    appropriated to the Secretary, out of any moneys in the Treasury 
    not otherwise appropriated, an amount necessary to enable the 
    Secretary to make awards, not later than 1 year after the date of 
    enactment of this Act, to States in the amount specified in 
    paragraph (2) for the uses described in paragraph (3).
        (2) Amount specified.--For each fiscal year, the Secretary 
    shall determine the total amount that the Secretary will make 
    available to each State for grants under this subsection.
        (3) Use of funds.--A State shall use amounts awarded under this 
    subsection for activities (including planning activities) related 
    to establishing an American Health Benefit Exchange, as described 
    in subsection (b).
        (4) Renewability of grant.--
            (A) In general.--Subject to subsection (d)(4), the 
        Secretary may renew a grant awarded under paragraph (1) if the 
        State recipient of such grant--
                (i) is making progress, as determined by the Secretary, 
            toward--

                    (I) establishing an Exchange; and
                    (II) implementing the reforms described in 
                subtitles A and C (and the amendments made by such 
                subtitles); and

                (ii) is meeting such other benchmarks as the Secretary 
            may establish.
            (B) Limitation.--No grant shall be awarded under this 
        subsection after January 1, 2015.
        (5) Technical assistance to facilitate participation in shop 
    exchanges.--The Secretary shall provide technical assistance to 
    States to facilitate the participation of qualified small 
    businesses in such States in SHOP Exchanges.
    (b) American Health Benefit Exchanges.--
        (1) In general.--Each State shall, not later than January 1, 
    2014, establish an American Health Benefit Exchange (referred to in 
    this title as an ``Exchange'') for the State that--
            (A) facilitates the purchase of qualified health plans;
            (B) provides for the establishment of a Small Business 
        Health Options Program (in this title referred to as a ``SHOP 
        Exchange'') that is designed to assist qualified employers in 
        the State who are small employers in facilitating the 
        enrollment of their employees in qualified health plans offered 
        in the small group market in the State; and
            (C) meets the requirements of subsection (d).
        (2) Merger of individual and shop exchanges.--A State may elect 
    to provide only one Exchange in the State for providing both 
    Exchange and SHOP Exchange services to both qualified individuals 
    and qualified small employers, but only if the Exchange has 
    adequate resources to assist such individuals and employers.
    (c) Responsibilities of the Secretary.--
        (1) In general.--The Secretary shall, by regulation, establish 
    criteria for the certification of health plans as qualified health 
    plans. Such criteria shall require that, to be certified, a plan 
    shall, at a minimum--
            (A) meet marketing requirements, and not employ marketing 
        practices or benefit designs that have the effect of 
        discouraging the enrollment in such plan by individuals with 
        significant health needs;
            (B) ensure a sufficient choice of providers (in a manner 
        consistent with applicable network adequacy provisions under 
        section 2702(c) of the Public Health Service Act), and provide 
        information to enrollees and prospective enrollees on the 
        availability of in-network and out-of-network providers;
            (C) include within health insurance plan networks those 
        essential community providers, where available, that serve 
        predominately low-income, medically-underserved individuals, 
        such as health care providers defined in section 340B(a)(4) of 
        the Public Health Service Act and providers described in 
        section 1927(c)(1)(D)(i)(IV) of the Social Security Act as set 
        forth by section 221 of Public Law 111-8, except that nothing 
        in this subparagraph shall be construed to require any health 
        plan to provide coverage for any specific medical procedure;
            (D)(i) be accredited with respect to local performance on 
        clinical quality measures such as the Healthcare Effectiveness 
        Data and Information Set, patient experience ratings on a 
        standardized Consumer Assessment of Healthcare Providers and 
        Systems survey, as well as consumer access, utilization 
        management, quality assurance, provider credentialing, 
        complaints and appeals, network adequacy and access, and 
        patient information programs by any entity recognized by the 
        Secretary for the accreditation of health insurance issuers or 
        plans (so long as any such entity has transparent and rigorous 
        methodological and scoring criteria); or
            (ii) receive such accreditation within a period established 
        by an Exchange for such accreditation that is applicable to all 
        qualified health plans;
            (E) implement a quality improvement strategy described in 
        subsection (g)(1);
            (F) utilize a uniform enrollment form that qualified 
        individuals and qualified employers may use (either 
        electronically or on paper) in enrolling in qualified health 
        plans offered through such Exchange, and that takes into 
        account criteria that the National Association of Insurance 
        Commissioners develops and submits to the Secretary;
            (G) utilize the standard format established for presenting 
        health benefits plan options; and
            (H) provide information to enrollees and prospective 
        enrollees, and to each Exchange in which the plan is offered, 
        on any quality measures for health plan performance endorsed 
        under section 399JJ of the Public Health Service Act, as 
        applicable.
        (2) Rule of construction.--Nothing in paragraph (1)(C) shall be 
    construed to require a qualified health plan to contract with a 
    provider described in such paragraph if such provider refuses to 
    accept the generally applicable payment rates of such plan.
        (3) Rating system.--The Secretary shall develop a rating system 
    that would rate qualified health plans offered through an Exchange 
    in each benefits level on the basis of the relative quality and 
    price. The Exchange shall include the quality rating in the 
    information provided to individuals and employers through the 
    Internet portal established under paragraph (4).
        (4) Enrollee satisfaction system.--The Secretary shall develop 
    an enrollee satisfaction survey system that would evaluate the 
    level of enrollee satisfaction with qualified health plans offered 
    through an Exchange, for each such qualified health plan that had 
    more than 500 enrollees in the previous year. The Exchange shall 
    include enrollee satisfaction information in the information 
    provided to individuals and employers through the Internet portal 
    established under paragraph (5) in a manner that allows individuals 
    to easily compare enrollee satisfaction levels between comparable 
    plans.
        (5) Internet portals.--The Secretary shall--
            (A) continue to operate, maintain, and update the Internet 
        portal developed under section 1103(a) and to assist States in 
        developing and maintaining their own such portal; and
            (B) make available for use by Exchanges a model template 
        for an Internet portal that may be used to direct qualified 
        individuals and qualified employers to qualified health plans, 
        to assist such individuals and employers in determining whether 
        they are eligible to participate in an Exchange or eligible for 
        a premium tax credit or cost-sharing reduction, and to present 
        standardized information (including quality ratings) regarding 
        qualified health plans offered through an Exchange to assist 
        consumers in making easy health insurance choices.
    Such template shall include, with respect to each qualified health 
    plan offered through the Exchange in each rating area, access to 
    the uniform outline of coverage the plan is required to provide 
    under section 2716 of the Public Health Service Act and to a copy 
    of the plan's written policy.
        (6) Enrollment periods.--The Secretary shall require an 
    Exchange to provide for--
            (A) an initial open enrollment, as determined by the 
        Secretary (such determination to be made not later than July 1, 
        2012);
            (B) annual open enrollment periods, as determined by the 
        Secretary for calendar years after the initial enrollment 
        period;
            (C) special enrollment periods specified in section 9801 of 
        the Internal Revenue Code of 1986 and other special enrollment 
        periods under circumstances similar to such periods under part 
        D of title XVIII of the Social Security Act; and
            (D) special monthly enrollment periods for Indians (as 
        defined in section 4 of the Indian Health Care Improvement 
        Act).
    (d) Requirements.--
        (1) In general.--An Exchange shall be a governmental agency or 
    nonprofit entity that is established by a State.
        (2) Offering of coverage.--
            (A) In general.--An Exchange shall make available qualified 
        health plans to qualified individuals and qualified employers.
            (B) Limitation.--
                (i) In general.--An Exchange may not make available any 
            health plan that is not a qualified health plan.
                (ii) Offering of stand-alone dental benefits.--Each 
            Exchange within a State shall allow an issuer of a plan 
            that only provides limited scope dental benefits meeting 
            the requirements of section 9832(c)(2)(A) of the Internal 
            Revenue Code of 1986 to offer the plan through the Exchange 
            (either separately or in conjunction with a qualified 
            health plan) if the plan provides pediatric dental benefits 
            meeting the requirements of section 1302(b)(1)(J)).
        (3) Rules relating to additional required benefits.--
            (A) In general.--Except as provided in subparagraph (B), an 
        Exchange may make available a qualified health plan 
        notwithstanding any provision of law that may require benefits 
        other than the essential health benefits specified under 
        section 1302(b).
            (B) States may require additional benefits.--
                (i) In general.--Subject to the requirements of clause 
            (ii), a State may require that a qualified health plan 
            offered in such State offer benefits in addition to the 
            essential health benefits specified under section 1302(b).
                (ii) State must assume cost.--A State shall make 
            payments to or on behalf of an individual eligible for the 
            premium tax credit under section 36B of the Internal 
            Revenue Code of 1986 and any cost-sharing reduction under 
            section 1402 to defray the cost to the individual of any 
            additional benefits described in clause (i) which are not 
            eligible for such credit or reduction under section 
            36B(b)(3)(D) of such Code and section 1402(c)(4).
        (4) Functions.--An Exchange shall, at a minimum--
            (A) implement procedures for the certification, 
        recertification, and decertification, consistent with 
        guidelines developed by the Secretary under subsection (c), of 
        health plans as qualified health plans;
            (B) provide for the operation of a toll-free telephone 
        hotline to respond to requests for assistance;
            (C) maintain an Internet website through which enrollees 
        and prospective enrollees of qualified health plans may obtain 
        standardized comparative information on such plans;
            (D) assign a rating to each qualified health plan offered 
        through such Exchange in accordance with the criteria developed 
        by the Secretary under subsection (c)(3);
            (E) utilize a standardized format for presenting health 
        benefits plan options in the Exchange, including the use of the 
        uniform outline of coverage established under section 2715 of 
        the Public Health Service Act;
            (F) in accordance with section 1413, inform individuals of 
        eligibility requirements for the medicaid program under title 
        XIX of the Social Security Act, the CHIP program under title 
        XXI of such Act, or any applicable State or local public 
        program and if through screening of the application by the 
        Exchange, the Exchange determines that such individuals are 
        eligible for any such program, enroll such individuals in such 
        program;
            (G) establish and make available by electronic means a 
        calculator to determine the actual cost of coverage after the 
        application of any premium tax credit under section 36B of the 
        Internal Revenue Code of 1986 and any cost-sharing reduction 
        under section 1402;
            (H) subject to section 1411, grant a certification 
        attesting that, for purposes of the individual responsibility 
        penalty under section 5000A of the Internal Revenue Code of 
        1986, an individual is exempt from the individual requirement 
        or from the penalty imposed by such section because--
                (i) there is no affordable qualified health plan 
            available through the Exchange, or the individual's 
            employer, covering the individual; or
                (ii) the individual meets the requirements for any 
            other such exemption from the individual responsibility 
            requirement or penalty;
            (I) transfer to the Secretary of the Treasury--
                (i) a list of the individuals who are issued a 
            certification under subparagraph (H), including the name 
            and taxpayer identification number of each individual;
                (ii) the name and taxpayer identification number of 
            each individual who was an employee of an employer but who 
            was determined to be eligible for the premium tax credit 
            under section 36B of the Internal Revenue Code of 1986 
            because--

                    (I) the employer did not provide minimum essential 
                coverage; or
                    (II) the employer provided such minimum essential 
                coverage but it was determined under section 
                36B(c)(2)(C) of such Code to either be unaffordable to 
                the employee or not provide the required minimum 
                actuarial value; and

                (iii) the name and taxpayer identification number of 
            each individual who notifies the Exchange under section 
            1411(b)(4) that they have changed employers and of each 
            individual who ceases coverage under a qualified health 
            plan during a plan year (and the effective date of such 
            cessation);
            (J) provide to each employer the name of each employee of 
        the employer described in subparagraph (I)(ii) who ceases 
        coverage under a qualified health plan during a plan year (and 
        the effective date of such cessation); and
            (K) establish the Navigator program described in subsection 
        (i).
        (5) Funding limitations.--
            (A) No federal funds for continued operations.--In 
        establishing an Exchange under this section, the State shall 
        ensure that such Exchange is self-sustaining beginning on 
        January 1, 2015, including allowing the Exchange to charge 
        assessments or user fees to participating health insurance 
        issuers, or to otherwise generate funding, to support its 
        operations.
            (B) Prohibiting wasteful use of funds.--In carrying out 
        activities under this subsection, an Exchange shall not utilize 
        any funds intended for the administrative and operational 
        expenses of the Exchange for staff retreats, promotional 
        giveaways, excessive executive compensation, or promotion of 
        Federal or State legislative and regulatory modifications.
        (6) Consultation.--An Exchange shall consult with stakeholders 
    relevant to carrying out the activities under this section, 
    including--
            (A) health care consumers who are enrollees in qualified 
        health plans;
            (B) individuals and entities with experience in 
        facilitating enrollment in qualified health plans;
            (C) representatives of small businesses and self-employed 
        individuals;
            (D) State Medicaid offices; and
            (E) advocates for enrolling hard to reach populations.
        (7) Publication of costs.--An Exchange shall publish the 
    average costs of licensing, regulatory fees, and any other payments 
    required by the Exchange, and the administrative costs of such 
    Exchange, on an Internet website to educate consumers on such 
    costs. Such information shall also include monies lost to waste, 
    fraud, and abuse.
    (e) Certification.--
        (1) In general.--An Exchange may certify a health plan as a 
    qualified health plan if--
            (A) such health plan meets the requirements for 
        certification as promulgated by the Secretary under subsection 
        (c)(1); and
            (B) the Exchange determines that making available such 
        health plan through such Exchange is in the interests of 
        qualified individuals and qualified employers in the State or 
        States in which such Exchange operates, except that the 
        Exchange may not exclude a health plan--
                (i) on the basis that such plan is a fee-for-service 
            plan;
                (ii) through the imposition of premium price controls; 
            or
                (iii) on the basis that the plan provides treatments 
            necessary to prevent patients' deaths in circumstances the 
            Exchange determines are inappropriate or too costly.
        (2) Premium considerations.--The Exchange shall require health 
    plans seeking certification as qualified health plans to submit a 
    justification for any premium increase prior to implementation of 
    the increase. Such plans shall prominently post such information on 
    their websites. The Exchange may take this information, and the 
    information and the recommendations provided to the Exchange by the 
    State under section 2794(b)(1) of the Public Health Service Act 
    (relating to patterns or practices of excessive or unjustified 
    premium increases), into consideration when determining whether to 
    make such health plan available through the Exchange. The Exchange 
    shall take into account any excess of premium growth outside the 
    Exchange as compared to the rate of such growth inside the 
    Exchange, including information reported by the States.
    (f) Flexibility.--
        (1) Regional or other interstate exchanges.--An Exchange may 
    operate in more than one State if--
            (A) each State in which such Exchange operates permits such 
        operation; and
            (B) the Secretary approves such regional or interstate 
        Exchange.
        (2) Subsidiary exchanges.--A State may establish one or more 
    subsidiary Exchanges if--
            (A) each such Exchange serves a geographically distinct 
        area; and
            (B) the area served by each such Exchange is at least as 
        large as a rating area described in section 2701(a) of the 
        Public Health Service Act.
        (3) Authority to contract.--
            (A) In general.--A State may elect to authorize an Exchange 
        established by the State under this section to enter into an 
        agreement with an eligible entity to carry out 1 or more 
        responsibilities of the Exchange.
            (B) Eligible entity.--In this paragraph, the term 
        ``eligible entity'' means--
                (i) a person--

                    (I) incorporated under, and subject to the laws of, 
                1 or more States;
                    (II) that has demonstrated experience on a State or 
                regional basis in the individual and small group health 
                insurance markets and in benefits coverage; and
                    (III) that is not a health insurance issuer or that 
                is treated under subsection (a) or (b) of section 52 of 
                the Internal Revenue Code of 1986 as a member of the 
                same controlled group of corporations (or under common 
                control with) as a health insurance issuer; or

                (ii) the State medicaid agency under title XIX of the 
            Social Security Act.
    (g) Rewarding Quality Through Market-Based Incentives.--
        (1) Strategy described.--A strategy described in this paragraph 
    is a payment structure that provides increased reimbursement or 
    other incentives for--
            (A) improving health outcomes through the implementation of 
        activities that shall include quality reporting, effective case 
        management, care coordination, chronic disease management, 
        medication and care compliance initiatives, including through 
        the use of the medical home model, for treatment or services 
        under the plan or coverage;
            (B) the implementation of activities to prevent hospital 
        readmissions through a comprehensive program for hospital 
        discharge that includes patient-centered education and 
        counseling, comprehensive discharge planning, and post 
        discharge reinforcement by an appropriate health care 
        professional;
            (C) the implementation of activities to improve patient 
        safety and reduce medical errors through the appropriate use of 
        best clinical practices, evidence based medicine, and health 
        information technology under the plan or coverage; and
            (D) the implementation of wellness and health promotion 
        activities.
        (2) Guidelines.--The Secretary, in consultation with experts in 
    health care quality and stakeholders, shall develop guidelines 
    concerning the matters described in paragraph (1).
        (3) Requirements.--The guidelines developed under paragraph (2) 
    shall require the periodic reporting to the applicable Exchange of 
    the activities that a qualified health plan has conducted to 
    implement a strategy described in paragraph (1).
    (h) Quality Improvement.--
        (1) Enhancing patient safety.--Beginning on January 1, 2015, a 
    qualified health plan may contract with--
            (A) a hospital with greater than 50 beds only if such 
        hospital--
                (i) utilizes a patient safety evaluation system as 
            described in part C of title IX of the Public Health 
            Service Act; and
                (ii) implements a mechanism to ensure that each patient 
            receives a comprehensive program for hospital discharge 
            that includes patient-centered education and counseling, 
            comprehensive discharge planning, and post discharge 
            reinforcement by an appropriate health care professional; 
            or
            (B) a health care provider only if such provider implements 
        such mechanisms to improve health care quality as the Secretary 
        may by regulation require.
        (2) Exceptions.--The Secretary may establish reasonable 
    exceptions to the requirements described in paragraph (1).
        (3) Adjustment.--The Secretary may by regulation adjust the 
    number of beds described in paragraph (1)(A).
    (i) Navigators.--
        (1) In general.--An Exchange shall establish a program under 
    which it awards grants to entities described in paragraph (2) to 
    carry out the duties described in paragraph (3).
        (2) Eligibility.--
            (A) In general.--To be eligible to receive a grant under 
        paragraph (1), an entity shall demonstrate to the Exchange 
        involved that the entity has existing relationships, or could 
        readily establish relationships, with employers and employees, 
        consumers (including uninsured and underinsured consumers), or 
        self-employed individuals likely to be qualified to enroll in a 
        qualified health plan.
            (B) Types.--Entities described in subparagraph (A) may 
        include trade, industry, and professional associations, 
        commercial fishing industry organizations, ranching and farming 
        organizations, community and consumer-focused nonprofit groups, 
        chambers of commerce, unions, small business development 
        centers, other licensed insurance agents and brokers, and other 
        entities that--
                (i) are capable of carrying out the duties described in 
            paragraph (3);
                (ii) meet the standards described in paragraph (4); and
                (iii) provide information consistent with the standards 
            developed under paragraph (5).
        (3) Duties.--An entity that serves as a navigator under a grant 
    under this subsection shall--
            (A) conduct public education activities to raise awareness 
        of the availability of qualified health plans;
            (B) distribute fair and impartial information concerning 
        enrollment in qualified health plans, and the availability of 
        premium tax credits under section 36B of the Internal Revenue 
        Code of 1986 and cost-sharing reductions under section 1402;
            (C) facilitate enrollment in qualified health plans;
            (D) provide referrals to any applicable office of health 
        insurance consumer assistance or health insurance ombudsman 
        established under section 2793 of the Public Health Service 
        Act, or any other appropriate State agency or agencies, for any 
        enrollee with a grievance, complaint, or question regarding 
        their health plan, coverage, or a determination under such plan 
        or coverage; and
            (E) provide information in a manner that is culturally and 
        linguistically appropriate to the needs of the population being 
        served by the Exchange or Exchanges.
        (4) Standards.--
            (A) In general.--The Secretary shall establish standards 
        for navigators under this subsection, including provisions to 
        ensure that any private or public entity that is selected as a 
        navigator is qualified, and licensed if appropriate, to engage 
        in the navigator activities described in this subsection and to 
        avoid conflicts of interest. Under such standards, a navigator 
        shall not--
                (i) be a health insurance issuer; or
                (ii) receive any consideration directly or indirectly 
            from any health insurance issuer in connection with the 
            enrollment of any qualified individuals or employees of a 
            qualified employer in a qualified health plan.
        (5) Fair and impartial information and services.--The 
    Secretary, in collaboration with States, shall develop standards to 
    ensure that information made available by navigators is fair, 
    accurate, and impartial.
        (6) Funding.--Grants under this subsection shall be made from 
    the operational funds of the Exchange and not Federal funds 
    received by the State to establish the Exchange.
    (j) Applicability of Mental Health Parity.--Section 2726 of the 
Public Health Service Act shall apply to qualified health plans in the 
same manner and to the same extent as such section applies to health 
insurance issuers and group health plans.
    (k) Conflict.--An Exchange may not establish rules that conflict 
with or prevent the application of regulations promulgated by the 
Secretary under this subtitle.

SEC. 1312. CONSUMER CHOICE.

    (a) Choice.--
        (1) Qualified individuals.--A qualified individual may enroll 
    in any qualified health plan available to such individual.
        (2) Qualified employers.--
            (A) Employer may specify level.--A qualified employer may 
        provide support for coverage of employees under a qualified 
        health plan by selecting any level of coverage under section 
        1302(d) to be made available to employees through an Exchange.
            (B) Employee may choose plans within a level.--Each 
        employee of a qualified employer that elects a level of 
        coverage under subparagraph (A) may choose to enroll in a 
        qualified health plan that offers coverage at that level.
    (b) Payment of Premiums by Qualified Individuals.--A qualified 
individual enrolled in any qualified health plan may pay any applicable 
premium owed by such individual to the health insurance issuer issuing 
such qualified health plan.
    (c) Single Risk Pool.--
        (1) Individual market.--A health insurance issuer shall 
    consider all enrollees in all health plans (other than 
    grandfathered health plans) offered by such issuer in the 
    individual market, including those enrollees who do not enroll in 
    such plans through the Exchange, to be members of a single risk 
    pool.
        (2) Small group market.--A health insurance issuer shall 
    consider all enrollees in all health plans (other than 
    grandfathered health plans) offered by such issuer in the small 
    group market, including those enrollees who do not enroll in such 
    plans through the Exchange, to be members of a single risk pool.
        (3) Merger of markets.--A State may require the individual and 
    small group insurance markets within a State to be merged if the 
    State determines appropriate.
        (4) State law.--A State law requiring grandfathered health 
    plans to be included in a pool described in paragraph (1) or (2) 
    shall not apply.
    (d) Empowering Consumer Choice.--
        (1) Continued operation of market outside exchanges.--Nothing 
    in this title shall be construed to prohibit--
            (A) a health insurance issuer from offering outside of an 
        Exchange a health plan to a qualified individual or qualified 
        employer; and
            (B) a qualified individual from enrolling in, or a 
        qualified employer from selecting for its employees, a health 
        plan offered outside of an Exchange.
        (2) Continued operation of state benefit requirements.--Nothing 
    in this title shall be construed to terminate, abridge, or limit 
    the operation of any requirement under State law with respect to 
    any policy or plan that is offered outside of an Exchange to offer 
    benefits.
        (3) Voluntary nature of an exchange.--
            (A) Choice to enroll or not to enroll.--Nothing in this 
        title shall be construed to restrict the choice of a qualified 
        individual to enroll or not to enroll in a qualified health 
        plan or to participate in an Exchange.
            (B) Prohibition against compelled enrollment.--Nothing in 
        this title shall be construed to compel an individual to enroll 
        in a qualified health plan or to participate in an Exchange.
            (C) Individuals allowed to enroll in any plan.--A qualified 
        individual may enroll in any qualified health plan, except that 
        in the case of a catastrophic plan described in section 
        1302(e), a qualified individual may enroll in the plan only if 
        the individual is eligible to enroll in the plan under section 
        1302(e)(2).
            (D) Members of congress in the exchange.--
                (i) Requirement.--Notwithstanding any other provision 
            of law, after the effective date of this subtitle, the only 
            health plans that the Federal Government may make available 
            to Members of Congress and congressional staff with respect 
            to their service as a Member of Congress or congressional 
            staff shall be health plans that are--

                    (I) created under this Act (or an amendment made by 
                this Act); or
                    (II) offered through an Exchange established under 
                this Act (or an amendment made by this Act).

                (ii) Definitions.--In this section:

                    (I) Member of congress.--The term ``Member of 
                Congress'' means any member of the House of 
                Representatives or the Senate.
                    (II) Congressional staff.--The term ``congressional 
                staff'' means all full-time and part-time employees 
                employed by the official office of a Member of 
                Congress, whether in Washington, DC or outside of 
                Washington, DC.

        (4) No penalty for transferring to minimum essential coverage 
    outside exchange.--An Exchange, or a qualified health plan offered 
    through an Exchange, shall not impose any penalty or other fee on 
    an individual who cancels enrollment in a plan because the 
    individual becomes eligible for minimum essential coverage (as 
    defined in section 5000A(f) of the Internal Revenue Code of 1986 
    without regard to paragraph (1)(C) or (D) thereof) or such coverage 
    becomes affordable (within the meaning of section 36B(c)(2)(C) of 
    such Code).
    (e) Enrollment Through Agents or Brokers.--The Secretary shall 
establish procedures under which a State may allow agents or brokers--
        (1) to enroll individuals in any qualified health plans in the 
    individual or small group market as soon as the plan is offered 
    through an Exchange in the State; and
        (2) to assist individuals in applying for premium tax credits 
    and cost-sharing reductions for plans sold through an Exchange.
Such procedures may include the establishment of rate schedules for 
broker commissions paid by health benefits plans offered through an 
exchange.
    (f) Qualified Individuals and Employers; Access Limited to Citizens 
and Lawful Residents.--
        (1) Qualified individuals.--In this title:
            (A) In general.--The term ``qualified individual'' means, 
        with respect to an Exchange, an individual who--
                (i) is seeking to enroll in a qualified health plan in 
            the individual market offered through the Exchange; and
                (ii) resides in the State that established the Exchange 
            (except with respect to territorial agreements under 
            section 1312(f)).
            (B) Incarcerated individuals excluded.--An individual shall 
        not be treated as a qualified individual if, at the time of 
        enrollment, the individual is incarcerated, other than 
        incarceration pending the disposition of charges.
        (2) Qualified employer.--In this title:
            (A) In general.--The term ``qualified employer'' means a 
        small employer that elects to make all full-time employees of 
        such employer eligible for 1 or more qualified health plans 
        offered in the small group market through an Exchange that 
        offers qualified health plans.
            (B) Extension to large groups.--
                (i) In general.--Beginning in 2017, each State may 
            allow issuers of health insurance coverage in the large 
            group market in the State to offer qualified health plans 
            in such market through an Exchange. Nothing in this 
            subparagraph shall be construed as requiring the issuer to 
            offer such plans through an Exchange.
                (ii) Large employers eligible.--If a State under clause 
            (i) allows issuers to offer qualified health plans in the 
            large group market through an Exchange, the term 
            ``qualified employer'' shall include a large employer that 
            elects to make all full-time employees of such employer 
            eligible for 1 or more qualified health plans offered in 
            the large group market through the Exchange.
        (3) Access limited to lawful residents.--If an individual is 
    not, or is not reasonably expected to be for the entire period for 
    which enrollment is sought, a citizen or national of the United 
    States or an alien lawfully present in the United States, the 
    individual shall not be treated as a qualified individual and may 
    not be covered under a qualified health plan in the individual 
    market that is offered through an Exchange.

SEC. 1313. FINANCIAL INTEGRITY.

    (a) Accounting for Expenditures.--
        (1) In general.--An Exchange shall keep an accurate accounting 
    of all activities, receipts, and expenditures and shall annually 
    submit to the Secretary a report concerning such accountings.
        (2) Investigations.--The Secretary, in coordination with the 
    Inspector General of the Department of Health and Human Services, 
    may investigate the affairs of an Exchange, may examine the 
    properties and records of an Exchange, and may require periodic 
    reports in relation to activities undertaken by an Exchange. An 
    Exchange shall fully cooperate in any investigation conducted under 
    this paragraph.
        (3) Audits.--An Exchange shall be subject to annual audits by 
    the Secretary.
        (4) Pattern of abuse.--If the Secretary determines that an 
    Exchange or a State has engaged in serious misconduct with respect 
    to compliance with the requirements of, or carrying out of 
    activities required under, this title, the Secretary may rescind 
    from payments otherwise due to such State involved under this or 
    any other Act administered by the Secretary an amount not to exceed 
    1 percent of such payments per year until corrective actions are 
    taken by the State that are determined to be adequate by the 
    Secretary.
        (5) Protections against fraud and abuse.--With respect to 
    activities carried out under this title, the Secretary shall 
    provide for the efficient and non-discriminatory administration of 
    Exchange activities and implement any measure or procedure that--
            (A) the Secretary determines is appropriate to reduce fraud 
        and abuse in the administration of this title; and
            (B) the Secretary has authority to implement under this 
        title or any other Act.
        (6) Application of the false claims act.--
            (A) In general.--Payments made by, through, or in 
        connection with an Exchange are subject to the False Claims Act 
        (31 U.S.C. 3729 et seq.) if those payments include any Federal 
        funds. Compliance with the requirements of this Act concerning 
        eligibility for a health insurance issuer to participate in the 
        Exchange shall be a material condition of an issuer's 
        entitlement to receive payments, including payments of premium 
        tax credits and cost-sharing reductions, through the Exchange.
            (B) Damages.--Notwithstanding paragraph (1) of section 
        3729(a) of title 31, United States Code, and subject to 
        paragraph (2) of such section, the civil penalty assessed under 
        the False Claims Act on any person found liable under such Act 
        as described in subparagraph (A) shall be increased by not less 
        than 3 times and not more than 6 times the amount of damages 
        which the Government sustains because of the act of that 
        person.
    (b) GAO Oversight.--Not later than 5 years after the first date on 
which Exchanges are required to be operational under this title, the 
Comptroller General shall conduct an ongoing study of Exchange 
activities and the enrollees in qualified health plans offered through 
Exchanges. Such study shall review--
        (1) the operations and administration of Exchanges, including 
    surveys and reports of qualified health plans offered through 
    Exchanges and on the experience of such plans (including data on 
    enrollees in Exchanges and individuals purchasing health insurance 
    coverage outside of Exchanges), the expenses of Exchanges, claims 
    statistics relating to qualified health plans, complaints data 
    relating to such plans, and the manner in which Exchanges meet 
    their goals;
        (2) any significant observations regarding the utilization and 
    adoption of Exchanges;
        (3) where appropriate, recommendations for improvements in the 
    operations or policies of Exchanges; and
        (4) how many physicians, by area and specialty, are not taking 
    or accepting new patients enrolled in Federal Government health 
    care programs, and the adequacy of provider networks of Federal 
    Government health care programs.

           PART III--STATE FLEXIBILITY RELATING TO EXCHANGES

SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF EXCHANGES 
              AND RELATED REQUIREMENTS.

    (a) Establishment of Standards.--
        (1) In general.--The Secretary shall, as soon as practicable 
    after the date of enactment of this Act, issue regulations setting 
    standards for meeting the requirements under this title, and the 
    amendments made by this title, with respect to--
            (A) the establishment and operation of Exchanges (including 
        SHOP Exchanges);
            (B) the offering of qualified health plans through such 
        Exchanges;
            (C) the establishment of the reinsurance and risk 
        adjustment programs under part V; and
            (D) such other requirements as the Secretary determines 
        appropriate.
    The preceding sentence shall not apply to standards for 
    requirements under subtitles A and C (and the amendments made by 
    such subtitles) for which the Secretary issues regulations under 
    the Public Health Service Act.
        (2) Consultation.--In issuing the regulations under paragraph 
    (1), the Secretary shall consult with the National Association of 
    Insurance Commissioners and its members and with health insurance 
    issuers, consumer organizations, and such other individuals as the 
    Secretary selects in a manner designed to ensure balanced 
    representation among interested parties.
    (b) State Action.--Each State that elects, at such time and in such 
manner as the Secretary may prescribe, to apply the requirements 
described in subsection (a) shall, not later than January 1, 2014, 
adopt and have in effect--
        (1) the Federal standards established under subsection (a); or
        (2) a State law or regulation that the Secretary determines 
    implements the standards within the State.
    (c) Failure To Establish Exchange or Implement Requirements.--
        (1) In general.--If--
            (A) a State is not an electing State under subsection (b); 
        or
            (B) the Secretary determines, on or before January 1, 2013, 
        that an electing State--
                (i) will not have any required Exchange operational by 
            January 1, 2014; or
                (ii) has not taken the actions the Secretary determines 
            necessary to implement--

                    (I) the other requirements set forth in the 
                standards under subsection (a); or
                    (II) the requirements set forth in subtitles A and 
                C and the amendments made by such subtitles;

    the Secretary shall (directly or through agreement with a not-for-
    profit entity) establish and operate such Exchange within the State 
    and the Secretary shall take such actions as are necessary to 
    implement such other requirements.
        (2) Enforcement authority.--The provisions of section 2736(b) 
    of the Public Health Services Act shall apply to the enforcement 
    under paragraph (1) of requirements of subsection (a)(1) (without 
    regard to any limitation on the application of those provisions to 
    group health plans).
    (d) No Interference With State Regulatory Authority.--Nothing in 
this title shall be construed to preempt any State law that does not 
prevent the application of the provisions of this title.
    (e) Presumption for Certain State-Operated Exchanges.--
        (1) In general.--In the case of a State operating an Exchange 
    before January 1, 2010, and which has insured a percentage of its 
    population not less than the percentage of the population projected 
    to be covered nationally after the implementation of this Act, that 
    seeks to operate an Exchange under this section, the Secretary 
    shall presume that such Exchange meets the standards under this 
    section unless the Secretary determines, after completion of the 
    process established under paragraph (2), that the Exchange does not 
    comply with such standards.
        (2) Process.--The Secretary shall establish a process to work 
    with a State described in paragraph (1) to provide assistance 
    necessary to assist the State's Exchange in coming into compliance 
    with the standards for approval under this section.

SEC. 1322. FEDERAL PROGRAM TO ASSIST ESTABLISHMENT AND OPERATION OF 
              NONPROFIT, MEMBER-RUN HEALTH INSURANCE ISSUERS.

    (a) Establishment of Program.--
        (1) In general.--The Secretary shall establish a program to 
    carry out the purposes of this section to be known as the Consumer 
    Operated and Oriented Plan (CO-OP) program.
        (2) Purpose.--It is the purpose of the CO-OP program to foster 
    the creation of qualified nonprofit health insurance issuers to 
    offer qualified health plans in the individual and small group 
    markets in the States in which the issuers are licensed to offer 
    such plans.
    (b) Loans and Grants Under the CO-OP Program.--
        (1) In general.--The Secretary shall provide through the CO-OP 
    program for the awarding to persons applying to become qualified 
    nonprofit health insurance issuers of--
            (A) loans to provide assistance to such person in meeting 
        its start-up costs; and
            (B) grants to provide assistance to such person in meeting 
        any solvency requirements of States in which the person seeks 
        to be licensed to issue qualified health plans.
        (2) Requirements for awarding loans and grants.--
            (A) In general.--In awarding loans and grants under the CO-
        OP program, the Secretary shall--
                (i) take into account the recommendations of the 
            advisory board established under paragraph (3);
                (ii) give priority to applicants that will offer 
            qualified health plans on a Statewide basis, will utilize 
            integrated care models, and have significant private 
            support; and
                (iii) ensure that there is sufficient funding to 
            establish at least 1 qualified nonprofit health insurance 
            issuer in each State, except that nothing in this clause 
            shall prohibit the Secretary from funding the establishment 
            of multiple qualified nonprofit health insurance issuers in 
            any State if the funding is sufficient to do so.
            (B) States without issuers in program.--If no health 
        insurance issuer applies to be a qualified nonprofit health 
        insurance issuer within a State, the Secretary may use amounts 
        appropriated under this section for the awarding of grants to 
        encourage the establishment of a qualified nonprofit health 
        insurance issuer within the State or the expansion of a 
        qualified nonprofit health insurance issuer from another State 
        to the State.
            (C) Agreement.--
                (i) In general.--The Secretary shall require any person 
            receiving a loan or grant under the CO-OP program to enter 
            into an agreement with the Secretary which requires such 
            person to meet (and to continue to meet)--

                    (I) any requirement under this section for such 
                person to be treated as a qualified nonprofit health 
                insurance issuer; and
                    (II) any requirements contained in the agreement 
                for such person to receive such loan or grant.

                (ii) Restrictions on use of federal funds.--The 
            agreement shall include a requirement that no portion of 
            the funds made available by any loan or grant under this 
            section may be used--

                    (I) for carrying on propaganda, or otherwise 
                attempting, to influence legislation; or
                    (II) for marketing.

            Nothing in this clause shall be construed to allow a person 
            to take any action prohibited by section 501(c)(29) of the 
            Internal Revenue Code of 1986.
                (iii) Failure to meet requirements.--If the Secretary 
            determines that a person has failed to meet any requirement 
            described in clause (i) or (ii) and has failed to correct 
            such failure within a reasonable period of time of when the 
            person first knows (or reasonably should have known) of 
            such failure, such person shall repay to the Secretary an 
            amount equal to the sum of--

                    (I) 110 percent of the aggregate amount of loans 
                and grants received under this section; plus
                    (II) interest on the aggregate amount of loans and 
                grants received under this section for the period the 
                loans or grants were outstanding.

            The Secretary shall notify the Secretary of the Treasury of 
            any determination under this section of a failure that 
            results in the termination of an issuer's tax-exempt status 
            under section 501(c)(29) of such Code.
            (D) Time for awarding loans and grants.--The Secretary 
        shall not later than July 1, 2013, award the loans and grants 
        under the CO-OP program and begin the distribution of amounts 
        awarded under such loans and grants.
        (3) Advisory board.--
            (A) In general.--The advisory board under this paragraph 
        shall consist of 15 members appointed by the Comptroller 
        General of the United States from among individuals with 
        qualifications described in section 1805(c)(2) of the Social 
        Security Act.
            (B) Rules relating to appointments.--
                (i) Standards.--Any individual appointed under 
            subparagraph (A) shall meet ethics and conflict of interest 
            standards protecting against insurance industry involvement 
            and interference.
                (ii) Original appointments.--The original appointment 
            of board members under subparagraph (A)(ii) shall be made 
            no later than 3 months after the date of enactment of this 
            Act.
            (C) Vacancy.--Any vacancy on the advisory board shall be 
        filled in the same manner as the original appointment.
            (D) Pay and reimbursement.--
                (i) No compensation for members of advisory board.--
            Except as provided in clause (ii), a member of the advisory 
            board may not receive pay, allowances, or benefits by 
            reason of their service on the board.
                (ii) Travel expenses.--Each member shall receive travel 
            expenses, including per diem in lieu of subsistence under 
            subchapter I of chapter 57 of title 5, United States Code.
            (E) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) shall apply to the advisory board, except 
        that section 14 of such Act shall not apply.
            (F) Termination.--The advisory board shall terminate on the 
        earlier of the date that it completes its duties under this 
        section or December 31, 2015.
    (c) Qualified Nonprofit Health Insurance Issuer.--For purposes of 
this section--
        (1) In general.--The term ``qualified nonprofit health 
    insurance issuer'' means a health insurance issuer that is an 
    organization--
            (A) that is organized under State law as a nonprofit, 
        member corporation;
            (B) substantially all of the activities of which consist of 
        the issuance of qualified health plans in the individual and 
        small group markets in each State in which it is licensed to 
        issue such plans; and
            (C) that meets the other requirements of this subsection.
        (2) Certain organizations prohibited.--An organization shall 
    not be treated as a qualified nonprofit health insurance issuer 
    if--
            (A) the organization or a related entity (or any 
        predecessor of either) was a health insurance issuer on July 
        16, 2009; or
            (B) the organization is sponsored by a State or local 
        government, any political subdivision thereof, or any 
        instrumentality of such government or political subdivision.
        (3) Governance requirements.--An organization shall not be 
    treated as a qualified nonprofit health insurance issuer unless--
            (A) the governance of the organization is subject to a 
        majority vote of its members;
            (B) its governing documents incorporate ethics and conflict 
        of interest standards protecting against insurance industry 
        involvement and interference; and
            (C) as provided in regulations promulgated by the 
        Secretary, the organization is required to operate with a 
        strong consumer focus, including timeliness, responsiveness, 
        and accountability to members.
        (4) Profits inure to benefit of members.--An organization shall 
    not be treated as a qualified nonprofit health insurance issuer 
    unless any profits made by the organization are required to be used 
    to lower premiums, to improve benefits, or for other programs 
    intended to improve the quality of health care delivered to its 
    members.
        (5) Compliance with state insurance laws.--An organization 
    shall not be treated as a qualified nonprofit health insurance 
    issuer unless the organization meets all the requirements that 
    other issuers of qualified health plans are required to meet in any 
    State where the issuer offers a qualified health plan, including 
    solvency and licensure requirements, rules on payments to 
    providers, and compliance with network adequacy rules, rate and 
    form filing rules, any applicable State premium assessments and any 
    other State law described in section 1324(b).
        (6) Coordination with state insurance reforms.--An organization 
    shall not be treated as a qualified nonprofit health insurance 
    issuer unless the organization does not offer a health plan in a 
    State until that State has in effect (or the Secretary has 
    implemented for the State) the market reforms required by part A of 
    title XXVII of the Public Health Service Act (as amended by 
    subtitles A and C of this Act).
    (d) Establishment of Private Purchasing Council.--
        (1) In general.--Qualified nonprofit health insurance issuers 
    participating in the CO-OP program under this section may establish 
    a private purchasing council to enter into collective purchasing 
    arrangements for items and services that increase administrative 
    and other cost efficiencies, including claims administration, 
    administrative services, health information technology, and 
    actuarial services.
        (2) Council may not set payment rates.--The private purchasing 
    council established under paragraph (1) shall not set payment rates 
    for health care facilities or providers participating in health 
    insurance coverage provided by qualified nonprofit health insurance 
    issuers.
        (3) Continued application of antitrust laws.--
            (A) In general.--Nothing in this section shall be construed 
        to limit the application of the antitrust laws to any private 
        purchasing council (whether or not established under this 
        subsection) or to any qualified nonprofit health insurance 
        issuer participating in such a council.
            (B) Antitrust laws.--For purposes of this subparagraph, the 
        term ``antitrust laws'' has the meaning given the term in 
        subsection (a) of the first section of the Clayton Act (15 
        U.S.C. 12(a)). Such term also includes section 5 of the Federal 
        Trade Commission Act (15 U.S.C. 45) to the extent that such 
        section 5 applies to unfair methods of competition.
    (e) Limitation on Participation.--No representative of any Federal, 
State, or local government (or of any political subdivision or 
instrumentality thereof), and no representative of a person described 
in subsection (c)(2)(A), may serve on the board of directors of a 
qualified nonprofit health insurance issuer or with a private 
purchasing council established under subsection (d).
    (f) Limitations on Secretary.--
        (1) In general.--The Secretary shall not--
            (A) participate in any negotiations between 1 or more 
        qualified nonprofit health insurance issuers (or a private 
        purchasing council established under subsection (d)) and any 
        health care facilities or providers, including any drug 
        manufacturer, pharmacy, or hospital; and
            (B) establish or maintain a price structure for 
        reimbursement of any health benefits covered by such issuers.
        (2) Competition.--Nothing in this section shall be construed as 
    authorizing the Secretary to interfere with the competitive nature 
    of providing health benefits through qualified nonprofit health 
    insurance issuers.
    (g) Appropriations.--There are hereby appropriated, out of any 
funds in the Treasury not otherwise appropriated, $6,000,000,000 to 
carry out this section.
    (h) Tax Exemption for Qualified Nonprofit Health Insurance 
Issuer.--
        (1) In general.--Section 501(c) of the Internal Revenue Code of 
    1986 (relating to list of exempt organizations) is amended by 
    adding at the end the following:
        ``(29) CO-OP health insurance issuers.--
            ``(A) In general.--A qualified nonprofit health insurance 
        issuer (within the meaning of section 1322 of the Patient 
        Protection and Affordable Care Act) which has received a loan 
        or grant under the CO-OP program under such section, but only 
        with respect to periods for which the issuer is in compliance 
        with the requirements of such section and any agreement with 
        respect to the loan or grant.
            ``(B) Conditions for exemption.--Subparagraph (A) shall 
        apply to an organization only if--
                ``(i) the organization has given notice to the 
            Secretary, in such manner as the Secretary may by 
            regulations prescribe, that it is applying for recognition 
            of its status under this paragraph,
                ``(ii) except as provided in section 1322(c)(4) of the 
            Patient Protection and Affordable Care Act, no part of the 
            net earnings of which inures to the benefit of any private 
            shareholder or individual,
                ``(iii) no substantial part of the activities of which 
            is carrying on propaganda, or otherwise attempting, to 
            influence legislation, and
                ``(iv) the organization does not participate in, or 
            intervene in (including the publishing or distributing of 
            statements), any political campaign on behalf of (or in 
            opposition to) any candidate for public office.''.
        (2) Additional reporting requirement.--Section 6033 of such 
    Code (relating to returns by exempt organizations) is amended by 
    redesignating subsection (m) as subsection (n) and by inserting 
    after subsection (l) the following:
    ``(m) Additional Information Required From CO-OP Insurers.--An 
organization described in section 501(c)(29) shall include on the 
return required under subsection (a) the following information:
        ``(1) The amount of the reserves required by each State in 
    which the organization is licensed to issue qualified health plans.
        ``(2) The amount of reserves on hand.''.
        (3) Application of tax on excess benefit transactions.--Section 
    4958(e)(1) of such Code (defining applicable tax-exempt 
    organization) is amended by striking ``paragraph (3) or (4)'' and 
    inserting ``paragraph (3), (4), or (29)''.
    (i) GAO Study and Report.--
        (1) Study.--The Comptroller General of the General 
    Accountability Office shall conduct an ongoing study on competition 
    and market concentration in the health insurance market in the 
    United States after the implementation of the reforms in such 
    market under the provisions of, and the amendments made by, this 
    Act. Such study shall include an analysis of new issuers of health 
    insurance in such market.
        (2) Report.--The Comptroller General shall, not later than 
    December 31 of each even-numbered year (beginning with 2014), 
    report to the appropriate committees of the Congress the results of 
    the study conducted under paragraph (1), including any 
    recommendations for administrative or legislative changes the 
    Comptroller General determines necessary or appropriate to increase 
    competition in the health insurance market.

SEC. 1323. COMMUNITY HEALTH INSURANCE OPTION.

    (a) Voluntary Nature.--
        (1) No requirement for health care providers to participate.--
    Nothing in this section shall be construed to require a health care 
    provider to participate in a community health insurance option, or 
    to impose any penalty for non-participation.
        (2) No requirement for individuals to join.--Nothing in this 
    section shall be construed to require an individual to participate 
    in a community health insurance option, or to impose any penalty 
    for non-participation.
        (3) State opt out.--
            (A) In general.--A State may elect to prohibit Exchanges in 
        such State from offering a community health insurance option if 
        such State enacts a law to provide for such prohibition.
            (B) Termination of opt out.--A State may repeal a law 
        described in subparagraph (A) and provide for the offering of 
        such an option through the Exchange.
    (b) Establishment of Community Health Insurance Option.--
        (1) Establishment.--The Secretary shall establish a community 
    health insurance option to offer, through the Exchanges established 
    under this title (other than Exchanges in States that elect to opt 
    out as provided for in subsection (a)(3)), health care coverage 
    that provides value, choice, competition, and stability of 
    affordable, high quality coverage throughout the United States.
        (2) Community health insurance option.--In this section, the 
    term ``community health insurance option'' means health insurance 
    coverage that--
            (A) except as specifically provided for in this section, 
        complies with the requirements for being a qualified health 
        plan;
            (B) provides high value for the premium charged;
            (C) reduces administrative costs and promotes 
        administrative simplification for beneficiaries;
            (D) promotes high quality clinical care;
            (E) provides high quality customer service to 
        beneficiaries;
            (F) offers a sufficient choice of providers; and
            (G) complies with State laws (if any), except as otherwise 
        provided for in this title, relating to the laws described in 
        section 1324(b).
        (3) Essential health benefits.--
            (A) General rule.--Except as provided in subparagraph (B), 
        a community health insurance option offered under this section 
        shall provide coverage only for the essential health benefits 
        described in section 1302(b).
            (B) States may offer additional benefits.--Nothing in this 
        section shall preclude a State from requiring that benefits in 
        addition to the essential health benefits required under 
        subparagraph (A) be provided to enrollees of a community health 
        insurance option offered in such State.
            (C) Credits.--
                (i) In general.--An individual enrolled in a community 
            health insurance option under this section shall be 
            eligible for credits under section 36B of the Internal 
            Revenue Code of 1986 in the same manner as an individual 
            who is enrolled in a qualified health plan.
                (ii) No additional federal cost.--A requirement by a 
            State under subparagraph (B) that benefits in addition to 
            the essential health benefits required under subparagraph 
            (A) be provided to enrollees of a community health 
            insurance option shall not affect the amount of a premium 
            tax credit provided under section 36B of the Internal 
            Revenue Code of 1986 with respect to such plan.
            (D) State must assume cost.--A State shall make payments to 
        or on behalf of an eligible individual to defray the cost of 
        any additional benefits described in subparagraph (B).
            (E) Ensuring access to all services.--Nothing in this Act 
        shall prohibit an individual enrolled in a community health 
        insurance option from paying out-of-pocket the full cost of any 
        item or service not included as an essential health benefit or 
        otherwise covered as a benefit by a health plan. Nothing in 
        subparagraph (B) shall prohibit any type of medical provider 
        from accepting an out-of-pocket payment from an individual 
        enrolled in a community health insurance option for a service 
        otherwise not included as an essential health benefit.
            (F) Protecting access to end of life care.--A community 
        health insurance option offered under this section shall be 
        prohibited from limiting access to end of life care.
        (4) Cost sharing.--A community health insurance option shall 
    offer coverage at each of the levels of coverage described in 
    section 1302(d).
        (5) Premiums.--
            (A) Premiums sufficient to cover costs.--The Secretary 
        shall establish geographically adjusted premium rates in an 
        amount sufficient to cover expected costs (including claims and 
        administrative costs) using methods in general use by qualified 
        health plans.
            (B) Applicable rules.--The provisions of title XXVII of the 
        Public Health Service Act relating to premiums shall apply to 
        community health insurance options under this section, 
        including modified community rating provisions under section 
        2701 of such Act.
            (C) Collection of data.--The Secretary shall collect data 
        as necessary to set premium rates under subparagraph (A).
            (D) National pooling.--Notwithstanding any other provision 
        of law, the Secretary may treat all enrollees in community 
        health insurance options as members of a single pool.
            (E) Contingency margin.--In establishing premium rates 
        under subparagraph (A), the Secretary shall include an 
        appropriate amount for a contingency margin.
        (6) Reimbursement rates.--
            (A) Negotiated rates.--The Secretary shall negotiate rates 
        for the reimbursement of health care providers for benefits 
        covered under a community health insurance option.
            (B) Limitation.--The rates described in subparagraph (A) 
        shall not be higher, in aggregate, than the average 
        reimbursement rates paid by health insurance issuers offering 
        qualified health plans through the Exchange.
            (C) Innovation.--Subject to the limits contained in 
        subparagraph (A), a State Advisory Council established or 
        designated under subsection (d) may develop or encourage the 
        use of innovative payment policies that promote quality, 
        efficiency and savings to consumers.
        (7) Solvency and consumer protection.--
            (A) Solvency.--The Secretary shall establish a Federal 
        solvency standard to be applied with respect to a community 
        health insurance option. A community health insurance option 
        shall also be subject to the solvency standard of each State in 
        which such community health insurance option is offered.
            (B) Minimum required.--In establishing the standard 
        described under subparagraph (A), the Secretary shall require a 
        reserve fund that shall be equal to at least the dollar value 
        of the incurred but not reported claims of a community health 
        insurance option.
            (C) Consumer protections.--The consumer protection laws of 
        a State shall apply to a community health insurance option.
        (8) Requirements established in partnership with insurance 
    commissioners.--
            (A) In general.--The Secretary, in collaboration with the 
        National Association of Insurance Commissioners (in this 
        paragraph referred to as the ``NAIC''), may promulgate 
        regulations to establish additional requirements for a 
        community health insurance option.
            (B) Applicability.--Any requirement promulgated under 
        subparagraph (A) shall be applicable to such option beginning 
        90 days after the date on which the regulation involved becomes 
        final.
    (c) Start-up Fund.--
        (1) Establishment of fund.--
            (A) In general.--There is established in the Treasury of 
        the United States a trust fund to be known as the ``Health 
        Benefit Plan Start-Up Fund'' (referred to in this section as 
        the ``Start-Up Fund''), that shall consist of such amounts as 
        may be appropriated or credited to the Start-Up Fund as 
        provided for in this subsection to provide loans for the 
        initial operations of a community health insurance option. Such 
        amounts shall remain available until expended.
            (B) Funding.--There is hereby appropriated to the Start-Up 
        Fund, out of any moneys in the Treasury not otherwise 
        appropriated an amount requested by the Secretary of Health and 
        Human Services as necessary to--
                (i) pay the start-up costs associated with the initial 
            operations of a community health insurance option; and
                (ii) pay the costs of making payments on claims 
            submitted during the period that is not more than 90 days 
            from the date on which such option is offered.
        (2) Use of start-up fund.--The Secretary shall use amounts 
    contained in the Start-Up Fund to make payments (subject to the 
    repayment requirements in paragraph (4)) for the purposes described 
    in paragraph (1)(B).
        (3) Pass through of rebates.--The Secretary may establish 
    procedures for reducing the amount of payments to a contracting 
    administrator to take into account any rebates or price 
    concessions.
        (4) Repayment.--
            (A) In general.--A community health insurance option shall 
        be required to repay the Secretary of the Treasury (on such 
        terms as the Secretary may require) for any payments made under 
        paragraph (1)(B) by the date that is not later than 9 years 
        after the date on which the payment is made. The Secretary may 
        require the payment of interest with respect to such repayments 
        at rates that do not exceed the market interest rate (as 
        determined by the Secretary).
            (B) Sanctions in case of for-profit conversion.--In any 
        case in which the Secretary enters into a contract with a 
        qualified entity for the offering of a community health 
        insurance option and such entity is determined to be a for-
        profit entity by the Secretary, such entity shall be--
                (i) immediately liable to the Secretary for any 
            payments received by such entity from the Start-Up Fund; 
            and
                (ii) permanently ineligible to offer a qualified health 
            plan.
    (d) State Advisory Council.--
        (1) Establishment.--A State (other than a State that elects to 
    opt out as provided for in subsection (a)(3)) shall establish or 
    designate a public or non-profit private entity to serve as the 
    State Advisory Council to provide recommendations to the Secretary 
    on the operations and policies of a community health insurance 
    option in the State. Such Council shall provide recommendations on 
    at least the following:
            (A) policies and procedures to integrate quality 
        improvement and cost containment mechanisms into the health 
        care delivery system;
            (B) mechanisms to facilitate public awareness of the 
        availability of a community health insurance option; and
            (C) alternative payment structures under a community health 
        insurance option for health care providers that encourage 
        quality improvement and cost control.
        (2) Members.--The members of the State Advisory Council shall 
    be representatives of the public and shall include health care 
    consumers and providers.
        (3) Applicability of recommendations.--The Secretary may apply 
    the recommendations of a State Advisory Council to a community 
    health insurance option in that State, in any other State, or in 
    all States.
    (e) Authority To Contract; Terms of Contract.--
        (1) Authority.--
            (A) In general.--The Secretary may enter into a contract or 
        contracts with one or more qualified entities for the purpose 
        of performing administrative functions (including functions 
        described in subsection (a)(4) of section 1874A of the Social 
        Security Act) with respect to a community health insurance 
        option in the same manner as the Secretary may enter into 
        contracts under subsection (a)(1) of such section. The 
        Secretary shall have the same authority with respect to a 
        community health insurance option under this section as the 
        Secretary has under subsections (a)(1) and (b) of section 1874A 
        of the Social Security Act with respect to title XVIII of such 
        Act.
            (B) Requirements apply.--If the Secretary enters into a 
        contract with a qualified entity to offer a community health 
        insurance option, under such contract such entity--
                (i) shall meet the criteria established under paragraph 
            (2); and
                (ii) shall receive an administrative fee under 
            paragraph (7).
            (C) Limitation.--Contracts under this subsection shall not 
        involve the transfer of insurance risk to the contracting 
        administrator.
            (D) Reference.--An entity with which the Secretary has 
        entered into a contract under this paragraph shall be referred 
        to as a ``contracting administrator''.
        (2) Qualified entity.--To be qualified to be selected by the 
    Secretary to offer a community health insurance option, an entity 
    shall--
            (A) meet the criteria established under section 1874A(a)(2) 
        of the Social Security Act;
            (B) be a nonprofit entity for purposes of offering such 
        option;
            (C) meet the solvency standards applicable under subsection 
        (b)(7);
            (D) be eligible to offer health insurance or health 
        benefits coverage;
            (E) meet quality standards specified by the Secretary;
            (F) have in place effective procedures to control fraud, 
        abuse, and waste; and
            (G) meet such other requirements as the Secretary may 
        impose.
    Procedures described under subparagraph (F) shall include the 
    implementation of procedures to use beneficiary identifiers to 
    identify individuals entitled to benefits so that such an 
    individual's social security account number is not used, and shall 
    also include procedures for the use of technology (including front-
    end, prepayment intelligent data-matching technology similar to 
    that used by hedge funds, investment funds, and banks) to provide 
    real-time data analysis of claims for payment under this title to 
    identify and investigate unusual billing or order practices under 
    this title that could indicate fraud or abuse.
        (3) Term.--A contract provided for under paragraph (1) shall be 
    for a term of at least 5 years but not more than 10 years, as 
    determined by the Secretary. At the end of each such term, the 
    Secretary shall conduct a competitive bidding process for the 
    purposes of renewing existing contracts or selecting new qualified 
    entities with which to enter into contracts under such paragraph.
        (4) Limitation.--A contract may not be renewed under this 
    subsection unless the Secretary determines that the contracting 
    administrator has met performance requirements established by the 
    Secretary in the areas described in paragraph (7)(B).
        (5) Audits.--The Inspector General shall conduct periodic 
    audits with respect to contracting administrators under this 
    subsection to ensure that the administrator involved is in 
    compliance with this section.
        (6) Revocation.--A contract awarded under this subsection shall 
    be revoked by the Secretary, upon the recommendation of the 
    Inspector General, only after notice to the contracting 
    administrator involved and an opportunity for a hearing. The 
    Secretary may revoke such contract if the Secretary determines that 
    such administrator has engaged in fraud, deception, waste, abuse of 
    power, negligence, mismanagement of taxpayer dollars, or gross 
    mismanagement. An entity that has had a contract revoked under this 
    paragraph shall not be qualified to enter into a subsequent 
    contract under this subsection.
        (7) Fee for administration.--
            (A) In general.--The Secretary shall pay the contracting 
        administrator a fee for the management, administration, and 
        delivery of the benefits under this section.
            (B) Requirement for high quality administration.--The 
        Secretary may increase the fee described in subparagraph (A) by 
        not more than 10 percent, or reduce the fee described in 
        subparagraph (A) by not more than 50 percent, based on the 
        extent to which the contracting administrator, in the 
        determination of the Secretary, meets performance requirements 
        established by the Secretary, in at least the following areas:
                (i) Maintaining low premium costs and low cost sharing 
            requirements, provided that such requirements are 
            consistent with section 1302.
                (ii) Reducing administrative costs and promoting 
            administrative simplification for beneficiaries.
                (iii) Promoting high quality clinical care.
                (iv) Providing high quality customer service to 
            beneficiaries.
            (C) Non-renewal.--The Secretary may not renew a contract to 
        offer a community health insurance option under this section 
        with any contracting entity that has been assessed more than 
        one reduction under subparagraph (B) during the contract 
        period.
        (8) Limitation.--Notwithstanding the terms of a contract under 
    this subsection, the Secretary shall negotiate the reimbursement 
    rates for purposes of subsection (b)(6).
    (f) Report by HHS and Insolvency Warnings.--
        (1) In general.--On an annual basis, the Secretary shall 
    conduct a study on the solvency of a community health insurance 
    option and submit to Congress a report describing the results of 
    such study.
        (2) Result.--If, in any year, the result of the study under 
    paragraph (1) is that a community health insurance option is 
    insolvent, such result shall be treated as a community health 
    insurance option solvency warning.
        (3) Submission of plan and procedure.--
            (A) In general.--If there is a community health insurance 
        option solvency warning under paragraph (2) made in a year, the 
        President shall submit to Congress, within the 15-day period 
        beginning on the date of the budget submission to Congress 
        under section 1105(a) of title 31, United States Code, for the 
        succeeding year, proposed legislation to respond to such 
        warning.
            (B) Procedure.--In the case of a legislative proposal 
        submitted by the President pursuant to subparagraph (A), such 
        proposal shall be considered by Congress using the same 
        procedures described under sections 803 and 804 of the Medicare 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        that shall be used for a medicare funding warning.
    (g) Marketing Parity.--In a facility controlled by the Federal 
Government, or by a State, where marketing or promotional materials 
related to a community health insurance option are made available to 
the public, making available marketing or promotional materials 
relating to private health insurance plans shall not be prohibited. 
Such materials include informational pamphlets, guidebooks, enrollment 
forms, or other materials determined reasonable for display.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 1324. LEVEL PLAYING FIELD.

    (a) In General.--Notwithstanding any other provision of law, any 
health insurance coverage offered by a private health insurance issuer 
shall not be subject to any Federal or State law described in 
subsection (b) if a qualified health plan offered under the Consumer 
Operated and Oriented Plan program under section 1322, a community 
health insurance option under section 1323, or a nationwide qualified 
health plan under section 1333(b), is not subject to such law.
    (b) Laws Described.--The Federal and State laws described in this 
subsection are those Federal and State laws relating to--
        (1) guaranteed renewal;
        (2) rating;
        (3) preexisting conditions;
        (4) non-discrimination;
        (5) quality improvement and reporting;
        (6) fraud and abuse;
        (7) solvency and financial requirements;
        (8) market conduct;
        (9) prompt payment;
        (10) appeals and grievances;
        (11) privacy and confidentiality;
        (12) licensure; and
        (13) benefit plan material or information.

      PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS

SEC. 1331. STATE FLEXIBILITY TO ESTABLISH BASIC HEALTH PROGRAMS FOR 
              LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID.

    (a) Establishment of Program.--
        (1) In general.--The Secretary shall establish a basic health 
    program meeting the requirements of this section under which a 
    State may enter into contracts to offer 1 or more standard health 
    plans providing at least the essential health benefits described in 
    section 1302(b) to eligible individuals in lieu of offering such 
    individuals coverage through an Exchange.
        (2) Certifications as to benefit coverage and costs.--Such 
    program shall provide that a State may not establish a basic health 
    program under this section unless the State establishes to the 
    satisfaction of the Secretary, and the Secretary certifies, that--
            (A) in the case of an eligible individual enrolled in a 
        standard health plan offered through the program, the State 
        provides--
                (i) that the amount of the monthly premium an eligible 
            individual is required to pay for coverage under the 
            standard health plan for the individual and the 
            individual's dependents does not exceed the amount of the 
            monthly premium that the eligible individual would have 
            been required to pay (in the rating area in which the 
            individual resides) if the individual had enrolled in the 
            applicable second lowest cost silver plan (as defined in 
            section 36B(b)(3)(B) of the Internal Revenue Code of 1986) 
            offered to the individual through an Exchange; and
                (ii) that the cost-sharing an eligible individual is 
            required to pay under the standard health plan does not 
            exceed--

                    (I) the cost-sharing required under a platinum plan 
                in the case of an eligible individual with household 
                income not in excess of 150 percent of the poverty line 
                for the size of the family involved; and
                    (II) the cost-sharing required under a gold plan in 
                the case of an eligible individual not described in 
                subclause (I); and

            (B) the benefits provided under the standard health plans 
        offered through the program cover at least the essential health 
        benefits described in section 1302(b).
    For purposes of subparagraph (A)(i), the amount of the monthly 
    premium an individual is required to pay under either the standard 
    health plan or the applicable second lowest cost silver plan shall 
    be determined after reduction for any premium tax credits and cost-
    sharing reductions allowable with respect to either plan.
    (b) Standard Health Plan.--In this section, the term ``standard 
heath plan'' means a health benefits plan that the State contracts with 
under this section--
        (1) under which the only individuals eligible to enroll are 
    eligible individuals;
        (2) that provides at least the essential health benefits 
    described in section 1302(b); and
        (3) in the case of a plan that provides health insurance 
    coverage offered by a health insurance issuer, that has a medical 
    loss ratio of at least 85 percent.
    (c) Contracting Process.--
        (1) In general.--A State basic health program shall establish a 
    competitive process for entering into contracts with standard 
    health plans under subsection (a), including negotiation of 
    premiums and cost-sharing and negotiation of benefits in addition 
    to the essential health benefits described in section 1302(b).
        (2) Specific items to be considered.--A State shall, as part of 
    its competitive process under paragraph (1), include at least the 
    following:
            (A) Innovation.--Negotiation with offerors of a standard 
        health plan for the inclusion of innovative features in the 
        plan, including--
                (i) care coordination and care management for 
            enrollees, especially for those with chronic health 
            conditions;
                (ii) incentives for use of preventive services; and
                (iii) the establishment of relationships between 
            providers and patients that maximize patient involvement in 
            health care decision-making, including providing incentives 
            for appropriate utilization under the plan.
            (B) Health and resource differences.--Consideration of, and 
        the making of suitable allowances for, differences in health 
        care needs of enrollees and differences in local availability 
        of, and access to, health care providers. Nothing in this 
        subparagraph shall be construed as allowing discrimination on 
        the basis of pre-existing conditions or other health status-
        related factors.
            (C) Managed care.--Contracting with managed care systems, 
        or with systems that offer as many of the attributes of managed 
        care as are feasible in the local health care market.
            (D) Performance measures.--Establishing specific 
        performance measures and standards for issuers of standard 
        health plans that focus on quality of care and improved health 
        outcomes, requiring such plans to report to the State with 
        respect to the measures and standards, and making the 
        performance and quality information available to enrollees in a 
        useful form.
        (3) Enhanced availability.--
            (A) Multiple plans.--A State shall, to the maximum extent 
        feasible, seek to make multiple standard health plans available 
        to eligible individuals within a State to ensure individuals 
        have a choice of such plans.
            (B) Regional compacts.--A State may negotiate a regional 
        compact with other States to include coverage of eligible 
        individuals in all such States in agreements with issuers of 
        standard health plans.
        (4) Coordination with other state programs.--A State shall seek 
    to coordinate the administration of, and provision of benefits 
    under, its program under this section with the State medicaid 
    program under title XIX of the Social Security Act, the State child 
    health plan under title XXI of such Act, and other State-
    administered health programs to maximize the efficiency of such 
    programs and to improve the continuity of care.
    (d) Transfer of Funds to States.--
        (1) In general.--If the Secretary determines that a State 
    electing the application of this section meets the requirements of 
    the program established under subsection (a), the Secretary shall 
    transfer to the State for each fiscal year for which 1 or more 
    standard health plans are operating within the State the amount 
    determined under paragraph (3).
        (2) Use of funds.--A State shall establish a trust for the 
    deposit of the amounts received under paragraph (1) and amounts in 
    the trust fund shall only be used to reduce the premiums and cost-
    sharing of, or to provide additional benefits for, eligible 
    individuals enrolled in standard health plans within the State. 
    Amounts in the trust fund, and expenditures of such amounts, shall 
    not be included in determining the amount of any non-Federal funds 
    for purposes of meeting any matching or expenditure requirement of 
    any federally-funded program.
        (3) Amount of payment.--
            (A) Secretarial determination.--
                (i) In general.--The amount determined under this 
            paragraph for any fiscal year is the amount the Secretary 
            determines is equal to 85 percent of the premium tax 
            credits under section 36B of the Internal Revenue Code of 
            1986, and the cost-sharing reductions under section 1402, 
            that would have been provided for the fiscal year to 
            eligible individuals enrolled in standard health plans in 
            the State if such eligible individuals were allowed to 
            enroll in qualified health plans through an Exchange 
            established under this subtitle.
                (ii) Specific requirements.--The Secretary shall make 
            the determination under clause (i) on a per enrollee basis 
            and shall take into account all relevant factors necessary 
            to determine the value of the premium tax credits and cost-
            sharing reductions that would have been provided to 
            eligible individuals described in clause (i), including the 
            age and income of the enrollee, whether the enrollment is 
            for self-only or family coverage, geographic differences in 
            average spending for health care across rating areas, the 
            health status of the enrollee for purposes of determining 
            risk adjustment payments and reinsurance payments that 
            would have been made if the enrollee had enrolled in a 
            qualified health plan through an Exchange, and whether any 
            reconciliation of the credit or cost-sharing reductions 
            would have occurred if the enrollee had been so enrolled. 
            This determination shall take into consideration the 
            experience of other States with respect to participation in 
            an Exchange and such credits and reductions provided to 
            residents of the other States, with a special focus on 
            enrollees with income below 200 percent of poverty.
                (iii) Certification.--The Chief Actuary of the Centers 
            for Medicare & Medicaid Services, in consultation with the 
            Office of Tax Analysis of the Department of the Treasury, 
            shall certify whether the methodology used to make 
            determinations under this subparagraph, and such 
            determinations, meet the requirements of clause (ii). Such 
            certifications shall be based on sufficient data from the 
            State and from comparable States about their experience 
            with programs created by this Act.
            (B) Corrections.--The Secretary shall adjust the payment 
        for any fiscal year to reflect any error in the determinations 
        under subparagraph (A) for any preceding fiscal year.
        (4) Application of special rules.--The provisions of section 
    1303 shall apply to a State basic health program, and to standard 
    health plans offered through such program, in the same manner as 
    such rules apply to qualified health plans.
    (e) Eligible Individual.--
        (1) In general.--In this section, the term ``eligible 
    individual'' means, with respect to any State, an individual--
            (A) who a resident of the State who is not eligible to 
        enroll in the State's medicaid program under title XIX of the 
        Social Security Act for benefits that at a minimum consist of 
        the essential health benefits described in section 1302(b);
            (B) whose household income exceeds 133 percent but does not 
        exceed 200 percent of the poverty line for the size of the 
        family involved;
            (C) who is not eligible for minimum essential coverage (as 
        defined in section 5000A(f) of the Internal Revenue Code of 
        1986) or is eligible for an employer-sponsored plan that is not 
        affordable coverage (as determined under section 5000A(e)(2) of 
        such Code); and
            (D) who has not attained age 65 as of the beginning of the 
        plan year.
    Such term shall not include any individual who is not a qualified 
    individual under section 1312 who is eligible to be covered by a 
    qualified health plan offered through an Exchange.
        (2) Eligible individuals may not use exchange.--An eligible 
    individual shall not be treated as a qualified individual under 
    section 1312 eligible for enrollment in a qualified health plan 
    offered through an Exchange established under section 1311.
    (f) Secretarial Oversight.--The Secretary shall each year conduct a 
review of each State program to ensure compliance with the requirements 
of this section, including ensuring that the State program meets--
        (1) eligibility verification requirements for participation in 
    the program;
        (2) the requirements for use of Federal funds received by the 
    program; and
        (3) the quality and performance standards under this section.
    (g) Standard Health Plan Offerors.--A State may provide that 
persons eligible to offer standard health plans under a basic health 
program established under this section may include a licensed health 
maintenance organization, a licensed health insurance insurer, or a 
network of health care providers established to offer services under 
the program.
    (h) Definitions.--Any term used in this section which is also used 
in section 36B of the Internal Revenue Code of 1986 shall have the 
meaning given such term by such section.

SEC. 1332. WAIVER FOR STATE INNOVATION.

    (a) Application.--
        (1) In general.--A State may apply to the Secretary for the 
    waiver of all or any requirements described in paragraph (2) with 
    respect to health insurance coverage within that State for plan 
    years beginning on or after January 1, 2017. Such application 
    shall--
            (A) be filed at such time and in such manner as the 
        Secretary may require;
            (B) contain such information as the Secretary may require, 
        including--
                (i) a comprehensive description of the State 
            legislation and program to implement a plan meeting the 
            requirements for a waiver under this section; and
                (ii) a 10-year budget plan for such plan that is budget 
            neutral for the Federal Government; and
            (C) provide an assurance that the State has enacted the law 
        described in subsection (b)(2).
        (2) Requirements.--The requirements described in this paragraph 
    with respect to health insurance coverage within the State for plan 
    years beginning on or after January 1, 2014, are as follows:
            (A) Part I of subtitle D.
            (B) Part II of subtitle D.
            (C) Section 1402.
            (D) Sections 36B, 4980H, and 5000A of the Internal Revenue 
        Code of 1986.
        (3) Pass through of funding.--With respect to a State waiver 
    under paragraph (1), under which, due to the structure of the State 
    plan, individuals and small employers in the State would not 
    qualify for the premium tax credits, cost-sharing reductions, or 
    small business credits under sections 36B of the Internal Revenue 
    Code of 1986 or under part I of subtitle E for which they would 
    otherwise be eligible, the Secretary shall provide for an 
    alternative means by which the aggregate amount of such credits or 
    reductions that would have been paid on behalf of participants in 
    the Exchanges established under this title had the State not 
    received such waiver, shall be paid to the State for purposes of 
    implementing the State plan under the waiver. Such amount shall be 
    determined annually by the Secretary, taking into consideration the 
    experience of other States with respect to participation in an 
    Exchange and credits and reductions provided under such provisions 
    to residents of the other States.
        (4) Waiver consideration and transparency.--
            (A) In general.--An application for a waiver under this 
        section shall be considered by the Secretary in accordance with 
        the regulations described in subparagraph (B).
            (B) Regulations.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall promulgate 
        regulations relating to waivers under this section that 
        provide--
                (i) a process for public notice and comment at the 
            State level, including public hearings, sufficient to 
            ensure a meaningful level of public input;
                (ii) a process for the submission of an application 
            that ensures the disclosure of--

                    (I) the provisions of law that the State involved 
                seeks to waive; and
                    (II) the specific plans of the State to ensure that 
                the waiver will be in compliance with subsection (b);

                (iii) a process for providing public notice and comment 
            after the application is received by the Secretary, that is 
            sufficient to ensure a meaningful level of public input and 
            that does not impose requirements that are in addition to, 
            or duplicative of, requirements imposed under the 
            Administrative Procedures Act, or requirements that are 
            unreasonable or unnecessarily burdensome with respect to 
            State compliance;
                (iv) a process for the submission to the Secretary of 
            periodic reports by the State concerning the implementation 
            of the program under the waiver; and
                (v) a process for the periodic evaluation by the 
            Secretary of the program under the waiver.
            (C) Report.--The Secretary shall annually report to 
        Congress concerning actions taken by the Secretary with respect 
        to applications for waivers under this section.
        (5) Coordinated waiver process.--The Secretary shall develop a 
    process for coordinating and consolidating the State waiver 
    processes applicable under the provisions of this section, and the 
    existing waiver processes applicable under titles XVIII, XIX, and 
    XXI of the Social Security Act, and any other Federal law relating 
    to the provision of health care items or services. Such process 
    shall permit a State to submit a single application for a waiver 
    under any or all of such provisions.
        (6) Definition.--In this section, the term ``Secretary'' 
    means--
            (A) the Secretary of Health and Human Services with respect 
        to waivers relating to the provisions described in subparagraph 
        (A) through (C) of paragraph (2); and
            (B) the Secretary of the Treasury with respect to waivers 
        relating to the provisions described in paragraph (2)(D).
    (b) Granting of Waivers.--
        (1) In general.--The Secretary may grant a request for a waiver 
    under subsection (a)(1) only if the Secretary determines that the 
    State plan--
            (A) will provide coverage that is at least as comprehensive 
        as the coverage defined in section 1302(b) and offered through 
        Exchanges established under this title as certified by Office 
        of the Actuary of the Centers for Medicare & Medicaid Services 
        based on sufficient data from the State and from comparable 
        States about their experience with programs created by this Act 
        and the provisions of this Act that would be waived;
            (B) will provide coverage and cost sharing protections 
        against excessive out-of-pocket spending that are at least as 
        affordable as the provisions of this title would provide;
            (C) will provide coverage to at least a comparable number 
        of its residents as the provisions of this title would provide; 
        and
            (D) will not increase the Federal deficit.
        (2) Requirement to enact a law.--
            (A) In general.--A law described in this paragraph is a 
        State law that provides for State actions under a waiver under 
        this section, including the implementation of the State plan 
        under subsection (a)(1)(B).
            (B) Termination of opt out.--A State may repeal a law 
        described in subparagraph (A) and terminate the authority 
        provided under the waiver with respect to the State.
    (c) Scope of Waiver.--
        (1) In general.--The Secretary shall determine the scope of a 
    waiver of a requirement described in subsection (a)(2) granted to a 
    State under subsection (a)(1).
        (2) Limitation.--The Secretary may not waive under this section 
    any Federal law or requirement that is not within the authority of 
    the Secretary.
    (d) Determinations by Secretary.--
        (1) Time for determination.--The Secretary shall make a 
    determination under subsection (a)(1) not later than 180 days after 
    the receipt of an application from a State under such subsection.
        (2) Effect of determination.--
            (A) Granting of waivers.--If the Secretary determines to 
        grant a waiver under subsection (a)(1), the Secretary shall 
        notify the State involved of such determination and the terms 
        and effectiveness of such waiver.
            (B) Denial of waiver.--If the Secretary determines a waiver 
        should not be granted under subsection (a)(1), the Secretary 
        shall notify the State involved, and the appropriate committees 
        of Congress of such determination and the reasons therefore.
    (e) Term of Waiver.--No waiver under this section may extend over a 
period of longer than 5 years unless the State requests continuation of 
such waiver, and such request shall be deemed granted unless the 
Secretary, within 90 days after the date of its submission to the 
Secretary, either denies such request in writing or informs the State 
in writing with respect to any additional information which is needed 
in order to make a final determination with respect to the request.

SEC. 1333. PROVISIONS RELATING TO OFFERING OF PLANS IN MORE THAN ONE 
              STATE.

    (a) Health Care Choice Compacts.--
        (1) In general.--Not later than July 1, 2013, the Secretary 
    shall, in consultation with the National Association of Insurance 
    Commissioners, issue regulations for the creation of health care 
    choice compacts under which 2 or more States may enter into an 
    agreement under which--
            (A) 1 or more qualified health plans could be offered in 
        the individual markets in all such States but, except as 
        provided in subparagraph (B), only be subject to the laws and 
        regulations of the State in which the plan was written or 
        issued;
            (B) the issuer of any qualified health plan to which the 
        compact applies--
                (i) would continue to be subject to market conduct, 
            unfair trade practices, network adequacy, and consumer 
            protection standards (including standards relating to 
            rating), including addressing disputes as to the 
            performance of the contract, of the State in which the 
            purchaser resides;
                (ii) would be required to be licensed in each State in 
            which it offers the plan under the compact or to submit to 
            the jurisdiction of each such State with regard to the 
            standards described in clause (i) (including allowing 
            access to records as if the insurer were licensed in the 
            State); and
                (iii) must clearly notify consumers that the policy may 
            not be subject to all the laws and regulations of the State 
            in which the purchaser resides.
        (2) State authority.--A State may not enter into an agreement 
    under this subsection unless the State enacts a law after the date 
    of the enactment of this title that specifically authorizes the 
    State to enter into such agreements.
        (3) Approval of compacts.--The Secretary may approve interstate 
    health care choice compacts under paragraph (1) only if the 
    Secretary determines that such health care choice compact--
            (A) will provide coverage that is at least as comprehensive 
        as the coverage defined in section 1302(b) and offered through 
        Exchanges established under this title;
            (B) will provide coverage and cost sharing protections 
        against excessive out-of-pocket spending that are at least as 
        affordable as the provisions of this title would provide;
            (C) will provide coverage to at least a comparable number 
        of its residents as the provisions of this title would provide;
            (D) will not increase the Federal deficit; and
            (E) will not weaken enforcement of laws and regulations 
        described in paragraph (1)(B)(i) in any State that is included 
        in such compact.
        (4) Effective date.--A health care choice compact described in 
    paragraph (1) shall not take effect before January 1, 2016.
    (b) Authority for Nationwide Plans.--
        (1) In general.--Except as provided in paragraph (2), if an 
    issuer (including a group of health insurance issuers affiliated 
    either by common ownership and control or by the common use of a 
    nationally licensed service mark) of a qualified health plan in the 
    individual or small group market meets the requirements of this 
    subsection (in this subsection a ``nationwide qualified health 
    plan'')--
            (A) the issuer of the plan may offer the nationwide 
        qualified health plan in the individual or small group market 
        in more than 1 State; and
            (B) with respect to State laws mandating benefit coverage 
        by a health plan, only the State laws of the State in which 
        such plan is written or issued shall apply to the nationwide 
        qualified health plan.
        (2) State opt-out.--A State may, by specific reference in a law 
    enacted after the date of enactment of this title, provide that 
    this subsection shall not apply to that State. Such opt-out shall 
    be effective until such time as the State by law revokes it.
        (3) Plan requirements.--An issuer meets the requirements of 
    this subsection with respect to a nationwide qualified health plan 
    if, in the determination of the Secretary--
            (A) the plan offers a benefits package that is uniform in 
        each State in which the plan is offered and meets the 
        requirements set forth in paragraphs (4) through (6);
            (B) the issuer is licensed in each State in which it offers 
        the plan and is subject to all requirements of State law not 
        inconsistent with this section, including but not limited to, 
        the standards and requirements that a State imposes that do not 
        prevent the application of a requirement of part A of title 
        XXVII of the Public Health Service Act or a requirement of this 
        title;
            (C) the issuer meets all requirements of this title with 
        respect to a qualified health plan, including the requirement 
        to offer the silver and gold levels of the plan in each 
        Exchange in the State for the market in which the plan is 
        offered;
            (D) the issuer determines the premiums for the plan in any 
        State on the basis of the rating rules in effect in that State 
        for the rating areas in which it is offered;
            (E) the issuer offers the nationwide qualified health plan 
        in at least 60 percent of the participating States in the first 
        year in which the plan is offered, 65 percent of such States in 
        the second year, 70 percent of such States in the third year, 
        75 percent of such States in the fourth year, and 80 percent of 
        such States in the fifth and subsequent years;
            (F) the issuer shall offer the plan in participating States 
        across the country, in all geographic regions, and in all 
        States that have adopted adjusted community rating before the 
        date of enactment of this Act; and
            (G) the issuer clearly notifies consumers that the policy 
        may not contain some benefits otherwise mandated for plans in 
        the State in which the purchaser resides and provides a 
        detailed statement of the benefits offered and the benefit 
        differences in that State, in accordance with rules promulgated 
        by the Secretary.
        (4) Form review for nationwide plans.--Notwithstanding any 
    contrary provision of State law, at least 3 months before any 
    nationwide qualified health plan is offered, the issuer shall file 
    all nationwide qualified health plan forms with the regulator in 
    each participating State in which the plan will be offered. An 
    issuer may appeal the disapproval of a nationwide qualified health 
    plan form to the Secretary.
        (5) Applicable rules.--The Secretary shall, in consultation 
    with the National Association of Insurance Commissioners, issue 
    rules for the offering of nationwide qualified health plans under 
    this subsection. Nationwide qualified health plans may be offered 
    only after such rules have taken effect.
        (6) Coverage.--The Secretary shall provide that the health 
    benefits coverage provided to an individual through a nationwide 
    qualified health plan under this subsection shall include at least 
    the essential benefits package described in section 1302.
        (7) State law mandating benefit coverage by a health benefits 
    plan.--For the purposes of this subsection, a State law mandating 
    benefit coverage by a health plan is a law that mandates health 
    insurance coverage or the offer of health insurance coverage for 
    specific health services or specific diseases. A law that mandates 
    health insurance coverage or reimbursement for services provided by 
    certain classes of providers of health care services, or a law that 
    mandates that certain classes of individuals must be covered as a 
    group or as dependents, is not a State law mandating benefit 
    coverage by a health benefits plan.

                PART V--REINSURANCE AND RISK ADJUSTMENT

SEC. 1341. TRANSITIONAL REINSURANCE PROGRAM FOR INDIVIDUAL AND SMALL 
              GROUP MARKETS IN EACH STATE.

    (a) In General.--Each State shall, not later than January 1, 2014--
        (1) include in the Federal standards or State law or regulation 
    the State adopts and has in effect under section 1321(b) the 
    provisions described in subsection (b); and
        (2) establish (or enter into a contract with) 1 or more 
    applicable reinsurance entities to carry out the reinsurance 
    program under this section.
    (b) Model Regulation.--
        (1) In general.--In establishing the Federal standards under 
    section 1321(a), the Secretary, in consultation with the National 
    Association of Insurance Commissioners (the ``NAIC''), shall 
    include provisions that enable States to establish and maintain a 
    program under which--
            (A) health insurance issuers, and third party 
        administrators on behalf of group health plans, are required to 
        make payments to an applicable reinsurance entity for any plan 
        year beginning in the 3-year period beginning January 1, 2014 
        (as specified in paragraph (3); and
            (B) the applicable reinsurance entity collects payments 
        under subparagraph (A) and uses amounts so collected to make 
        reinsurance payments to health insurance issuers described in 
        subparagraph (A) that cover high risk individuals in the 
        individual market (excluding grandfathered health plans) for 
        any plan year beginning in such 3-year period.
        (2) High-risk individual; payment amounts.--The Secretary shall 
    include the following in the provisions under paragraph (1):
            (A) Determination of high-risk individuals.--The method by 
        which individuals will be identified as high risk individuals 
        for purposes of the reinsurance program established under this 
        section. Such method shall provide for identification of 
        individuals as high-risk individuals on the basis of--
                (i) a list of at least 50 but not more than 100 medical 
            conditions that are identified as high-risk conditions and 
            that may be based on the identification of diagnostic and 
            procedure codes that are indicative of individuals with 
            pre-existing, high-risk conditions; or
                (ii) any other comparable objective method of 
            identification recommended by the American Academy of 
            Actuaries.
            (B) Payment amount.--The formula for determining the amount 
        of payments that will be paid to health insurance issuers 
        described in paragraph (1)(A) that insure high-risk 
        individuals. Such formula shall provide for the equitable 
        allocation of available funds through reconciliation and may be 
        designed--
                (i) to provide a schedule of payments that specifies 
            the amount that will be paid for each of the conditions 
            identified under subparagraph (A); or
                (ii) to use any other comparable method for determining 
            payment amounts that is recommended by the American Academy 
            of Actuaries and that encourages the use of care 
            coordination and care management programs for high risk 
            conditions.
        (3) Determination of required contributions.--
            (A) In general.--The Secretary shall include in the 
        provisions under paragraph (1) the method for determining the 
        amount each health insurance issuer and group health plan 
        described in paragraph (1)(A) contributing to the reinsurance 
        program under this section is required to contribute under such 
        paragraph for each plan year beginning in the 36-month period 
        beginning January 1, 2014. The contribution amount for any plan 
        year may be based on the percentage of revenue of each issuer 
        and the total costs of providing benefits to enrollees in self-
        insured plans or on a specified amount per enrollee and may be 
        required to be paid in advance or periodically throughout the 
        plan year.
            (B) Specific requirements.--The method under this paragraph 
        shall be designed so that--
                (i) the contribution amount for each issuer 
            proportionally reflects each issuer's fully insured 
            commercial book of business for all major medical products 
            and the total value of all fees charged by the issuer and 
            the costs of coverage administered by the issuer as a third 
            party administrator;
                (ii) the contribution amount can include an additional 
            amount to fund the administrative expenses of the 
            applicable reinsurance entity;
                (iii) the aggregate contribution amounts for all States 
            shall, based on the best estimates of the NAIC and without 
            regard to amounts described in clause (ii), equal 
            $10,000,000,000 for plan years beginning in 2014, 
            $6,000,000,000 for plan years beginning 2015, and 
            $4,000,000,000 for plan years beginning in 2016; and
                (iv) in addition to the aggregate contribution amounts 
            under clause (iii), each issuer's contribution amount for 
            any calendar year under clause (iii) reflects its 
            proportionate share of an additional $2,000,000,000 for 
            2014, an additional $2,000,000,000 for 2015, and an 
            additional $1,000,000,000 for 2016.
        Nothing in this subparagraph shall be construed to preclude a 
        State from collecting additional amounts from issuers on a 
        voluntary basis.
        (4) Expenditure of funds.--The provisions under paragraph (1) 
    shall provide that--
            (A) the contribution amounts collected for any calendar 
        year may be allocated and used in any of the three calendar 
        years for which amounts are collected based on the reinsurance 
        needs of a particular period or to reflect experience in a 
        prior period; and
            (B) amounts remaining unexpended as of December, 2016, may 
        be used to make payments under any reinsurance program of a 
        State in the individual market in effect in the 2-year period 
        beginning on January 1, 2017.
    Notwithstanding the preceding sentence, any contribution amounts 
    described in paragraph (3)(B)(iv) shall be deposited into the 
    general fund of the Treasury of the United States and may not be 
    used for the program established under this section.
    (c) Applicable Reinsurance Entity.--For purposes of this section--
        (1) In general.--The term ``applicable reinsurance entity'' 
    means a not-for-profit organization--
            (A) the purpose of which is to help stabilize premiums for 
        coverage in the individual and small group markets in a State 
        during the first 3 years of operation of an Exchange for such 
        markets within the State when the risk of adverse selection 
        related to new rating rules and market changes is greatest; and
            (B) the duties of which shall be to carry out the 
        reinsurance program under this section by coordinating the 
        funding and operation of the risk-spreading mechanisms designed 
        to implement the reinsurance program.
        (2) State discretion.--A State may have more than 1 applicable 
    reinsurance entity to carry out the reinsurance program under this 
    section within the State and 2 or more States may enter into 
    agreements to provide for an applicable reinsurance entity to carry 
    out such program in all such States.
        (3) Entities are tax-exempt.--An applicable reinsurance entity 
    established under this section shall be exempt from taxation under 
    chapter 1 of the Internal Revenue Code of 1986. The preceding 
    sentence shall not apply to the tax imposed by section 511 such 
    Code (relating to tax on unrelated business taxable income of an 
    exempt organization).
    (d) Coordination With State High-risk Pools.--The State shall 
eliminate or modify any State high-risk pool to the extent necessary to 
carry out the reinsurance program established under this section. The 
State may coordinate the State high-risk pool with such program to the 
extent not inconsistent with the provisions of this section.

SEC. 1342. ESTABLISHMENT OF RISK CORRIDORS FOR PLANS IN INDIVIDUAL AND 
              SMALL GROUP MARKETS.

    (a) In General.--The Secretary shall establish and administer a 
program of risk corridors for calendar years 2014, 2015, and 2016 under 
which a qualified health plan offered in the individual or small group 
market shall participate in a payment adjustment system based on the 
ratio of the allowable costs of the plan to the plan's aggregate 
premiums. Such program shall be based on the program for regional 
participating provider organizations under part D of title XVIII of the 
Social Security Act.
    (b) Payment Methodology.--
        (1) Payments out.--The Secretary shall provide under the 
    program established under subsection (a) that if--
            (A) a participating plan's allowable costs for any plan 
        year are more than 103 percent but not more than 108 percent of 
        the target amount, the Secretary shall pay to the plan an 
        amount equal to 50 percent of the target amount in excess of 
        103 percent of the target amount; and
            (B) a participating plan's allowable costs for any plan 
        year are more than 108 percent of the target amount, the 
        Secretary shall pay to the plan an amount equal to the sum of 
        2.5 percent of the target amount plus 80 percent of allowable 
        costs in excess of 108 percent of the target amount.
        (2) Payments in.--The Secretary shall provide under the program 
    established under subsection (a) that if--
            (A) a participating plan's allowable costs for any plan 
        year are less than 97 percent but not less than 92 percent of 
        the target amount, the plan shall pay to the Secretary an 
        amount equal to 50 percent of the excess of 97 percent of the 
        target amount over the allowable costs; and
            (B) a participating plan's allowable costs for any plan 
        year are less than 92 percent of the target amount, the plan 
        shall pay to the Secretary an amount equal to the sum of 2.5 
        percent of the target amount plus 80 percent of the excess of 
        92 percent of the target amount over the allowable costs.
    (c) Definitions.--In this section:
        (1) Allowable costs.--
            (A) In general.--The amount of allowable costs of a plan 
        for any year is an amount equal to the total costs (other than 
        administrative costs) of the plan in providing benefits covered 
        by the plan.
            (B) Reduction for risk adjustment and reinsurance 
        payments.--Allowable costs shall reduced by any risk adjustment 
        and reinsurance payments received under section 1341 and 1343.
        (2) Target amount.--The target amount of a plan for any year is 
    an amount equal to the total premiums (including any premium 
    subsidies under any governmental program), reduced by the 
    administrative costs of the plan.

SEC. 1343. RISK ADJUSTMENT.

    (a) In General.--
        (1) Low actuarial risk plans.--Using the criteria and methods 
    developed under subsection (b), each State shall assess a charge on 
    health plans and health insurance issuers (with respect to health 
    insurance coverage) described in subsection (c) if the actuarial 
    risk of the enrollees of such plans or coverage for a year is less 
    than the average actuarial risk of all enrollees in all plans or 
    coverage in such State for such year that are not self-insured 
    group health plans (which are subject to the provisions of the 
    Employee Retirement Income Security Act of 1974).
        (2) High actuarial risk plans.--Using the criteria and methods 
    developed under subsection (b), each State shall provide a payment 
    to health plans and health insurance issuers (with respect to 
    health insurance coverage) described in subsection (c) if the 
    actuarial risk of the enrollees of such plans or coverage for a 
    year is greater than the average actuarial risk of all enrollees in 
    all plans and coverage in such State for such year that are not 
    self-insured group health plans (which are subject to the 
    provisions of the Employee Retirement Income Security Act of 1974).
    (b) Criteria and Methods.--The Secretary, in consultation with 
States, shall establish criteria and methods to be used in carrying out 
the risk adjustment activities under this section. The Secretary may 
utilize criteria and methods similar to the criteria and methods 
utilized under part C or D of title XVIII of the Social Security Act. 
Such criteria and methods shall be included in the standards and 
requirements the Secretary prescribes under section 1321.
    (c) Scope.--A health plan or a health insurance issuer is described 
in this subsection if such health plan or health insurance issuer 
provides coverage in the individual or small group market within the 
State. This subsection shall not apply to a grandfathered health plan 
or the issuer of a grandfathered health plan with respect to that plan.

       Subtitle E--Affordable Coverage Choices for All Americans

        PART I--PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS

       Subpart A--Premium Tax Credits and Cost-sharing Reductions

SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR 
              COVERAGE UNDER A QUALIFIED HEALTH PLAN.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36A the following new section:

``SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH 
              PLAN.

    ``(a) In General.--In the case of an applicable taxpayer, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for any taxable year an amount equal to the premium assistance credit 
amount of the taxpayer for the taxable year.
    ``(b) Premium Assistance Credit Amount.--For purposes of this 
section--
        ``(1) In general.--The term `premium assistance credit amount' 
    means, with respect to any taxable year, the sum of the premium 
    assistance amounts determined under paragraph (2) with respect to 
    all coverage months of the taxpayer occurring during the taxable 
    year.
        ``(2) Premium assistance amount.--The premium assistance amount 
    determined under this subsection with respect to any coverage month 
    is the amount equal to the lesser of--
            ``(A) the monthly premiums for such month for 1 or more 
        qualified health plans offered in the individual market within 
        a State which cover the taxpayer, the taxpayer's spouse, or any 
        dependent (as defined in section 152) of the taxpayer and which 
        were enrolled in through an Exchange established by the State 
        under 1311 of the Patient Protection and Affordable Care Act, 
        or
            ``(B) the excess (if any) of--
                ``(i) the adjusted monthly premium for such month for 
            the applicable second lowest cost silver plan with respect 
            to the taxpayer, over
                ``(ii) an amount equal to 1/12 of the product of the 
            applicable percentage and the taxpayer's household income 
            for the taxable year.
        ``(3) Other terms and rules relating to premium assistance 
    amounts.--For purposes of paragraph (2)--
            ``(A) Applicable percentage.--
                ``(i) In general.--Except as provided in clause (ii), 
            the applicable percentage with respect to any taxpayer for 
            any taxable year is equal to 2.8 percent, increased by the 
            number of percentage points (not greater than 7) which 
            bears the same ratio to 7 percentage points as--

                    ``(I) the taxpayer's household income for the 
                taxable year in excess of 100 percent of the poverty 
                line for a family of the size involved, bears to
                    ``(II) an amount equal to 200 percent of the 
                poverty line for a family of the size involved.

                ``(ii) Special rule for taxpayers under 133 percent of 
            poverty line.--If a taxpayer's household income for the 
            taxable year is in excess of 100 percent, but not more than 
            133 percent, of the poverty line for a family of the size 
            involved, the taxpayer's applicable percentage shall be 2 
            percent.
                ``(iii) Indexing.--In the case of taxable years 
            beginning in any calendar year after 2014, the Secretary 
            shall adjust the initial and final applicable percentages 
            under clause (i), and the 2 percent under clause (ii), for 
            the calendar year to reflect the excess of the rate of 
            premium growth between the preceding calendar year and 2013 
            over the rate of income growth for such period.
            ``(B) Applicable second lowest cost silver plan.--The 
        applicable second lowest cost silver plan with respect to any 
        applicable taxpayer is the second lowest cost silver plan of 
        the individual market in the rating area in which the taxpayer 
        resides which--
                ``(i) is offered through the same Exchange through 
            which the qualified health plans taken into account under 
            paragraph (2)(A) were offered, and
                ``(ii) provides--

                    ``(I) self-only coverage in the case of an 
                applicable taxpayer--

                        ``(aa) whose tax for the taxable year is 
                    determined under section 1(c) (relating to 
                    unmarried individuals other than surviving spouses 
                    and heads of households) and who is not allowed a 
                    deduction under section 151 for the taxable year 
                    with respect to a dependent, or
                        ``(bb) who is not described in item (aa) but 
                    who purchases only self-only coverage, and

                    ``(II) family coverage in the case of any other 
                applicable taxpayer.

        If a taxpayer files a joint return and no credit is allowed 
        under this section with respect to 1 of the spouses by reason 
        of subsection (e), the taxpayer shall be treated as described 
        in clause (ii)(I) unless a deduction is allowed under section 
        151 for the taxable year with respect to a dependent other than 
        either spouse and subsection (e) does not apply to the 
        dependent.
            ``(C) Adjusted monthly premium.--The adjusted monthly 
        premium for an applicable second lowest cost silver plan is the 
        monthly premium which would have been charged (for the rating 
        area with respect to which the premiums under paragraph (2)(A) 
        were determined) for the plan if each individual covered under 
        a qualified health plan taken into account under paragraph 
        (2)(A) were covered by such silver plan and the premium was 
        adjusted only for the age of each such individual in the manner 
        allowed under section 2701 of the Public Health Service Act. In 
        the case of a State participating in the wellness discount 
        demonstration project under section 2705(d) of the Public 
        Health Service Act, the adjusted monthly premium shall be 
        determined without regard to any premium discount or rebate 
        under such project.
            ``(D) Additional benefits.--If--
                ``(i) a qualified health plan under section 1302(b)(5) 
            of the Patient Protection and Affordable Care Act offers 
            benefits in addition to the essential health benefits 
            required to be provided by the plan, or
                ``(ii) a State requires a qualified health plan under 
            section 1311(d)(3)(B) of such Act to cover benefits in 
            addition to the essential health benefits required to be 
            provided by the plan,
        the portion of the premium for the plan properly allocable 
        (under rules prescribed by the Secretary of Health and Human 
        Services) to such additional benefits shall not be taken into 
        account in determining either the monthly premium or the 
        adjusted monthly premium under paragraph (2).
            ``(E) Special rule for pediatric dental coverage.--For 
        purposes of determining the amount of any monthly premium, if 
        an individual enrolls in both a qualified health plan and a 
        plan described in section 1311(d)(2)(B)(ii)(I) of the Patient 
        Protection and Affordable Care Act for any plan year, the 
        portion of the premium for the plan described in such section 
        that (under regulations prescribed by the Secretary) is 
        properly allocable to pediatric dental benefits which are 
        included in the essential health benefits required to be 
        provided by a qualified health plan under section 1302(b)(1)(J) 
        of such Act shall be treated as a premium payable for a 
        qualified health plan.
    ``(c) Definition and Rules Relating to Applicable Taxpayers, 
Coverage Months, and Qualified Health Plan.--For purposes of this 
section--
        ``(1) Applicable taxpayer.--
            ``(A) In general.--The term `applicable taxpayer' means, 
        with respect to any taxable year, a taxpayer whose household 
        income for the taxable year exceeds 100 percent but does not 
        exceed 400 percent of an amount equal to the poverty line for a 
        family of the size involved.
            ``(B) Special rule for certain individuals lawfully present 
        in the united states.--If--
                ``(i) a taxpayer has a household income which is not 
            greater than 100 percent of an amount equal to the poverty 
            line for a family of the size involved, and
                ``(ii) the taxpayer is an alien lawfully present in the 
            United States, but is not eligible for the medicaid program 
            under title XIX of the Social Security Act by reason of 
            such alien status,
        the taxpayer shall, for purposes of the credit under this 
        section, be treated as an applicable taxpayer with a household 
        income which is equal to 100 percent of the poverty line for a 
        family of the size involved.
            ``(C) Married couples must file joint return.--If the 
        taxpayer is married (within the meaning of section 7703) at the 
        close of the taxable year, the taxpayer shall be treated as an 
        applicable taxpayer only if the taxpayer and the taxpayer's 
        spouse file a joint return for the taxable year.
            ``(D) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
        ``(2) Coverage month.--For purposes of this subsection--
            ``(A) In general.--The term `coverage month' means, with 
        respect to an applicable taxpayer, any month if--
                ``(i) as of the first day of such month the taxpayer, 
            the taxpayer's spouse, or any dependent of the taxpayer is 
            covered by a qualified health plan described in subsection 
            (b)(2)(A) that was enrolled in through an Exchange 
            established by the State under section 1311 of the Patient 
            Protection and Affordable Care Act, and
                ``(ii) the premium for coverage under such plan for 
            such month is paid by the taxpayer (or through advance 
            payment of the credit under subsection (a) under section 
            1412 of the Patient Protection and Affordable Care Act).
            ``(B) Exception for minimum essential coverage.--
                ``(i) In general.--The term `coverage month' shall not 
            include any month with respect to an individual if for such 
            month the individual is eligible for minimum essential 
            coverage other than eligibility for coverage described in 
            section 5000A(f)(1)(C) (relating to coverage in the 
            individual market).
                ``(ii) Minimum essential coverage.--The term `minimum 
            essential coverage' has the meaning given such term by 
            section 5000A(f).
            ``(C) Special rule for employer-sponsored minimum essential 
        coverage.--For purposes of subparagraph (B)--
                ``(i) Coverage must be affordable.--Except as provided 
            in clause (iii), an employee shall not be treated as 
            eligible for minimum essential coverage if such coverage--

                    ``(I) consists of an eligible employer-sponsored 
                plan (as defined in section 5000A(f)(2)), and
                    ``(II) the employee's required contribution (within 
                the meaning of section 5000A(e)(1)(B)) with respect to 
                the plan exceeds 9.8 percent of the applicable 
                taxpayer's household income.

            This clause shall also apply to an individual who is 
            eligible to enroll in the plan by reason of a relationship 
            the individual bears to the employee.
                ``(ii) Coverage must provide minimum value.--Except as 
            provided in clause (iii), an employee shall not be treated 
            as eligible for minimum essential coverage if such coverage 
            consists of an eligible employer-sponsored plan (as defined 
            in section 5000A(f)(2)) and the plan's share of the total 
            allowed costs of benefits provided under the plan is less 
            than 60 percent of such costs.
                ``(iii) Employee or family must not be covered under 
            employer plan.--Clauses (i) and (ii) shall not apply if the 
            employee (or any individual described in the last sentence 
            of clause (i)) is covered under the eligible employer-
            sponsored plan or the grandfathered health plan.
                ``(iv) Indexing.--In the case of plan years beginning 
            in any calendar year after 2014, the Secretary shall adjust 
            the 9.8 percent under clause (i)(II) in the same manner as 
            the percentages are adjusted under subsection 
            (b)(3)(A)(ii).
        ``(3) Definitions and other rules.--
            ``(A) Qualified health plan.--The term `qualified health 
        plan' has the meaning given such term by section 1301(a) of the 
        Patient Protection and Affordable Care Act, except that such 
        term shall not include a qualified health plan which is a 
        catastrophic plan described in section 1302(e) of such Act.
            ``(B) Grandfathered health plan.--The term `grandfathered 
        health plan' has the meaning given such term by section 1251 of 
        the Patient Protection and Affordable Care Act.
    ``(d) Terms Relating to Income and Families.--For purposes of this 
section--
        ``(1) Family size.--The family size involved with respect to 
    any taxpayer shall be equal to the number of individuals for whom 
    the taxpayer is allowed a deduction under section 151 (relating to 
    allowance of deduction for personal exemptions) for the taxable 
    year.
        ``(2) Household income.--
            ``(A) Household income.--The term `household income' means, 
        with respect to any taxpayer, an amount equal to the sum of--
                ``(i) the modified gross income of the taxpayer, plus
                ``(ii) the aggregate modified gross incomes of all 
            other individuals who--

                    ``(I) were taken into account in determining the 
                taxpayer's family size under paragraph (1), and
                    ``(II) were required to file a return of tax 
                imposed by section 1 for the taxable year.

            ``(B) Modified gross income.--The term `modified gross 
        income' means gross income--
                ``(i) decreased by the amount of any deduction 
            allowable under paragraph (1), (3), (4), or (10) of section 
            62(a),
                ``(ii) increased by the amount of interest received or 
            accrued during the taxable year which is exempt from tax 
            imposed by this chapter, and
                ``(iii) determined without regard to sections 911, 931, 
            and 933.
        ``(3) Poverty line.--
            ``(A) In general.--The term `poverty line' has the meaning 
        given that term in section 2110(c)(5) of the Social Security 
        Act (42 U.S.C. 1397jj(c)(5)).
            ``(B) Poverty line used.--In the case of any qualified 
        health plan offered through an Exchange for coverage during a 
        taxable year beginning in a calendar year, the poverty line 
        used shall be the most recently published poverty line as of 
        the 1st day of the regular enrollment period for coverage 
        during such calendar year.
    ``(e) Rules for Individuals Not Lawfully Present.--
        ``(1) In general.--If 1 or more individuals for whom a taxpayer 
    is allowed a deduction under section 151 (relating to allowance of 
    deduction for personal exemptions) for the taxable year (including 
    the taxpayer or his spouse) are individuals who are not lawfully 
    present--
            ``(A) the aggregate amount of premiums otherwise taken into 
        account under clauses (i) and (ii) of subsection (b)(2)(A) 
        shall be reduced by the portion (if any) of such premiums which 
        is attributable to such individuals, and
            ``(B) for purposes of applying this section, the 
        determination as to what percentage a taxpayer's household 
        income bears to the poverty level for a family of the size 
        involved shall be made under one of the following methods:
                ``(i) A method under which--

                    ``(I) the taxpayer's family size is determined by 
                not taking such individuals into account, and
                    ``(II) the taxpayer's household income is equal to 
                the product of the taxpayer's household income 
                (determined without regard to this subsection) and a 
                fraction--

                        ``(aa) the numerator of which is the poverty 
                    line for the taxpayer's family size determined 
                    after application of subclause (I), and
                        ``(bb) the denominator of which is the poverty 
                    line for the taxpayer's family size determined 
                    without regard to subclause (I).
                ``(ii) A comparable method reaching the same result as 
            the method under clause (i).
        ``(2) Lawfully present.--For purposes of this section, an 
    individual shall be treated as lawfully present only if the 
    individual is, and is reasonably expected to be for the entire 
    period of enrollment for which the credit under this section is 
    being claimed, a citizen or national of the United States or an 
    alien lawfully present in the United States.
        ``(3) Secretarial authority.--The Secretary of Health and Human 
    Services, in consultation with the Secretary, shall prescribe rules 
    setting forth the methods by which calculations of family size and 
    household income are made for purposes of this subsection. Such 
    rules shall be designed to ensure that the least burden is placed 
    on individuals enrolling in qualified health plans through an 
    Exchange and taxpayers eligible for the credit allowable under this 
    section.
    ``(f) Reconciliation of Credit and Advance Credit.--
        ``(1) In general.--The amount of the credit allowed under this 
    section for any taxable year shall be reduced (but not below zero) 
    by the amount of any advance payment of such credit under section 
    1412 of the Patient Protection and Affordable Care Act.
        ``(2) Excess advance payments.--
            ``(A) In general.--If the advance payments to a taxpayer 
        under section 1412 of the Patient Protection and Affordable 
        Care Act for a taxable year exceed the credit allowed by this 
        section (determined without regard to paragraph (1)), the tax 
        imposed by this chapter for the taxable year shall be increased 
        by the amount of such excess.
            ``(B) Limitation on increase where income less than 400 
        percent of poverty line.--
                ``(i) In general.--In the case of an applicable 
            taxpayer whose household income is less than 400 percent of 
            the poverty line for the size of the family involved for 
            the taxable year, the amount of the increase under 
            subparagraph (A) shall in no event exceed $400 ($250 in the 
            case of a taxpayer whose tax is determined under section 
            1(c) for the taxable year).
                ``(ii) Indexing of amount.--In the case of any calendar 
            year beginning after 2014, each of the dollar amounts under 
            clause (i) shall be increased by an amount equal to--

                    ``(I) such dollar amount, multiplied by
                    ``(II) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year, determined 
                by substituting `calendar year 2013' for `calendar year 
                1992' in subparagraph (B) thereof.

            If the amount of any increase under clause (i) is not a 
            multiple of $50, such increase shall be rounded to the next 
            lowest multiple of $50.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations which provide for--
        ``(1) the coordination of the credit allowed under this section 
    with the program for advance payment of the credit under section 
    1412 of the Patient Protection and Affordable Care Act, and
        ``(2) the application of subsection (f) where the filing status 
    of the taxpayer for a taxable year is different from such status 
    used for determining the advance payment of the credit.''.
    (b) Disallowance of Deduction.--Section 280C of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(g) Credit for Health Insurance Premiums.--No deduction shall be 
allowed for the portion of the premiums paid by the taxpayer for 
coverage of 1 or more individuals under a qualified health plan which 
is equal to the amount of the credit determined for the taxable year 
under section 36B(a) with respect to such premiums.''.
    (c) Study on Affordable Coverage.--
        (1) Study and report.--
            (A) In general.--Not later than 5 years after the date of 
        the enactment of this Act, the Comptroller General shall 
        conduct a study on the affordability of health insurance 
        coverage, including--
                (i) the impact of the tax credit for qualified health 
            insurance coverage of individuals under section 36B of the 
            Internal Revenue Code of 1986 and the tax credit for 
            employee health insurance expenses of small employers under 
            section 45R of such Code on maintaining and expanding the 
            health insurance coverage of individuals;
                (ii) the availability of affordable health benefits 
            plans, including a study of whether the percentage of 
            household income used for purposes of section 36B(c)(2)(C) 
            of the Internal Revenue Code of 1986 (as added by this 
            section) is the appropriate level for determining whether 
            employer-provided coverage is affordable for an employee 
            and whether such level may be lowered without significantly 
            increasing the costs to the Federal Government and reducing 
            employer-provided coverage; and
                (iii) the ability of individuals to maintain essential 
            health benefits coverage (as defined in section 5000A(f) of 
            the Internal Revenue Code of 1986).
            (B) Report.--The Comptroller General shall submit to the 
        appropriate committees of Congress a report on the study 
        conducted under subparagraph (A), together with legislative 
        recommendations relating to the matters studied under such 
        subparagraph.
        (2) Appropriate committees of congress.--In this subsection, 
    the term ``appropriate committees of Congress'' means the Committee 
    on Ways and Means, the Committee on Education and Labor, and the 
    Committee on Energy and Commerce of the House of Representatives 
    and the Committee on Finance and the Committee on Health, 
    Education, Labor and Pensions of the Senate.
    (d) Conforming Amendments.--
        (1) Paragraph (2) of section 1324(b) of title 31, United States 
    Code, is amended by inserting ``36B,'' after ``36A,''.
        (2) The table of sections for subpart C of part IV of 
    subchapter A of chapter 1 of the Internal Revenue Code of 1986 is 
    amended by inserting after the item relating to section 36A the 
    following new item:
``Sec. 36B. Refundable credit for coverage under a qualified health 
          plan.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2013.

SEC. 1402. REDUCED COST-SHARING FOR INDIVIDUALS ENROLLING IN QUALIFIED 
              HEALTH PLANS.

    (a) In General.--In the case of an eligible insured enrolled in a 
qualified health plan--
        (1) the Secretary shall notify the issuer of the plan of such 
    eligibility; and
        (2) the issuer shall reduce the cost-sharing under the plan at 
    the level and in the manner specified in subsection (c).
    (b) Eligible Insured.--In this section, the term ``eligible 
insured'' means an individual--
        (1) who enrolls in a qualified health plan in the silver level 
    of coverage in the individual market offered through an Exchange; 
    and
        (2) whose household income exceeds 100 percent but does not 
    exceed 400 percent of the poverty line for a family of the size 
    involved.
In the case of an individual described in section 36B(c)(1)(B) of the 
Internal Revenue Code of 1986, the individual shall be treated as 
having household income equal to 100 percent for purposes of applying 
this section.
    (c) Determination of Reduction in Cost-sharing.--
        (1) Reduction in out-of-pocket limit.--
            (A) In general.--The reduction in cost-sharing under this 
        subsection shall first be achieved by reducing the applicable 
        out-of pocket limit under section 1302(c)(1) in the case of--
                (i) an eligible insured whose household income is more 
            than 100 percent but not more than 200 percent of the 
            poverty line for a family of the size involved, by two-
            thirds;
                (ii) an eligible insured whose household income is more 
            than 200 percent but not more than 300 percent of the 
            poverty line for a family of the size involved, by one-
            half; and
                (iii) an eligible insured whose household income is 
            more than 300 percent but not more than 400 percent of the 
            poverty line for a family of the size involved, by one-
            third.
            (B) Coordination with actuarial value limits.--
                (i) In general.--The Secretary shall ensure the 
            reduction under this paragraph shall not result in an 
            increase in the plan's share of the total allowed costs of 
            benefits provided under the plan above--

                    (I) 90 percent in the case of an eligible insured 
                described in paragraph (2)(A);
                    (II) 80 percent in the case of an eligible insured 
                described in paragraph (2)(B); and
                    (III) 70 percent in the case of an eligible insured 
                described in clause (ii) or (iii) of subparagraph (A).

                (ii) Adjustment.--The Secretary shall adjust the out-of 
            pocket limits under paragraph (1) if necessary to ensure 
            that such limits do not cause the respective actuarial 
            values to exceed the levels specified in clause (i).
        (2) Additional reduction for lower income insureds.--The 
    Secretary shall establish procedures under which the issuer of a 
    qualified health plan to which this section applies shall further 
    reduce cost-sharing under the plan in a manner sufficient to--
            (A) in the case of an eligible insured whose household 
        income is not less than 100 percent but not more than 150 
        percent of the poverty line for a family of the size involved, 
        increase the plan's share of the total allowed costs of 
        benefits provided under the plan to 90 percent of such costs; 
        and
            (B) in the case of an eligible insured whose household 
        income is more than 150 percent but not more than 200 percent 
        of the poverty line for a family of the size involved, increase 
        the plan's share of the total allowed costs of benefits 
        provided under the plan to 80 percent of such costs.
        (3) Methods for reducing cost-sharing.--
            (A) In general.--An issuer of a qualified health plan 
        making reductions under this subsection shall notify the 
        Secretary of such reductions and the Secretary shall make 
        periodic and timely payments to the issuer equal to the value 
        of the reductions.
            (B) Capitated payments.--The Secretary may establish a 
        capitated payment system to carry out the payment of cost-
        sharing reductions under this section. Any such system shall 
        take into account the value of the reductions and make 
        appropriate risk adjustments to such payments.
        (4) Additional benefits.--If a qualified health plan under 
    section 1302(b)(5) offers benefits in addition to the essential 
    health benefits required to be provided by the plan, or a State 
    requires a qualified health plan under section 1311(d)(3)(B) to 
    cover benefits in addition to the essential health benefits 
    required to be provided by the plan, the reductions in cost-sharing 
    under this section shall not apply to such additional benefits.
        (5) Special rule for pediatric dental plans.--If an individual 
    enrolls in both a qualified health plan and a plan described in 
    section 1311(d)(2)(B)(ii)(I) for any plan year, subsection (a) 
    shall not apply to that portion of any reduction in cost-sharing 
    under subsection (c) that (under regulations prescribed by the 
    Secretary) is properly allocable to pediatric dental benefits which 
    are included in the essential health benefits required to be 
    provided by a qualified health plan under section 1302(b)(1)(J).
    (d) Special Rules for Indians.--
        (1) Indians under 300 percent of poverty.--If an individual 
    enrolled in any qualified health plan in the individual market 
    through an Exchange is an Indian (as defined in section 4(d) of the 
    Indian Self-Determination and Education Assistance Act (25 U.S.C. 
    450b(d))) whose household income is not more than 300 percent of 
    the poverty line for a family of the size involved, then, for 
    purposes of this section--
            (A) such individual shall be treated as an eligible 
        insured; and
            (B) the issuer of the plan shall eliminate any cost-sharing 
        under the plan.
        (2) Items or services furnished through indian health 
    providers.--If an Indian (as so defined) enrolled in a qualified 
    health plan is furnished an item or service directly by the Indian 
    Health Service, an Indian Tribe, Tribal Organization, or Urban 
    Indian Organization or through referral under contract health 
    services--
            (A) no cost-sharing under the plan shall be imposed under 
        the plan for such item or service; and
            (B) the issuer of the plan shall not reduce the payment to 
        any such entity for such item or service by the amount of any 
        cost-sharing that would be due from the Indian but for 
        subparagraph (A).
        (3) Payment.--The Secretary shall pay to the issuer of a 
    qualified health plan the amount necessary to reflect the increase 
    in actuarial value of the plan required by reason of this 
    subsection.
    (e) Rules for Individuals Not Lawfully Present.--
        (1) In general.--If an individual who is an eligible insured is 
    not lawfully present--
            (A) no cost-sharing reduction under this section shall 
        apply with respect to the individual; and
            (B) for purposes of applying this section, the 
        determination as to what percentage a taxpayer's household 
        income bears to the poverty level for a family of the size 
        involved shall be made under one of the following methods:
                (i) A method under which--

                    (I) the taxpayer's family size is determined by not 
                taking such individuals into account, and
                    (II) the taxpayer's household income is equal to 
                the product of the taxpayer's household income 
                (determined without regard to this subsection) and a 
                fraction--

                        (aa) the numerator of which is the poverty line 
                    for the taxpayer's family size determined after 
                    application of subclause (I), and
                        (bb) the denominator of which is the poverty 
                    line for the taxpayer's family size determined 
                    without regard to subclause (I).
                (ii) A comparable method reaching the same result as 
            the method under clause (i).
        (2) Lawfully present.--For purposes of this section, an 
    individual shall be treated as lawfully present only if the 
    individual is, and is reasonably expected to be for the entire 
    period of enrollment for which the cost-sharing reduction under 
    this section is being claimed, a citizen or national of the United 
    States or an alien lawfully present in the United States.
        (3) Secretarial authority.--The Secretary, in consultation with 
    the Secretary of the Treasury, shall prescribe rules setting forth 
    the methods by which calculations of family size and household 
    income are made for purposes of this subsection. Such rules shall 
    be designed to ensure that the least burden is placed on 
    individuals enrolling in qualified health plans through an Exchange 
    and taxpayers eligible for the credit allowable under this section.
    (f) Definitions and Special Rules.--In this section:
        (1) In general.--Any term used in this section which is also 
    used in section 36B of the Internal Revenue Code of 1986 shall have 
    the meaning given such term by such section.
        (2) Limitations on reduction.--No cost-sharing reduction shall 
    be allowed under this section with respect to coverage for any 
    month unless the month is a coverage month with respect to which a 
    credit is allowed to the insured (or an applicable taxpayer on 
    behalf of the insured) under section 36B of such Code.
        (3) Data used for eligibility.--Any determination under this 
    section shall be made on the basis of the taxable year for which 
    the advance determination is made under section 1412 and not the 
    taxable year for which the credit under section 36B of such Code is 
    allowed.

                 Subpart B--Eligibility Determinations

SEC. 1411. PROCEDURES FOR DETERMINING ELIGIBILITY FOR EXCHANGE 
              PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED COST-
              SHARING, AND INDIVIDUAL RESPONSIBILITY EXEMPTIONS.

    (a) Establishment of Program.--The Secretary shall establish a 
program meeting the requirements of this section for determining--
        (1) whether an individual who is to be covered in the 
    individual market by a qualified health plan offered through an 
    Exchange, or who is claiming a premium tax credit or reduced cost-
    sharing, meets the requirements of sections 1312(f)(3), 1402(e), 
    and 1412(d) of this title and section 36B(e) of the Internal 
    Revenue Code of 1986 that the individual be a citizen or national 
    of the United States or an alien lawfully present in the United 
    States;
        (2) in the case of an individual claiming a premium tax credit 
    or reduced cost-sharing under section 36B of such Code or section 
    1402--
            (A) whether the individual meets the income and coverage 
        requirements of such sections; and
            (B) the amount of the tax credit or reduced cost-sharing;
        (3) whether an individual's coverage under an employer-
    sponsored health benefits plan is treated as unaffordable under 
    sections 36B(c)(2)(C) and 5000A(e)(2); and
        (4) whether to grant a certification under section 
    1311(d)(4)(H) attesting that, for purposes of the individual 
    responsibility requirement under section 5000A of the Internal 
    Revenue Code of 1986, an individual is entitled to an exemption 
    from either the individual responsibility requirement or the 
    penalty imposed by such section.
    (b) Information Required To Be Provided by Applicants.--
        (1) In general.--An applicant for enrollment in a qualified 
    health plan offered through an Exchange in the individual market 
    shall provide--
            (A) the name, address, and date of birth of each individual 
        who is to be covered by the plan (in this subsection referred 
        to as an ``enrollee''); and
            (B) the information required by any of the following 
        paragraphs that is applicable to an enrollee.
        (2) Citizenship or immigration status.--The following 
    information shall be provided with respect to every enrollee:
            (A) In the case of an enrollee whose eligibility is based 
        on an attestation of citizenship of the enrollee, the 
        enrollee's social security number.
            (B) In the case of an individual whose eligibility is based 
        on an attestation of the enrollee's immigration status, the 
        enrollee's social security number (if applicable) and such 
        identifying information with respect to the enrollee's 
        immigration status as the Secretary, after consultation with 
        the Secretary of Homeland Security, determines appropriate.
        (3) Eligibility and amount of tax credit or reduced cost-
    sharing.--In the case of an enrollee with respect to whom a premium 
    tax credit or reduced cost-sharing under section 36B of such Code 
    or section 1402 is being claimed, the following information:
            (A) Information regarding income and family size.--The 
        information described in section 6103(l)(21) for the taxable 
        year ending with or within the second calendar year preceding 
        the calendar year in which the plan year begins.
            (B) Changes in circumstances.--The information described in 
        section 1412(b)(2), including information with respect to 
        individuals who were not required to file an income tax return 
        for the taxable year described in subparagraph (A) or 
        individuals who experienced changes in marital status or family 
        size or significant reductions in income.
        (4) Employer-sponsored coverage.--In the case of an enrollee 
    with respect to whom eligibility for a premium tax credit under 
    section 36B of such Code or cost-sharing reduction under section 
    1402 is being established on the basis that the enrollee's (or 
    related individual's) employer is not treated under section 
    36B(c)(2)(C) of such Code as providing minimum essential coverage 
    or affordable minimum essential coverage, the following 
    information:
            (A) The name, address, and employer identification number 
        (if available) of the employer.
            (B) Whether the enrollee or individual is a full-time 
        employee and whether the employer provides such minimum 
        essential coverage.
            (C) If the employer provides such minimum essential 
        coverage, the lowest cost option for the enrollee's or 
        individual's enrollment status and the enrollee's or 
        individual's required contribution (within the meaning of 
        section 5000A(e)(1)(B) of such Code) under the employer-
        sponsored plan.
            (D) If an enrollee claims an employer's minimum essential 
        coverage is unaffordable, the information described in 
        paragraph (3).
    If an enrollee changes employment or obtains additional employment 
    while enrolled in a qualified health plan for which such credit or 
    reduction is allowed, the enrollee shall notify the Exchange of 
    such change or additional employment and provide the information 
    described in this paragraph with respect to the new employer.
        (5) Exemptions from individual responsibility requirements.--In 
    the case of an individual who is seeking an exemption certificate 
    under section 1311(d)(4)(H) from any requirement or penalty imposed 
    by section 5000A, the following information:
            (A) In the case of an individual seeking exemption based on 
        the individual's status as a member of an exempt religious sect 
        or division, as a member of a health care sharing ministry, as 
        an Indian, or as an individual eligible for a hardship 
        exemption, such information as the Secretary shall prescribe.
            (B) In the case of an individual seeking exemption based on 
        the lack of affordable coverage or the individual's status as a 
        taxpayer with household income less than 100 percent of the 
        poverty line, the information described in paragraphs (3) and 
        (4), as applicable.
    (c) Verification of Information Contained in Records of Specific 
Federal Officials.--
        (1) Information transferred to secretary.--An Exchange shall 
    submit the information provided by an applicant under subsection 
    (b) to the Secretary for verification in accordance with the 
    requirements of this subsection and subsection (d).
        (2) Citizenship or immigration status.--
            (A) Commissioner of social security.--The Secretary shall 
        submit to the Commissioner of Social Security the following 
        information for a determination as to whether the information 
        provided is consistent with the information in the records of 
        the Commissioner:
                (i) The name, date of birth, and social security number 
            of each individual for whom such information was provided 
            under subsection (b)(2).
                (ii) The attestation of an individual that the 
            individual is a citizen.
            (B) Secretary of homeland security.--
                (i) In general.--In the case of an individual--

                    (I) who attests that the individual is an alien 
                lawfully present in the United States; or
                    (II) who attests that the individual is a citizen 
                but with respect to whom the Commissioner of Social 
                Security has notified the Secretary under subsection 
                (e)(3) that the attestation is inconsistent with 
                information in the records maintained by the 
                Commissioner;

            the Secretary shall submit to the Secretary of Homeland 
            Security the information described in clause (ii) for a 
            determination as to whether the information provided is 
            consistent with the information in the records of the 
            Secretary of Homeland Security.
                (ii) Information.--The information described in clause 
            (ii) is the following:

                    (I) The name, date of birth, and any identifying 
                information with respect to the individual's 
                immigration status provided under subsection (b)(2).
                    (II) The attestation that the individual is an 
                alien lawfully present in the United States or in the 
                case of an individual described in clause (i)(II), the 
                attestation that the individual is a citizen.

        (3) Eligibility for tax credit and cost-sharing reduction.--The 
    Secretary shall submit the information described in subsection 
    (b)(3)(A) provided under paragraph (3), (4), or (5) of subsection 
    (b) to the Secretary of the Treasury for verification of household 
    income and family size for purposes of eligibility.
        (4) Methods.--
            (A) In general.--The Secretary, in consultation with the 
        Secretary of the Treasury, the Secretary of Homeland Security, 
        and the Commissioner of Social Security, shall provide that 
        verifications and determinations under this subsection shall be 
        done--
                (i) through use of an on-line system or otherwise for 
            the electronic submission of, and response to, the 
            information submitted under this subsection with respect to 
            an applicant; or
                (ii) by determining the consistency of the information 
            submitted with the information maintained in the records of 
            the Secretary of the Treasury, the Secretary of Homeland 
            Security, or the Commissioner of Social Security through 
            such other method as is approved by the Secretary.
            (B) Flexibility.--The Secretary may modify the methods used 
        under the program established by this section for the Exchange 
        and verification of information if the Secretary determines 
        such modifications would reduce the administrative costs and 
        burdens on the applicant, including allowing an applicant to 
        request the Secretary of the Treasury to provide the 
        information described in paragraph (3) directly to the Exchange 
        or to the Secretary. The Secretary shall not make any such 
        modification unless the Secretary determines that any 
        applicable requirements under this section and section 6103 of 
        the Internal Revenue Code of 1986 with respect to the 
        confidentiality, disclosure, maintenance, or use of information 
        will be met.
    (d) Verification by Secretary.--In the case of information provided 
under subsection (b) that is not required under subsection (c) to be 
submitted to another person for verification, the Secretary shall 
verify the accuracy of such information in such manner as the Secretary 
determines appropriate, including delegating responsibility for 
verification to the Exchange.
    (e) Actions Relating to Verification.--
        (1) In general.--Each person to whom the Secretary provided 
    information under subsection (c) shall report to the Secretary 
    under the method established under subsection (c)(4) the results of 
    its verification and the Secretary shall notify the Exchange of 
    such results. Each person to whom the Secretary provided 
    information under subsection (d) shall report to the Secretary in 
    such manner as the Secretary determines appropriate.
        (2) Verification.--
            (A) Eligibility for enrollment and premium tax credits and 
        cost-sharing reductions.--If information provided by an 
        applicant under paragraphs (1), (2), (3), and (4) of subsection 
        (b) is verified under subsections (c) and (d)--
                (i) the individual's eligibility to enroll through the 
            Exchange and to apply for premium tax credits and cost-
            sharing reductions shall be satisfied; and
                (ii) the Secretary shall, if applicable, notify the 
            Secretary of the Treasury under section 1412(c) of the 
            amount of any advance payment to be made.
            (B) Exemption from individual responsibility.--If 
        information provided by an applicant under subsection (b)(5) is 
        verified under subsections (c) and (d), the Secretary shall 
        issue the certification of exemption described in section 
        1311(d)(4)(H).
        (3) Inconsistencies involving attestation of citizenship or 
    lawful presence.--If the information provided by any applicant 
    under subsection (b)(2) is inconsistent with information in the 
    records maintained by the Commissioner of Social Security or 
    Secretary of Homeland Security, whichever is applicable, the 
    applicant's eligibility will be determined in the same manner as an 
    individual's eligibility under the medicaid program is determined 
    under section 1902(ee) of the Social Security Act (as in effect on 
    January 1, 2010).
        (4) Inconsistencies involving other information.--
            (A) In general.--If the information provided by an 
        applicant under subsection (b) (other than subsection (b)(2)) 
        is inconsistent with information in the records maintained by 
        persons under subsection (c) or is not verified under 
        subsection (d), the Secretary shall notify the Exchange and the 
        Exchange shall take the following actions:
                (i) Reasonable effort.--The Exchange shall make a 
            reasonable effort to identify and address the causes of 
            such inconsistency, including through typographical or 
            other clerical errors, by contacting the applicant to 
            confirm the accuracy of the information, and by taking such 
            additional actions as the Secretary, through regulation or 
            other guidance, may identify.
                (ii) Notice and opportunity to correct.--In the case 
            the inconsistency or inability to verify is not resolved 
            under subparagraph (A), the Exchange shall--

                    (I) notify the applicant of such fact;
                    (II) provide the applicant an opportunity to either 
                present satisfactory documentary evidence or resolve 
                the inconsistency with the person verifying the 
                information under subsection (c) or (d) during the 90-
                day period beginning the date on which the notice 
                required under subclause (I) is sent to the applicant.

            The Secretary may extend the 90-day period under subclause 
            (II) for enrollments occurring during 2014.
            (B) Specific actions not involving citizenship or lawful 
        presence.--
                (i) In general.--Except as provided in paragraph (3), 
            the Exchange shall, during any period before the close of 
            the period under subparagraph (A)(ii)(II), make any 
            determination under paragraphs (2), (3), and (4) of 
            subsection (a) on the basis of the information contained on 
            the application.
                (ii) Eligibility or amount of credit or reduction.--If 
            an inconsistency involving the eligibility for, or amount 
            of, any premium tax credit or cost-sharing reduction is 
            unresolved under this subsection as of the close of the 
            period under subparagraph (A)(ii)(II), the Exchange shall 
            notify the applicant of the amount (if any) of the credit 
            or reduction that is determined on the basis of the records 
            maintained by persons under subsection (c).
                (iii) Employer affordability.--If the Secretary 
            notifies an Exchange that an enrollee is eligible for a 
            premium tax credit under section 36B of such Code or cost-
            sharing reduction under section 1402 because the enrollee's 
            (or related individual's) employer does not provide minimum 
            essential coverage through an employer-sponsored plan or 
            that the employer does provide that coverage but it is not 
            affordable coverage, the Exchange shall notify the employer 
            of such fact and that the employer may be liable for the 
            payment assessed under section 4980H of such Code.
                (iv) Exemption.--In any case where the inconsistency 
            involving, or inability to verify, information provided 
            under subsection (b)(5) is not resolved as of the close of 
            the period under subparagraph (A)(ii)(II), the Exchange 
            shall notify an applicant that no certification of 
            exemption from any requirement or payment under section 
            5000A of such Code will be issued.
            (C) Appeals process.--The Exchange shall also notify each 
        person receiving notice under this paragraph of the appeals 
        processes established under subsection (f).
    (f) Appeals and Redeterminations.--
        (1) In general.--The Secretary, in consultation with the 
    Secretary of the Treasury, the Secretary of Homeland Security, and 
    the Commissioner of Social Security, shall establish procedures by 
    which the Secretary or one of such other Federal officers--
            (A) hears and makes decisions with respect to appeals of 
        any determination under subsection (e); and
            (B) redetermines eligibility on a periodic basis in 
        appropriate circumstances.
        (2) Employer liability.--
            (A) In general.--The Secretary shall establish a separate 
        appeals process for employers who are notified under subsection 
        (e)(4)(C) that the employer may be liable for a tax imposed by 
        section 4980H of the Internal Revenue Code of 1986 with respect 
        to an employee because of a determination that the employer 
        does not provide minimum essential coverage through an 
        employer-sponsored plan or that the employer does provide that 
        coverage but it is not affordable coverage with respect to an 
        employee. Such process shall provide an employer the 
        opportunity to--
                (i) present information to the Exchange for review of 
            the determination either by the Exchange or the person 
            making the determination, including evidence of the 
            employer-sponsored plan and employer contributions to the 
            plan; and
                (ii) have access to the data used to make the 
            determination to the extent allowable by law.
        Such process shall be in addition to any rights of appeal the 
        employer may have under subtitle F of such Code.
            (B) Confidentiality.--Notwithstanding any provision of this 
        title (or the amendments made by this title) or section 6103 of 
        the Internal Revenue Code of 1986, an employer shall not be 
        entitled to any taxpayer return information with respect to an 
        employee for purposes of determining whether the employer is 
        subject to the penalty under section 4980H of such Code with 
        respect to the employee, except that--
                (i) the employer may be notified as to the name of an 
            employee and whether or not the employee's income is above 
            or below the threshold by which the affordability of an 
            employer's health insurance coverage is measured; and
                (ii) this subparagraph shall not apply to an employee 
            who provides a waiver (at such time and in such manner as 
            the Secretary may prescribe) authorizing an employer to 
            have access to the employee's taxpayer return information.
    (g) Confidentiality of Applicant Information.--
        (1) In general.--An applicant for insurance coverage or for a 
    premium tax credit or cost-sharing reduction shall be required to 
    provide only the information strictly necessary to authenticate 
    identity, determine eligibility, and determine the amount of the 
    credit or reduction.
        (2) Receipt of information.--Any person who receives 
    information provided by an applicant under subsection (b) (whether 
    directly or by another person at the request of the applicant), or 
    receives information from a Federal agency under subsection (c), 
    (d), or (e), shall--
            (A) use the information only for the purposes of, and to 
        the extent necessary in, ensuring the efficient operation of 
        the Exchange, including verifying the eligibility of an 
        individual to enroll through an Exchange or to claim a premium 
        tax credit or cost-sharing reduction or the amount of the 
        credit or reduction; and
            (B) not disclose the information to any other person except 
        as provided in this section.
    (h) Penalties.--
        (1) False or fraudulent information.--
            (A) Civil penalty.--
                (i) In general.--If--

                    (I) any person fails to provides correct 
                information under subsection (b); and
                    (II) such failure is attributable to negligence or 
                disregard of any rules or regulations of the Secretary,

            such person shall be subject, in addition to any other 
            penalties that may be prescribed by law, to a civil penalty 
            of not more than $25,000 with respect to any failures 
            involving an application for a plan year. For purposes of 
            this subparagraph, the terms ``negligence'' and 
            ``disregard'' shall have the same meanings as when used in 
            section 6662 of the Internal Revenue Code of 1986.
                (ii) Reasonable cause exception.--No penalty shall be 
            imposed under clause (i) if the Secretary determines that 
            there was a reasonable cause for the failure and that the 
            person acted in good faith.
            (B) Knowing and willful violations.--Any person who 
        knowingly and willfully provides false or fraudulent 
        information under subsection (b) shall be subject, in addition 
        to any other penalties that may be prescribed by law, to a 
        civil penalty of not more than $250,000.
        (2) Improper use or disclosure of information.--Any person who 
    knowingly and willfully uses or discloses information in violation 
    of subsection (g) shall be subject, in addition to any other 
    penalties that may be prescribed by law, to a civil penalty of not 
    more than $25,000.
        (3) Limitations on liens and levies.--The Secretary (or, if 
    applicable, the Attorney General of the United States) shall not--
            (A) file notice of lien with respect to any property of a 
        person by reason of any failure to pay the penalty imposed by 
        this subsection; or
            (B) levy on any such property with respect to such failure.
    (i) Study of Administration of Employer Responsibility.--
        (1) In general.--The Secretary of Health and Human Services 
    shall, in consultation with the Secretary of the Treasury, conduct 
    a study of the procedures that are necessary to ensure that in the 
    administration of this title and section 4980H of the Internal 
    Revenue Code of 1986 (as added by section 1513) that the following 
    rights are protected:
            (A) The rights of employees to preserve their right to 
        confidentiality of their taxpayer return information and their 
        right to enroll in a qualified health plan through an Exchange 
        if an employer does not provide affordable coverage.
            (B) The rights of employers to adequate due process and 
        access to information necessary to accurately determine any 
        payment assessed on employers.
        (2) Report.--Not later than January 1, 2013, the Secretary of 
    Health and Human Services shall report the results of the study 
    conducted under paragraph (1), including any recommendations for 
    legislative changes, to the Committees on Finance and Health, 
    Education, Labor and Pensions of the Senate and the Committees of 
    Education and Labor and Ways and Means of the House of 
    Representatives.

SEC. 1412. ADVANCE DETERMINATION AND PAYMENT OF PREMIUM TAX CREDITS AND 
              COST-SHARING REDUCTIONS.

    (a) In General.--The Secretary, in consultation with the Secretary 
of the Treasury, shall establish a program under which--
        (1) upon request of an Exchange, advance determinations are 
    made under section 1411 with respect to the income eligibility of 
    individuals enrolling in a qualified health plan in the individual 
    market through the Exchange for the premium tax credit allowable 
    under section 36B of the Internal Revenue Code of 1986 and the 
    cost-sharing reductions under section 1402;
        (2) the Secretary notifies--
            (A) the Exchange and the Secretary of the Treasury of the 
        advance determinations; and
            (B) the Secretary of the Treasury of the name and employer 
        identification number of each employer with respect to whom 1 
        or more employee of the employer were determined to be eligible 
        for the premium tax credit under section 36B of the Internal 
        Revenue Code of 1986 and the cost-sharing reductions under 
        section 1402 because--
                (i) the employer did not provide minimum essential 
            coverage; or
                (ii) the employer provided such minimum essential 
            coverage but it was determined under section 36B(c)(2)(C) 
            of such Code to either be unaffordable to the employee or 
            not provide the required minimum actuarial value; and
        (3) the Secretary of the Treasury makes advance payments of 
    such credit or reductions to the issuers of the qualified health 
    plans in order to reduce the premiums payable by individuals 
    eligible for such credit.
    (b) Advance Determinations.--
        (1) In general.--The Secretary shall provide under the program 
    established under subsection (a) that advance determination of 
    eligibility with respect to any individual shall be made--
            (A) during the annual open enrollment period applicable to 
        the individual (or such other enrollment period as may be 
        specified by the Secretary); and
            (B) on the basis of the individual's household income for 
        the most recent taxable year for which the Secretary, after 
        consultation with the Secretary of the Treasury, determines 
        information is available.
        (2) Changes in circumstances.--The Secretary shall provide 
    procedures for making advance determinations on the basis of 
    information other than that described in paragraph (1)(B) in cases 
    where information included with an application form demonstrates 
    substantial changes in income, changes in family size or other 
    household circumstances, change in filing status, the filing of an 
    application for unemployment benefits, or other significant changes 
    affecting eligibility, including--
            (A) allowing an individual claiming a decrease of 20 
        percent or more in income, or filing an application for 
        unemployment benefits, to have eligibility for the credit 
        determined on the basis of household income for a later period 
        or on the basis of the individual's estimate of such income for 
        the taxable year; and
            (B) the determination of household income in cases where 
        the taxpayer was not required to file a return of tax imposed 
        by this chapter for the second preceding taxable year.
    (c) Payment of Premium Tax Credits and Cost-sharing Reductions.--
        (1) In general.--The Secretary shall notify the Secretary of 
    the Treasury and the Exchange through which the individual is 
    enrolling of the advance determination under section 1411.
        (2) Premium tax credit.--
            (A) In general.--The Secretary of the Treasury shall make 
        the advance payment under this section of any premium tax 
        credit allowed under section 36B of the Internal Revenue Code 
        of 1986 to the issuer of a qualified health plan on a monthly 
        basis (or such other periodic basis as the Secretary may 
        provide).
            (B) Issuer responsibilities.--An issuer of a qualified 
        health plan receiving an advance payment with respect to an 
        individual enrolled in the plan shall--
                (i) reduce the premium charged the insured for any 
            period by the amount of the advance payment for the period;
                (ii) notify the Exchange and the Secretary of such 
            reduction;
                (iii) include with each billing statement the amount by 
            which the premium for the plan has been reduced by reason 
            of the advance payment; and
                (iv) in the case of any nonpayment of premiums by the 
            insured--

                    (I) notify the Secretary of such nonpayment; and
                    (II) allow a 3-month grace period for nonpayment of 
                premiums before discontinuing coverage.

        (3) Cost-sharing reductions.--The Secretary shall also notify 
    the Secretary of the Treasury and the Exchange under paragraph (1) 
    if an advance payment of the cost-sharing reductions under section 
    1402 is to be made to the issuer of any qualified health plan with 
    respect to any individual enrolled in the plan. The Secretary of 
    the Treasury shall make such advance payment at such time and in 
    such amount as the Secretary specifies in the notice.
    (d) No Federal Payments for Individuals Not Lawfully Present.--
Nothing in this subtitle or the amendments made by this subtitle allows 
Federal payments, credits, or cost-sharing reductions for individuals 
who are not lawfully present in the United States.
    (e) State Flexibility.--Nothing in this subtitle or the amendments 
made by this subtitle shall be construed to prohibit a State from 
making payments to or on behalf of an individual for coverage under a 
qualified health plan offered through an Exchange that are in addition 
to any credits or cost-sharing reductions allowable to the individual 
under this subtitle and such amendments.

SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH AN 
              EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY 
              PROGRAMS.

    (a) In General.--The Secretary shall establish a system meeting the 
requirements of this section under which residents of each State may 
apply for enrollment in, receive a determination of eligibility for 
participation in, and continue participation in, applicable State 
health subsidy programs. Such system shall ensure that if an individual 
applying to an Exchange is found through screening to be eligible for 
medical assistance under the State medicaid plan under title XIX, or 
eligible for enrollment under a State children's health insurance 
program (CHIP) under title XXI of such Act, the individual is enrolled 
for assistance under such plan or program.
    (b) Requirements Relating to Forms and Notice.--
        (1) Requirements relating to forms.--
            (A) In general.--The Secretary shall develop and provide to 
        each State a single, streamlined form that--
                (i) may be used to apply for all applicable State 
            health subsidy programs within the State;
                (ii) may be filed online, in person, by mail, or by 
            telephone;
                (iii) may be filed with an Exchange or with State 
            officials operating one of the other applicable State 
            health subsidy programs; and
                (iv) is structured to maximize an applicant's ability 
            to complete the form satisfactorily, taking into account 
            the characteristics of individuals who qualify for 
            applicable State health subsidy programs.
            (B) State authority to establish form.--A State may develop 
        and use its own single, streamlined form as an alternative to 
        the form developed under subparagraph (A) if the alternative 
        form is consistent with standards promulgated by the Secretary 
        under this section.
            (C) Supplemental eligibility forms.--The Secretary may 
        allow a State to use a supplemental or alternative form in the 
        case of individuals who apply for eligibility that is not 
        determined on the basis of the household income (as defined in 
        section 36B of the Internal Revenue Code of 1986).
        (2) Notice.--The Secretary shall provide that an applicant 
    filing a form under paragraph (1) shall receive notice of 
    eligibility for an applicable State health subsidy program without 
    any need to provide additional information or paperwork unless such 
    information or paperwork is specifically required by law when 
    information provided on the form is inconsistent with data used for 
    the electronic verification under paragraph (3) or is otherwise 
    insufficient to determine eligibility.
    (c) Requirements Relating to Eligibility Based on Data Exchanges.--
        (1) Development of secure interfaces.--Each State shall develop 
    for all applicable State health subsidy programs a secure, 
    electronic interface allowing an exchange of data (including 
    information contained in the application forms described in 
    subsection (b)) that allows a determination of eligibility for all 
    such programs based on a single application. Such interface shall 
    be compatible with the method established for data verification 
    under section 1411(c)(4).
        (2) Data matching program.--Each applicable State health 
    subsidy program shall participate in a data matching arrangement 
    for determining eligibility for participation in the program under 
    paragraph (3) that--
            (A) provides access to data described in paragraph (3);
            (B) applies only to individuals who--
                (i) receive assistance from an applicable State health 
            subsidy program; or
                (ii) apply for such assistance--

                    (I) by filing a form described in subsection (b); 
                or
                    (II) by requesting a determination of eligibility 
                and authorizing disclosure of the information described 
                in paragraph (3) to applicable State health coverage 
                subsidy programs for purposes of determining and 
                establishing eligibility; and

            (C) consistent with standards promulgated by the Secretary, 
        including the privacy and data security safeguards described in 
        section 1942 of the Social Security Act or that are otherwise 
        applicable to such programs.
        (3) Determination of eligibility.--
            (A) In general.--Each applicable State health subsidy 
        program shall, to the maximum extent practicable--
                (i) establish, verify, and update eligibility for 
            participation in the program using the data matching 
            arrangement under paragraph (2); and
                (ii) determine such eligibility on the basis of 
            reliable, third party data, including information described 
            in sections 1137, 453(i), and 1942(a) of the Social 
            Security Act, obtained through such arrangement.
            (B) Exception.--This paragraph shall not apply in 
        circumstances with respect to which the Secretary determines 
        that the administrative and other costs of use of the data 
        matching arrangement under paragraph (2) outweigh its expected 
        gains in accuracy, efficiency, and program participation.
        (4) Secretarial standards.--The Secretary shall, after 
    consultation with persons in possession of the data to be matched 
    and representatives of applicable State health subsidy programs, 
    promulgate standards governing the timing, contents, and procedures 
    for data matching described in this subsection. Such standards 
    shall take into account administrative and other costs and the 
    value of data matching to the establishment, verification, and 
    updating of eligibility for applicable State health subsidy 
    programs.
    (d) Administrative Authority.--
        (1) Agreements.--Subject to section 1411 and section 
    6103(l)(21) of the Internal Revenue Code of 1986 and any other 
    requirement providing safeguards of privacy and data integrity, the 
    Secretary may establish model agreements, and enter into 
    agreements, for the sharing of data under this section.
        (2) Authority of exchange to contract out.--Nothing in this 
    section shall be construed to--
            (A) prohibit contractual arrangements through which a State 
        medicaid agency determines eligibility for all applicable State 
        health subsidy programs, but only if such agency complies with 
        the Secretary's requirements ensuring reduced administrative 
        costs, eligibility errors, and disruptions in coverage; or
            (B) change any requirement under title XIX that eligibility 
        for participation in a State's medicaid program must be 
        determined by a public agency.
    (e) Applicable State Health Subsidy Program.--In this section, the 
term ``applicable State health subsidy program'' means--
        (1) the program under this title for the enrollment in 
    qualified health plans offered through an Exchange, including the 
    premium tax credits under section 36B of the Internal Revenue Code 
    of 1986 and cost-sharing reductions under section 1402;
        (2) a State medicaid program under title XIX of the Social 
    Security Act;
        (3) a State children's health insurance program (CHIP) under 
    title XXI of such Act; and
        (4) a State program under section 1331 establishing qualified 
    basic health plans.

SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR 
              CERTAIN PROGRAMS.

    (a) Disclosure of Taxpayer Return Information and Social Security 
Numbers.--
        (1) Taxpayer return information.--Subsection (l) of section 
    6103 of the Internal Revenue Code of 1986 is amended by adding at 
    the end the following new paragraph:
        ``(21) Disclosure of return information to carry out 
    eligibility requirements for certain programs.--
            ``(A) In general.--The Secretary, upon written request from 
        the Secretary of Health and Human Services, shall disclose to 
        officers, employees, and contractors of the Department of 
        Health and Human Services return information of any taxpayer 
        whose income is relevant in determining any premium tax credit 
        under section 36B or any cost-sharing reduction under section 
        1402 of the Patient Protection and Affordable Care Act or 
        eligibility for participation in a State medicaid program under 
        title XIX of the Social Security Act, a State's children's 
        health insurance program under title XXI of the Social Security 
        Act, or a basic health program under section 1331 of Patient 
        Protection and Affordable Care Act. Such return information 
        shall be limited to--
                ``(i) taxpayer identity information with respect to 
            such taxpayer,
                ``(ii) the filing status of such taxpayer,
                ``(iii) the number of individuals for whom a deduction 
            is allowed under section 151 with respect to the taxpayer 
            (including the taxpayer and the taxpayer's spouse),
                ``(iv) the modified gross income (as defined in section 
            36B) of such taxpayer and each of the other individuals 
            included under clause (iii) who are required to file a 
            return of tax imposed by chapter 1 for the taxable year,
                ``(v) such other information as is prescribed by the 
            Secretary by regulation as might indicate whether the 
            taxpayer is eligible for such credit or reduction (and the 
            amount thereof), and
                ``(vi) the taxable year with respect to which the 
            preceding information relates or, if applicable, the fact 
            that such information is not available.
            ``(B) Information to exchange and state agencies.--The 
        Secretary of Health and Human Services may disclose to an 
        Exchange established under the Patient Protection and 
        Affordable Care Act or its contractors, or to a State agency 
        administering a State program described in subparagraph (A) or 
        its contractors, any inconsistency between the information 
        provided by the Exchange or State agency to the Secretary and 
        the information provided to the Secretary under subparagraph 
        (A).
            ``(C) Restriction on use of disclosed information.--Return 
        information disclosed under subparagraph (A) or (B) may be used 
        by officers, employees, and contractors of the Department of 
        Health and Human Services, an Exchange, or a State agency only 
        for the purposes of, and to the extent necessary in--
                ``(i) establishing eligibility for participation in the 
            Exchange, and verifying the appropriate amount of, any 
            credit or reduction described in subparagraph (A),
                ``(ii) determining eligibility for participation in the 
            State programs described in subparagraph (A).''.
        (2) Social security numbers.--Section 205(c)(2)(C) of the 
    Social Security Act is amended by adding at the end the following 
    new clause:
                ``(x) The Secretary of Health and Human Services, and 
            the Exchanges established under section 1311 of the Patient 
            Protection and Affordable Care Act, are authorized to 
            collect and use the names and social security account 
            numbers of individuals as required to administer the 
            provisions of, and the amendments made by, the such Act.''.
    (b) Confidentiality and Disclosure.--Paragraph (3) of section 
6103(a) of such Code is amended by striking ``or (20)'' and inserting 
``(20), or (21)''.
    (c) Procedures and Recordkeeping Related to Disclosures.--Paragraph 
(4) of section 6103(p) of such Code is amended--
        (1) by inserting ``, or any entity described in subsection 
    (l)(21),'' after ``or (20)'' in the matter preceding subparagraph 
    (A),
        (2) by inserting ``or any entity described in subsection 
    (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
        (3) by inserting ``or any entity described in subsection 
    (l)(21),'' after ``or (20)'' both places it appears in the matter 
    after subparagraph (F).
    (d) Unauthorized Disclosure or Inspection.--Paragraph (2) of 
section 7213(a) of such Code is amended by striking ``or (20)'' and 
inserting ``(20), or (21)''.

SEC. 1415. PREMIUM TAX CREDIT AND COST-SHARING REDUCTION PAYMENTS 
              DISREGARDED FOR FEDERAL AND FEDERALLY-ASSISTED PROGRAMS.

    For purposes of determining the eligibility of any individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or local 
program financed in whole or in part with Federal funds--
        (1) any credit or refund allowed or made to any individual by 
    reason of section 36B of the Internal Revenue Code of 1986 (as 
    added by section 1401) shall not be taken into account as income 
    and shall not be taken into account as resources for the month of 
    receipt and the following 2 months; and
        (2) any cost-sharing reduction payment or advance payment of 
    the credit allowed under such section 36B that is made under 
    section 1402 or 1412 shall be treated as made to the qualified 
    health plan in which an individual is enrolled and not to that 
    individual.

                   PART II--SMALL BUSINESS TAX CREDIT

SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL 
              BUSINESSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by inserting after section 45Q the following:

``SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible small employer, the small employer health insurance credit 
determined under this section for any taxable year in the credit period 
is the amount determined under subsection (b).
    ``(b) Health Insurance Credit Amount.--Subject to subsection (c), 
the amount determined under this subsection with respect to any 
eligible small employer is equal to 50 percent (35 percent in the case 
of a tax-exempt eligible small employer) of the lesser of--
        ``(1) the aggregate amount of nonelective contributions the 
    employer made on behalf of its employees during the taxable year 
    under the arrangement described in subsection (d)(4) for premiums 
    for qualified health plans offered by the employer to its employees 
    through an Exchange, or
        ``(2) the aggregate amount of nonelective contributions which 
    the employer would have made during the taxable year under the 
    arrangement if each employee taken into account under paragraph (1) 
    had enrolled in a qualified health plan which had a premium equal 
    to the average premium (as determined by the Secretary of Health 
    and Human Services) for the small group market in the rating area 
    in which the employee enrolls for coverage.
    ``(c) Phaseout of Credit Amount Based on Number of Employees and 
Average Wages.--The amount of the credit determined under subsection 
(b) without regard to this subsection shall be reduced (but not below 
zero) by the sum of the following amounts:
        ``(1) Such amount multiplied by a fraction the numerator of 
    which is the total number of full-time equivalent employees of the 
    employer in excess of 10 and the denominator of which is 15.
        ``(2) Such amount multiplied by a fraction the numerator of 
    which is the average annual wages of the employer in excess of the 
    dollar amount in effect under subsection (d)(3)(B) and the 
    denominator of which is such dollar amount.
    ``(d) Eligible Small Employer.--For purposes of this section--
        ``(1) In general.--The term `eligible small employer' means, 
    with respect to any taxable year, an employer--
            ``(A) which has no more than 25 full-time equivalent 
        employees for the taxable year,
            ``(B) the average annual wages of which do not exceed an 
        amount equal to twice the dollar amount in effect under 
        paragraph (3)(B) for the taxable year, and
            ``(C) which has in effect an arrangement described in 
        paragraph (4).
        ``(2) Full-time equivalent employees.--
            ``(A) In general.--The term `full-time equivalent 
        employees' means a number of employees equal to the number 
        determined by dividing--
                ``(i) the total number of hours of service for which 
            wages were paid by the employer to employees during the 
            taxable year, by
                ``(ii) 2,080.
        Such number shall be rounded to the next lowest whole number if 
        not otherwise a whole number.
            ``(B) Excess hours not counted.--If an employee works in 
        excess of 2,080 hours of service during any taxable year, such 
        excess shall not be taken into account under subparagraph (A).
            ``(C) Hours of service.--The Secretary, in consultation 
        with the Secretary of Labor, shall prescribe such regulations, 
        rules, and guidance as may be necessary to determine the hours 
        of service of an employee, including rules for the application 
        of this paragraph to employees who are not compensated on an 
        hourly basis.
        ``(3) Average annual wages.--
            ``(A) In general.--The average annual wages of an eligible 
        small employer for any taxable year is the amount determined by 
        dividing--
                ``(i) the aggregate amount of wages which were paid by 
            the employer to employees during the taxable year, by
                ``(ii) the number of full-time equivalent employees of 
            the employee determined under paragraph (2) for the taxable 
            year.
        Such amount shall be rounded to the next lowest multiple of 
        $1,000 if not otherwise such a multiple.
            ``(B) Dollar amount.--For purposes of paragraph (1)(B)--
                ``(i) 2011, 2012, and 2013.--The dollar amount in 
            effect under this paragraph for taxable years beginning in 
            2011, 2012, or 2013 is $20,000.
                ``(ii) Subsequent years.--In the case of a taxable year 
            beginning in a calendar year after 2013, the dollar amount 
            in effect under this paragraph shall be equal to $20,000, 
            multiplied by the cost-of-living adjustment determined 
            under section 1(f)(3) for the calendar year, determined by 
            substituting `calendar year 2012' for `calendar year 1992' 
            in subparagraph (B) thereof.
        ``(4) Contribution arrangement.--An arrangement is described in 
    this paragraph if it requires an eligible small employer to make a 
    nonelective contribution on behalf of each employee who enrolls in 
    a qualified health plan offered to employees by the employer 
    through an exchange in an amount equal to a uniform percentage (not 
    less than 50 percent) of the premium cost of the qualified health 
    plan.
        ``(5) Seasonal worker hours and wages not counted.--For 
    purposes of this subsection--
            ``(A) In general.--The number of hours of service worked 
        by, and wages paid to, a seasonal worker of an employer shall 
        not be taken into account in determining the full-time 
        equivalent employees and average annual wages of the employer 
        unless the worker works for the employer on more than 120 days 
        during the taxable year.
            ``(B) Definition of seasonal worker.--The term `seasonal 
        worker' means a worker who performs labor or services on a 
        seasonal basis as defined by the Secretary of Labor, including 
        workers covered by section 500.20(s)(1) of title 29, Code of 
        Federal Regulations and retail workers employed exclusively 
        during holiday seasons.
    ``(e) Other Rules and Definitions.--For purposes of this section--
        ``(1) Employee.--
            ``(A) Certain employees excluded.--The term `employee' 
        shall not include--
                ``(i) an employee within the meaning of section 
            401(c)(1),
                ``(ii) any 2-percent shareholder (as defined in section 
            1372(b)) of an eligible small business which is an S 
            corporation,
                ``(iii) any 5-percent owner (as defined in section 
            416(i)(1)(B)(i)) of an eligible small business, or
                ``(iv) any individual who bears any of the 
            relationships described in subparagraphs (A) through (G) of 
            section 152(d)(2) to, or is a dependent described in 
            section 152(d)(2)(H) of, an individual described in clause 
            (i), (ii), or (iii).
            ``(B) Leased employees.--The term `employee' shall include 
        a leased employee within the meaning of section 414(n).
        ``(2) Credit period.--The term `credit period' means, with 
    respect to any eligible small employer, the 2-consecutive-taxable 
    year period beginning with the 1st taxable year in which the 
    employer (or any predecessor) offers 1 or more qualified health 
    plans to its employees through an Exchange.
        ``(3) Nonelective contribution.--The term `nonelective 
    contribution' means an employer contribution other than an employer 
    contribution pursuant to a salary reduction arrangement.
        ``(4) Wages.--The term `wages' has the meaning given such term 
    by section 3121(a) (determined without regard to any dollar 
    limitation contained in such section).
        ``(5) Aggregation and other rules made applicable.--
            ``(A) Aggregation rules.--All employers treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        shall be treated as a single employer for purposes of this 
        section.
            ``(B) Other rules.--Rules similar to the rules of 
        subsections (c), (d), and (e) of section 52 shall apply.
    ``(f) Credit Made Available to Tax-exempt Eligible Small 
Employers.--
        ``(1) In general.--In the case of a tax-exempt eligible small 
    employer, there shall be treated as a credit allowable under 
    subpart C (and not allowable under this subpart) the lesser of--
            ``(A) the amount of the credit determined under this 
        section with respect to such employer, or
            ``(B) the amount of the payroll taxes of the employer 
        during the calendar year in which the taxable year begins.
        ``(2) Tax-exempt eligible small employer.--For purposes of this 
    section, the term `tax-exempt eligible small employer' means an 
    eligible small employer which is any organization described in 
    section 501(c) which is exempt from taxation under section 501(a).
        ``(3) Payroll taxes.--For purposes of this subsection--
            ``(A) In general.--The term `payroll taxes' means--
                ``(i) amounts required to be withheld from the 
            employees of the tax-exempt eligible small employer under 
            section 3401(a),
                ``(ii) amounts required to be withheld from such 
            employees under section 3101(b), and
                ``(iii) amounts of the taxes imposed on the tax-exempt 
            eligible small employer under section 3111(b).
            ``(B) Special rule.--A rule similar to the rule of section 
        24(d)(2)(C) shall apply for purposes of subparagraph (A).
    ``(g) Application of Section for Calendar Years 2011, 2012, and 
2013.--In the case of any taxable year beginning in 2011, 2012, or 
2013, the following modifications to this section shall apply in 
determining the amount of the credit under subsection (a):
        ``(1) No credit period required.--The credit shall be 
    determined without regard to whether the taxable year is in a 
    credit period and for purposes of applying this section to taxable 
    years beginning after 2013, no credit period shall be treated as 
    beginning with a taxable year beginning before 2014.
        ``(2) Amount of credit.--The amount of the credit determined 
    under subsection (b) shall be determined--
            ``(A) by substituting `35 percent (25 percent in the case 
        of a tax-exempt eligible small employer)' for `50 percent (35 
        percent in the case of a tax-exempt eligible small employer)',
            ``(B) by reference to an eligible small employer's 
        nonelective contributions for premiums paid for health 
        insurance coverage (within the meaning of section 9832(b)(1)) 
        of an employee, and
            ``(C) by substituting for the average premium determined 
        under subsection (b)(2) the amount the Secretary of Health and 
        Human Services determines is the average premium for the small 
        group market in the State in which the employer is offering 
        health insurance coverage (or for such area within the State as 
        is specified by the Secretary).
        ``(3) Contribution arrangement.--An arrangement shall not fail 
    to meet the requirements of subsection (d)(4) solely because it 
    provides for the offering of insurance outside of an Exchange.
    ``(h) Insurance Definitions.--Any term used in this section which 
is also used in the Public Health Service Act or subtitle A of title I 
of the Patient Protection and Affordable Care Act shall have the 
meaning given such term by such Act or subtitle.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations to prevent the avoidance of the 2-year limit on 
the credit period through the use of successor entities and the 
avoidance of the limitations under subsection (c) through the use of 
multiple entities.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (34), 
by striking the period at the end of paragraph (35) and inserting ``, 
plus'', and by inserting after paragraph (35) the following:
        ``(36) the small employer health insurance credit determined 
    under section 45R.''.
    (c) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by redesignating clauses (vi), (vii), and (viii) as 
clauses (vii), (viii), and (ix), respectively, and by inserting after 
clause (v) the following new clause:
                ``(vi) the credit determined under section 45R,''.
    (d) Disallowance of Deduction for Certain Expenses for Which Credit 
Allowed.--
        (1) In general.--Section 280C of the Internal Revenue Code of 
    1986 (relating to disallowance of deduction for certain expenses 
    for which credit allowed), as amended by section 1401(b), is 
    amended by adding at the end the following new subsection:
    ``(h) Credit for Employee Health Insurance Expenses of Small 
Employers.--No deduction shall be allowed for that portion of the 
premiums for qualified health plans (as defined in section 1301(a) of 
the Patient Protection and Affordable Care Act), or for health 
insurance coverage in the case of taxable years beginning in 2011, 
2012, or 2013, paid by an employer which is equal to the amount of the 
credit determined under section 45R(a) with respect to the premiums.''.
        (2) Deduction for expiring credits.--Section 196(c) of such 
    Code is amended by striking ``and'' at the end of paragraph (12), 
    by striking the period at the end of paragraph (13) and inserting 
    ``, and'', and by adding at the end the following new paragraph:
        ``(14) the small employer health insurance credit determined 
    under section 45R(a).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
``Sec. 45R. Employee health insurance expenses of small employers.''.
    (f) Effective Dates.--
        (1) In general.--The amendments made by this section shall 
    apply to amounts paid or incurred in taxable years beginning after 
    December 31, 2010.
        (2) Minimum tax.--The amendments made by subsection (c) shall 
    apply to credits determined under section 45R of the Internal 
    Revenue Code of 1986 in taxable years beginning after December 31, 
    2010, and to carrybacks of such credits.

           Subtitle F--Shared Responsibility for Health Care

                   PART I--INDIVIDUAL RESPONSIBILITY

SEC. 1501. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

    (a) Findings.--Congress makes the following findings:
        (1) In general.--The individual responsibility requirement 
    provided for in this section (in this subsection referred to as the 
    ``requirement'') is commercial and economic in nature, and 
    substantially affects interstate commerce, as a result of the 
    effects described in paragraph (2).
        (2) Effects on the national economy and interstate commerce.--
    The effects described in this paragraph are the following:
            (A) The requirement regulates activity that is commercial 
        and economic in nature: economic and financial decisions about 
        how and when health care is paid for, and when health insurance 
        is purchased.
            (B) Health insurance and health care services are a 
        significant part of the national economy. National health 
        spending is projected to increase from $2,500,000,000,000, or 
        17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 
        2019. Private health insurance spending is projected to be 
        $854,000,000,000 in 2009, and pays for medical supplies, drugs, 
        and equipment that are shipped in interstate commerce. Since 
        most health insurance is sold by national or regional health 
        insurance companies, health insurance is sold in interstate 
        commerce and claims payments flow through interstate commerce.
            (C) The requirement, together with the other provisions of 
        this Act, will add millions of new consumers to the health 
        insurance market, increasing the supply of, and demand for, 
        health care services. According to the Congressional Budget 
        Office, the requirement will increase the number and share of 
        Americans who are insured.
            (D) The requirement achieves near-universal coverage by 
        building upon and strengthening the private employer-based 
        health insurance system, which covers 176,000,000 Americans 
        nationwide. In Massachusetts, a similar requirement has 
        strengthened private employer-based coverage: despite the 
        economic downturn, the number of workers offered employer-based 
        coverage has actually increased.
            (E) Half of all personal bankruptcies are caused in part by 
        medical expenses. By significantly increasing health insurance 
        coverage, the requirement, together with the other provisions 
        of this Act, will improve financial security for families.
            (F) Under the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act 
        (42 U.S.C. 201 et seq.), and this Act, the Federal Government 
        has a significant role in regulating health insurance which is 
        in interstate commerce.
            (G) Under sections 2704 and 2705 of the Public Health 
        Service Act (as added by section 1201 of this Act), if there 
        were no requirement, many individuals would wait to purchase 
        health insurance until they needed care. By significantly 
        increasing health insurance coverage, the requirement, together 
        with the other provisions of this Act, will minimize this 
        adverse selection and broaden the health insurance risk pool to 
        include healthy individuals, which will lower health insurance 
        premiums. The requirement is essential to creating effective 
        health insurance markets in which improved health insurance 
        products that are guaranteed issue and do not exclude coverage 
        of pre-existing conditions can be sold.
            (H) Administrative costs for private health insurance, 
        which were $90,000,000,000 in 2006, are 26 to 30 percent of 
        premiums in the current individual and small group markets. By 
        significantly increasing health insurance coverage and the size 
        of purchasing pools, which will increase economies of scale, 
        the requirement, together with the other provisions of this 
        Act, will significantly reduce administrative costs and lower 
        health insurance premiums. The requirement is essential to 
        creating effective health insurance markets that do not require 
        underwriting and eliminate its associated administrative costs.
        (3) Supreme court ruling.--In United States v. South-Eastern 
    Underwriters Association (322 U.S. 533 (1944)), the Supreme Court 
    of the United States ruled that insurance is interstate commerce 
    subject to Federal regulation.
    (b) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

        ``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE

``Sec. 5000A. Requirement to maintain minimum essential coverage.

``SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

    ``(a) Requirement To Maintain Minimum Essential Coverage.--An 
applicable individual shall for each month beginning after 2013 ensure 
that the individual, and any dependent of the individual who is an 
applicable individual, is covered under minimum essential coverage for 
such month.
    ``(b) Shared Responsibility Payment.--
        ``(1) In general.--If an applicable individual fails to meet 
    the requirement of subsection (a) for 1 or more months during any 
    calendar year beginning after 2013, then, except as provided in 
    subsection (d), there is hereby imposed a penalty with respect to 
    the individual in the amount determined under subsection (c).
        ``(2) Inclusion with return.--Any penalty imposed by this 
    section with respect to any month shall be included with a 
    taxpayer's return under chapter 1 for the taxable year which 
    includes such month.
        ``(3) Payment of penalty.--If an individual with respect to 
    whom a penalty is imposed by this section for any month--
            ``(A) is a dependent (as defined in section 152) of another 
        taxpayer for the other taxpayer's taxable year including such 
        month, such other taxpayer shall be liable for such penalty, or
            ``(B) files a joint return for the taxable year including 
        such month, such individual and the spouse of such individual 
        shall be jointly liable for such penalty.
    ``(c) Amount of Penalty.--
        ``(1) In general.--The penalty determined under this subsection 
    for any month with respect to any individual is an amount equal to 
    \1/12\ of the applicable dollar amount for the calendar year.
        ``(2) Dollar limitation.--The amount of the penalty imposed by 
    this section on any taxpayer for any taxable year with respect to 
    all individuals for whom the taxpayer is liable under subsection 
    (b)(3) shall not exceed an amount equal to 300 percent the 
    applicable dollar amount (determined without regard to paragraph 
    (3)(C)) for the calendar year with or within which the taxable year 
    ends.
        ``(3) Applicable dollar amount.--For purposes of paragraph 
    (1)--
            ``(A) In general.--Except as provided in subparagraphs (B) 
        and (C), the applicable dollar amount is $750.
            ``(B) Phase in.--The applicable dollar amount is $95 for 
        2014 and $350 for 2015.
            ``(C) Special rule for individuals under age 18.--If an 
        applicable individual has not attained the age of 18 as of the 
        beginning of a month, the applicable dollar amount with respect 
        to such individual for the month shall be equal to one-half of 
        the applicable dollar amount for the calendar year in which the 
        month occurs.
            ``(D) Indexing of amount.--In the case of any calendar year 
        beginning after 2016, the applicable dollar amount shall be 
        equal to $750, increased by an amount equal to--
                ``(i) $750, multiplied by
                ``(ii) the cost-of-living adjustment determined under 
            section 1(f)(3) for the calendar year, determined by 
            substituting `calendar year 2015' for `calendar year 1992' 
            in subparagraph (B) thereof.
        If the amount of any increase under clause (i) is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.
        ``(4) Terms relating to income and families.--For purposes of 
    this section--
            ``(A) Family size.--The family size involved with respect 
        to any taxpayer shall be equal to the number of individuals for 
        whom the taxpayer is allowed a deduction under section 151 
        (relating to allowance of deduction for personal exemptions) 
        for the taxable year.
            ``(B) Household income.--The term `household income' means, 
        with respect to any taxpayer for any taxable year, an amount 
        equal to the sum of--
                ``(i) the modified gross income of the taxpayer, plus
                ``(ii) the aggregate modified gross incomes of all 
            other individuals who--

                    ``(I) were taken into account in determining the 
                taxpayer's family size under paragraph (1), and
                    ``(II) were required to file a return of tax 
                imposed by section 1 for the taxable year.

            ``(C) Modified gross income.--The term `modified gross 
        income' means gross income--
                ``(i) decreased by the amount of any deduction 
            allowable under paragraph (1), (3), (4), or (10) of section 
            62(a),
                ``(ii) increased by the amount of interest received or 
            accrued during the taxable year which is exempt from tax 
            imposed by this chapter, and
                ``(iii) determined without regard to sections 911, 931, 
            and 933.
            ``(D) Poverty line.--
                ``(i) In general.--The term `poverty line' has the 
            meaning given that term in section 2110(c)(5) of the Social 
            Security Act (42 U.S.C. 1397jj(c)(5)).
                ``(ii) Poverty line used.--In the case of any taxable 
            year ending with or within a calendar year, the poverty 
            line used shall be the most recently published poverty line 
            as of the 1st day of such calendar year.
    ``(d) Applicable Individual.--For purposes of this section--
        ``(1) In general.--The term `applicable individual' means, with 
    respect to any month, an individual other than an individual 
    described in paragraph (2), (3), or (4).
        ``(2) Religious exemptions.--
            ``(A) Religious conscience exemption.--Such term shall not 
        include any individual for any month if such individual has in 
        effect an exemption under section 1311(d)(4)(H) of the Patient 
        Protection and Affordable Care Act which certifies that such 
        individual is a member of a recognized religious sect or 
        division thereof described in section 1402(g)(1) and an 
        adherent of established tenets or teachings of such sect or 
        division as described in such section.
            ``(B) Health care sharing ministry.--
                ``(i) In general.--Such term shall not include any 
            individual for any month if such individual is a member of 
            a health care sharing ministry for the month.
                ``(ii) Health care sharing ministry.--The term `health 
            care sharing ministry' means an organization--

                    ``(I) which is described in section 501(c)(3) and 
                is exempt from taxation under section 501(a),
                    ``(II) members of which share a common set of 
                ethical or religious beliefs and share medical expenses 
                among members in accordance with those beliefs and 
                without regard to the State in which a member resides 
                or is employed,
                    ``(III) members of which retain membership even 
                after they develop a medical condition,
                    ``(IV) which (or a predecessor of which) has been 
                in existence at all times since December 31, 1999, and 
                medical expenses of its members have been shared 
                continuously and without interruption since at least 
                December 31, 1999, and
                    ``(V) which conducts an annual audit which is 
                performed by an independent certified public accounting 
                firm in accordance with generally accepted accounting 
                principles and which is made available to the public 
                upon request.

        ``(3) Individuals not lawfully present.--Such term shall not 
    include an individual for any month if for the month the individual 
    is not a citizen or national of the United States or an alien 
    lawfully present in the United States.
        ``(4) Incarcerated individuals.--Such term shall not include an 
    individual for any month if for the month the individual is 
    incarcerated, other than incarceration pending the disposition of 
    charges.
    ``(e) Exemptions.--No penalty shall be imposed under subsection (a) 
with respect to--
        ``(1) Individuals who cannot afford coverage.--
            ``(A) In general.--Any applicable individual for any month 
        if the applicable individual's required contribution 
        (determined on an annual basis) for coverage for the month 
        exceeds 8 percent of such individual's household income for the 
        taxable year described in section 1412(b)(1)(B) of the Patient 
        Protection and Affordable Care Act. For purposes of applying 
        this subparagraph, the taxpayer's household income shall be 
        increased by any exclusion from gross income for any portion of 
        the required contribution made through a salary reduction 
        arrangement.
            ``(B) Required contribution.--For purposes of this 
        paragraph, the term `required contribution' means--
                ``(i) in the case of an individual eligible to purchase 
            minimum essential coverage consisting of coverage through 
            an eligible-employer-sponsored plan, the portion of the 
            annual premium which would be paid by the individual 
            (without regard to whether paid through salary reduction or 
            otherwise) for self-only coverage, or
                ``(ii) in the case of an individual eligible only to 
            purchase minimum essential coverage described in subsection 
            (f)(1)(C), the annual premium for the lowest cost bronze 
            plan available in the individual market through the 
            Exchange in the State in the rating area in which the 
            individual resides (without regard to whether the 
            individual purchased a qualified health plan through the 
            Exchange), reduced by the amount of the credit allowable 
            under section 36B for the taxable year (determined as if 
            the individual was covered by a qualified health plan 
            offered through the Exchange for the entire taxable year).
            ``(C) Special rules for individuals related to employees.--
        For purposes of subparagraph (B)(i), if an applicable 
        individual is eligible for minimum essential coverage through 
        an employer by reason of a relationship to an employee, the 
        determination shall be made by reference to the affordability 
        of the coverage to the employee.
            ``(D) Indexing.--In the case of plan years beginning in any 
        calendar year after 2014, subparagraph (A) shall be applied by 
        substituting for `8 percent' the percentage the Secretary of 
        Health and Human Services determines reflects the excess of the 
        rate of premium growth between the preceding calendar year and 
        2013 over the rate of income growth for such period.
        ``(2) Taxpayers with income under 100 percent of poverty 
    line.--Any applicable individual for any month during a calendar 
    year if the individual's household income for the taxable year 
    described in section 1412(b)(1)(B) of the Patient Protection and 
    Affordable Care Act is less than 100 percent of the poverty line 
    for the size of the family involved (determined in the same manner 
    as under subsection (b)(4)).
        ``(3) Members of indian tribes.--Any applicable individual for 
    any month during which the individual is a member of an Indian 
    tribe (as defined in section 45A(c)(6)).
        ``(4) Months during short coverage gaps.--
            ``(A) In general.--Any month the last day of which occurred 
        during a period in which the applicable individual was not 
        covered by minimum essential coverage for a continuous period 
        of less than 3 months.
            ``(B) Special rules.--For purposes of applying this 
        paragraph--
                ``(i) the length of a continuous period shall be 
            determined without regard to the calendar years in which 
            months in such period occur,
                ``(ii) if a continuous period is greater than the 
            period allowed under subparagraph (A), no exception shall 
            be provided under this paragraph for any month in the 
            period, and
                ``(iii) if there is more than 1 continuous period 
            described in subparagraph (A) covering months in a calendar 
            year, the exception provided by this paragraph shall only 
            apply to months in the first of such periods.
        The Secretary shall prescribe rules for the collection of the 
        penalty imposed by this section in cases where continuous 
        periods include months in more than 1 taxable year.
        ``(5) Hardships.--Any applicable individual who for any month 
    is determined by the Secretary of Health and Human Services under 
    section 1311(d)(4)(H) to have suffered a hardship with respect to 
    the capability to obtain coverage under a qualified health plan.
    ``(f) Minimum Essential Coverage.--For purposes of this section--
        ``(1) In general.--The term `minimum essential coverage' means 
    any of the following:
            ``(A) Government sponsored programs.--Coverage under--
                ``(i) the Medicare program under part A of title XVIII 
            of the Social Security Act,
                ``(ii) the Medicaid program under title XIX of the 
            Social Security Act,
                ``(iii) the CHIP program under title XXI of the Social 
            Security Act,
                ``(iv) the TRICARE for Life program,
                ``(v) the veteran's health care program under chapter 
            17 of title 38, United States Code, or
                ``(vi) a health plan under section 2504(e) of title 22, 
            United States Code (relating to Peace Corps volunteers).
            ``(B) Employer-sponsored plan.--Coverage under an eligible 
        employer-sponsored plan.
            ``(C) Plans in the individual market.--Coverage under a 
        health plan offered in the individual market within a State.
            ``(D) Grandfathered health plan.--Coverage under a 
        grandfathered health plan.
            ``(E) Other coverage.--Such other health benefits coverage, 
        such as a State health benefits risk pool, as the Secretary of 
        Health and Human Services, in coordination with the Secretary, 
        recognizes for purposes of this subsection.
        ``(2) Eligible employer-sponsored plan.--The term `eligible 
    employer-sponsored plan' means, with respect to any employee, a 
    group health plan or group health insurance coverage offered by an 
    employer to the employee which is--
            ``(A) a governmental plan (within the meaning of section 
        2791(d)(8) of the Public Health Service Act), or
            ``(B) any other plan or coverage offered in the small or 
        large group market within a State.
    Such term shall include a grandfathered health plan described in 
    paragraph (1)(D) offered in a group market.
        ``(3) Excepted benefits not treated as minimum essential 
    coverage.--The term `minimum essential coverage' shall not include 
    health insurance coverage which consists of coverage of excepted 
    benefits--
            ``(A) described in paragraph (1) of subsection (c) of 
        section 2791 of the Public Health Service Act; or
            ``(B) described in paragraph (2), (3), or (4) of such 
        subsection if the benefits are provided under a separate 
        policy, certificate, or contract of insurance.
        ``(4) Individuals residing outside united states or residents 
    of territories.--Any applicable individual shall be treated as 
    having minimum essential coverage for any month--
            ``(A) if such month occurs during any period described in 
        subparagraph (A) or (B) of section 911(d)(1) which is 
        applicable to the individual, or
            ``(B) if such individual is a bona fide resident of any 
        possession of the United States (as determined under section 
        937(a)) for such month.
        ``(5) Insurance-related terms.--Any term used in this section 
    which is also used in title I of the Patient Protection and 
    Affordable Care Act shall have the same meaning as when used in 
    such title.
    ``(g) Administration and Procedure.--
        ``(1) In general.--The penalty provided by this section shall 
    be paid upon notice and demand by the Secretary, and except as 
    provided in paragraph (2), shall be assessed and collected in the 
    same manner as an assessable penalty under subchapter B of chapter 
    68.
        ``(2) Special rules.--Notwithstanding any other provision of 
    law--
            ``(A) Waiver of criminal penalties.--In the case of any 
        failure by a taxpayer to timely pay any penalty imposed by this 
        section, such taxpayer shall not be subject to any criminal 
        prosecution or penalty with respect to such failure.
            ``(B) Limitations on liens and levies.--The Secretary shall 
        not--
                ``(i) file notice of lien with respect to any property 
            of a taxpayer by reason of any failure to pay the penalty 
            imposed by this section, or
                ``(ii) levy on any such property with respect to such 
            failure.''.
    (c) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by inserting after the 
item relating to chapter 47 the following new item:

       ``Chapter 48--Maintenance of Minimum Essential Coverage.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2013.

SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

    (a) In General.--Part III of subchapter A of chapter 61 of the 
Internal Revenue Code of 1986 is amended by inserting after subpart C 
the following new subpart:

      ``Subpart D--Information Regarding Health Insurance Coverage

``Sec. 6055. Reporting of health insurance coverage.

``SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE.

    ``(a) In General.--Every person who provides minimum essential 
coverage to an individual during a calendar year shall, at such time as 
the Secretary may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--
        ``(1) In general.--A return is described in this subsection if 
    such return--
            ``(A) is in such form as the Secretary may prescribe, and
            ``(B) contains--
                ``(i) the name, address and TIN of the primary insured 
            and the name and TIN of each other individual obtaining 
            coverage under the policy,
                ``(ii) the dates during which such individual was 
            covered under minimum essential coverage during the 
            calendar year,
                ``(iii) in the case of minimum essential coverage which 
            consists of health insurance coverage, information 
            concerning--

                    ``(I) whether or not the coverage is a qualified 
                health plan offered through an Exchange established 
                under section 1311 of the Patient Protection and 
                Affordable Care Act, and
                    ``(II) in the case of a qualified health plan, the 
                amount (if any) of any advance payment under section 
                1412 of the Patient Protection and Affordable Care Act 
                of any cost-sharing reduction under section 1402 of 
                such Act or of any premium tax credit under section 36B 
                with respect to such coverage, and

                ``(iv) such other information as the Secretary may 
            require.
        ``(2) Information relating to employer-provided coverage.--If 
    minimum essential coverage provided to an individual under 
    subsection (a) consists of health insurance coverage of a health 
    insurance issuer provided through a group health plan of an 
    employer, a return described in this subsection shall include--
            ``(A) the name, address, and employer identification number 
        of the employer maintaining the plan,
            ``(B) the portion of the premium (if any) required to be 
        paid by the employer, and
            ``(C) if the health insurance coverage is a qualified 
        health plan in the small group market offered through an 
        Exchange, such other information as the Secretary may require 
        for administration of the credit under section 45R (relating to 
        credit for employee health insurance expenses of small 
        employers).
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
        ``(1) In general.--Every person required to make a return under 
    subsection (a) shall furnish to each individual whose name is 
    required to be set forth in such return a written statement 
    showing--
            ``(A) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(B) the information required to be shown on the return 
        with respect to such individual.
        ``(2) Time for furnishing statements.--The written statement 
    required under paragraph (1) shall be furnished on or before 
    January 31 of the year following the calendar year for which the 
    return under subsection (a) was required to be made.
    ``(d) Coverage Provided by Governmental Units.--In the case of 
coverage provided by any governmental unit or any agency or 
instrumentality thereof, the officer or employee who enters into the 
agreement to provide such coverage (or the person appropriately 
designated for purposes of this section) shall make the returns and 
statements required by this section.
    ``(e) Minimum Essential Coverage.--For purposes of this section, 
the term `minimum essential coverage' has the meaning given such term 
by section 5000A(f).''.
    (b) Assessable Penalties.--
        (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
    Revenue Code of 1986 (relating to definitions) is amended by 
    striking ``or'' at the end of clause (xxii), by striking ``and'' at 
    the end of clause (xxiii) and inserting ``or'', and by inserting 
    after clause (xxiii) the following new clause:
                ``(xxiv) section 6055 (relating to returns relating to 
            information regarding health insurance coverage), and''.
        (2) Paragraph (2) of section 6724(d) of such Code is amended by 
    striking ``or'' at the end of subparagraph (EE), by striking the 
    period at the end of subparagraph (FF) and inserting ``, or'' and 
    by inserting after subparagraph (FF) the following new 
    subparagraph:
            ``(GG) section 6055(c) (relating to statements relating to 
        information regarding health insurance coverage).''.
    (c) Notification of Nonenrollment.--Not later than June 30 of each 
year, the Secretary of the Treasury, acting through the Internal 
Revenue Service and in consultation with the Secretary of Health and 
Human Services, shall send a notification to each individual who files 
an individual income tax return and who is not enrolled in minimum 
essential coverage (as defined in section 5000A of the Internal Revenue 
Code of 1986). Such notification shall contain information on the 
services available through the Exchange operating in the State in which 
such individual resides.
    (d) Conforming Amendment.--The table of subparts for part III of 
subchapter A of chapter 61 of such Code is amended by inserting after 
the item relating to subpart C the following new item:

     ``subpart d--information regarding health insurance coverage''.

    (e) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2013.

                   PART II--EMPLOYER RESPONSIBILITIES

SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18 (29 U.S.C. 218) the following:

``SEC. 18A. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.

    ``In accordance with regulations promulgated by the Secretary, an 
employer to which this Act applies that has more than 200 full-time 
employees and that offers employees enrollment in 1 or more health 
benefits plans shall automatically enroll new full-time employees in 
one of the plans offered (subject to any waiting period authorized by 
law) and to continue the enrollment of current employees in a health 
benefits plan offered through the employer. Any automatic enrollment 
program shall include adequate notice and the opportunity for an 
employee to opt out of any coverage the individual or employee were 
automatically enrolled in. Nothing in this section shall be construed 
to supersede any State law which establishes, implements, or continues 
in effect any standard or requirement relating to employers in 
connection with payroll except to the extent that such standard or 
requirement prevents an employer from instituting the automatic 
enrollment program under this section.''.

SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE 
              OPTIONS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18A (as added by section 1513) the following:

``SEC. 18B. NOTICE TO EMPLOYEES.

    ``(a) In General.--In accordance with regulations promulgated by 
the Secretary, an employer to which this Act applies, shall provide to 
each employee at the time of hiring (or with respect to current 
employees, not later than March 1, 2013), written notice--
        ``(1) informing the employee of the existence of an Exchange, 
    including a description of the services provided by such Exchange, 
    and the manner in which the employee may contact the Exchange to 
    request assistance;
        ``(2) if the employer plan's share of the total allowed costs 
    of benefits provided under the plan is less than 60 percent of such 
    costs, that the employee may be eligible for a premium tax credit 
    under section 36B of the Internal Revenue Code of 1986 and a cost 
    sharing reduction under section 1402 of the Patient Protection and 
    Affordable Care Act if the employee purchases a qualified health 
    plan through the Exchange; and
        ``(3) if the employee purchases a qualified health plan through 
    the Exchange, the employee will lose the employer contribution (if 
    any) to any health benefits plan offered by the employer and that 
    all or a portion of such contribution may be excludable from income 
    for Federal income tax purposes.
    ``(b) Effective Date.--Subsection (a) shall take effect with 
respect to employers in a State beginning on March 1, 2013.''.

SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH 
              COVERAGE.

    ``(a) Large Employers Not Offering Health Coverage.--If--
        ``(1) any applicable large employer fails to offer to its full-
    time employees (and their dependents) the opportunity to enroll in 
    minimum essential coverage under an eligible employer-sponsored 
    plan (as defined in section 5000A(f)(2)) for any month, and
        ``(2) at least one full-time employee of the applicable large 
    employer has been certified to the employer under section 1411 of 
    the Patient Protection and Affordable Care Act as having enrolled 
    for such month in a qualified health plan with respect to which an 
    applicable premium tax credit or cost-sharing reduction is allowed 
    or paid with respect to the employee,
then there is hereby imposed on the employer an assessable payment 
equal to the product of the applicable payment amount and the number of 
individuals employed by the employer as full-time employees during such 
month.
    ``(b) Large Employers With Waiting Periods Exceeding 30 Days.--
        ``(1) In general.--In the case of any applicable large employer 
    which requires an extended waiting period to enroll in any minimum 
    essential coverage under an employer-sponsored plan (as defined in 
    section 5000A(f)(2)), there is hereby imposed on the employer an 
    assessable payment, in the amount specified in paragraph (2), for 
    each full-time employee of the employer to whom the extended 
    waiting period applies.
        ``(2) Amount.--For purposes of paragraph (1), the amount 
    specified in this paragraph for a full-time employee is--
            ``(A) in the case of an extended waiting period which 
        exceeds 30 days but does not exceed 60 days, $400, and
            ``(B) in the case of an extended waiting period which 
        exceeds 60 days, $600.
        ``(3) Extended waiting period.--The term `extended waiting 
    period' means any waiting period (as defined in section 2701(b)(4) 
    of the Public Health Service Act) which exceeds 30 days.
    ``(c) Large Employers Offering Coverage With Employees Who Qualify 
for Premium Tax Credits or Cost-sharing Reductions.--
        ``(1) In general.--If--
            ``(A) an applicable large employer offers to its full-time 
        employees (and their dependents) the opportunity to enroll in 
        minimum essential coverage under an eligible employer-sponsored 
        plan (as defined in section 5000A(f)(2)) for any month, and
            ``(B) 1 or more full-time employees of the applicable large 
        employer has been certified to the employer under section 1411 
        of the Patient Protection and Affordable Care Act as having 
        enrolled for such month in a qualified health plan with respect 
        to which an applicable premium tax credit or cost-sharing 
        reduction is allowed or paid with respect to the employee,
    then there is hereby imposed on the employer an assessable payment 
    equal to the product of the number of full-time employees of the 
    applicable large employer described in subparagraph (B) for such 
    month and 400 percent of the applicable payment amount.
        ``(2) Overall limitation.--The aggregate amount of tax 
    determined under paragraph (1) with respect to all employees of an 
    applicable large employer for any month shall not exceed the 
    product of the applicable payment amount and the number of 
    individuals employed by the employer as full-time employees during 
    such month.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
        ``(1) Applicable payment amount.--The term `applicable payment 
    amount' means, with respect to any month, \1/12\ of $750.
        ``(2) Applicable large employer.--
            ``(A) In general.--The term `applicable large employer' 
        means, with respect to a calendar year, an employer who 
        employed an average of at least 50 full-time employees on 
        business days during the preceding calendar year.
            ``(B) Exemption for certain employers.--
                ``(i) In general.--An employer shall not be considered 
            to employ more than 50 full-time employees if--

                    ``(I) the employer's workforce exceeds 50 full-time 
                employees for 120 days or fewer during the calendar 
                year, and
                    ``(II) the employees in excess of 50 employed 
                during such 120-day period were seasonal workers.

                ``(ii) Definition of seasonal workers.--The term 
            `seasonal worker' means a worker who performs labor or 
            services on a seasonal basis as defined by the Secretary of 
            Labor, including workers covered by section 500.20(s)(1) of 
            title 29, Code of Federal Regulations and retail workers 
            employed exclusively during holiday seasons.
            ``(C) Rules for determining employer size.--For purposes of 
        this paragraph--
                ``(i) Application of aggregation rule for employers.--
            All persons treated as a single employer under subsection 
            (b), (c), (m), or (o) of section 414 of the Internal 
            Revenue Code of 1986 shall be treated as 1 employer.
                ``(ii) Employers not in existence in preceding year.--
            In the case of an employer which was not in existence 
            throughout the preceding calendar year, the determination 
            of whether such employer is an applicable large employer 
            shall be based on the average number of employees that it 
            is reasonably expected such employer will employ on 
            business days in the current calendar year.
                ``(iii) Predecessors.--Any reference in this subsection 
            to an employer shall include a reference to any predecessor 
            of such employer.
        ``(3) Applicable premium tax credit and cost-sharing 
    reduction.--The term `applicable premium tax credit and cost-
    sharing reduction' means--
            ``(A) any premium tax credit allowed under section 36B,
            ``(B) any cost-sharing reduction under section 1402 of the 
        Patient Protection and Affordable Care Act, and
            ``(C) any advance payment of such credit or reduction under 
        section 1412 of such Act.
        ``(4) Full-time employee.--
            ``(A) In general.--The term `full-time employee' means an 
        employee who is employed on average at least 30 hours of 
        service per week.
            ``(B) Hours of service.--The Secretary, in consultation 
        with the Secretary of Labor, shall prescribe such regulations, 
        rules, and guidance as may be necessary to determine the hours 
        of service of an employee, including rules for the application 
        of this paragraph to employees who are not compensated on an 
        hourly basis.
        ``(5) Inflation adjustment.--
            ``(A) In general.--In the case of any calendar year after 
        2014, each of the dollar amounts in subsection (b)(2) and 
        (d)(1) shall be increased by an amount equal to the product 
        of--
                ``(i) such dollar amount, and
                ``(ii) the premium adjustment percentage (as defined in 
            section 1302(c)(4) of the Patient Protection and Affordable 
            Care Act) for the calendar year.
            ``(B) Rounding.--If the amount of any increase under 
        subparagraph (A) is not a multiple of $10, such increase shall 
        be rounded to the next lowest multiple of $10.
        ``(6) Other definitions.--Any term used in this section which 
    is also used in the Patient Protection and Affordable Care Act 
    shall have the same meaning as when used in such Act.
        ``(7) Tax nondeductible.--For denial of deduction for the tax 
    imposed by this section, see section 275(a)(6).
    ``(e) Administration and Procedure.--
        ``(1) In general.--Any assessable payment provided by this 
    section shall be paid upon notice and demand by the Secretary, and 
    shall be assessed and collected in the same manner as an assessable 
    penalty under subchapter B of chapter 68.
        ``(2) Time for payment.--The Secretary may provide for the 
    payment of any assessable payment provided by this section on an 
    annual, monthly, or other periodic basis as the Secretary may 
    prescribe.
        ``(3) Coordination with credits, etc..--The Secretary shall 
    prescribe rules, regulations, or guidance for the repayment of any 
    assessable payment (including interest) if such payment is based on 
    the allowance or payment of an applicable premium tax credit or 
    cost-sharing reduction with respect to an employee, such allowance 
    or payment is subsequently disallowed, and the assessable payment 
    would not have been required to be made but for such allowance or 
    payment.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:
``Sec. 4980H. Shared responsibility for employers regarding health 
          coverage.''.
    (c) Study and Report of Effect of Tax on Workers' Wages.--
        (1) In general.--The Secretary of Labor shall conduct a study 
    to determine whether employees' wages are reduced by reason of the 
    application of the assessable payments under section 4980H of the 
    Internal Revenue Code of 1986 (as added by the amendments made by 
    this section). The Secretary shall make such determination on the 
    basis of the National Compensation Survey published by the Bureau 
    of Labor Statistics.
        (2) Report.--The Secretary shall report the results of the 
    study under paragraph (1) to the Committee on Ways and Means of the 
    House of Representatives and to the Committee on Finance of the 
    Senate.
    (d) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 31, 2013.

SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart D of part III of subchapter A of chapter 
61 of the Internal Revenue Code of 1986, as added by section 1502, is 
amended by inserting after section 6055 the following new section:

``SEC. 6056. LARGE EMPLOYERS REQUIRED TO REPORT ON HEALTH INSURANCE 
              COVERAGE.

    ``(a) In General.--Every applicable large employer required to meet 
the requirements of section 4980H with respect to its full-time 
employees during a calendar year shall, at such time as the Secretary 
may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--A return is described in this 
subsection if such return--
        ``(1) is in such form as the Secretary may prescribe, and
        ``(2) contains--
            ``(A) the name, date, and employer identification number of 
        the employer,
            ``(B) a certification as to whether the employer offers to 
        its full-time employees (and their dependents) the opportunity 
        to enroll in minimum essential coverage under an eligible 
        employer-sponsored plan (as defined in section 5000A(f)(2)),
            ``(C) if the employer certifies that the employer did offer 
        to its full-time employees (and their dependents) the 
        opportunity to so enroll--
                ``(i) the length of any waiting period (as defined in 
            section 2701(b)(4) of the Public Health Service Act) with 
            respect to such coverage,
                ``(ii) the months during the calendar year for which 
            coverage under the plan was available,
                ``(iii) the monthly premium for the lowest cost option 
            in each of the enrollment categories under the plan, and
                ``(iv) the applicable large employer's share of the 
            total allowed costs of benefits provided under the plan,
            ``(D) the number of full-time employees for each month 
        during the calendar year,
            ``(E) the name, address, and TIN of each full-time employee 
        during the calendar year and the months (if any) during which 
        such employee (and any dependents) were covered under any such 
        health benefits plans, and
            ``(F) such other information as the Secretary may require.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
        ``(1) In general.--Every person required to make a return under 
    subsection (a) shall furnish to each full-time employee whose name 
    is required to be set forth in such return under subsection 
    (b)(2)(E) a written statement showing--
            ``(A) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(B) the information required to be shown on the return 
        with respect to such individual.
        ``(2) Time for furnishing statements.--The written statement 
    required under paragraph (1) shall be furnished on or before 
    January 31 of the year following the calendar year for which the 
    return under subsection (a) was required to be made.
    ``(d) Coordination With Other Requirements.--To the maximum extent 
feasible, the Secretary may provide that--
        ``(1) any return or statement required to be provided under 
    this section may be provided as part of any return or statement 
    required under section 6051 or 6055, and
        ``(2) in the case of an applicable large employer offering 
    health insurance coverage of a health insurance issuer, the 
    employer may enter into an agreement with the issuer to include 
    information required under this section with the return and 
    statement required to be provided by the issuer under section 6055.
    ``(e) Coverage Provided by Governmental Units.--In the case of any 
applicable large employer which is a governmental unit or any agency or 
instrumentality thereof, the person appropriately designated for 
purposes of this section shall make the returns and statements required 
by this section.
    ``(f) Definitions.--For purposes of this section, any term used in 
this section which is also used in section 4980H shall have the meaning 
given such term by section 4980H.''.
    (b) Assessable Penalties.--
        (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
    Revenue Code of 1986 (relating to definitions), as amended by 
    section 1502, is amended by striking ``or'' at the end of clause 
    (xxiii), by striking ``and'' at the end of clause (xxiv) and 
    inserting ``or'', and by inserting after clause (xxiv) the 
    following new clause:
                ``(xxv) section 6056 (relating to returns relating to 
            large employers required to report on health insurance 
            coverage), and''.
        (2) Paragraph (2) of section 6724(d) of such Code, as so 
    amended, is amended by striking ``or'' at the end of subparagraph 
    (FF), by striking the period at the end of subparagraph (GG) and 
    inserting ``, or'' and by inserting after subparagraph (GG) the 
    following new subparagraph:
            ``(HH) section 6056(c) (relating to statements relating to 
        large employers required to report on health insurance 
        coverage).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part III of subchapter A of chapter 61 of such Code, as added by 
section 1502, is amended by adding at the end the following new item:
``Sec. 6056. Large employers required to report on health insurance 
          coverage.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2013.

SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED HEALTH PLANS 
              THROUGH CAFETERIA PLANS.

    (a) In General.--Subsection (f) of section 125 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
        ``(3) Certain exchange-participating qualified health plans not 
    qualified.--
            ``(A) In general.--The term `qualified benefit' shall not 
        include any qualified health plan (as defined in section 
        1301(a) of the Patient Protection and Affordable Care Act) 
        offered through an Exchange established under section 1311 of 
        such Act.
            ``(B) Exception for exchange-eligible employers.--
        Subparagraph (A) shall not apply with respect to any employee 
        if such employee's employer is a qualified employer (as defined 
        in section 1312(f)(2) of the Patient Protection and Affordable 
        Care Act) offering the employee the opportunity to enroll 
        through such an Exchange in a qualified health plan in a group 
        market.''.
    (b) Conforming Amendments.--Subsection (f) of section 125 of such 
Code is amended--
        (1) by striking ``For purposes of this section, the term'' and 
    inserting ``For purposes of this section--
    ``(1) In General.--The term'', and
        (2) by striking ``Such term shall not include'' and inserting 
    the following:
        ``(2) Long-term care insurance not qualified.--The term 
    `qualified benefit' shall not include''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

                  Subtitle G--Miscellaneous Provisions

SEC. 1551. DEFINITIONS.

    Unless specifically provided for otherwise, the definitions 
contained in section 2791 of the Public Health Service Act (42 U.S.C. 
300gg-91) shall apply with respect to this title.

SEC. 1552. TRANSPARENCY IN GOVERNMENT.

    Not later than 30 days after the date of enactment of this Act, the 
Secretary of Health and Human Services shall publish on the Internet 
website of the Department of Health and Human Services, a list of all 
of the authorities provided to the Secretary under this Act (and the 
amendments made by this Act).

SEC. 1553. PROHIBITION AGAINST DISCRIMINATION ON ASSISTED SUICIDE.

    (a) In General.--The Federal Government, and any State or local 
government or health care provider that receives Federal financial 
assistance under this Act (or under an amendment made by this Act) or 
any health plan created under this Act (or under an amendment made by 
this Act), may not subject an individual or institutional health care 
entity to discrimination on the basis that the entity does not provide 
any health care item or service furnished for the purpose of causing, 
or for the purpose of assisting in causing, the death of any 
individual, such as by assisted suicide, euthanasia, or mercy killing.
    (b) Definition.--In this section, the term ``health care entity'' 
includes an individual physician or other health care professional, a 
hospital, a provider-sponsored organization, a health maintenance 
organization, a health insurance plan, or any other kind of health care 
facility, organization, or plan.
    (c) Construction and Treatment of Certain Services.--Nothing in 
subsection (a) shall be construed to apply to, or to affect, any 
limitation relating to--
        (1) the withholding or withdrawing of medical treatment or 
    medical care;
        (2) the withholding or withdrawing of nutrition or hydration;
        (3) abortion; or
        (4) the use of an item, good, benefit, or service furnished for 
    the purpose of alleviating pain or discomfort, even if such use may 
    increase the risk of death, so long as such item, good, benefit, or 
    service is not also furnished for the purpose of causing, or the 
    purpose of assisting in causing, death, for any reason.
    (d) Administration.--The Office for Civil Rights of the Department 
of Health and Human Services is designated to receive complaints of 
discrimination based on this section.

SEC. 1554. ACCESS TO THERAPIES.

    Notwithstanding any other provision of this Act, the Secretary of 
Health and Human Services shall not promulgate any regulation that--
        (1) creates any unreasonable barriers to the ability of 
    individuals to obtain appropriate medical care;
        (2) impedes timely access to health care services;
        (3) interferes with communications regarding a full range of 
    treatment options between the patient and the provider;
        (4) restricts the ability of health care providers to provide 
    full disclosure of all relevant information to patients making 
    health care decisions;
        (5) violates the principles of informed consent and the ethical 
    standards of health care professionals; or
        (6) limits the availability of health care treatment for the 
    full duration of a patient's medical needs.

SEC. 1555. FREEDOM NOT TO PARTICIPATE IN FEDERAL HEALTH INSURANCE 
              PROGRAMS.

    No individual, company, business, nonprofit entity, or health 
insurance issuer offering group or individual health insurance coverage 
shall be required to participate in any Federal health insurance 
program created under this Act (or any amendments made by this Act), or 
in any Federal health insurance program expanded by this Act (or any 
such amendments), and there shall be no penalty or fine imposed upon 
any such issuer for choosing not to participate in such programs.

SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.

    (a) Rebuttable Presumption.--Section 411(c)(4) of the Black Lung 
Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last 
sentence.
    (b) Continuation of Benefits.--Section 422(l) of the Black Lung 
Benefits Act (30 U.S.C. 932(l)) is amended by striking ``, except with 
respect to a claim filed under this part on or after the effective date 
of the Black Lung Benefits Amendments of 1981''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to claims filed under part B or part C of the Black 
Lung Benefits Act (30 U.S.C. 921 et seq., 931 et seq.) after January 1, 
2005, that are pending on or after the date of enactment of this Act.

SEC. 1557. NONDISCRIMINATION.

    (a) In General.--Except as otherwise provided for in this title (or 
an amendment made by this title), an individual shall not, on the 
ground prohibited under title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d et seq.), title IX of the Education Amendments of 1972 (20 
U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 
6101 et seq.), or section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), be excluded from participation in, be denied the benefits 
of, or be subjected to discrimination under, any health program or 
activity, any part of which is receiving Federal financial assistance, 
including credits, subsidies, or contracts of insurance, or under any 
program or activity that is administered by an Executive Agency or any 
entity established under this title (or amendments). The enforcement 
mechanisms provided for and available under such title VI, title IX, 
section 504, or such Age Discrimination Act shall apply for purposes of 
violations of this subsection.
    (b) Continued Application of Laws.--Nothing in this title (or an 
amendment made by this title) shall be construed to invalidate or limit 
the rights, remedies, procedures, or legal standards available to 
individuals aggrieved under title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 
(42 U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972 
(20 U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611 
et seq.), or to supersede State laws that provide additional 
protections against discrimination on any basis described in subsection 
(a).
    (c) Regulations.--The Secretary may promulgate regulations to 
implement this section.

SEC. 1558. PROTECTIONS FOR EMPLOYEES.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18B (as added by section 1512) the following:

``SEC. 18C. PROTECTIONS FOR EMPLOYEES.

    ``(a) Prohibition.--No employer shall discharge or in any manner 
discriminate against any employee with respect to his or her 
compensation, terms, conditions, or other privileges of employment 
because the employee (or an individual acting at the request of the 
employee) has--
        ``(1) received a credit under section 36B of the Internal 
    Revenue Code of 1986 or a subsidy under section 1402 of this Act;
        ``(2) provided, caused to be provided, or is about to provide 
    or cause to be provided to the employer, the Federal Government, or 
    the attorney general of a State information relating to any 
    violation of, or any act or omission the employee reasonably 
    believes to be a violation of, any provision of this title (or an 
    amendment made by this title);
        ``(3) testified or is about to testify in a proceeding 
    concerning such violation;
        ``(4) assisted or participated, or is about to assist or 
    participate, in such a proceeding; or
        ``(5) objected to, or refused to participate in, any activity, 
    policy, practice, or assigned task that the employee (or other such 
    person) reasonably believed to be in violation of any provision of 
    this title (or amendment), or any order, rule, regulation, 
    standard, or ban under this title (or amendment).
    ``(b) Complaint Procedure.--
        ``(1) In general.--An employee who believes that he or she has 
    been discharged or otherwise discriminated against by any employer 
    in violation of this section may seek relief in accordance with the 
    procedures, notifications, burdens of proof, remedies, and statutes 
    of limitation set forth in section 2087(b) of title 15, United 
    States Code.
        ``(2) No limitation on rights.--Nothing in this section shall 
    be deemed to diminish the rights, privileges, or remedies of any 
    employee under any Federal or State law or under any collective 
    bargaining agreement. The rights and remedies in this section may 
    not be waived by any agreement, policy, form, or condition of 
    employment.''.

SEC. 1559. OVERSIGHT.

    The Inspector General of the Department of Health and Human 
Services shall have oversight authority with respect to the 
administration and implementation of this title as it relates to such 
Department.

SEC. 1560. RULES OF CONSTRUCTION.

    (a) No Effect on Antitrust Laws.--Nothing in this title (or an 
amendment made by this title) shall be construed to modify, impair, or 
supersede the operation of any of the antitrust laws. For the purposes 
of this section, the term ``antitrust laws'' has the meaning given such 
term in subsection (a) of the first section of the Clayton Act, except 
that such term includes section 5 of the Federal Trade Commission Act 
to the extent that such section 5 applies to unfair methods of 
competition.
    (b) Rule of Construction Regarding Hawaii's Prepaid Health Care 
Act.--Nothing in this title (or an amendment made by this title) shall 
be construed to modify or limit the application of the exemption for 
Hawaii's Prepaid Health Care Act (Haw. Rev. Stat. Sec. Sec.  393-1 et 
seq.) as provided for under section 514(b)(5) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(5)).
    (c) Student Health Insurance Plans.--Nothing in this title (or an 
amendment made by this title) shall be construed to prohibit an 
institution of higher education (as such term is defined for purposes 
of the Higher Education Act of 1965) from offering a student health 
insurance plan, to the extent that such requirement is otherwise 
permitted under applicable Federal, State or local law.
    (d) No Effect on Existing Requirements.--Nothing in this title (or 
an amendment made by this title, unless specified by direct statutory 
reference) shall be construed to modify any existing Federal 
requirement concerning the State agency responsible for determining 
eligibility for programs identified in section 1413.

SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND 
              PROTOCOLS.

    Title XXX of the Public Health Service Act (42 U.S.C. 300jj et 
seq.) is amended by adding at the end the following:

                     ``Subtitle C--Other Provisions

``SEC. 3021. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND 
              PROTOCOLS.

    ``(a) In General.--
        ``(1) Standards and protocols.--Not later than 180 days after 
    the date of enactment of this title, the Secretary, in consultation 
    with the HIT Policy Committee and the HIT Standards Committee, 
    shall develop interoperable and secure standards and protocols that 
    facilitate enrollment of individuals in Federal and State health 
    and human services programs, as determined by the Secretary.
        ``(2) Methods.--The Secretary shall facilitate enrollment in 
    such programs through methods determined appropriate by the 
    Secretary, which shall include providing individuals and third 
    parties authorized by such individuals and their designees 
    notification of eligibility and verification of eligibility 
    required under such programs.
    ``(b) Content.--The standards and protocols for electronic 
enrollment in the Federal and State programs described in subsection 
(a) shall allow for the following:
        ``(1) Electronic matching against existing Federal and State 
    data, including vital records, employment history, enrollment 
    systems, tax records, and other data determined appropriate by the 
    Secretary to serve as evidence of eligibility and in lieu of paper-
    based documentation.
        ``(2) Simplification and submission of electronic 
    documentation, digitization of documents, and systems verification 
    of eligibility.
        ``(3) Reuse of stored eligibility information (including 
    documentation) to assist with retention of eligible individuals.
        ``(4) Capability for individuals to apply, recertify and manage 
    their eligibility information online, including at home, at points 
    of service, and other community-based locations.
        ``(5) Ability to expand the enrollment system to integrate new 
    programs, rules, and functionalities, to operate at increased 
    volume, and to apply streamlined verification and eligibility 
    processes to other Federal and State programs, as appropriate.
        ``(6) Notification of eligibility, recertification, and other 
    needed communication regarding eligibility, which may include 
    communication via email and cellular phones.
        ``(7) Other functionalities necessary to provide eligibles with 
    streamlined enrollment process.
    ``(c) Approval and Notification.--With respect to any standard or 
protocol developed under subsection (a) that has been approved by the 
HIT Policy Committee and the HIT Standards Committee, the Secretary--
        ``(1) shall notify States of such standards or protocols; and
        ``(2) may require, as a condition of receiving Federal funds 
    for the health information technology investments, that States or 
    other entities incorporate such standards and protocols into such 
    investments.
    ``(d) Grants for Implementation of Appropriate Enrollment HIT.--
        ``(1) In general.--The Secretary shall award grant to eligible 
    entities to develop new, and adapt existing, technology systems to 
    implement the HIT enrollment standards and protocols developed 
    under subsection (a) (referred to in this subsection as 
    `appropriate HIT technology').
        ``(2) Eligible entities.--To be eligible for a grant under this 
    subsection, an entity shall--
            ``(A) be a State, political subdivision of a State, or a 
        local governmental entity; and
            ``(B) submit to the Secretary an application at such time, 
        in such manner, and containing--
                ``(i) a plan to adopt and implement appropriate 
            enrollment technology that includes--

                    ``(I) proposed reduction in maintenance costs of 
                technology systems;
                    ``(II) elimination or updating of legacy systems; 
                and
                    ``(III) demonstrated collaboration with other 
                entities that may receive a grant under this section 
                that are located in the same State, political 
                subdivision, or locality;

                ``(ii) an assurance that the entity will share such 
            appropriate enrollment technology in accordance with 
            paragraph (4); and
                ``(iii) such other information as the Secretary may 
            require.
        ``(3) Sharing.--
            ``(A) In general.--The Secretary shall ensure that 
        appropriate enrollment HIT adopted under grants under this 
        subsection is made available to other qualified State, 
        qualified political subdivisions of a State, or other 
        appropriate qualified entities (as described in subparagraph 
        (B)) at no cost.
            ``(B) Qualified entities.--The Secretary shall determine 
        what entities are qualified to receive enrollment HIT under 
        subparagraph (A), taking into consideration the recommendations 
        of the HIT Policy Committee and the HIT Standards Committee.''.

SEC. 1562. CONFORMING AMENDMENTS.

    (a) Applicability.--Section 2735 of the Public Health Service Act 
(42 U.S.C. 300gg-21), as so redesignated by section 1001(4), is 
amended--
        (1) by striking subsection (a);
        (2) in subsection (b)--
            (A) in paragraph (1), by striking ``1 through 3'' and 
        inserting ``1 and 2''; and
            (B) in paragraph (2)--
                (i) in subparagraph (A), by striking ``subparagraph 
            (D)'' and inserting ``subparagraph (D) or (E)'';
                (ii) by striking ``1 through 3'' and inserting ``1 and 
            2''; and
                (iii) by adding at the end the following:
            ``(E) Election not applicable.--The election described in 
        subparagraph (A) shall not be available with respect to the 
        provisions of subpart 1.'';
        (3) in subsection (c), by striking ``1 through 3 shall not 
    apply to any group'' and inserting ``1 and 2 shall not apply to any 
    individual coverage or any group''; and
        (4) in subsection (d)--
            (A) in paragraph (1), by striking ``1 through 3 shall not 
        apply to any group'' and inserting ``1 and 2 shall not apply to 
        any individual coverage or any group'';
            (B) in paragraph (2)--
                (i) in the matter preceding subparagraph (A), by 
            striking ``1 through 3 shall not apply to any group'' and 
            inserting ``1 and 2 shall not apply to any individual 
            coverage or any group''; and
                (ii) in subparagraph (C), by inserting ``or, with 
            respect to individual coverage, under any health insurance 
            coverage maintained by the same health insurance issuer''; 
            and
            (C) in paragraph (3), by striking ``any group'' and 
        inserting ``any individual coverage or any group''.
    (b) Definitions.--Section 2791(d) of the Public Health Service Act 
(42 U.S.C. 300gg-91(d)) is amended by adding at the end the following:
        ``(20) Qualified health plan.--The term `qualified health plan' 
    has the meaning given such term in section 1301(a) of the Patient 
    Protection and Affordable Care Act.
        ``(21) Exchange.--The term `Exchange' means an American Health 
    Benefit Exchange established under section 1311 of the Patient 
    Protection and Affordable Care Act.''.
    (c) Technical and Conforming Amendments.--Title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg et seq.) is amended--
        (1) in section 2704 (42 U.S.C. 300gg), as so redesignated by 
    section 1201(2)--
            (A) in subsection (c)--
                (i) in paragraph (2), by striking ``group health plan'' 
            each place that such term appears and inserting ``group or 
            individual health plan''; and
                (ii) in paragraph (3)--

                    (I) by striking ``group health insurance'' each 
                place that such term appears and inserting ``group or 
                individual health insurance''; and
                    (II) in subparagraph (D), by striking ``small or 
                large'' and inserting ``individual or group'';

            (B) in subsection (d), by striking ``group health 
        insurance'' each place that such term appears and inserting 
        ``group or individual health insurance''; and
            (C) in subsection (e)(1)(A), by striking ``group health 
        insurance'' and inserting ``group or individual health 
        insurance'';
        (2) by striking the second heading for subpart 2 of part A 
    (relating to other requirements);
        (3) in section 2725 (42 U.S.C. 300gg-4), as so redesignated by 
    section 1001(2)--
            (A) in subsection (a), by striking ``health insurance 
        issuer offering group health insurance coverage'' and inserting 
        ``health insurance issuer offering group or individual health 
        insurance coverage'';
            (B) in subsection (b)--
                (i) by striking ``health insurance issuer offering 
            group health insurance coverage in connection with a group 
            health plan'' in the matter preceding paragraph (1) and 
            inserting ``health insurance issuer offering group or 
            individual health insurance coverage''; and
                (ii) in paragraph (1), by striking ``plan'' and 
            inserting ``plan or coverage'';
            (C) in subsection (c)--
                (i) in paragraph (2), by striking ``group health 
            insurance coverage offered by a health insurance issuer'' 
            and inserting ``health insurance issuer offering group or 
            individual health insurance coverage''; and
                (ii) in paragraph (3), by striking ``issuer'' and 
            inserting ``health insurance issuer''; and
            (D) in subsection (e), by striking ``health insurance 
        issuer offering group health insurance coverage'' and inserting 
        ``health insurance issuer offering group or individual health 
        insurance coverage'';
        (4) in section 2726 (42 U.S.C. 300gg-5), as so redesignated by 
    section 1001(2)--
            (A) in subsection (a), by striking ``(or health insurance 
        coverage offered in connection with such a plan)'' each place 
        that such term appears and inserting ``or a health insurance 
        issuer offering group or individual health insurance 
        coverage'';
            (B) in subsection (b), by striking ``(or health insurance 
        coverage offered in connection with such a plan)'' each place 
        that such term appears and inserting ``or a health insurance 
        issuer offering group or individual health insurance 
        coverage''; and
            (C) in subsection (c)--
                (i) in paragraph (1), by striking ``(and group health 
            insurance coverage offered in connection with a group 
            health plan)'' and inserting ``and a health insurance 
            issuer offering group or individual health insurance 
            coverage'';
                (ii) in paragraph (2), by striking ``(or health 
            insurance coverage offered in connection with such a 
            plan)'' each place that such term appears and inserting 
            ``or a health insurance issuer offering group or individual 
            health insurance coverage'';
        (5) in section 2727 (42 U.S.C. 300gg-6), as so redesignated by 
    section 1001(2), by striking ``health insurance issuers providing 
    health insurance coverage in connection with group health plans'' 
    and inserting ``and health insurance issuers offering group or 
    individual health insurance coverage'';
        (6) in section 2728 (42 U.S.C. 300gg-7), as so redesignated by 
    section 1001(2)--
            (A) in subsection (a), by striking ``health insurance 
        coverage offered in connection with such plan'' and inserting 
        ``individual health insurance coverage'';
            (B) in subsection (b)--
                (i) in paragraph (1), by striking ``or a health 
            insurance issuer that provides health insurance coverage in 
            connection with a group health plan'' and inserting ``or a 
            health insurance issuer that offers group or individual 
            health insurance coverage'';
                (ii) in paragraph (2), by striking ``health insurance 
            coverage offered in connection with the plan'' and 
            inserting ``individual health insurance coverage''; and
                (iii) in paragraph (3), by striking ``health insurance 
            coverage offered by an issuer in connection with such 
            plan'' and inserting ``individual health insurance 
            coverage'';
            (C) in subsection (c), by striking ``health insurance 
        issuer providing health insurance coverage in connection with a 
        group health plan'' and inserting ``health insurance issuer 
        that offers group or individual health insurance coverage''; 
        and
            (D) in subsection (e)(1), by striking ``health insurance 
        coverage offered in connection with such a plan'' and inserting 
        ``individual health insurance coverage'';
        (7) by striking the heading for subpart 3;
        (8) in section 2731 (42 U.S.C. 300gg-11), as so redesignated by 
    section 1001(3)--
            (A) by striking the section heading and all that follows 
        through subsection (b);
            (B) in subsection (c)--
                (i) in paragraph (1)--

                    (I) in the matter preceding subparagraph (A), by 
                striking ``small group'' and inserting ``group and 
                individual''; and
                    (II) in subparagraph (B)--

                        (aa) in the matter preceding clause (i), by 
                    inserting ``and individuals'' after ``employers'';
                        (bb) in clause (i), by inserting ``or any 
                    additional individuals'' after ``additional 
                    groups''; and
                        (cc) in clause (ii), by striking ``without 
                    regard to the claims experience of those employers 
                    and their employees (and their dependents) or any 
                    health status-related factor relating to such'' and 
                    inserting ``and individuals without regard to the 
                    claims experience of those individuals, employers 
                    and their employees (and their dependents) or any 
                    health status-related factor relating to such 
                    individuals''; and
                (ii) in paragraph (2), by striking ``small group'' and 
            inserting ``group or individual'';
            (C) in subsection (d)--
                (i) by striking ``small group'' each place that such 
            appears and inserting ``group or individual''; and
                (ii) in paragraph (1)(B)--

                    (I) by striking ``all employers'' and inserting 
                ``all employers and individuals'';
                    (II) by striking ``those employers'' and inserting 
                ``those individuals, employers''; and
                    (III) by striking ``such employees'' and inserting 
                ``such individuals, employees'';

            (D) by striking subsection (e);
            (E) by striking subsection (f); and
            (F) by transferring such section (as amended by this 
        paragraph) to appear at the end of section 2702 (as added by 
        section 1001(4));
        (9) in section 2732 (42 U.S.C. 300gg-12), as so redesignated by 
    section 1001(3)--
            (A) by striking the section heading and all that follows 
        through subsection (a);
            (B) in subsection (b)--
                (i) in the matter preceding paragraph (1), by striking 
            ``group health plan in the small or large group market'' 
            and inserting ``health insurance coverage offered in the 
            group or individual market'';
                (ii) in paragraph (1), by inserting ``, or individual, 
            as applicable,'' after ``plan sponsor'';
                (iii) in paragraph (2), by inserting ``, or individual, 
            as applicable,'' after ``plan sponsor''; and
                (iv) by striking paragraph (3) and inserting the 
            following:
        ``(3) Violation of participation or contribution rates.--In the 
    case of a group health plan, the plan sponsor has failed to comply 
    with a material plan provision relating to employer contribution or 
    group participation rules, pursuant to applicable State law.'';
            (C) in subsection (c)--
                (i) in paragraph (1)--

                    (I) in the matter preceding subparagraph (A), by 
                striking ``group health insurance coverage offered in 
                the small or large group market'' and inserting ``group 
                or individual health insurance coverage'';
                    (II) in subparagraph (A), by inserting ``or 
                individual, as applicable,'' after ``plan sponsor'';
                    (III) in subparagraph (B)--

                        (aa) by inserting ``or individual, as 
                    applicable,'' after ``plan sponsor''; and
                        (bb) by inserting ``or individual health 
                    insurance coverage''; and

                    (IV) in subparagraph (C), by inserting ``or 
                individuals, as applicable,'' after ``those sponsors''; 
                and

                (ii) in paragraph (2)(A)--

                    (I) in the matter preceding clause (i), by striking 
                ``small group market or the large group market, or both 
                markets,'' and inserting ``individual or group market, 
                or all markets,''; and
                    (II) in clause (i), by inserting ``or individual, 
                as applicable,'' after ``plan sponsor''; and

            (D) by transferring such section (as amended by this 
        paragraph) to appear at the end of section 2703 (as added by 
        section 1001(4));
        (10) in section 2733 (42 U.S.C. 300gg-13), as so redesignated 
    by section 1001(4)--
            (A) in subsection (a)--
                (i) in the matter preceding paragraph (1), by striking 
            ``small employer'' and inserting ``small employer or an 
            individual'';
                (ii) in paragraph (1), by inserting ``, or individual, 
            as applicable,'' after ``employer'' each place that such 
            appears; and
                (iii) in paragraph (2), by striking ``small employer'' 
            and inserting ``employer, or individual, as applicable,'';
            (B) in subsection (b)--
                (i) in paragraph (1)--

                    (I) in the matter preceding subparagraph (A), by 
                striking ``small employer'' and inserting ``employer, 
                or individual, as applicable,'';
                    (II) in subparagraph (A), by adding ``and'' at the 
                end;
                    (III) by striking subparagraphs (B) and (C); and
                    (IV) in subparagraph (D)--

                        (aa) by inserting ``, or individual, as 
                    applicable,'' after ``employer''; and
                        (bb) by redesignating such subparagraph as 
                    subparagraph (B);
                (ii) in paragraph (2)--

                    (I) by striking ``small employers'' each place that 
                such term appears and inserting ``employers, or 
                individuals, as applicable,''; and
                    (II) by striking ``small employer'' and inserting 
                ``employer, or individual, as applicable,''; and

            (C) by redesignating such section (as amended by this 
        paragraph) as section 2709 and transferring such section to 
        appear after section 2708 (as added by section 1001(5));
        (11) by redesignating subpart 4 as subpart 2;
        (12) in section 2735 (42 U.S.C. 300gg-21), as so redesignated 
    by section 1001(4)--
            (A) by striking subsection (a);
            (B) by striking ``subparts 1 through 3'' each place that 
        such appears and inserting ``subpart 1'';
            (C) by redesignating subsections (b) through (e) as 
        subsections (a) through (d), respectively; and
            (D) by redesignating such section (as amended by this 
        paragraph) as section 2722;
        (13) in section 2736 (42 U.S.C. 300gg-22), as so redesignated 
    by section 1001(4)--
            (A) in subsection (a)--
                (i) in paragraph (1), by striking ``small or large 
            group markets'' and inserting ``individual or group 
            market''; and
                (ii) in paragraph (2), by inserting ``or individual 
            health insurance coverage'' after ``group health plans'';
            (B) in subsection (b)(1)(B), by inserting ``individual 
        health insurance coverage or'' after ``respect to''; and
            (C) by redesignating such section (as amended by this 
        paragraph) as section 2723;
        (14) in section 2737(a)(1) (42 U.S.C. 300gg-23), as so 
    redesignated by section 1001(4)--
            (A) by inserting ``individual or'' before ``group health 
        insurance''; and
            (B) by redesignating such section(as amended by this 
        paragraph) as section 2724;
        (15) in section 2762 (42 U.S.C. 300gg-62)--
            (A) in the section heading by inserting ``and application'' 
        before the period; and
            (B) by adding at the end the following:
    ``(c) Application of Part A Provisions.--
        ``(1) In general.--The provisions of part A shall apply to 
    health insurance issuers providing health insurance coverage in the 
    individual market in a State as provided for in such part.
        ``(2) Clarification.--To the extent that any provision of this 
    part conflicts with a provision of part A with respect to health 
    insurance issuers providing health insurance coverage in the 
    individual market in a State, the provisions of such part A shall 
    apply.''; and
        (16) in section 2791(e) (42 U.S.C. 300gg-91(e))--
            (A) in paragraph (2), by striking ``51'' and inserting 
        ``101''; and
            (B) in paragraph (4)--
                (i) by striking ``at least 2'' each place that such 
            appears and inserting ``at least 1''; and
                (ii) by striking ``50'' and inserting ``100''.
    (d) Application.--Notwithstanding any other provision of the 
Patient Protection and Affordable Care Act, nothing in such Act (or an 
amendment made by such Act) shall be construed to--
        (1) prohibit (or authorize the Secretary of Health and Human 
    Services to promulgate regulations that prohibit) a group health 
    plan or health insurance issuer from carrying out utilization 
    management techniques that are commonly used as of the date of 
    enactment of this Act; or
        (2) restrict the application of the amendments made by this 
    subtitle.
    (e) Technical Amendment to the Employee Retirement Income Security 
Act of 1974.--Subpart B of part 7 of subtitle A of title I of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et. 
seq.) is amended, by adding at the end the following:

``SEC. 715. ADDITIONAL MARKET REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
        ``(1) the provisions of part A of title XXVII of the Public 
    Health Service Act (as amended by the Patient Protection and 
    Affordable Care Act) shall apply to group health plans, and health 
    insurance issuers providing health insurance coverage in connection 
    with group health plans, as if included in this subpart; and
        ``(2) to the extent that any provision of this part conflicts 
    with a provision of such part A with respect to group health plans, 
    or health insurance issuers providing health insurance coverage in 
    connection with group health plans, the provisions of such part A 
    shall apply.
    ``(b) Exception.--Notwithstanding subsection (a), the provisions of 
sections 2716 and 2718 of title XXVII of the Public Health Service Act 
(as amended by the Patient Protection and Affordable Care Act) shall 
not apply with respect to self-insured group health plans, and the 
provisions of this part shall continue to apply to such plans as if 
such sections of the Public Health Service Act (as so amended) had not 
been enacted.''.
    (f) Technical Amendment to the Internal Revenue Code of 1986.--
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 9815. ADDITIONAL MARKET REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
        ``(1) the provisions of part A of title XXVII of the Public 
    Health Service Act (as amended by the Patient Protection and 
    Affordable Care Act) shall apply to group health plans, and health 
    insurance issuers providing health insurance coverage in connection 
    with group health plans, as if included in this subchapter; and
        ``(2) to the extent that any provision of this subchapter 
    conflicts with a provision of such part A with respect to group 
    health plans, or health insurance issuers providing health 
    insurance coverage in connection with group health plans, the 
    provisions of such part A shall apply.
    ``(b) Exception.--Notwithstanding subsection (a), the provisions of 
sections 2716 and 2718 of title XXVII of the Public Health Service Act 
(as amended by the Patient Protection and Affordable Care Act) shall 
not apply with respect to self-insured group health plans, and the 
provisions of this subchapter shall continue to apply to such plans as 
if such sections of the Public Health Service Act (as so amended) had 
not been enacted.''.

SEC. 1563. SENSE OF THE SENATE PROMOTING FISCAL RESPONSIBILITY.

    (a) Findings.--The Senate makes the following findings:
        (1) Based on Congressional Budget Office (CBO) estimates, this 
    Act will reduce the Federal deficit between 2010 and 2019.
        (2) CBO projects this Act will continue to reduce budget 
    deficits after 2019.
        (3) Based on CBO estimates, this Act will extend the solvency 
    of the Medicare HI Trust Fund.
        (4) This Act will increase the surplus in the Social Security 
    Trust Fund, which should be reserved to strengthen the finances of 
    Social Security.
        (5) The initial net savings generated by the Community Living 
    Assistance Services and Supports (CLASS) program are necessary to 
    ensure the long-term solvency of that program.
    (b) Sense of the Senate.--It is the sense of the Senate that--
        (1) the additional surplus in the Social Security Trust Fund 
    generated by this Act should be reserved for Social Security and 
    not spent in this Act for other purposes; and
        (2) the net savings generated by the CLASS program should be 
    reserved for the CLASS program and not spent in this Act for other 
    purposes.

                   TITLE II--ROLE OF PUBLIC PROGRAMS
                Subtitle A--Improved Access to Medicaid

SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS.

    (a) Coverage for Individuals With Income at or Below 133 Percent of 
the Poverty Line.--
        (1) Beginning 2014.--Section 1902(a)(10)(A)(i) of the Social 
    Security Act (42 U.S.C. 1396a) is amended--
            (A) by striking ``or'' at the end of subclause (VI);
            (B) by adding ``or'' at the end of subclause (VII); and
            (C) by inserting after subclause (VII) the following:

                    ``(VIII) beginning January 1, 2014, who are under 
                65 years of age, not pregnant, not entitled to, or 
                enrolled for, benefits under part A of title XVIII, or 
                enrolled for benefits under part B of title XVIII, and 
                are not described in a previous subclause of this 
                clause, and whose income (as determined under 
                subsection (e)(14)) does not exceed 133 percent of the 
                poverty line (as defined in section 2110(c)(5)) 
                applicable to a family of the size involved, subject to 
                subsection (k);''.

        (2) Provision of at least minimum essential coverage.--
            (A) In general.--Section 1902 of such Act (42 U.S.C. 1396a) 
        is amended by inserting after subsection (j) the following:
    ``(k)(1) The medical assistance provided to an individual described 
in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of 
benchmark coverage described in section 1937(b)(1) or benchmark 
equivalent coverage described in section 1937(b)(2). Such medical 
assistance shall be provided subject to the requirements of section 
1937, without regard to whether a State otherwise has elected the 
option to provide medical assistance through coverage under that 
section, unless an individual described in subclause (VIII) of 
subsection (a)(10)(A)(i) is also an individual for whom, under 
subparagraph (B) of section 1937(a)(2), the State may not require 
enrollment in benchmark coverage described in subsection (b)(1) of 
section 1937 or benchmark equivalent coverage described in subsection 
(b)(2) of that section.''.
            (B) Conforming amendment.--Section 1903(i) of the Social 
        Security Act, as amended by section 6402(c), is amended--
                (i) in paragraph (24), by striking ``or'' at the end;
                (ii) in paragraph (25), by striking the period and 
            inserting ``; or''; and
                (iii) by adding at the end the following:
        ``(26) with respect to any amounts expended for medical 
    assistance for individuals described in subclause (VIII) of 
    subsection (a)(10)(A)(i) other than medical assistance provided 
    through benchmark coverage described in section 1937(b)(1) or 
    benchmark equivalent coverage described in section 1937(b)(2).''.
        (3) Federal funding for cost of covering newly eligible 
    individuals.--Section 1905 of the Social Security Act (42 U.S.C. 
    1396d), is amended--
            (A) in subsection (b), in the first sentence, by inserting 
        ``subsection (y) and'' before ``section 1933(d)''; and
            (B) by adding at the end the following new subsection:
    ``(y) Increased FMAP for Medical Assistance for Newly Eligible 
Mandatory Individuals.--
        ``(1) Amount of increase.--
            ``(A) 100 percent fmap.--During the period that begins on 
        January 1, 2014, and ends on December 31, 2016, notwithstanding 
        subsection (b), the Federal medical assistance percentage 
        determined for a State that is one of the 50 States or the 
        District of Columbia for each fiscal year occurring during that 
        period with respect to amounts expended for medical assistance 
        for newly eligible individuals described in subclause (VIII) of 
        section 1902(a)(10)(A)(i) shall be equal to 100 percent.
            ``(B) 2017 and 2018.--
                ``(i) In general.--During the period that begins on 
            January 1, 2017, and ends on December 31, 2018, 
            notwithstanding subsection (b) and subject to subparagraph 
            (D), the Federal medical assistance percentage determined 
            for a State that is one of the 50 States or the District of 
            Columbia for each fiscal year occurring during that period 
            with respect to amounts expended for medical assistance for 
            newly eligible individuals described in subclause (VIII) of 
            section 1902(a)(10)(A)(i), shall be increased by the 
            applicable percentage point increase specified in clause 
            (ii) for the quarter and the State.
                ``(ii) Applicable percentage point increase.--

                    ``(I) In general.--For purposes of clause (i), the 
                applicable percentage point increase for a quarter is 
                the following:

 
------------------------------------------------------------------------
                            If the State is an    If the State is not an
 ``For any fiscal year     expansion State, the    expansion State, the
  quarter occurring in    applicable percentage    applicable percentage
   the calendar year:       point increase is:      point increase is:
------------------------------------------------------------------------
2017                     30.3                     34.3
------------------------------------------------------------------------
2018                     31.3                     33.3
------------------------------------------------------------------------

                    ``(II) Expansion state defined.--For purposes of 
                the table in subclause (I), a State is an expansion 
                State if, on the date of the enactment of the Patient 
                Protection and Affordable Care Act, the State offers 
                health benefits coverage statewide to parents and 
                nonpregnant, childless adults whose income is at least 
                100 percent of the poverty line, that is not dependent 
                on access to employer coverage, employer contribution, 
                or employment and is not limited to premium assistance, 
                hospital-only benefits, a high deductible health plan, 
                or alternative benefits under a demonstration program 
                authorized under section 1938. A State that offers 
                health benefits coverage to only parents or only 
                nonpregnant childless adults described in the preceding 
                sentence shall not be considered to be an expansion 
                State.

            ``(C) 2019 and succeeding years.--Beginning January 1, 
        2019, notwithstanding subsection (b) but subject to 
        subparagraph (D), the Federal medical assistance percentage 
        determined for a State that is one of the 50 States or the 
        District of Columbia for each fiscal year quarter occurring 
        during that period with respect to amounts expended for medical 
        assistance for newly eligible individuals described in 
        subclause (VIII) of section 1902(a)(10)(A)(i), shall be 
        increased by 32.3 percentage points.
            ``(D) Limitation.--The Federal medical assistance 
        percentage determined for a State under subparagraph (B) or (C) 
        shall in no case be more than 95 percent.
        ``(2) Definitions.--In this subsection:
            ``(A) Newly eligible.--The term `newly eligible' means, 
        with respect to an individual described in subclause (VIII) of 
        section 1902(a)(10)(A)(i), an individual who is not under 19 
        years of age (or such higher age as the State may have elected) 
        and who, on the date of enactment of the Patient Protection and 
        Affordable Care Act, is not eligible under the State plan or 
        under a waiver of the plan for full benefits or for benchmark 
        coverage described in subparagraph (A), (B), or (C) of section 
        1937(b)(1) or benchmark equivalent coverage described in 
        section 1937(b)(2) that has an aggregate actuarial value that 
        is at least actuarially equivalent to benchmark coverage 
        described in subparagraph (A), (B), or (C) of section 
        1937(b)(1), or is eligible but not enrolled (or is on a waiting 
        list) for such benefits or coverage through a waiver under the 
        plan that has a capped or limited enrollment that is full.
            ``(B) Full benefits.--The term `full benefits' means, with 
        respect to an individual, medical assistance for all services 
        covered under the State plan under this title that is not less 
        in amount, duration, or scope, or is determined by the 
        Secretary to be substantially equivalent, to the medical 
        assistance available for an individual described in section 
        1902(a)(10)(A)(i).''.
        (4) State options to offer coverage earlier and presumptive 
    eligibility; children required to have coverage for parents to be 
    eligible.--
            (A) In general.--Subsection (k) of section 1902 of the 
        Social Security Act (as added by paragraph (2)), is amended by 
        inserting after paragraph (1) the following:
    ``(2) Beginning with the first day of any fiscal year quarter that 
begins on or after January 1, 2011, and before January 1, 2014, a State 
may elect through a State plan amendment to provide medical assistance 
to individuals who would be described in subclause (VIII) of subsection 
(a)(10)(A)(i) if that subclause were effective before January 1, 2014. 
A State may elect to phase-in the extension of eligibility for medical 
assistance to such individuals based on income, so long as the State 
does not extend such eligibility to individuals described in such 
subclause with higher income before making individuals described in 
such subclause with lower income eligible for medical assistance.
    ``(3) If an individual described in subclause (VIII) of subsection 
(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or 
such higher age as the State may have elected) who is eligible for 
medical assistance under the State plan or under a waiver of such plan 
(under that subclause or under a State plan amendment under paragraph 
(2), the individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a waiver 
of the plan or is enrolled in other health insurance coverage. For 
purposes of the preceding sentence, the term `parent' includes an 
individual treated as a caretaker relative for purposes of carrying out 
section 1931.''.
            (B) Presumptive eligibility.--Section 1920 of the Social 
        Security Act (42 U.S.C. 1396r-1) is amended by adding at the 
        end the following:
    ``(e) If the State has elected the option to provide a presumptive 
eligibility period under this section or section 1920A, the State may 
elect to provide a presumptive eligibility period (as defined in 
subsection (b)(1)) for individuals who are eligible for medical 
assistance under clause (i)(VIII) of subsection (a)(10)(A) or section 
1931 in the same manner as the State provides for such a period under 
this section or section 1920A, subject to such guidance as the 
Secretary shall establish.''.
        (5) Conforming amendments.--
            (A) Section 1902(a)(10) of such Act (42 U.S.C. 
        1396a(a)(10)) is amended in the matter following subparagraph 
        (G), by striking ``and (XIV)'' and inserting ``(XIV)'' and by 
        inserting ``and (XV) the medical assistance made available to 
        an individual described in subparagraph (A)(i)(VIII) shall be 
        limited to medical assistance described in subsection (k)(1)'' 
        before the semicolon.
            (B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 
        1396a(l)(2)(C)) is amended by striking ``100'' and inserting 
        ``133''.
            (C) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is 
        amended in the matter preceding paragraph (1)--
                (i) by striking ``or'' at the end of clause (xii);
                (ii) by inserting ``or'' at the end of clause (xiii); 
            and
                (iii) by inserting after clause (xiii) the following:
        ``(xiv) individuals described in section 
    1902(a)(10)(A)(i)(VIII),''.
            (D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) 
        is amended by inserting ``1902(a)(10)(A)(i)(VIII),'' after 
        ``1902(a)(10)(A)(i)(VII),''.
            (E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u-
        7(a)(1)(B)) is amended by inserting ``subclause (VIII) of 
        section 1902(a)(10)(A)(i) or under'' after ``eligible under''.
    (b) Maintenance of Medicaid Income Eligibility.--Section 1902 of 
the Social Security Act (42 U.S.C. 1396a) is amended--
        (1) in subsection (a)--
            (A) by striking ``and'' at the end of paragraph (72);
            (B) by striking the period at the end of paragraph (73) and 
        inserting ``; and''; and
            (C) by inserting after paragraph (73) the following new 
        paragraph:
        ``(74) provide for maintenance of effort under the State plan 
    or under any waiver of the plan in accordance with subsection 
    (gg).''; and
        (2) by adding at the end the following new subsection:
    ``(gg) Maintenance of Effort.--
        ``(1) General requirement to maintain eligibility standards 
    until state exchange is fully operational.--Subject to the 
    succeeding paragraphs of this subsection, during the period that 
    begins on the date of enactment of the Patient Protection and 
    Affordable Care Act and ends on the date on which the Secretary 
    determines that an Exchange established by the State under section 
    1311 of the Patient Protection and Affordable Care Act is fully 
    operational, as a condition for receiving any Federal payments 
    under section 1903(a) for calendar quarters occurring during such 
    period, a State shall not have in effect eligibility standards, 
    methodologies, or procedures under the State plan under this title 
    or under any waiver of such plan that is in effect during that 
    period, that are more restrictive than the eligibility standards, 
    methodologies, or procedures, respectively, under the plan or 
    waiver that are in effect on the date of enactment of the Patient 
    Protection and Affordable Care Act.
        ``(2) Continuation of eligibility standards for children until 
    october 1, 2019.--The requirement under paragraph (1) shall 
    continue to apply to a State through September 30, 2019, with 
    respect to the eligibility standards, methodologies, and procedures 
    under the State plan under this title or under any waiver of such 
    plan that are applicable to determining the eligibility for medical 
    assistance of any child who is under 19 years of age (or such 
    higher age as the State may have elected).
        ``(3) Nonapplication.--During the period that begins on January 
    1, 2011, and ends on December 31, 2013, the requirement under 
    paragraph (1) shall not apply to a State with respect to 
    nonpregnant, nondisabled adults who are eligible for medical 
    assistance under the State plan or under a waiver of the plan at 
    the option of the State and whose income exceeds 133 percent of the 
    poverty line (as defined in section 2110(c)(5)) applicable to a 
    family of the size involved if, on or after December 31, 2010, the 
    State certifies to the Secretary that, with respect to the State 
    fiscal year during which the certification is made, the State has a 
    budget deficit, or with respect to the succeeding State fiscal 
    year, the State is projected to have a budget deficit. Upon 
    submission of such a certification to the Secretary, the 
    requirement under paragraph (1) shall not apply to the State with 
    respect to any remaining portion of the period described in the 
    preceding sentence.
        ``(4) Determination of compliance.--
            ``(A) States shall apply modified gross income.--A State's 
        determination of income in accordance with subsection (e)(14) 
        shall not be considered to be eligibility standards, 
        methodologies, or procedures that are more restrictive than the 
        standards, methodologies, or procedures in effect under the 
        State plan or under a waiver of the plan on the date of 
        enactment of the Patient Protection and Affordable Care Act for 
        purposes of determining compliance with the requirements of 
        paragraph (1), (2), or (3).
            ``(B) States may expand eligibility or move waivered 
        populations into coverage under the state plan.--With respect 
        to any period applicable under paragraph (1), (2), or (3), a 
        State that applies eligibility standards, methodologies, or 
        procedures under the State plan under this title or under any 
        waiver of the plan that are less restrictive than the 
        eligibility standards, methodologies, or procedures, applied 
        under the State plan or under a waiver of the plan on the date 
        of enactment of the Patient Protection and Affordable Care Act, 
        or that makes individuals who, on such date of enactment, are 
        eligible for medical assistance under a waiver of the State 
        plan, after such date of enactment eligible for medical 
        assistance through a State plan amendment with an income 
        eligibility level that is not less than the income eligibility 
        level that applied under the waiver, or as a result of the 
        application of subclause (VIII) of section 1902(a)(10)(A)(i), 
        shall not be considered to have in effect eligibility 
        standards, methodologies, or procedures that are more 
        restrictive than the standards, methodologies, or procedures in 
        effect under the State plan or under a waiver of the plan on 
        the date of enactment of the Patient Protection and Affordable 
        Care Act for purposes of determining compliance with the 
        requirements of paragraph (1), (2), or (3).''.
    (c) Medicaid Benchmark Benefits Must Consist of at Least Minimum 
Essential Coverage.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b)) 
is amended--
        (1) in paragraph (1), in the matter preceding subparagraph (A), 
    by inserting ``subject to paragraphs (5) and (6),'' before 
    ``each'';
        (2) in paragraph (2)--
            (A) in the matter preceding subparagraph (A), by inserting 
        ``subject to paragraphs (5) and (6)'' after ``subsection 
        (a)(1),'';
            (B) in subparagraph (A)--
                (i) by redesignating clauses (iv) and (v) as clauses 
            (vi) and (vii), respectively; and
                (ii) by inserting after clause (iii), the following:
                ``(iv) Coverage of prescription drugs.
                ``(v) Mental health services.''; and
            (C) in subparagraph (C)--
                (i) by striking clauses (i) and (ii); and
                (ii) by redesignating clauses (iii) and (iv) as clauses 
            (i) and (ii), respectively; and
        (3) by adding at the end the following new paragraphs:
        ``(5) Minimum standards.--Effective January 1, 2014, any 
    benchmark benefit package under paragraph (1) or benchmark 
    equivalent coverage under paragraph (2) must provide at least 
    essential health benefits as described in section 1302(b) of the 
    Patient Protection and Affordable Care Act.
        ``(6) Mental health services parity.--
            ``(A) In general.--In the case of any benchmark benefit 
        package under paragraph (1) or benchmark equivalent coverage 
        under paragraph (2) that is offered by an entity that is not a 
        medicaid managed care organization and that provides both 
        medical and surgical benefits and mental health or substance 
        use disorder benefits, the entity shall ensure that the 
        financial requirements and treatment limitations applicable to 
        such mental health or substance use disorder benefits comply 
        with the requirements of section 2705(a) of the Public Health 
        Service Act in the same manner as such requirements apply to a 
        group health plan.
            ``(B) Deemed compliance.--Coverage provided with respect to 
        an individual described in section 1905(a)(4)(B) and covered 
        under the State plan under section 1902(a)(10)(A) of the 
        services described in section 1905(a)(4)(B) (relating to early 
        and periodic screening, diagnostic, and treatment services 
        defined in section 1905(r)) and provided in accordance with 
        section 1902(a)(43), shall be deemed to satisfy the 
        requirements of subparagraph (A).''.
    (d) Annual Reports on Medicaid Enrollment.--
        (1) State reports.--Section 1902(a) of the Social Security Act 
    (42 U.S.C. 1396a(a)), as amended by subsection (b), is amended--
            (A) by striking ``and'' at the end of paragraph (73);
            (B) by striking the period at the end of paragraph (74) and 
        inserting ``; and''; and
            (C) by inserting after paragraph (74) the following new 
        paragraph:
        ``(75) provide that, beginning January 2015, and annually 
    thereafter, the State shall submit a report to the Secretary that 
    contains--
            ``(A) the total number of enrolled and newly enrolled 
        individuals in the State plan or under a waiver of the plan for 
        the fiscal year ending on September 30 of the preceding 
        calendar year, disaggregated by population, including children, 
        parents, nonpregnant childless adults, disabled individuals, 
        elderly individuals, and such other categories or sub-
        categories of individuals eligible for medical assistance under 
        the State plan or under a waiver of the plan as the Secretary 
        may require;
            ``(B) a description, which may be specified by population, 
        of the outreach and enrollment processes used by the State 
        during such fiscal year; and
            ``(C) any other data reporting determined necessary by the 
        Secretary to monitor enrollment and retention of individuals 
        eligible for medical assistance under the State plan or under a 
        waiver of the plan.''.
        (2) Reports to congress.--Beginning April 2015, and annually 
    thereafter, the Secretary of Health and Human Services shall submit 
    a report to the appropriate committees of Congress on the total 
    enrollment and new enrollment in Medicaid for the fiscal year 
    ending on September 30 of the preceding calendar year on a national 
    and State-by-State basis, and shall include in each such report 
    such recommendations for administrative or legislative changes to 
    improve enrollment in the Medicaid program as the Secretary 
    determines appropriate.
    (e) State Option for Coverage for Individuals With Income That 
Exceeds 133 Percent of the Poverty Line.--
        (1) Coverage as optional categorically needy group.--Section 
    1902 of the Social Security Act (42 U.S.C. 1396a) is amended--
            (A) in subsection (a)(10)(A)(ii)--
                (i) in subclause (XVIII), by striking ``or'' at the 
            end;
                (ii) in subclause (XIX), by adding ``or'' at the end; 
            and
                (iii) by adding at the end the following new subclause:

                    ``(XX) beginning January 1, 2014, who are under 65 
                years of age and are not described in or enrolled under 
                a previous subclause of this clause, and whose income 
                (as determined under subsection (e)(14)) exceeds 133 
                percent of the poverty line (as defined in section 
                2110(c)(5)) applicable to a family of the size involved 
                but does not exceed the highest income eligibility 
                level established under the State plan or under a 
                waiver of the plan, subject to subsection (hh);'' and

            (B) by adding at the end the following new subsection:
    ``(hh)(1) A State may elect to phase-in the extension of 
eligibility for medical assistance to individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) based on the categorical 
group (including nonpregnant childless adults) or income, so long as 
the State does not extend such eligibility to individuals described in 
such subclause with higher income before making individuals described 
in such subclause with lower income eligible for medical assistance.
    ``(2) If an individual described in subclause (XX) of subsection 
(a)(10)(A)(ii) is the parent of a child who is under 19 years of age 
(or such higher age as the State may have elected) who is eligible for 
medical assistance under the State plan or under a waiver of such plan, 
the individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a waiver 
of the plan or is enrolled in other health insurance coverage. For 
purposes of the preceding sentence, the term `parent' includes an 
individual treated as a caretaker relative for purposes of carrying out 
section 1931.''.
        (2) Conforming amendments.--
            (A) Section 1905(a) of such Act (42 U.S.C. 1396d(a)), as 
        amended by subsection (a)(5)(C), is amended in the matter 
        preceding paragraph (1)--
                (i) by striking ``or'' at the end of clause (xiii);
                (ii) by inserting ``or'' at the end of clause (xiv); 
            and
                (iii) by inserting after clause (xiv) the following:
        ``(xv) individuals described in section 
    1902(a)(10)(A)(ii)(XX),''.
            (B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) 
        is amended by inserting ``1902(a)(10)(A)(ii)(XX),'' after 
        ``1902(a)(10)(A)(ii)(XIX),''.
            (C) Section 1920(e) of such Act (42 U.S.C. 1396r-1(e)), as 
        added by subsection (a)(4)(B), is amended by inserting ``or 
        clause (ii)(XX)'' after ``clause (i)(VIII)''.

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED 
              GROSS INCOME.

    (a) In General.--Section 1902(e) of the Social Security Act (42 
U.S.C. 1396a(e)) is amended by adding at the end the following:
        ``(14) Income determined using modified gross income.--
            ``(A) In general.--Notwithstanding subsection (r) or any 
        other provision of this title, except as provided in 
        subparagraph (D), for purposes of determining income 
        eligibility for medical assistance under the State plan or 
        under any waiver of such plan and for any other purpose 
        applicable under the plan or waiver for which a determination 
        of income is required, including with respect to the imposition 
        of premiums and cost-sharing, a State shall use the modified 
        gross income of an individual and, in the case of an individual 
        in a family greater than 1, the household income of such 
        family. A State shall establish income eligibility thresholds 
        for populations to be eligible for medical assistance under the 
        State plan or a waiver of the plan using modified gross income 
        and household income that are not less than the effective 
        income eligibility levels that applied under the State plan or 
        waiver on the date of enactment of the Patient Protection and 
        Affordable Care Act. For purposes of complying with the 
        maintenance of effort requirements under subsection (gg) during 
        the transition to modified gross income and household income, a 
        State shall, working with the Secretary, establish an 
        equivalent income test that ensures individuals eligible for 
        medical assistance under the State plan or under a waiver of 
        the plan on the date of enactment of the Patient Protection and 
        Affordable Care Act, do not lose coverage under the State plan 
        or under a waiver of the plan. The Secretary may waive such 
        provisions of this title and title XXI as are necessary to 
        ensure that States establish income and eligibility 
        determination systems that protect beneficiaries.
            ``(B) No income or expense disregards.--No type of expense, 
        block, or other income disregard shall be applied by a State to 
        determine income eligibility for medical assistance under the 
        State plan or under any waiver of such plan or for any other 
        purpose applicable under the plan or waiver for which a 
        determination of income is required.
            ``(C) No assets test.--A State shall not apply any assets 
        or resources test for purposes of determining eligibility for 
        medical assistance under the State plan or under a waiver of 
        the plan.
            ``(D) Exceptions.--
                ``(i) Individuals eligible because of other aid or 
            assistance, elderly individuals, medically needy 
            individuals, and individuals eligible for medicare cost-
            sharing.--Subparagraphs (A), (B), and (C) shall not apply 
            to the determination of eligibility under the State plan or 
            under a waiver for medical assistance for the following:

                    ``(I) Individuals who are eligible for medical 
                assistance under the State plan or under a waiver of 
                the plan on a basis that does not require a 
                determination of income by the State agency 
                administering the State plan or waiver, including as a 
                result of eligibility for, or receipt of, other Federal 
                or State aid or assistance, individuals who are 
                eligible on the basis of receiving (or being treated as 
                if receiving) supplemental security income benefits 
                under title XVI, and individuals who are eligible as a 
                result of being or being deemed to be a child in foster 
                care under the responsibility of the State.
                    ``(II) Individuals who have attained age 65.
                    ``(III) Individuals who qualify for medical 
                assistance under the State plan or under any waiver of 
                such plan on the basis of being blind or disabled (or 
                being treated as being blind or disabled) without 
                regard to whether the individual is eligible for 
                supplemental security income benefits under title XVI 
                on the basis of being blind or disabled and including 
                an individual who is eligible for medical assistance on 
                the basis of section 1902(e)(3).
                    ``(IV) Individuals described in subsection 
                (a)(10)(C).
                    ``(V) Individuals described in any clause of 
                subsection (a)(10)(E).

                ``(ii) Express lane agency findings.--In the case of a 
            State that elects the Express Lane option under paragraph 
            (13), notwithstanding subparagraphs (A), (B), and (C), the 
            State may rely on a finding made by an Express Lane agency 
            in accordance with that paragraph relating to the income of 
            an individual for purposes of determining the individual's 
            eligibility for medical assistance under the State plan or 
            under a waiver of the plan.
                ``(iii) Medicare prescription drug subsidies 
            determinations.--Subparagraphs (A), (B), and (C) shall not 
            apply to any determinations of eligibility for premium and 
            cost-sharing subsidies under and in accordance with section 
            1860D-14 made by the State pursuant to section 1935(a)(2).
                ``(iv) Long-term care.--Subparagraphs (A), (B), and (C) 
            shall not apply to any determinations of eligibility of 
            individuals for purposes of medical assistance for nursing 
            facility services, a level of care in any institution 
            equivalent to that of nursing facility services, home or 
            community-based services furnished under a waiver or State 
            plan amendment under section 1915 or a waiver under section 
            1115, and services described in section 1917(c)(1)(C)(ii).
                ``(v) Grandfather of current enrollees until date of 
            next regular redetermination.--An individual who, on 
            January 1, 2014, is enrolled in the State plan or under a 
            waiver of the plan and who would be determined ineligible 
            for medical assistance solely because of the application of 
            the modified gross income or household income standard 
            described in subparagraph (A), shall remain eligible for 
            medical assistance under the State plan or waiver (and 
            subject to the same premiums and cost-sharing as applied to 
            the individual on that date) through March 31, 2014, or the 
            date on which the individual's next regularly scheduled 
            redetermination of eligibility is to occur, whichever is 
            later.
            ``(E) Transition planning and oversight.--Each State shall 
        submit to the Secretary for the Secretary's approval the income 
        eligibility thresholds proposed to be established using 
        modified gross income and household income, the methodologies 
        and procedures to be used to determine income eligibility using 
        modified gross income and household income and, if applicable, 
        a State plan amendment establishing an optional eligibility 
        category under subsection (a)(10)(A)(ii)(XX). To the extent 
        practicable, the State shall use the same methodologies and 
        procedures for purposes of making such determinations as the 
        State used on the date of enactment of the Patient Protection 
        and Affordable Care Act. The Secretary shall ensure that the 
        income eligibility thresholds proposed to be established using 
        modified gross income and household income, including under the 
        eligibility category established under subsection 
        (a)(10)(A)(ii)(XX), and the methodologies and procedures 
        proposed to be used to determine income eligibility, will not 
        result in children who would have been eligible for medical 
        assistance under the State plan or under a waiver of the plan 
        on the date of enactment of the Patient Protection and 
        Affordable Care Act no longer being eligible for such 
        assistance.
            ``(F) Limitation on secretarial authority.--The Secretary 
        shall not waive compliance with the requirements of this 
        paragraph except to the extent necessary to permit a State to 
        coordinate eligibility requirements for dual eligible 
        individuals (as defined in section 1915(h)(2)(B)) under the 
        State plan or under a waiver of the plan and under title XVIII 
        and individuals who require the level of care provided in a 
        hospital, a nursing facility, or an intermediate care facility 
        for the mentally retarded.
            ``(G) Definitions of modified gross income and household 
        income.--In this paragraph, the terms `modified gross income' 
        and `household income' have the meanings given such terms in 
        section 36B(d)(2) of the Internal Revenue Code of 1986.
            ``(H) Continued application of medicaid rules regarding 
        point-in-time income and sources of income.--The requirement 
        under this paragraph for States to use modified gross income 
        and household income to determine income eligibility for 
        medical assistance under the State plan or under any waiver of 
        such plan and for any other purpose applicable under the plan 
        or waiver for which a determination of income is required shall 
        not be construed as affecting or limiting the application of--
                ``(i) the requirement under this title and under the 
            State plan or a waiver of the plan to determine an 
            individual's income as of the point in time at which an 
            application for medical assistance under the State plan or 
            a waiver of the plan is processed; or
                ``(ii) any rules established under this title or under 
            the State plan or a waiver of the plan regarding sources of 
            countable income.''.
    (b) Conforming Amendment.--Section 1902(a)(17) of such Act (42 
U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before 
``(l)(3)''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
take effect on January 1, 2014.

SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR EMPLOYER-
              SPONSORED INSURANCE.

    (a) In General.--Section 1906A of such Act (42 U.S.C. 1396e-1) is 
amended--
        (1) in subsection (a)--
            (A) by striking ``may elect to'' and inserting ``shall'';
            (B) by striking ``under age 19''; and
            (C) by inserting ``, in the case of an individual under age 
        19,'' after ``(and'';
        (2) in subsection (c), in the first sentence, by striking 
    ``under age 19''; and
        (3) in subsection (d)--
            (A) in paragraph (2)--
                (i) in the first sentence, by striking ``under age 
            19''; and
                (ii) by striking the third sentence and inserting ``A 
            State may not require, as a condition of an individual (or 
            the individual's parent) being or remaining eligible for 
            medical assistance under this title, that the individual 
            (or the individual's parent) apply for enrollment in 
            qualified employer-sponsored coverage under this 
            section.''; and
            (B) in paragraph (3), by striking ``the parent of an 
        individual under age 19'' and inserting ``an individual (or the 
        parent of an individual)''; and
        (4) in subsection (e), by striking ``under age 19'' each place 
    it appears.
    (b) Conforming Amendment.--The heading for section 1906A of such 
Act (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2014.

SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHILDREN.

    (a) In General.--Section 1902(a)(10)(A)(i) of the Social Security 
Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended--
        (1) by striking ``or'' at the end of subclause (VII);
        (2) by adding ``or'' at the end of subclause (VIII); and
        (3) by inserting after subclause (VIII) the following:

                    ``(IX) who were in foster care under the 
                responsibility of a State for more than 6 months 
                (whether or not consecutive) but are no longer in such 
                care, who are not described in any of subclauses (I) 
                through (VII) of this clause, and who are under 25 
                years of age;''.

    (b) Option To Provide Presumptive Eligibility.--Section 1920(e) of 
such Act (42 U.S.C. 1396r-1(e)), as added by section 2001(a)(4)(B) and 
amended by section 2001(e)(2)(C), is amended by inserting ``, clause 
(i)(IX),'' after ``clause (i)(VIII)''.
    (c) Conforming Amendments.--
        (1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), as 
    amended by section 2001(a)(5)(D), is amended by inserting 
    ``1902(a)(10)(A)(i)(IX),'' after ``1902(a)(10)(A)(i)(VIII),''.
        (2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 1396u-
    7(a)(2)(B)(viii)) is amended by inserting ``, or the individual 
    qualifies for medical assistance on the basis of section 
    1902(a)(10)(A)(i)(IX)'' before the period.
    (d) Effective Date.--The amendments made by this section take 
effect on January 1, 2019.

SEC. 2005. PAYMENTS TO TERRITORIES.

    (a) Increase in Limit on Payments.--Section 1108(g) of the Social 
Security Act (42 U.S.C. 1308(g)) is amended--
        (1) in paragraph (2), in the matter preceding subparagraph (A), 
    by striking ``paragraph (3)'' and inserting ``paragraphs (3) and 
    (5)'';
        (2) in paragraph (4), by striking ``and (3)'' and inserting 
    ``(3), and (4)''; and
        (3) by adding at the end the following paragraph:
        ``(5) Fiscal year 2011 and thereafter.--The amounts otherwise 
    determined under this subsection for Puerto Rico, the Virgin 
    Islands, Guam, the Northern Mariana Islands, and American Samoa for 
    the second, third, and fourth quarters of fiscal year 2011, and for 
    each fiscal year after fiscal year 2011 (after the application of 
    subsection (f) and the preceding paragraphs of this subsection), 
    shall be increased by 30 percent.''.
    (b) Disregard of Payments for Mandatory Expanded Enrollment.--
Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)(4)) is amended--
        (1) by striking ``to fiscal years beginning'' and inserting 
    ``to--
            ``(A) fiscal years beginning'';
        (2) by striking the period at the end and inserting ``; and''; 
    and
        (3) by adding at the end the following:
            ``(B) fiscal years beginning with fiscal year 2014, 
        payments made to Puerto Rico, the Virgin Islands, Guam, the 
        Northern Mariana Islands, or American Samoa with respect to 
        amounts expended for medical assistance for newly eligible (as 
        defined in section 1905(y)(2)) nonpregnant childless adults who 
        are eligible under subclause (VIII) of section 
        1902(a)(10)(A)(i) and whose income (as determined under section 
        1902(e)(14)) does not exceed (in the case of each such 
        commonwealth and territory respectively) the income eligibility 
        level in effect for that population under title XIX or under a 
        waiver on the date of enactment of the Patient Protection and 
        Affordable Care Act, shall not be taken into account in 
        applying subsection (f) (as increased in accordance with 
        paragraphs (1), (2), (3), and (5) of this subsection) to such 
        commonwealth or territory for such fiscal year.''.
    (c) Increased FMAP.--
        (1) In general.--The first sentence of section 1905(b) of the 
    Social Security Act (42 U.S.C. 1396d(b)) is amended by striking 
    ``shall be 50 per centum'' and inserting ``shall be 55 percent''.
        (2) Effective date.--The amendment made by paragraph (1) takes 
    effect on January 1, 2011.

SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CERTAIN STATES 
              RECOVERING FROM A MAJOR DISASTER.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 
amended by sections 2001(a)(3) and 2001(b)(2), is amended--
        (1) in subsection (b), in the first sentence, by striking 
    ``subsection (y)'' and inserting ``subsections (y) and (aa)''; and
        (2) by adding at the end the following new subsection:
    ``(aa)(1) Notwithstanding subsection (b), beginning January 1, 
2011, the Federal medical assistance percentage for a fiscal year for a 
disaster-recovery FMAP adjustment State shall be equal to the 
following:
        ``(A) In the case of the first fiscal year (or part of a fiscal 
    year) for which this subsection applies to the State, the Federal 
    medical assistance percentage determined for the fiscal year 
    without regard to this subsection and subsection (y), increased by 
    50 percent of the number of percentage points by which the Federal 
    medical assistance percentage determined for the State for the 
    fiscal year without regard to this subsection and subsection (y), 
    is less than the Federal medical assistance percentage determined 
    for the State for the preceding fiscal year after the application 
    of only subsection (a) of section 5001 of Public Law 111-5 (if 
    applicable to the preceding fiscal year) and without regard to this 
    subsection, subsection (y), and subsections (b) and (c) of section 
    5001 of Public Law 111-5.
        ``(B) In the case of the second or any succeeding fiscal year 
    for which this subsection applies to the State, the Federal medical 
    assistance percentage determined for the preceding fiscal year 
    under this subsection for the State, increased by 25 percent of the 
    number of percentage points by which the Federal medical assistance 
    percentage determined for the State for the fiscal year without 
    regard to this subsection and subsection (y), is less than the 
    Federal medical assistance percentage determined for the State for 
    the preceding fiscal year under this subsection.
    ``(2) In this subsection, the term `disaster-recovery FMAP 
adjustment State' means a State that is one of the 50 States or the 
District of Columbia, for which, at any time during the preceding 7 
fiscal years, the President has declared a major disaster under section 
401 of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act and determined as a result of such disaster that every county or 
parish in the State warrant individual and public assistance or public 
assistance from the Federal Government under such Act and for which--
        ``(A) in the case of the first fiscal year (or part of a fiscal 
    year) for which this subsection applies to the State, the Federal 
    medical assistance percentage determined for the State for the 
    fiscal year without regard to this subsection and subsection (y), 
    is less than the Federal medical assistance percentage determined 
    for the State for the preceding fiscal year after the application 
    of only subsection (a) of section 5001 of Public Law 111-5 (if 
    applicable to the preceding fiscal year) and without regard to this 
    subsection, subsection (y), and subsections (b) and (c) of section 
    5001 of Public Law 111-5, by at least 3 percentage points; and
        ``(B) in the case of the second or any succeeding fiscal year 
    for which this subsection applies to the State, the Federal medical 
    assistance percentage determined for the State for the fiscal year 
    without regard to this subsection and subsection (y), is less than 
    the Federal medical assistance percentage determined for the State 
    for the preceding fiscal year under this subsection by at least 3 
    percentage points.
    ``(3) The Federal medical assistance percentage determined for a 
disaster-recovery FMAP adjustment State under paragraph (1) shall apply 
for purposes of this title (other than with respect to disproportionate 
share hospital payments described in section 1923 and payments under 
this title that are based on the enhanced FMAP described in 2105(b)) 
and shall not apply with respect to payments under title IV (other than 
under part E of title IV) or payments under title XXI.''.

SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

    (a) Rescission.--Any amounts available to the Medicaid Improvement 
Fund established under section 1941 of the Social Security Act (42 
U.S.C. 1396w-1) for any of fiscal years 2014 through 2018 that are 
available for expenditure from the Fund and that are not so obligated 
as of the date of the enactment of this Act are rescinded.
    (b) Conforming Amendments.--Section 1941(b)(1) of the Social 
Security Act (42 U.S.C. 1396w-1(b)(1)) is amended--
        (1) in subparagraph (A), by striking ``$100,000,000'' and 
    inserting ``$0''; and
        (2) in subparagraph (B), by striking ``$150,000,000'' and 
    inserting ``$0''.

   Subtitle B--Enhanced Support for the Children's Health Insurance 
                                Program

SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.

    (a) In General.--Section 2105(b) of the Social Security Act (42 
U.S.C. 1397ee(b)) is amended by adding at the end the following: 
``Notwithstanding the preceding sentence, during the period that begins 
on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP 
determined for a State for a fiscal year (or for any portion of a 
fiscal year occurring during such period) shall be increased by 23 
percentage points, but in no case shall exceed 100 percent. The 
increase in the enhanced FMAP under the preceding sentence shall not 
apply with respect to determining the payment to a State under 
subsection (a)(1) for expenditures described in subparagraph (D)(iv), 
paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first 
sentence of section 1905(b).''.
    (b) Maintenance of Effort.--
        (1) In general.--Section 2105(d) of the Social Security Act (42 
    U.S.C. 1397ee(d)) is amended by adding at the end the following:
        ``(3) Continuation of eligibility standards for children until 
    october 1, 2019.--
            ``(A) In general.--During the period that begins on the 
        date of enactment of the Patient Protection and Affordable Care 
        Act and ends on September 30, 2019, a State shall not have in 
        effect eligibility standards, methodologies, or procedures 
        under its State child health plan (including any waiver under 
        such plan) for children (including children provided medical 
        assistance for which payment is made under section 
        2105(a)(1)(A)) that are more restrictive than the eligibility 
        standards, methodologies, or procedures, respectively, under 
        such plan (or waiver) as in effect on the date of enactment of 
        that Act. The preceding sentence shall not be construed as 
        preventing a State during such period from--
                ``(i) applying eligibility standards, methodologies, or 
            procedures for children under the State child health plan 
            or under any waiver of the plan that are less restrictive 
            than the eligibility standards, methodologies, or 
            procedures, respectively, for children under the plan or 
            waiver that are in effect on the date of enactment of such 
            Act; or
                ``(ii) imposing a limitation described in section 
            2112(b)(7) for a fiscal year in order to limit expenditures 
            under the State child health plan to those for which 
            Federal financial participation is available under this 
            section for the fiscal year.
            ``(B) Assurance of exchange coverage for targeted low-
        income children unable to be provided child health assistance 
        as a result of funding shortfalls.--In the event that 
        allotments provided under section 2104 are insufficient to 
        provide coverage to all children who are eligible to be 
        targeted low-income children under the State child health plan 
        under this title, a State shall establish procedures to ensure 
        that such children are provided coverage through an Exchange 
        established by the State under section 1311 of the Patient 
        Protection and Affordable Care Act.''.
        (2) Conforming amendment to title xxi medicaid maintenance of 
    effort.--Section 2105(d)(1) of the Social Security Act (42 U.S.C. 
    1397ee(d)(1)) is amended by adding before the period ``, except as 
    required under section 1902(e)(14)''.
    (c) No Enrollment Bonus Payments for Children Enrolled After Fiscal 
Year 2013.--Section 2105(a)(3)(F)(iii) of the Social Security Act (42 
U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ``or any children 
enrolled on or after October 1, 2013'' before the period.
    (d) Income Eligibility Determined Using Modified Gross Income.--
        (1) State plan requirement.--Section 2102(b)(1)(B) of the 
    Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
            (A) in clause (iii), by striking ``and'' after the 
        semicolon;
            (B) in clause (iv), by striking the period and inserting 
        ``; and''; and
            (C) by adding at the end the following:
                ``(v) shall, beginning January 1, 2014, use modified 
            gross income and household income (as defined in section 
            36B(d)(2) of the Internal Revenue Code of 1986) to 
            determine eligibility for child health assistance under the 
            State child health plan or under any waiver of such plan 
            and for any other purpose applicable under the plan or 
            waiver for which a determination of income is required, 
            including with respect to the imposition of premiums and 
            cost-sharing, consistent with section 1902(e)(14).''.
        (2) Conforming amendment.--Section 2107(e)(1) of the Social 
    Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
            (A) by redesignating subparagraphs (E) through (L) as 
        subparagraphs (F) through (M), respectively; and
            (B) by inserting after subparagraph (D), the following:
            ``(E) Section 1902(e)(14) (relating to income determined 
        using modified gross income and household income).''.
    (e) Application of Streamlined Enrollment System.--Section 
2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as 
amended by subsection (d)(2), is amended by adding at the end the 
following:
            ``(N) Section 1943(b) (relating to coordination with State 
        Exchanges and the State Medicaid agency).''.
    (f) CHIP Eligibility for Children Ineligible for Medicaid as a 
Result of Elimination of Disregards.--Notwithstanding any other 
provision of law, a State shall treat any child who is determined to be 
ineligible for medical assistance under the State Medicaid plan or 
under a waiver of the plan as a result of the elimination of the 
application of an income disregard based on expense or type of income, 
as required under section 1902(e)(14) of the Social Security Act (as 
added by this Act), as a targeted low-income child under section 
2110(b) (unless the child is excluded under paragraph (2) of that 
section) and shall provide child health assistance to the child under 
the State child health plan (whether implemented under title XIX or 
XXI, or both, of the Social Security Act).

SEC. 2102. TECHNICAL CORRECTIONS.

    (a) CHIPRA.--Effective as if included in the enactment of the 
Children's Health Insurance Program Reauthorization Act of 2009 (Public 
Law 111-3) (in this section referred to as ``CHIPRA''):
        (1) Section 2104(m) of the Social Security Act, as added by 
    section 102 of CHIPRA, is amended--
            (A) by redesignating paragraph (7) as paragraph (8); and
            (B) by inserting after paragraph (6), the following:
        ``(7) Adjustment of fiscal year 2010 allotments to account for 
    changes in projected spending for certain previously approved 
    expansion programs.--For purposes of recalculating the fiscal year 
    2010 allotment, in the case of one of the 50 States or the District 
    of Columbia that has an approved State plan amendment effective 
    January 1, 2006, to provide child health assistance through the 
    provision of benefits under the State plan under title XIX for 
    children from birth through age 5 whose family income does not 
    exceed 200 percent of the poverty line, the Secretary shall 
    increase the allotment by an amount that would be equal to the 
    Federal share of expenditures that would have been claimed at the 
    enhanced FMAP rate rather than the Federal medical assistance 
    percentage matching rate for such population.''.
        (2) Section 605 of CHIPRA is amended by striking ``legal 
    residents'' and insert ``lawfully residing in the United States''.
        (3) Subclauses (I) and (II) of paragraph (3)(C)(i) of section 
    2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)), as 
    added by section 104 of CHIPRA, are each amended by striking ``, 
    respectively''.
        (4) Section 2105(a)(3)(E)(ii) of the Social Security Act (42 
    U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA, is 
    amended by striking subclause (IV).
        (5) Section 2105(c)(9)(B) of the Social Security Act (42 U.S.C. 
    1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA, is 
    amended by striking ``section 1903(a)(3)(F)'' and inserting 
    ``section 1903(a)(3)(G)''.
        (6) Section 2109(b)(2)(B) of the Social Security Act (42 U.S.C. 
    1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is amended by 
    striking ``the child population growth factor under section 
    2104(m)(5)(B)'' and inserting ``a high-performing State under 
    section 2111(b)(3)(B)''.
        (7) Section 2110(c)(9)(B)(v) of the Social Security Act (42 
    U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of CHIPRA, 
    is amended by striking ``school or school system'' and inserting 
    ``local educational agency (as defined under section 9101 of the 
    Elementary and Secondary Education Act of 1965''.
        (8) Section 211(a)(1)(B) of CHIPRA is amended--
            (A) by striking ``is amended'' and all that follows through 
        ``adding'' and inserting ``is amended by adding''; and
            (B) by redesignating the new subparagraph to be added by 
        such section to section 1903(a)(3) of the Social Security Act 
        as a new subparagraph (H).
    (b) ARRA.--Effective as if included in the enactment of section 
5006(a) of division B of the American Recovery and Reinvestment Act of 
2009 (Public Law 111-5), the second sentence of section 1916A(a)(1) of 
the Social Security Act (42 U.S.C. 1396o-1(a)(1)) is amended by 
striking ``or (i)'' and inserting ``, (i), or (j)''.

        Subtitle C--Medicaid and CHIP Enrollment Simplification

SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE HEALTH 
              INSURANCE EXCHANGES.

    Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is 
amended by adding at the end the following:

``SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE 
              HEALTH INSURANCE EXCHANGES.

    ``(a) Condition for Participation in Medicaid.--As a condition of 
the State plan under this title and receipt of any Federal financial 
assistance under section 1903(a) for calendar quarters beginning after 
January 1, 2014, a State shall ensure that the requirements of 
subsection (b) is met.
    ``(b) Enrollment Simplification and Coordination With State Health 
Insurance Exchanges and Chip.--
        ``(1) In general.--A State shall establish procedures for--
            ``(A) enabling individuals, through an Internet website 
        that meets the requirements of paragraph (4), to apply for 
        medical assistance under the State plan or under a waiver of 
        the plan, to be enrolled in the State plan or waiver, to renew 
        their enrollment in the plan or waiver, and to consent to 
        enrollment or reenrollment in the State plan through electronic 
        signature;
            ``(B) enrolling, without any further determination by the 
        State and through such website, individuals who are identified 
        by an Exchange established by the State under section 1311 of 
        the Patient Protection and Affordable Care Act as being 
        eligible for--
                ``(i) medical assistance under the State plan or under 
            a waiver of the plan; or
                ``(ii) child health assistance under the State child 
            health plan under title XXI;
            ``(C) ensuring that individuals who apply for but are 
        determined to be ineligible for medical assistance under the 
        State plan or a waiver or ineligible for child health 
        assistance under the State child health plan under title XXI, 
        are screened for eligibility for enrollment in qualified health 
        plans offered through such an Exchange and, if applicable, 
        premium assistance for the purchase of a qualified health plan 
        under section 36B of the Internal Revenue Code of 1986 (and, if 
        applicable, advance payment of such assistance under section 
        1412 of the Patient Protection and Affordable Care Act), and, 
        if eligible, enrolled in such a plan without having to submit 
        an additional or separate application, and that such 
        individuals receive information regarding reduced cost-sharing 
        for eligible individuals under section 1402 of the Patient 
        Protection and Affordable Care Act, and any other assistance or 
        subsidies available for coverage obtained through the Exchange;
            ``(D) ensuring that the State agency responsible for 
        administering the State plan under this title (in this section 
        referred to as the `State Medicaid agency'), the State agency 
        responsible for administering the State child health plan under 
        title XXI (in this section referred to as the `State CHIP 
        agency') and an Exchange established by the State under section 
        1311 of the Patient Protection and Affordable Care Act utilize 
        a secure electronic interface sufficient to allow for a 
        determination of an individual's eligibility for such medical 
        assistance, child health assistance, or premium assistance, and 
        enrollment in the State plan under this title, title XXI, or a 
        qualified health plan, as appropriate;
            ``(E) coordinating, for individuals who are enrolled in the 
        State plan or under a waiver of the plan and who are also 
        enrolled in a qualified health plan offered through such an 
        Exchange, and for individuals who are enrolled in the State 
        child health plan under title XXI and who are also enrolled in 
        a qualified health plan, the provision of medical assistance or 
        child health assistance to such individuals with the coverage 
        provided under the qualified health plan in which they are 
        enrolled, including services described in section 1905(a)(4)(B) 
        (relating to early and periodic screening, diagnostic, and 
        treatment services defined in section 1905(r)) and provided in 
        accordance with the requirements of section 1902(a)(43); and
            ``(F) conducting outreach to and enrolling vulnerable and 
        underserved populations eligible for medical assistance under 
        this title XIX or for child health assistance under title XXI, 
        including children, unaccompanied homeless youth, children and 
        youth with special health care needs, pregnant women, racial 
        and ethnic minorities, rural populations, victims of abuse or 
        trauma, individuals with mental health or substance-related 
        disorders, and individuals with HIV/AIDS.
        ``(2) Agreements with state health insurance exchanges.--The 
    State Medicaid agency and the State CHIP agency may enter into an 
    agreement with an Exchange established by the State under section 
    1311 of the Patient Protection and Affordable Care Act under which 
    the State Medicaid agency or State CHIP agency may determine 
    whether a State resident is eligible for premium assistance for the 
    purchase of a qualified health plan under section 36B of the 
    Internal Revenue Code of 1986 (and, if applicable, advance payment 
    of such assistance under section 1412 of the Patient Protection and 
    Affordable Care Act), so long as the agreement meets such 
    conditions and requirements as the Secretary of the Treasury may 
    prescribe to reduce administrative costs and the likelihood of 
    eligibility errors and disruptions in coverage.
        ``(3) Streamlined enrollment system.--The State Medicaid agency 
    and State CHIP agency shall participate in and comply with the 
    requirements for the system established under section 1413 of the 
    Patient Protection and Affordable Care Act (relating to streamlined 
    procedures for enrollment through an Exchange, Medicaid, and CHIP).
        ``(4) Enrollment website requirements.--The procedures 
    established by State under paragraph (1) shall include establishing 
    and having in operation, not later than January 1, 2014, an 
    Internet website that is linked to any website of an Exchange 
    established by the State under section 1311 of the Patient 
    Protection and Affordable Care Act and to the State CHIP agency (if 
    different from the State Medicaid agency) and allows an individual 
    who is eligible for medical assistance under the State plan or 
    under a waiver of the plan and who is eligible to receive premium 
    credit assistance for the purchase of a qualified health plan under 
    section 36B of the Internal Revenue Code of 1986 to compare the 
    benefits, premiums, and cost-sharing applicable to the individual 
    under the State plan or waiver with the benefits, premiums, and 
    cost-sharing available to the individual under a qualified health 
    plan offered through such an Exchange, including, in the case of a 
    child, the coverage that would be provided for the child through 
    the State plan or waiver with the coverage that would be provided 
    to the child through enrollment in family coverage under that plan 
    and as supplemental coverage by the State under the State plan or 
    waiver.
        ``(5) Continued need for assessment for home and community-
    based services.--Nothing in paragraph (1) shall limit or modify the 
    requirement that the State assess an individual for purposes of 
    providing home and community-based services under the State plan or 
    under any waiver of such plan for individuals described in 
    subsection (a)(10)(A)(ii)(VI).''.

SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGIBILITY 
              DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS.

    (a) In General.--Section 1902(a)(47) of the Social Security Act (42 
U.S.C. 1396a(a)(47)) is amended--
        (1) by striking ``at the option of the State, provide'' and 
    inserting ``provide--
            ``(A) at the option of the State,'';
        (2) by inserting ``and'' after the semicolon; and
        (3) by adding at the end the following:
            ``(B) that any hospital that is a participating provider 
        under the State plan may elect to be a qualified entity for 
        purposes of determining, on the basis of preliminary 
        information, whether any individual is eligible for medical 
        assistance under the State plan or under a waiver of the plan 
        for purposes of providing the individual with medical 
        assistance during a presumptive eligibility period, in the same 
        manner, and subject to the same requirements, as apply to the 
        State options with respect to populations described in section 
        1920, 1920A, or 1920B (but without regard to whether the State 
        has elected to provide for a presumptive eligibility period 
        under any such sections), subject to such guidance as the 
        Secretary shall establish;''.
    (b) Conforming Amendment.--Section 1903(u)(1)(D)(v) of such Act (42 
U.S.C. 1396b(u)(1)(D)v)) is amended--
        (1) by striking ``or for'' and inserting ``for''; and
        (2) by inserting before the period at the end the following: 
    ``, or for medical assistance provided to an individual during a 
    presumptive eligibility period resulting from a determination of 
    presumptive eligibility made by a hospital that elects under 
    section 1902(a)(47)(B) to be a qualified entity for such purpose''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2014, and apply to services furnished on or after 
that date.

             Subtitle D--Improvements to Medicaid Services

SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), is amended--
        (1) in subsection (a)--
            (A) in paragraph (27), by striking ``and'' at the end;
            (B) by redesignating paragraph (28) as paragraph (29); and
            (C) by inserting after paragraph (27) the following new 
        paragraph:
        ``(28) freestanding birth center services (as defined in 
    subsection (l)(3)(A)) and other ambulatory services that are 
    offered by a freestanding birth center (as defined in subsection 
    (l)(3)(B)) and that are otherwise included in the plan; and''; and
        (2) in subsection (l), by adding at the end the following new 
    paragraph:
    ``(3)(A) The term `freestanding birth center services' means 
services furnished to an individual at a freestanding birth center (as 
defined in subparagraph (B)) at such center.
    ``(B) The term `freestanding birth center' means a health 
facility--
        ``(i) that is not a hospital;
        ``(ii) where childbirth is planned to occur away from the 
    pregnant woman's residence;
        ``(iii) that is licensed or otherwise approved by the State to 
    provide prenatal labor and delivery or postpartum care and other 
    ambulatory services that are included in the plan; and
        ``(iv) that complies with such other requirements relating to 
    the health and safety of individuals furnished services by the 
    facility as the State shall establish.
    ``(C) A State shall provide separate payments to providers 
administering prenatal labor and delivery or postpartum care in a 
freestanding birth center (as defined in subparagraph (B)), such as 
nurse midwives and other providers of services such as birth attendants 
recognized under State law, as determined appropriate by the Secretary. 
For purposes of the preceding sentence, the term `birth attendant' 
means an individual who is recognized or registered by the State 
involved to provide health care at childbirth and who provides such 
care within the scope of practice under which the individual is legally 
authorized to perform such care under State law (or the State 
regulatory mechanism provided by State law), regardless of whether the 
individual is under the supervision of, or associated with, a physician 
or other health care provider. Nothing in this subparagraph shall be 
construed as changing State law requirements applicable to a birth 
attendant.''.
    (b) Conforming Amendment.--Section 1902(a)(10)(A) of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter 
preceding clause (i) by striking ``and (21)'' and inserting ``, (21), 
and (28)''.
    (c) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall take effect on the date of 
    the enactment of this Act and shall apply to services furnished on 
    or after such date.
        (2) Exception if state legislation required.--In the case of a 
    State plan for medical assistance under title XIX of the Social 
    Security Act which the Secretary of Health and Human Services 
    determines requires State legislation (other than legislation 
    appropriating funds) in order for the plan to meet the additional 
    requirement imposed by the amendments made by this section, the 
    State plan shall not be regarded as failing to comply with the 
    requirements of such title solely on the basis of its failure to 
    meet this additional requirement before the first day of the first 
    calendar quarter beginning after the close of the first regular 
    session of the State legislature that begins after the date of the 
    enactment of this Act. For purposes of the previous sentence, in 
    the case of a State that has a 2-year legislative session, each 
    year of such session shall be deemed to be a separate regular 
    session of the State legislature.

SEC. 2302. CONCURRENT CARE FOR CHILDREN.

    (a) In General.--Section 1905(o)(1) of the Social Security Act (42 
U.S.C. 1396d(o)(1)) is amended--
        (1) in subparagraph (A), by striking ``subparagraph (B)'' and 
    inserting ``subparagraphs (B) and (C)''; and
        (2) by adding at the end the following new subparagraph:
    ``(C) A voluntary election to have payment made for hospice care 
for a child (as defined by the State) shall not constitute a waiver of 
any rights of the child to be provided with, or to have payment made 
under this title for, services that are related to the treatment of the 
child's condition for which a diagnosis of terminal illness has been 
made.''.
    (b) Application to CHIP.--Section 2110(a)(23) of the Social 
Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting 
``(concurrent, in the case of an individual who is a child, with care 
related to the treatment of the child's condition with respect to which 
a diagnosis of terminal illness has been made'' after ``hospice care''.

SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (a) Coverage as Optional Categorically Needy Group.--
        (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
    Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 
    2001(e), is amended--
            (A) in subclause (XIX), by striking ``or'' at the end;
            (B) in subclause (XX), by adding ``or'' at the end; and
            (C) by adding at the end the following new subclause:

                    ``(XXI) who are described in subsection (ii) 
                (relating to individuals who meet certain income 
                standards);''.

        (2) Group described.--Section 1902 of such Act (42 U.S.C. 
    1396a), as amended by section 2001(d), is amended by adding at the 
    end the following new subsection:
    ``(ii)(1) Individuals described in this subsection are 
individuals--
            ``(A) whose income does not exceed an income eligibility 
        level established by the State that does not exceed the highest 
        income eligibility level established under the State plan under 
        this title (or under its State child health plan under title 
        XXI) for pregnant women; and
            ``(B) who are not pregnant.
        ``(2) At the option of a State, individuals described in this 
    subsection may include individuals who, had individuals applied on 
    or before January 1, 2007, would have been made eligible pursuant 
    to the standards and processes imposed by that State for benefits 
    described in clause (XV) of the matter following subparagraph (G) 
    of section subsection (a)(10) pursuant to a waiver granted under 
    section 1115.
        ``(3) At the option of a State, for purposes of subsection 
    (a)(17)(B), in determining eligibility for services under this 
    subsection, the State may consider only the income of the applicant 
    or recipient.''.
        (3) Limitation on benefits.--Section 1902(a)(10) of the Social 
    Security Act (42 U.S.C. 1396a(a)(10)), as amended by section 
    2001(a)(5)(A), is amended in the matter following subparagraph 
    (G)--
            (A) by striking ``and (XV)'' and inserting ``(XV)''; and
            (B) by inserting ``, and (XVI) the medical assistance made 
        available to an individual described in subsection (ii) shall 
        be limited to family planning services and supplies described 
        in section 1905(a)(4)(C) including medical diagnosis and 
        treatment services that are provided pursuant to a family 
        planning service in a family planning setting'' before the 
        semicolon.
        (4) Conforming amendments.--
            (A) Section 1905(a) of the Social Security Act (42 U.S.C. 
        1396d(a)), as amended by section 2001(e)(2)(A), is amended in 
        the matter preceding paragraph (1)--
                (i) in clause (xiv), by striking ``or'' at the end;
                (ii) in clause (xv), by adding ``or'' at the end; and
                (iii) by inserting after clause (xv) the following:
                ``(xvi) individuals described in section 1902(ii),''.
            (B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), 
        as amended by section 2001(e)(2)(B), is amended by inserting 
        ``1902(a)(10)(A)(ii)(XXI),'' after ``1902(a)(10)(A)(ii)(XX),''.
    (b) Presumptive Eligibility.--
        (1) In general.--Title XIX of the Social Security Act (42 
    U.S.C. 1396 et seq.) is amended by inserting after section 1920B 
    the following:


          ``presumptive eligibility for family planning services

    ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(ii) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(ii), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
    ``(b) Definitions.--For purposes of this section:
        ``(1) Presumptive eligibility period.--The term `presumptive 
    eligibility period' means, with respect to an individual described 
    in subsection (a), the period that--
            ``(A) begins with the date on which a qualified entity 
        determines, on the basis of preliminary information, that the 
        individual is described in section 1902(ii); and
            ``(B) ends with (and includes) the earlier of--
                ``(i) the day on which a determination is made with 
            respect to the eligibility of such individual for services 
            under the State plan; or
                ``(ii) in the case of such an individual who does not 
            file an application by the last day of the month following 
            the month during which the entity makes the determination 
            referred to in subparagraph (A), such last day.
        ``(2) Qualified entity.--
            ``(A) In general.--Subject to subparagraph (B), the term 
        `qualified entity' means any entity that--
                ``(i) is eligible for payments under a State plan 
            approved under this title; and
                ``(ii) is determined by the State agency to be capable 
            of making determinations of the type described in paragraph 
            (1)(A).
            ``(B) Rule of construction.--Nothing in this paragraph 
        shall be construed as preventing a State from limiting the 
        classes of entities that may become qualified entities in order 
        to prevent fraud and abuse.
    ``(c) Administration.--
        ``(1) In general.--The State agency shall provide qualified 
    entities with--
            ``(A) such forms as are necessary for an application to be 
        made by an individual described in subsection (a) for medical 
        assistance under the State plan; and
            ``(B) information on how to assist such individuals in 
        completing and filing such forms.
        ``(2) Notification requirements.--A qualified entity that 
    determines under subsection (b)(1)(A) that an individual described 
    in subsection (a) is presumptively eligible for medical assistance 
    under a State plan shall--
            ``(A) notify the State agency of the determination within 5 
        working days after the date on which determination is made; and
            ``(B) inform such individual at the time the determination 
        is made that an application for medical assistance is required 
        to be made by not later than the last day of the month 
        following the month during which the determination is made.
        ``(3) Application for medical assistance.--In the case of an 
    individual described in subsection (a) who is determined by a 
    qualified entity to be presumptively eligible for medical 
    assistance under a State plan, the individual shall apply for 
    medical assistance by not later than the last day of the month 
    following the month during which the determination is made.
    ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
        ``(1) is furnished to an individual described in subsection 
    (a)--
            ``(A) during a presumptive eligibility period; and
            ``(B) by a entity that is eligible for payments under the 
        State plan; and
        ``(2) is included in the care and services covered by the State 
    plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
        (2) Conforming amendments.--
            (A) Section 1902(a)(47) of the Social Security Act (42 
        U.S.C. 1396a(a)(47)), as amended by section 2202(a), is 
        amended--
                (i) in subparagraph (A), by inserting before the 
            semicolon at the end the following: ``and provide for 
            making medical assistance available to individuals 
            described in subsection (a) of section 1920C during a 
            presumptive eligibility period in accordance with such 
            section''; and
                (ii) in subparagraph (B), by striking ``or 1920B'' and 
            inserting ``1920B, or 1920C''.
            (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
        1396b(u)(1)(D)(v)), as amended by section 2202(b), is amended 
        by inserting ``or for medical assistance provided to an 
        individual described in subsection (a) of section 1920C during 
        a presumptive eligibility period under such section,'' after 
        ``1920B during a presumptive eligibility period under such 
        section,''.
    (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)), as amended by section 2001(c), is amended by adding at the end 
the following:
        ``(7) Coverage of family planning services and supplies.--
    Notwithstanding the previous provisions of this section, a State 
    may not provide for medical assistance through enrollment of an 
    individual with benchmark coverage or benchmark-equivalent coverage 
    under this section unless such coverage includes for any individual 
    described in section 1905(a)(4)(C), medical assistance for family 
    planning services and supplies in accordance with such section.''.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

    Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is 
amended by inserting ``or the care and services themselves, or both'' 
before ``(if provided in or after''.

 Subtitle E--New Options for States to Provide Long-Term Services and 
                                Supports

SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

    Section 1915 of the Social Security Act (42 U.S.C. 1396n) is 
amended by adding at the end the following:
    ``(k) State Plan Option To Provide Home and Community-based 
Attendant Services and Supports.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, beginning October 1, 2010, a State may provide through 
    a State plan amendment for the provision of medical assistance for 
    home and community-based attendant services and supports for 
    individuals who are eligible for medical assistance under the State 
    plan whose income does not exceed 150 percent of the poverty line 
    (as defined in section 2110(c)(5)) or, if greater, the income level 
    applicable for an individual who has been determined to require an 
    institutional level of care to be eligible for nursing facility 
    services under the State plan and with respect to whom there has 
    been a determination that, but for the provision of such services, 
    the individuals would require the level of care provided in a 
    hospital, a nursing facility, an intermediate care facility for the 
    mentally retarded, or an institution for mental diseases, the cost 
    of which could be reimbursed under the State plan, but only if the 
    individual chooses to receive such home and community-based 
    attendant services and supports, and only if the State meets the 
    following requirements:
            ``(A) Availability.--The State shall make available home 
        and community-based attendant services and supports to eligible 
        individuals, as needed, to assist in accomplishing activities 
        of daily living, instrumental activities of daily living, and 
        health-related tasks through hands-on assistance, supervision, 
        or cueing--
                ``(i) under a person-centered plan of services and 
            supports that is based on an assessment of functional need 
            and that is agreed to in writing by the individual or, as 
            appropriate, the individual's representative;
                ``(ii) in a home or community setting, which does not 
            include a nursing facility, institution for mental 
            diseases, or an intermediate care facility for the mentally 
            retarded;
                ``(iii) under an agency-provider model or other model 
            (as defined in paragraph (6)(C )); and
                ``(iv) the furnishing of which--

                    ``(I) is selected, managed, and dismissed by the 
                individual, or, as appropriate, with assistance from 
                the individual's representative;
                    ``(II) is controlled, to the maximum extent 
                possible, by the individual or where appropriate, the 
                individual's representative, regardless of who may act 
                as the employer of record; and
                    ``(III) provided by an individual who is qualified 
                to provide such services, including family members (as 
                defined by the Secretary).

            ``(B) Included services and supports.--In addition to 
        assistance in accomplishing activities of daily living, 
        instrumental activities of daily living, and health related 
        tasks, the home and community-based attendant services and 
        supports made available include--
                ``(i) the acquisition, maintenance, and enhancement of 
            skills necessary for the individual to accomplish 
            activities of daily living, instrumental activities of 
            daily living, and health related tasks;
                ``(ii) back-up systems or mechanisms (such as the use 
            of beepers or other electronic devices) to ensure 
            continuity of services and supports; and
                ``(iii) voluntary training on how to select, manage, 
            and dismiss attendants.
            ``(C) Excluded services and supports.--Subject to 
        subparagraph (D), the home and community-based attendant 
        services and supports made available do not include--
                ``(i) room and board costs for the individual;
                ``(ii) special education and related services provided 
            under the Individuals with Disabilities Education Act and 
            vocational rehabilitation services provided under the 
            Rehabilitation Act of 1973;
                ``(iii) assistive technology devices and assistive 
            technology services other than those under (1)(B)(ii);
                ``(iv) medical supplies and equipment; or
                ``(v) home modifications.
            ``(D) Permissible services and supports.--The home and 
        community-based attendant services and supports may include--
                ``(i) expenditures for transition costs such as rent 
            and utility deposits, first month's rent and utilities, 
            bedding, basic kitchen supplies, and other necessities 
            required for an individual to make the transition from a 
            nursing facility, institution for mental diseases, or 
            intermediate care facility for the mentally retarded to a 
            community-based home setting where the individual resides; 
            and
                ``(ii) expenditures relating to a need identified in an 
            individual's person-centered plan of services that increase 
            independence or substitute for human assistance, to the 
            extent that expenditures would otherwise be made for the 
            human assistance.
        ``(2) Increased federal financial participation.--For purposes 
    of payments to a State under section 1903(a)(1), with respect to 
    amounts expended by the State to provide medical assistance under 
    the State plan for home and community-based attendant services and 
    supports to eligible individuals in accordance with this subsection 
    during a fiscal year quarter occurring during the period described 
    in paragraph (1), the Federal medical assistance percentage 
    applicable to the State (as determined under section 1905(b)) shall 
    be increased by 6 percentage points.
        ``(3) State requirements.--In order for a State plan amendment 
    to be approved under this subsection, the State shall--
            ``(A) develop and implement such amendment in collaboration 
        with a Development and Implementation Council established by 
        the State that includes a majority of members with 
        disabilities, elderly individuals, and their representatives 
        and consults and collaborates with such individuals;
            ``(B) provide consumer controlled home and community-based 
        attendant services and supports to individuals on a statewide 
        basis, in a manner that provides such services and supports in 
        the most integrated setting appropriate to the individual's 
        needs, and without regard to the individual's age, type or 
        nature of disability, severity of disability, or the form of 
        home and community-based attendant services and supports that 
        the individual requires in order to lead an independent life;
            ``(C) with respect to expenditures during the first full 
        fiscal year in which the State plan amendment is implemented, 
        maintain or exceed the level of State expenditures for medical 
        assistance that is provided under section 1905(a), section 
        1915, section 1115, or otherwise to individuals with 
        disabilities or elderly individuals attributable to the 
        preceding fiscal year;
            ``(D) establish and maintain a comprehensive, continuous 
        quality assurance system with respect to community- based 
        attendant services and supports that--
                ``(i) includes standards for agency-based and other 
            delivery models with respect to training, appeals for 
            denials and reconsideration procedures of an individual 
            plan, and other factors as determined by the Secretary;
                ``(ii) incorporates feedback from consumers and their 
            representatives, disability organizations, providers, 
            families of disabled or elderly individuals, members of the 
            community, and others and maximizes consumer independence 
            and consumer control;
                ``(iii) monitors the health and well-being of each 
            individual who receives home and community-based attendant 
            services and supports, including a process for the 
            mandatory reporting, investigation, and resolution of 
            allegations of neglect, abuse, or exploitation in 
            connection with the provision of such services and 
            supports; and
                ``(iv) provides information about the provisions of the 
            quality assurance required under clauses (i) through (iii) 
            to each individual receiving such services; and
            ``(E) collect and report information, as determined 
        necessary by the Secretary, for the purposes of approving the 
        State plan amendment, providing Federal oversight, and 
        conducting an evaluation under paragraph (5)(A), including data 
        regarding how the State provides home and community-based 
        attendant services and supports and other home and community-
        based services, the cost of such services and supports, and how 
        the State provides individuals with disabilities who otherwise 
        qualify for institutional care under the State plan or under a 
        waiver the choice to instead receive home and community-based 
        services in lieu of institutional care.
        ``(4) Compliance with certain laws.--A State shall ensure that, 
    regardless of whether the State uses an agency-provider model or 
    other models to provide home and community-based attendant services 
    and supports under a State plan amendment under this subsection, 
    such services and supports are provided in accordance with the 
    requirements of the Fair Labor Standards Act of 1938 and applicable 
    Federal and State laws regarding--
            ``(A) withholding and payment of Federal and State income 
        and payroll taxes;
            ``(B) the provision of unemployment and workers 
        compensation insurance;
            ``(C) maintenance of general liability insurance; and
            ``(D) occupational health and safety.
        ``(5) Evaluation, data collection, and report to congress.--
            ``(A) Evaluation.--The Secretary shall conduct an 
        evaluation of the provision of home and community-based 
        attendant services and supports under this subsection in order 
        to determine the effectiveness of the provision of such 
        services and supports in allowing the individuals receiving 
        such services and supports to lead an independent life to the 
        maximum extent possible; the impact on the physical and 
        emotional health of the individuals who receive such services; 
        and an comparative analysis of the costs of services provided 
        under the State plan amendment under this subsection and those 
        provided under institutional care in a nursing facility, 
        institution for mental diseases, or an intermediate care 
        facility for the mentally retarded.
            ``(B) Data collection.--The State shall provide the 
        Secretary with the following information regarding the 
        provision of home and community-based attendant services and 
        supports under this subsection for each fiscal year for which 
        such services and supports are provided:
                ``(i) The number of individuals who are estimated to 
            receive home and community-based attendant services and 
            supports under this subsection during the fiscal year.
                ``(ii) The number of individuals that received such 
            services and supports during the preceding fiscal year.
                ``(iii) The specific number of individuals served by 
            type of disability, age, gender, education level, and 
            employment status.
                ``(iv) Whether the specific individuals have been 
            previously served under any other home and community based 
            services program under the State plan or under a waiver.
            ``(C) Reports.--Not later than--
                ``(i) December 31, 2013, the Secretary shall submit to 
            Congress and make available to the public an interim report 
            on the findings of the evaluation under subparagraph (A); 
            and
                ``(ii) December 31, 2015, the Secretary shall submit to 
            Congress and make available to the public a final report on 
            the findings of the evaluation under subparagraph (A).
        ``(6) Definitions.--In this subsection:
            ``(A) Activities of daily living.--The term `activities of 
        daily living' includes tasks such as eating, toileting, 
        grooming, dressing, bathing, and transferring.
            ``(B) Consumer controlled.--The term `consumer controlled' 
        means a method of selecting and providing services and supports 
        that allow the individual, or where appropriate, the 
        individual's representative, maximum control of the home and 
        community-based attendant services and supports, regardless of 
        who acts as the employer of record.
            ``(C) Delivery models.--
                ``(i) Agency-provider model.--The term `agency-provider 
            model' means, with respect to the provision of home and 
            community-based attendant services and supports for an 
            individual, subject to paragraph (4), a method of providing 
            consumer controlled services and supports under which 
            entities contract for the provision of such services and 
            supports.
                ``(ii) Other models.--The term `other models' means, 
            subject to paragraph (4), methods, other than an agency-
            provider model, for the provision of consumer controlled 
            services and supports. Such models may include the 
            provision of vouchers, direct cash payments, or use of a 
            fiscal agent to assist in obtaining services.
            ``(D) Health-related tasks.--The term `health-related 
        tasks' means specific tasks related to the needs of an 
        individual, which can be delegated or assigned by licensed 
        health-care professionals under State law to be performed by an 
        attendant.
            ``(E) Individual's representative.--The term `individual's 
        representative' means a parent, family member, guardian, 
        advocate, or other authorized representative of an individual
            ``(F) Instrumental activities of daily living.--The term 
        `instrumental activities of daily living' includes (but is not 
        limited to) meal planning and preparation, managing finances, 
        shopping for food, clothing, and other essential items, 
        performing essential household chores, communicating by phone 
        or other media, and traveling around and participating in the 
        community.''.

SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED 
              SERVICES.

    (a) Oversight and Assessment of the Administration of Home and 
Community-based Services.--The Secretary of Health and Human Services 
shall promulgate regulations to ensure that all States develop service 
systems that are designed to--
        (1) allocate resources for services in a manner that is 
    responsive to the changing needs and choices of beneficiaries 
    receiving non-institutionally-based long-term services and supports 
    (including such services and supports that are provided under 
    programs other the State Medicaid program), and that provides 
    strategies for beneficiaries receiving such services to maximize 
    their independence, including through the use of client-employed 
    providers;
        (2) provide the support and coordination needed for a 
    beneficiary in need of such services (and their family caregivers 
    or representative, if applicable) to design an individualized, 
    self-directed, community-supported life; and
        (3) improve coordination among, and the regulation of, all 
    providers of such services under federally and State-funded 
    programs in order to--
            (A) achieve a more consistent administration of policies 
        and procedures across programs in relation to the provision of 
        such services; and
            (B) oversee and monitor all service system functions to 
        assure--
                (i) coordination of, and effectiveness of, eligibility 
            determinations and individual assessments;
                (ii) development and service monitoring of a complaint 
            system, a management system, a system to qualify and 
            monitor providers, and systems for role-setting and 
            individual budget determinations; and
                (iii) an adequate number of qualified direct care 
            workers to provide self-directed personal assistance 
            services.
    (b) Additional State Options.--Section 1915(i) of the Social 
Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the 
following new paragraphs:
        ``(6) State option to provide home and community-based services 
    to individuals eligible for services under a waiver.--
            ``(A) In general.--A State that provides home and 
        community-based services in accordance with this subsection to 
        individuals who satisfy the needs-based criteria for the 
        receipt of such services established under paragraph (1)(A) 
        may, in addition to continuing to provide such services to such 
        individuals, elect to provide home and community-based services 
        in accordance with the requirements of this paragraph to 
        individuals who are eligible for home and community-based 
        services under a waiver approved for the State under subsection 
        (c), (d), or (e) or under section 1115 to provide such 
        services, but only for those individuals whose income does not 
        exceed 300 percent of the supplemental security income benefit 
        rate established by section 1611(b)(1).
            ``(B) Application of same requirements for individuals 
        satisfying needs-based criteria.--Subject to subparagraph (C), 
        a State shall provide home and community-based services to 
        individuals under this paragraph in the same manner and subject 
        to the same requirements as apply under the other paragraphs of 
        this subsection to the provision of home and community-based 
        services to individuals who satisfy the needs-based criteria 
        established under paragraph (1)(A).
            ``(C) Authority to offer different type, amount, duration, 
        or scope of home and community-based services.--A State may 
        offer home and community-based services to individuals under 
        this paragraph that differ in type, amount, duration, or scope 
        from the home and community-based services offered for 
        individuals who satisfy the needs-based criteria established 
        under paragraph (1)(A), so long as such services are within the 
        scope of services described in paragraph (4)(B) of subsection 
        (c) for which the Secretary has the authority to approve a 
        waiver and do not include room or board.
        ``(7) State option to offer home and community-based services 
    to specific, targeted populations.--
            ``(A) In general.--A State may elect in a State plan 
        amendment under this subsection to target the provision of home 
        and community-based services under this subsection to specific 
        populations and to differ the type, amount, duration, or scope 
        of such services to such specific populations.
            ``(B) 5-year term.--
                ``(i) In general.--An election by a State under this 
            paragraph shall be for a period of 5 years.
                ``(ii) Phase-in of services and eligibility permitted 
            during initial 5-year period.--A State making an election 
            under this paragraph may, during the first 5-year period 
            for which the election is made, phase-in the enrollment of 
            eligible individuals, or the provision of services to such 
            individuals, or both, so long as all eligible individuals 
            in the State for such services are enrolled, and all such 
            services are provided, before the end of the initial 5-year 
            period.
            ``(C) Renewal.--An election by a State under this paragraph 
        may be renewed for additional 5-year terms if the Secretary 
        determines, prior to beginning of each such renewal period, 
        that the State has--
                ``(i) adhered to the requirements of this subsection 
            and paragraph in providing services under such an election; 
            and
                ``(ii) met the State's objectives with respect to 
            quality improvement and beneficiary outcomes.''.
    (c) Removal of Limitation on Scope of Services.--Paragraph (1) of 
section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as 
amended by subsection (a), is amended by striking ``or such other 
services requested by the State as the Secretary may approve''.
    (d) Optional Eligibility Category To Provide Full Medicaid Benefits 
to Individuals Receiving Home and Community-based Services Under a 
State Plan Amendment.--
        (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
    Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 
    2304(a)(1), is amended--
            (A) in subclause (XX), by striking ``or'' at the end;
            (B) in subclause (XXI), by adding ``or'' at the end; and
            (C) by inserting after subclause (XXI), the following new 
        subclause:

                    ``(XXII) who are eligible for home and community-
                based services under needs-based criteria established 
                under paragraph (1)(A) of section 1915(i), or who are 
                eligible for home and community-based services under 
                paragraph (6) of such section, and who will receive 
                home and community-based services pursuant to a State 
                plan amendment under such subsection;''.

        (2) Conforming amendments.--
            (A) Section 1903(f)(4) of the Social Security Act (42 
        U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B), is 
        amended in the matter preceding subparagraph (A), by inserting 
        ``1902(a)(10)(A)(ii)(XXII),'' after 
        ``1902(a)(10)(A)(ii)(XXI),''.
            (B) Section 1905(a) of the Social Security Act (42 U.S.C. 
        1396d(a)), as so amended, is amended in the matter preceding 
        paragraph (1)--
                (i) in clause (xv), by striking ``or'' at the end;
                (ii) in clause (xvi), by adding ``or'' at the end; and
                (iii) by inserting after clause (xvi) the following new 
            clause:
        ``(xvii) individuals who are eligible for home and community-
    based services under needs-based criteria established under 
    paragraph (1)(A) of section 1915(i), or who are eligible for home 
    and community-based services under paragraph (6) of such section, 
    and who will receive home and community-based services pursuant to 
    a State plan amendment under such subsection,''.
    (e) Elimination of Option To Limit Number of Eligible Individuals 
or Length of Period for Grandfathered Individuals if Eligibility 
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42 
U.S.C. 1396n(i)) is amended--
        (1) by striking subparagraph (C) and inserting the following:
            ``(C) Projection of number of individuals to be provided 
        home and community-based services.--The State submits to the 
        Secretary, in such form and manner, and upon such frequency as 
        the Secretary shall specify, the projected number of 
        individuals to be provided home and community-based 
        services.''; and
        (2) in subclause (II) of subparagraph (D)(ii), by striking ``to 
    be eligible for such services for a period of at least 12 months 
    beginning on the date the individual first received medical 
    assistance for such services'' and inserting ``to continue to be 
    eligible for such services after the effective date of the 
    modification and until such time as the individual no longer meets 
    the standard for receipt of such services under such pre-modified 
    criteria''.
    (f) Elimination of Option To Waive Statewideness; Addition of 
Option To Waive Comparability.--Paragraph (3) of section 1915(i) of 
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1) 
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating 
to comparability)''.
    (g) Effective Date.--The amendments made by subsections (b) through 
(f) take effect on the first day of the first fiscal year quarter that 
begins after the date of enactment of this Act.

SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

    (a) Extension of Demonstration.--
        (1) In general.--Section 6071(h) of the Deficit Reduction Act 
    of 2005 (42 U.S.C. 1396a note) is amended--
            (A) in paragraph (1)(E), by striking ``fiscal year 2011'' 
        and inserting ``each of fiscal years 2011 through 2016''; and
            (B) in paragraph (2), by striking ``2011'' and inserting 
        ``2016''.
        (2) Evaluation.--Paragraphs (2) and (3) of section 6071(g) of 
    such Act is amended are each amended by striking ``2011'' and 
    inserting ``2016''.
    (b) Reduction of Institutional Residency Period.--
        (1) In general.--Section 6071(b)(2) of the Deficit Reduction 
    Act of 2005 (42 U.S.C. 1396a note) is amended--
            (A) in subparagraph (A)(i), by striking ``, for a period of 
        not less than 6 months or for such longer minimum period, not 
        to exceed 2 years, as may be specified by the State'' and 
        inserting ``for a period of not less than 90 consecutive 
        days''; and
            (B) by adding at the end the following:
    ``Any days that an individual resides in an institution on the 
    basis of having been admitted solely for purposes of receiving 
    short-term rehabilitative services for a period for which payment 
    for such services is limited under title XVIII shall not be taken 
    into account for purposes of determining the 90-day period required 
    under subparagraph (A)(i).''.
        (2) Effective date.--The amendments made by this subsection 
    take effect 30 days after the date of enactment of this Act.

SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY-BASED 
              SERVICES AGAINST SPOUSAL IMPOVERISHMENT.

    During the 5-year period that begins on January 1, 2014, section 
1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r-5(h)(1)(A)) 
shall be applied as though ``is eligible for medical assistance for 
home and community-based services provided under subsection (c), (d), 
or (i) of section 1915, under a waiver approved under section 1115, or 
who is eligible for such medical assistance by reason of being 
determined eligible under section 1902(a)(10)(C) or by reason of 
section 1902(f) or otherwise on the basis of a reduction of income 
based on costs incurred for medical or other remedial care, or who is 
eligible for medical assistance for home and community-based attendant 
services and supports under section 1915(k)'' were substituted in such 
section for ``(at the option of the State) is described in section 
1902(a)(10)(A)(ii)(VI)''.

SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY RESOURCE 
              CENTERS.

    Out of any funds in the Treasury not otherwise appropriated, there 
is appropriated to the Secretary of Health and Human Services, acting 
through the Assistant Secretary for Aging, $10,000,000 for each of 
fiscal years 2010 through 2014, to carry out subsections 
(a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of 
1965 (42 U.S.C. 3012).

SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

    (a) Findings.--The Senate makes the following findings:
        (1) Nearly 2 decades have passed since Congress seriously 
    considered long-term care reform. The United States Bipartisan 
    Commission on Comprehensive Health Care, also know as the ``Pepper 
    Commission'', released its ``Call for Action'' blueprint for health 
    reform in September 1990. In the 20 years since those 
    recommendations were made, Congress has never acted on the report.
        (2) In 1999, under the United States Supreme Court's decision 
    in Olmstead v. L.C., 527 U.S. 581 (1999), individuals with 
    disabilities have the right to choose to receive their long-term 
    services and supports in the community, rather than in an 
    institutional setting.
        (3) Despite the Pepper Commission and Olmstead decision, the 
    long-term care provided to our Nation's elderly and disabled has 
    not improved. In fact, for many, it has gotten far worse.
        (4) In 2007, 69 percent of Medicaid long-term care spending for 
    elderly individuals and adults with physical disabilities paid for 
    institutional services. Only 6 states spent 50 percent or more of 
    their Medicaid long-term care dollars on home and community-based 
    services for elderly individuals and adults with physical 
    disabilities while \1/2\ of the States spent less than 25 percent. 
    This disparity continues even though, on average, it is estimated 
    that Medicaid dollars can support nearly 3 elderly individuals and 
    adults with physical disabilities in home and community-based 
    services for every individual in a nursing home. Although every 
    State has chosen to provide certain services under home and 
    community-based waivers, these services are unevenly available 
    within and across States, and reach a small percentage of eligible 
    individuals.
    (b) Sense of the Senate.--It is the sense of the Senate that--
        (1) during the 111th session of Congress, Congress should 
    address long-term services and supports in a comprehensive way that 
    guarantees elderly and disabled individuals the care they need; and
        (2) long term services and supports should be made available in 
    the community in addition to in institutions.

            Subtitle F--Medicaid Prescription Drug Coverage

SEC. 2501. PRESCRIPTION DRUG REBATES.

    (a) Increase in Minimum Rebate Percentage for Single Source Drugs 
and Innovator Multiple Source Drugs.--
        (1) In general.--Section 1927(c)(1)(B) of the Social Security 
    Act (42 U.S.C. 1396r-8(c)(1)(B)) is amended--
            (A) in clause (i)--
                (i) in subclause (IV), by striking ``and'' at the end;
                (ii) in subclause (V)--

                    (I) by inserting ``and before January 1, 2010'' 
                after ``December 31, 1995,''; and
                    (II) by striking the period at the end and 
                inserting ``; and''; and

                (iii) by adding at the end the following new subclause:

                    ``(VI) except as provided in clause (iii), after 
                December 31, 2009, 23.1 percent.''; and

            (B) by adding at the end the following new clause:
                ``(iii) Minimum rebate percentage for certain drugs.--

                    ``(I) In general.--In the case of a single source 
                drug or an innovator multiple source drug described in 
                subclause (II), the minimum rebate percentage for 
                rebate periods specified in clause (i)(VI) is 17.1 
                percent.
                    ``(II) Drug described.--For purposes of subclause 
                (I), a single source drug or an innovator multiple 
                source drug described in this subclause is any of the 
                following drugs:

                        ``(aa) A clotting factor for which a separate 
                    furnishing payment is made under section 1842(o)(5) 
                    and which is included on a list of such factors 
                    specified and updated regularly by the Secretary.
                        ``(bb) A drug approved by the Food and Drug 
                    Administration exclusively for pediatric 
                    indications.''.
        (2) Recapture of total savings due to increase.--Section 
    1927(b)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended by 
    adding at the end the following new subparagraph:
            ``(C) Special rule for increased minimum rebate 
        percentage.--
                ``(i) In general.--In addition to the amounts applied 
            as a reduction under subparagraph (B), for rebate periods 
            beginning on or after January 1, 2010, during a fiscal 
            year, the Secretary shall reduce payments to a State under 
            section 1903(a) in the manner specified in clause (ii), in 
            an amount equal to the product of--

                    ``(I) 100 percent minus the Federal medical 
                assistance percentage applicable to the rebate period 
                for the State; and
                    ``(II) the amounts received by the State under such 
                subparagraph that are attributable (as estimated by the 
                Secretary based on utilization and other data) to the 
                increase in the minimum rebate percentage effected by 
                the amendments made by subsections (a)(1), (b), and (d) 
                of section 2501 of the Patient Protection and 
                Affordable Care Act, taking into account the additional 
                drugs included under the amendments made by subsection 
                (c) of section 2501 of such Act.

            The Secretary shall adjust such payment reduction for a 
            calendar quarter to the extent the Secretary determines, 
            based upon subsequent utilization and other data, that the 
            reduction for such quarter was greater or less than the 
            amount of payment reduction that should have been made.
                ``(ii) Manner of payment reduction.--The amount of the 
            payment reduction under clause (i) for a State for a 
            quarter shall be deemed an overpayment to the State under 
            this title to be disallowed against the State's regular 
            quarterly draw for all Medicaid spending under section 
            1903(d)(2). Such a disallowance is not subject to a 
            reconsideration under section 1116(d).''.
    (b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of 
such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
        (1) in clause (i), by striking ``and'' at the end;
        (2) in clause (ii)--
            (A) by inserting ``and before January 1, 2010,'' after 
        ``December 31, 1993,''; and
            (B) by striking the period and inserting ``; and''; and
        (3) by adding at the end the following new clause:
                ``(iii) after December 31, 2009, is 13 percent.''.
    (c) Extension of Prescription Drug Discounts to Enrollees of 
Medicaid Managed Care Organizations.--
        (1) In general.--Section 1903(m)(2)(A) of such Act (42 U.S.C. 
    1396b(m)(2)(A)) is amended--
            (A) in clause (xi), by striking ``and'' at the end;
            (B) in clause (xii), by striking the period at the end and 
        inserting ``; and''; and
            (C) by adding at the end the following:
                ``(xiii) such contract provides that (I) covered 
            outpatient drugs dispensed to individuals eligible for 
            medical assistance who are enrolled with the entity shall 
            be subject to the same rebate required by the agreement 
            entered into under section 1927 as the State is subject to 
            and that the State shall collect such rebates from 
            manufacturers, (II) capitation rates paid to the entity 
            shall be based on actual cost experience related to rebates 
            and subject to the Federal regulations requiring 
            actuarially sound rates, and (III) the entity shall report 
            to the State, on such timely and periodic basis as 
            specified by the Secretary in order to include in the 
            information submitted by the State to a manufacturer and 
            the Secretary under section 1927(b)(2)(A), information on 
            the total number of units of each dosage form and strength 
            and package size by National Drug Code of each covered 
            outpatient drug dispensed to individuals eligible for 
            medical assistance who are enrolled with the entity and for 
            which the entity is responsible for coverage of such drug 
            under this subsection (other than covered outpatient drugs 
            that under subsection (j)(1) of section 1927 are not 
            subject to the requirements of that section) and such other 
            data as the Secretary determines necessary to carry out 
            this subsection.''.
        (2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-8) is 
    amended--
            (A) in subsection (b)--
                (i) in paragraph (1)(A), in the first sentence, by 
            inserting ``, including such drugs dispensed to individuals 
            enrolled with a medicaid managed care organization if the 
            organization is responsible for coverage of such drugs'' 
            before the period; and
                (ii) in paragraph (2)(A), by inserting ``including such 
            information reported by each medicaid managed care 
            organization,'' after ``for which payment was made under 
            the plan during the period,''; and
            (B) in subsection (j), by striking paragraph (1) and 
        inserting the following:
        ``(1) Covered outpatient drugs are not subject to the 
    requirements of this section if such drugs are--
            ``(A) dispensed by health maintenance organizations, 
        including Medicaid managed care organizations that contract 
        under section 1903(m); and
            ``(B) subject to discounts under section 340B of the Public 
        Health Service Act.''.
    (d) Additional Rebate for New Formulations of Existing Drugs.--
        (1) In general.--Section 1927(c)(2) of the Social Security Act 
    (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end the 
    following new subparagraph:
            ``(C) Treatment of new formulations.--
                ``(i) In general.--Except as provided in clause (ii), 
            in the case of a drug that is a new formulation, such as an 
            extended-release formulation, of a single source drug or an 
            innovator multiple source drug, the rebate obligation with 
            respect to the drug under this section shall be the amount 
            computed under this section for the new formulation of the 
            drug or, if greater, the product of--

                    ``(I) the average manufacturer price for each 
                dosage form and strength of the new formulation of the 
                single source drug or innovator multiple source drug;
                    ``(II) the highest additional rebate (calculated as 
                a percentage of average manufacturer price) under this 
                section for any strength of the original single source 
                drug or innovator multiple source drug; and
                    ``(III) the total number of units of each dosage 
                form and strength of the new formulation paid for under 
                the State plan in the rebate period (as reported by the 
                State).

                ``(ii) No application to new formulations of orphan 
            drugs.--Clause (i) shall not apply to a new formulation of 
            a covered outpatient drug that is or has been designated 
            under section 526 of the Federal Food, Drug, and Cosmetic 
            Act (21 U.S.C. 360bb) for a rare disease or condition, 
            without regard to whether the period of market exclusivity 
            for the drug under section 527 of such Act has expired or 
            the specific indication for use of the drug.''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply to drugs that are paid for by a State after December 31, 
    2009.
    (e) Maximum Rebate Amount.--Section 1927(c)(2) of such Act (42 
U.S.C. 1396r-8(c)(2)), as amended by subsection (d), is amended by 
adding at the end the following new subparagraph:
            ``(D) Maximum rebate amount.--In no case shall the sum of 
        the amounts applied under paragraph (1)(A)(ii) and this 
        paragraph with respect to each dosage form and strength of a 
        single source drug or an innovator multiple source drug for a 
        rebate period beginning after December 31, 2009, exceed 100 
        percent of the average manufacturer price of the drug.''.
    (f) Conforming Amendments.--
        (1) In general.--Section 340B of the Public Health Service Act 
    (42 U.S.C. 256b) is amended--
            (A) in subsection (a)(2)(B)(i), by striking ``1927(c)(4)'' 
        and inserting ``1927(c)(3)''; and
            (B) by striking subsection (c); and
            (C) redesignating subsection (d) as subsection (c).
        (2) Effective date.--The amendments made by this subsection 
    take effect on January 1, 2010.

SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN DRUGS.

    (a) In General.--Section 1927(d) of the Social Security Act (42 
U.S.C. 1397r-8(d)) is amended--
        (1) in paragraph (2)--
            (A) by striking subparagraphs (E), (I), and (J), 
        respectively; and
            (B) by redesignating subparagraphs (F), (G), (H), and (K) 
        as subparagraphs (E), (F), (G), and (H), respectively; and
        (2) by adding at the end the following new paragraph:
        ``(7) Non-excludable drugs.--The following drugs or classes of 
    drugs, or their medical uses, shall not be excluded from coverage:
            ``(A) Agents when used to promote smoking cessation, 
        including agents approved by the Food and Drug Administration 
        under the over-the-counter monograph process for purposes of 
        promoting, and when used to promote, tobacco cessation.
            ``(B) Barbiturates.
            ``(C) Benzodiazepines.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2014.

SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

    (a) Pharmacy Reimbursement Limits.--
        (1) In general.--Section 1927(e) of the Social Security Act (42 
    U.S.C. 1396r-8(e)) is amended--
            (A) in paragraph (4), by striking ``(or, effective January 
        1, 2007, two or more)''; and
            (B) by striking paragraph (5) and inserting the following:
        ``(5) Use of amp in upper payment limits.--The Secretary shall 
    calculate the Federal upper reimbursement limit established under 
    paragraph (4) as no less than 175 percent of the weighted average 
    (determined on the basis of utilization) of the most recently 
    reported monthly average manufacturer prices for pharmaceutically 
    and therapeutically equivalent multiple source drug products that 
    are available for purchase by retail community pharmacies on a 
    nationwide basis. The Secretary shall implement a smoothing process 
    for average manufacturer prices. Such process shall be similar to 
    the smoothing process used in determining the average sales price 
    of a drug or biological under section 1847A.''.
        (2) Definition of amp.--Section 1927(k)(1) of such Act (42 
    U.S.C. 1396r-8(k)(1)) is amended--
            (A) in subparagraph (A), by striking ``by'' and all that 
        follows through the period and inserting ``by--
                ``(i) wholesalers for drugs distributed to retail 
            community pharmacies; and
                ``(ii) retail community pharmacies that purchase drugs 
            directly from the manufacturer.''; and
            (B) by striking subparagraph (B) and inserting the 
        following:
            ``(B) Exclusion of customary prompt pay discounts and other 
        payments.--
                ``(i) In general.--The average manufacturer price for a 
            covered outpatient drug shall exclude--

                    ``(I) customary prompt pay discounts extended to 
                wholesalers;
                    ``(II) bona fide service fees paid by manufacturers 
                to wholesalers or retail community pharmacies, 
                including (but not limited to) distribution service 
                fees, inventory management fees, product stocking 
                allowances, and fees associated with administrative 
                services agreements and patient care programs (such as 
                medication compliance programs and patient education 
                programs);
                    ``(III) reimbursement by manufacturers for 
                recalled, damaged, expired, or otherwise unsalable 
                returned goods, including (but not limited to) 
                reimbursement for the cost of the goods and any 
                reimbursement of costs associated with return goods 
                handling and processing, reverse logistics, and drug 
                destruction; and
                    ``(IV) payments received from, and rebates or 
                discounts provided to, pharmacy benefit managers, 
                managed care organizations, health maintenance 
                organizations, insurers, hospitals, clinics, mail order 
                pharmacies, long term care providers, manufacturers, or 
                any other entity that does not conduct business as a 
                wholesaler or a retail community pharmacy.

                ``(ii) Inclusion of other discounts and payments.--
            Notwithstanding clause (i), any other discounts, rebates, 
            payments, or other financial transactions that are received 
            by, paid by, or passed through to, retail community 
            pharmacies shall be included in the average manufacturer 
            price for a covered outpatient drug.''; and
            (C) in subparagraph (C), by striking ``the retail pharmacy 
        class of trade'' and inserting ``retail community pharmacies''.
        (3) Definition of multiple source drug.--Section 1927(k)(7) of 
    such Act (42 U.S.C. 1396r-8(k)(7)) is amended--
            (A) in subparagraph (A)(i)(III), by striking ``the State'' 
        and inserting ``the United States''; and
            (B) in subparagraph (C)--
                (i) in clause (i), by inserting ``and'' after the 
            semicolon;
                (ii) in clause (ii), by striking ``; and'' and 
            inserting a period; and
                (iii) by striking clause (iii).
        (4) Definitions of retail community pharmacy; wholesaler.--
    Section 1927(k) of such Act (42 U.S.C. 1396r-8(k)) is amended by 
    adding at the end the following new paragraphs:
        ``(10) Retail community pharmacy.--The term `retail community 
    pharmacy' means an independent pharmacy, a chain pharmacy, a 
    supermarket pharmacy, or a mass merchandiser pharmacy that is 
    licensed as a pharmacy by the State and that dispenses medications 
    to the general public at retail prices. Such term does not include 
    a pharmacy that dispenses prescription medications to patients 
    primarily through the mail, nursing home pharmacies, long-term care 
    facility pharmacies, hospital pharmacies, clinics, charitable or 
    not-for-profit pharmacies, government pharmacies, or pharmacy 
    benefit managers.
        ``(11) Wholesaler.--The term `wholesaler' means a drug 
    wholesaler that is engaged in wholesale distribution of 
    prescription drugs to retail community pharmacies, including (but 
    not limited to) manufacturers, repackers, distributors, own-label 
    distributors, private-label distributors, jobbers, brokers, 
    warehouses (including manufacturer's and distributor's warehouses, 
    chain drug warehouses, and wholesale drug warehouses) independent 
    wholesale drug traders, and retail community pharmacies that 
    conduct wholesale distributions.''.
    (b) Disclosure of Price Information to the Public.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
        (1) in subparagraph (A)--
            (A) in the first sentence, by inserting after clause (iii) 
        the following:
                ``(iv) not later than 30 days after the last day of 
            each month of a rebate period under the agreement, on the 
            manufacturer's total number of units that are used to 
            calculate the monthly average manufacturer price for each 
            covered outpatient drug;''; and
            (B) in the second sentence, by inserting ``(relating to the 
        weighted average of the most recently reported monthly average 
        manufacturer prices)'' after ``(D)(v)''; and
        (2) in subparagraph (D)(v), by striking ``average manufacturer 
    prices'' and inserting ``the weighted average of the most recently 
    reported monthly average manufacturer prices and the average retail 
    survey price determined for each multiple source drug in accordance 
    with subsection (f)''.
    (c) Clarification of Application of Survey of Retail Prices.--
Section 1927(f)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended--
        (1) in subparagraph (A)(i), by inserting ``with respect to a 
    retail community pharmacy,'' before ``the determination''; and
        (2) in subparagraph (C)(ii), by striking ``retail pharmacies'' 
    and inserting ``retail community pharmacies''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the first day of the first calendar year quarter that begins 
at least 180 days after the date of enactment of this Act, without 
regard to whether or not final regulations to carry out such amendments 
have been promulgated by such date.

  Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments

SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

    (a) In General.--Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r-4(f)) is amended--
        (1) in paragraph (1), by striking ``and (3)'' and inserting ``, 
    (3), and (7)'';
        (2) in paragraph (3)(A), by striking ``paragraph (6)'' and 
    inserting ``paragraphs (6) and (7)'';
        (3) by redesignating paragraph (7) as paragraph (8); and
        (4) by inserting after paragraph (6) the following new 
    paragraph:
        ``(7) Reduction of state dsh allotments once reduction in 
    uninsured threshold reached.--
            ``(A) In general.--Subject to subparagraph (E), the DSH 
        allotment for a State for fiscal years beginning with the 
        fiscal year described in subparagraph (C) (with respect to the 
        State), is equal to--
                ``(i) in the case of the first fiscal year described in 
            subparagraph (C) with respect to a State, the DSH allotment 
            that would be determined under this subsection for the 
            State for the fiscal year without application of this 
            paragraph (but after the application of subparagraph (D)), 
            reduced by the applicable percentage determined for the 
            State for the fiscal year under subparagraph (B)(i); and
                ``(ii) in the case of any subsequent fiscal year with 
            respect to the State, the DSH allotment determined under 
            this paragraph for the State for the preceding fiscal year, 
            reduced by the applicable percentage determined for the 
            State for the fiscal year under subparagraph (B)(ii).
            ``(B) Applicable percentage.--For purposes of subparagraph 
        (A), the applicable percentage for a State for a fiscal year is 
        the following:
                ``(i) Uninsured reduction threshold fiscal year.--In 
            the case of the first fiscal year described in subparagraph 
            (C) with respect to the State--

                    ``(I) if the State is a low DSH State described in 
                paragraph (5)(B), the applicable percentage is equal to 
                25 percent; and
                    ``(II) if the State is any other State, the 
                applicable percentage is 50 percent.

                ``(ii) Subsequent fiscal years in which the percentage 
            of uninsured decreases.--In the case of any fiscal year 
            after the first fiscal year described in subparagraph (C) 
            with respect to a State, if the Secretary determines on the 
            basis of the most recent American Community Survey of the 
            Bureau of the Census, that the percentage of uncovered 
            individuals residing in the State is less than the 
            percentage of such individuals determined for the State for 
            the preceding fiscal year--

                    ``(I) if the State is a low DSH State described in 
                paragraph (5)(B), the applicable percentage is equal to 
                the product of the percentage reduction in uncovered 
                individuals for the fiscal year from the preceding 
                fiscal year and 25 percent; and
                    ``(II) if the State is any other State, the 
                applicable percentage is equal to the product of the 
                percentage reduction in uncovered individuals for the 
                fiscal year from the preceding fiscal year and 50 
                percent.

            ``(C) Fiscal year described.--For purposes of subparagraph 
        (A), the fiscal year described in this subparagraph with 
        respect to a State is the first fiscal year that occurs after 
        fiscal year 2012 for which the Secretary determines, on the 
        basis of the most recent American Community Survey of the 
        Bureau of the Census, that the percentage of uncovered 
        individuals residing in the State is at least 45 percent less 
        than the percentage of such individuals determined for the 
        State for fiscal year 2009.
            ``(D) Exclusion of portions diverted for coverage 
        expansions.--For purposes of applying the applicable percentage 
        reduction under subparagraph (A) to the DSH allotment for a 
        State for a fiscal year, the DSH allotment for a State that 
        would be determined under this subsection for the State for the 
        fiscal year without the application of this paragraph (and 
        prior to any such reduction) shall not include any portion of 
        the allotment for which the Secretary has approved the State's 
        diversion to the costs of providing medical assistance or other 
        health benefits coverage under a waiver that is in effect on 
        July 2009.
            ``(E) Minimum allotment.--In no event shall the DSH 
        allotment determined for a State in accordance with this 
        paragraph for fiscal year 2013 or any succeeding fiscal year be 
        less than the amount equal to 35 percent of the DSH allotment 
        determined for the State for fiscal year 2012 under this 
        subsection (and after the application of this paragraph, if 
        applicable), increased by the percentage change in the consumer 
        price index for all urban consumers (all items, U.S. city 
        average) for each previous fiscal year occurring before the 
        fiscal year.
            ``(F) Uncovered individuals.--In this paragraph, the term 
        `uncovered individuals' means individuals with no health 
        insurance coverage at any time during a year (as determined by 
        the Secretary based on the most recent data available).''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2011.

   Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

    (a) In General.--Section 1915(h) of the Social Security Act (42 
U.S.C. 1396n(h)) is amended--
        (1) by inserting ``(1)'' after ``(h)'';
        (2) by inserting ``, or a waiver described in paragraph (2)'' 
    after ``(e)''; and
        (3) by adding at the end the following new paragraph:
    ``(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any waiver 
under subsection (b), (c), or (d), or a waiver under section 1115, that 
provides medical assistance for dual eligible individuals (including 
any such waivers under which non dual eligible individuals may be 
enrolled in addition to dual eligible individuals) may be conducted for 
a period of 5 years and, upon the request of the State, may be extended 
for additional 5-year periods unless the Secretary determines that for 
the previous waiver period the conditions for the waiver have not been 
met or it would no longer be cost-effective and efficient, or 
consistent with the purposes of this title, to extend the waiver.
    ``(B) In this paragraph, the term `dual eligible individual' means 
an individual who is entitled to, or enrolled for, benefits under part 
A of title XVIII, or enrolled for benefits under part B of title XVIII, 
and is eligible for medical assistance under the State plan under this 
title or under a waiver of such plan.''.
    (b) Conforming Amendments.--
        (1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
            (A) in subsection (b), by adding at the end the following 
        new sentence: ``Subsection (h)(2) shall apply to a waiver under 
        this subsection.'';
            (B) in subsection (c)(3), in the second sentence, by 
        inserting ``(other than a waiver described in subsection 
        (h)(2))'' after ``A waiver under this subsection'';
            (C) in subsection (d)(3), in the second sentence, by 
        inserting ``(other than a waiver described in subsection 
        (h)(2))'' after ``A waiver under this subsection''.
        (2) Section 1115 of such Act (42 U.S.C. 1315) is amended--
            (A) in subsection (e)(2), by inserting ``(5 years, in the 
        case of a waiver described in section 1915(h)(2))'' after ``3 
        years''; and
            (B) in subsection (f)(6), by inserting ``(5 years, in the 
        case of a waiver described in section 1915(h)(2))'' after ``3 
        years''.

SEC. 2602. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR DUAL 
              ELIGIBLE BENEFICIARIES.

    (a) Establishment of Federal Coordinated Health Care Office.--
        (1) In general.--Not later than March 1, 2010, the Secretary of 
    Health and Human Services (in this section referred to as the 
    ``Secretary'') shall establish a Federal Coordinated Health Care 
    Office.
        (2) Establishment and reporting to cms administrator.--The 
    Federal Coordinated Health Care Office--
            (A) shall be established within the Centers for Medicare & 
        Medicaid Services; and
            (B) have as the Office a Director who shall be appointed 
        by, and be in direct line of authority to, the Administrator of 
        the Centers for Medicare & Medicaid Services.
    (b) Purpose.--The purpose of the Federal Coordinated Health Care 
Office is to bring together officers and employees of the Medicare and 
Medicaid programs at the Centers for Medicare & Medicaid Services in 
order to--
        (1) more effectively integrate benefits under the Medicare 
    program under title XVIII of the Social Security Act and the 
    Medicaid program under title XIX of such Act; and
        (2) improve the coordination between the Federal Government and 
    States for individuals eligible for benefits under both such 
    programs in order to ensure that such individuals get full access 
    to the items and services to which they are entitled under titles 
    XVIII and XIX of the Social Security Act.
    (c) Goals.--The goals of the Federal Coordinated Health Care Office 
are as follows:
        (1) Providing dual eligible individuals full access to the 
    benefits to which such individuals are entitled under the Medicare 
    and Medicaid programs.
        (2) Simplifying the processes for dual eligible individuals to 
    access the items and services they are entitled to under the 
    Medicare and Medicaid programs.
        (3) Improving the quality of health care and long-term services 
    for dual eligible individuals.
        (4) Increasing dual eligible individuals' understanding of and 
    satisfaction with coverage under the Medicare and Medicaid 
    programs.
        (5) Eliminating regulatory conflicts between rules under the 
    Medicare and Medicaid programs.
        (6) Improving care continuity and ensuring safe and effective 
    care transitions for dual eligible individuals.
        (7) Eliminating cost-shifting between the Medicare and Medicaid 
    program and among related health care providers.
        (8) Improving the quality of performance of providers of 
    services and suppliers under the Medicare and Medicaid programs.
    (d) Specific Responsibilities.--The specific responsibilities of 
the Federal Coordinated Health Care Office are as follows:
        (1) Providing States, specialized MA plans for special needs 
    individuals (as defined in section 1859(b)(6) of the Social 
    Security Act (42 U.S.C. 1395w-28(b)(6))), physicians and other 
    relevant entities or individuals with the education and tools 
    necessary for developing programs that align benefits under the 
    Medicare and Medicaid programs for dual eligible individuals.
        (2) Supporting State efforts to coordinate and align acute care 
    and long-term care services for dual eligible individuals with 
    other items and services furnished under the Medicare program.
        (3) Providing support for coordination of contracting and 
    oversight by States and the Centers for Medicare & Medicaid 
    Services with respect to the integration of the Medicare and 
    Medicaid programs in a manner that is supportive of the goals 
    described in paragraph (3).
        (4) To consult and coordinate with the Medicare Payment 
    Advisory Commission established under section 1805 of the Social 
    Security Act (42 U.S.C. 1395b-6) and the Medicaid and CHIP Payment 
    and Access Commission established under section 1900 of such Act 
    (42 U.S.C. 1396) with respect to policies relating to the 
    enrollment in, and provision of, benefits to dual eligible 
    individuals under the Medicare program under title XVIII of the 
    Social Security Act and the Medicaid program under title XIX of 
    such Act.
        (5) To study the provision of drug coverage for new full-
    benefit dual eligible individuals (as defined in section 1935(c)(6) 
    of the Social Security Act (42 U.S.C. 1396u-5(c)(6)), as well as to 
    monitor and report annual total expenditures, health outcomes, and 
    access to benefits for all dual eligible individuals.
    (e) Report.--The Secretary shall, as part of the budget transmitted 
under section 1105(a) of title 31, United States Code, submit to 
Congress an annual report containing recommendations for legislation 
that would improve care coordination and benefits for dual eligible 
individuals.
    (f) Dual Eligible Defined.--In this section, the term ``dual 
eligible individual'' means an individual who is entitled to, or 
enrolled for, benefits under part A of title XVIII of the Social 
Security Act, or enrolled for benefits under part B of title XVIII of 
such Act, and is eligible for medical assistance under a State plan 
under title XIX of such Act or under a waiver of such plan.

    Subtitle I--Improving the Quality of Medicaid for Patients and 
                               Providers

SEC. 2701. ADULT HEALTH QUALITY MEASURES.

    Title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as 
amended by section 401 of the Children's Health Insurance Program 
Reauthorization Act of 2009 (Public Law 111-3), is amended by inserting 
after section 1139A the following new section:

``SEC. 1139B. ADULT HEALTH QUALITY MEASURES.

    ``(a) Development of Core Set of Health Care Quality Measures for 
Adults Eligible for Benefits Under Medicaid.--The Secretary shall 
identify and publish a recommended core set of adult health quality 
measures for Medicaid eligible adults in the same manner as the 
Secretary identifies and publishes a core set of child health quality 
measures under section 1139A, including with respect to identifying and 
publishing existing adult health quality measures that are in use under 
public and privately sponsored health care coverage arrangements, or 
that are part of reporting systems that measure both the presence and 
duration of health insurance coverage over time, that may be applicable 
to Medicaid eligible adults.
    ``(b) Deadlines.--
        ``(1) Recommended measures.--Not later than January 1, 2011, 
    the Secretary shall identify and publish for comment a recommended 
    core set of adult health quality measures for Medicaid eligible 
    adults.
        ``(2) Dissemination.--Not later than January 1, 2012, the 
    Secretary shall publish an initial core set of adult health quality 
    measures that are applicable to Medicaid eligible adults.
        ``(3) Standardized reporting.--Not later than January 1, 2013, 
    the Secretary, in consultation with States, shall develop a 
    standardized format for reporting information based on the initial 
    core set of adult health quality measures and create procedures to 
    encourage States to use such measures to voluntarily report 
    information regarding the quality of health care for Medicaid 
    eligible adults.
        ``(4) Reports to congress.--Not later than January 1, 2014, and 
    every 3 years thereafter, the Secretary shall include in the report 
    to Congress required under section 1139A(a)(6) information similar 
    to the information required under that section with respect to the 
    measures established under this section.
        ``(5) Establishment of medicaid quality measurement program.--
            ``(A) In general.--Not later than 12 months after the 
        release of the recommended core set of adult health quality 
        measures under paragraph (1)), the Secretary shall establish a 
        Medicaid Quality Measurement Program in the same manner as the 
        Secretary establishes the pediatric quality measures program 
        under section 1139A(b). The aggregate amount awarded by the 
        Secretary for grants and contracts for the development, 
        testing, and validation of emerging and innovative evidence-
        based measures under such program shall equal the aggregate 
        amount awarded by the Secretary for grants under section 
        1139A(b)(4)(A)
            ``(B) Revising, strengthening, and improving initial core 
        measures.--Beginning not later than 24 months after the 
        establishment of the Medicaid Quality Measurement Program, and 
        annually thereafter, the Secretary shall publish recommended 
        changes to the initial core set of adult health quality 
        measures that shall reflect the results of the testing, 
        validation, and consensus process for the development of adult 
        health quality measures.
    ``(c) Construction.--Nothing in this section shall be construed as 
supporting the restriction of coverage, under title XIX or XXI or 
otherwise, to only those services that are evidence-based, or in anyway 
limiting available services.
    ``(d) Annual State Reports Regarding State-Specific Quality of Care 
Measures Applied Under Medicaid.--
        ``(1) Annual state reports.--Each State with a State plan or 
    waiver approved under title XIX shall annually report (separately 
    or as part of the annual report required under section 1139A(c)), 
    to the Secretary on the--
            ``(A) State-specific adult health quality measures applied 
        by the State under the such plan, including measures described 
        in subsection (a)(5); and
            ``(B) State-specific information on the quality of health 
        care furnished to Medicaid eligible adults under such plan, 
        including information collected through external quality 
        reviews of managed care organizations under section 1932 and 
        benchmark plans under section 1937.
        ``(2) Publication.--Not later than September 30, 2014, and 
    annually thereafter, the Secretary shall collect, analyze, and make 
    publicly available the information reported by States under 
    paragraph (1).
    ``(e) Appropriation.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal years 
2010 through 2014, $60,000,000 for the purpose of carrying out this 
section. Funds appropriated under this subsection shall remain 
available until expended.''.

SEC. 2702. PAYMENT ADJUSTMENT FOR HEALTH CARE-ACQUIRED CONDITIONS.

    (a) In General.--The Secretary of Health and Human Services (in 
this subsection referred to as the ``Secretary'') shall identify 
current State practices that prohibit payment for health care-acquired 
conditions and shall incorporate the practices identified, or elements 
of such practices, which the Secretary determines appropriate for 
application to the Medicaid program in regulations. Such regulations 
shall be effective as of July 1, 2011, and shall prohibit payments to 
States under section 1903 of the Social Security Act for any amounts 
expended for providing medical assistance for health care-acquired 
conditions specified in the regulations. The regulations shall ensure 
that the prohibition on payment for health care-acquired conditions 
shall not result in a loss of access to care or services for Medicaid 
beneficiaries.
    (b) Health Care-Acquired Condition.--In this section. the term 
``health care-acquired condition'' means a medical condition for which 
an individual was diagnosed that could be identified by a secondary 
diagnostic code described in section 1886(d)(4)(D)(iv) of the Social 
Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)).
    (c) Medicare Provisions.--In carrying out this section, the 
Secretary shall apply to State plans (or waivers) under title XIX of 
the Social Security Act the regulations promulgated pursuant to section 
1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relating to the 
prohibition of payments based on the presence of a secondary diagnosis 
code specified by the Secretary in such regulations, as appropriate for 
the Medicaid program. The Secretary may exclude certain conditions 
identified under title XVIII of the Social Security Act for non-payment 
under title XIX of such Act when the Secretary finds the inclusion of 
such conditions to be inapplicable to beneficiaries under title XIX.

SEC. 2703. STATE OPTION TO PROVIDE HEALTH HOMES FOR ENROLLEES WITH 
              CHRONIC CONDITIONS.

    (a) State Plan Amendment.--Title XIX of the Social Security Act (42 
U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended 
by adding at the end the following new section:
    ``Sec. 1945. State Option To Provide Coordinated Care Through a 
Health Home for Individuals With Chronic Conditions.--
    ``(a) In General.--Notwithstanding section 1902(a)(1) (relating to 
statewideness), section 1902(a)(10)(B) (relating to comparability), and 
any other provision of this title for which the Secretary determines it 
is necessary to waive in order to implement this section, beginning 
January 1, 2011, a State, at its option as a State plan amendment, may 
provide for medical assistance under this title to eligible individuals 
with chronic conditions who select a designated provider (as described 
under subsection (h)(5)), a team of health care professionals (as 
described under subsection (h)(6)) operating with such a provider, or a 
health team (as described under subsection (h)(7)) as the individual's 
health home for purposes of providing the individual with health home 
services.
    ``(b) Health Home Qualification Standards.--The Secretary shall 
establish standards for qualification as a designated provider for the 
purpose of being eligible to be a health home for purposes of this 
section.
    ``(c) Payments.--
        ``(1) In general.--A State shall provide a designated provider, 
    a team of health care professionals operating with such a provider, 
    or a health team with payments for the provision of health home 
    services to each eligible individual with chronic conditions that 
    selects such provider, team of health care professionals, or health 
    team as the individual's health home. Payments made to a designated 
    provider, a team of health care professionals operating with such a 
    provider, or a health team for such services shall be treated as 
    medical assistance for purposes of section 1903(a), except that, 
    during the first 8 fiscal year quarters that the State plan 
    amendment is in effect, the Federal medical assistance percentage 
    applicable to such payments shall be equal to 90 percent.
        ``(2) Methodology.--
            ``(A) In general.--The State shall specify in the State 
        plan amendment the methodology the State will use for 
        determining payment for the provision of health home services. 
        Such methodology for determining payment--
                ``(i) may be tiered to reflect, with respect to each 
            eligible individual with chronic conditions provided such 
            services by a designated provider, a team of health care 
            professionals operating with such a provider, or a health 
            team, as well as the severity or number of each such 
            individual's chronic conditions or the specific 
            capabilities of the provider, team of health care 
            professionals, or health team; and
                ``(ii) shall be established consistent with section 
            1902(a)(30)(A).
            ``(B) Alternate models of payment.--The methodology for 
        determining payment for provision of health home services under 
        this section shall not be limited to a per-member per-month 
        basis and may provide (as proposed by the State and subject to 
        approval by the Secretary) for alternate models of payment.
        ``(3) Planning grants.--
            ``(A) In general.--Beginning January 1, 2011, the Secretary 
        may award planning grants to States for purposes of developing 
        a State plan amendment under this section. A planning grant 
        awarded to a State under this paragraph shall remain available 
        until expended.
            ``(B) State contribution.--A State awarded a planning grant 
        shall contribute an amount equal to the State percentage 
        determined under section 1905(b) (without regard to section 
        5001 of Public Law 111-5) for each fiscal year for which the 
        grant is awarded.
            ``(C) Limitation.--The total amount of payments made to 
        States under this paragraph shall not exceed $25,000,000.
    ``(d) Hospital Referrals.--A State shall include in the State plan 
amendment a requirement for hospitals that are participating providers 
under the State plan or a waiver of such plan to establish procedures 
for referring any eligible individuals with chronic conditions who seek 
or need treatment in a hospital emergency department to designated 
providers.
    ``(e) Coordination.--A State shall consult and coordinate, as 
appropriate, with the Substance Abuse and Mental Health Services 
Administration in addressing issues regarding the prevention and 
treatment of mental illness and substance abuse among eligible 
individuals with chronic conditions.
    ``(f) Monitoring.--A State shall include in the State plan 
amendment--
        ``(1) a methodology for tracking avoidable hospital 
    readmissions and calculating savings that result from improved 
    chronic care coordination and management under this section; and
        ``(2) a proposal for use of health information technology in 
    providing health home services under this section and improving 
    service delivery and coordination across the care continuum 
    (including the use of wireless patient technology to improve 
    coordination and management of care and patient adherence to 
    recommendations made by their provider).
    ``(g) Report on Quality Measures.--As a condition for receiving 
payment for health home services provided to an eligible individual 
with chronic conditions, a designated provider shall report to the 
State, in accordance with such requirements as the Secretary shall 
specify, on all applicable measures for determining the quality of such 
services. When appropriate and feasible, a designated provider shall 
use health information technology in providing the State with such 
information.
    ``(h) Definitions.--In this section:
        ``(1) Eligible individual with chronic conditions.--
            ``(A) In general.--Subject to subparagraph (B), the term 
        `eligible individual with chronic conditions' means an 
        individual who--
                ``(i) is eligible for medical assistance under the 
            State plan or under a waiver of such plan; and
                ``(ii) has at least--

                    ``(I) 2 chronic conditions;
                    ``(II) 1 chronic condition and is at risk of having 
                a second chronic condition; or
                    ``(III) 1 serious and persistent mental health 
                condition.

            ``(B) Rule of construction.--Nothing in this paragraph 
        shall prevent the Secretary from establishing higher levels as 
        to the number or severity of chronic or mental health 
        conditions for purposes of determining eligibility for receipt 
        of health home services under this section.
        ``(2) Chronic condition.--The term `chronic condition' has the 
    meaning given that term by the Secretary and shall include, but is 
    not limited to, the following:
            ``(A) A mental health condition.
            ``(B) Substance use disorder.
            ``(C) Asthma.
            ``(D) Diabetes.
            ``(E) Heart disease.
            ``(F) Being overweight, as evidenced by having a Body Mass 
        Index (BMI) over 25.
        ``(3) Health home.--The term `health home' means a designated 
    provider (including a provider that operates in coordination with a 
    team of health care professionals) or a health team selected by an 
    eligible individual with chronic conditions to provide health home 
    services.
        ``(4) Health home services.--
            ``(A) In general.--The term `health home services' means 
        comprehensive and timely high-quality services described in 
        subparagraph (B) that are provided by a designated provider, a 
        team of health care professionals operating with such a 
        provider, or a health team.
            ``(B) Services described.--The services described in this 
        subparagraph are--
                ``(i) comprehensive care management;
                ``(ii) care coordination and health promotion;
                ``(iii) comprehensive transitional care, including 
            appropriate follow-up, from inpatient to other settings;
                ``(iv) patient and family support (including authorized 
            representatives);
                ``(v) referral to community and social support 
            services, if relevant; and
                ``(vi) use of health information technology to link 
            services, as feasible and appropriate.
        ``(5) Designated provider.--The term `designated provider' 
    means a physician, clinical practice or clinical group practice, 
    rural clinic, community health center, community mental health 
    center, home health agency, or any other entity or provider 
    (including pediatricians, gynecologists, and obstetricians) that is 
    determined by the State and approved by the Secretary to be 
    qualified to be a health home for eligible individuals with chronic 
    conditions on the basis of documentation evidencing that the 
    physician, practice, or clinic--
            ``(A) has the systems and infrastructure in place to 
        provide health home services; and
            ``(B) satisfies the qualification standards established by 
        the Secretary under subsection (b).
        ``(6) Team of health care professionals.--The term `team of 
    health care professionals' means a team of health professionals (as 
    described in the State plan amendment) that may--
            ``(A) include physicians and other professionals, such as a 
        nurse care coordinator, nutritionist, social worker, behavioral 
        health professional, or any professionals deemed appropriate by 
        the State; and
            ``(B) be free standing, virtual, or based at a hospital, 
        community health center, community mental health center, rural 
        clinic, clinical practice or clinical group practice, academic 
        health center, or any entity deemed appropriate by the State 
        and approved by the Secretary.
        ``(7) Health team.--The term `health team' has the meaning 
    given such term for purposes of section 3502 of the Patient 
    Protection and Affordable Care Act.''.
    (b) Evaluation.--
        (1) Independent evaluation.--
            (A) In general.--The Secretary shall enter into a contract 
        with an independent entity or organization to conduct an 
        evaluation and assessment of the States that have elected the 
        option to provide coordinated care through a health home for 
        Medicaid beneficiaries with chronic conditions under section 
        1945 of the Social Security Act (as added by subsection (a)) 
        for the purpose of determining the effect of such option on 
        reducing hospital admissions, emergency room visits, and 
        admissions to skilled nursing facilities.
            (B) Evaluation report.--Not later than January 1, 2017, the 
        Secretary shall report to Congress on the evaluation and 
        assessment conducted under subparagraph (A).
        (2) Survey and interim report.--
            (A) In general.--Not later than January 1, 2014, the 
        Secretary of Health and Human Services shall survey States that 
        have elected the option under section 1945 of the Social 
        Security Act (as added by subsection (a)) and report to 
        Congress on the nature, extent, and use of such option, 
        particularly as it pertains to--
                (i) hospital admission rates;
                (ii) chronic disease management;
                (iii) coordination of care for individuals with chronic 
            conditions;
                (iv) assessment of program implementation;
                (v) processes and lessons learned (as described in 
            subparagraph (B));
                (vi) assessment of quality improvements and clinical 
            outcomes under such option; and
                (vii) estimates of cost savings.
            (B)  Implementation reporting.--A State that has elected 
        the option under section 1945 of the Social Security Act (as 
        added by subsection (a)) shall report to the Secretary, as 
        necessary, on processes that have been developed and lessons 
        learned regarding provision of coordinated care through a 
        health home for Medicaid beneficiaries with chronic conditions 
        under such option.

SEC. 2704. DEMONSTRATION PROJECT TO EVALUATE INTEGRATED CARE AROUND A 
              HOSPITALIZATION.

    (a) Authority To Conduct Project.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall establish a 
    demonstration project under title XIX of the Social Security Act to 
    evaluate the use of bundled payments for the provision of 
    integrated care for a Medicaid beneficiary--
            (A) with respect to an episode of care that includes a 
        hospitalization; and
            (B) for concurrent physicians services provided during a 
        hospitalization.
        (2) Duration.--The demonstration project shall begin on January 
    1, 2012, and shall end on December 31, 2016.
    (b) Requirements.--The demonstration project shall be conducted in 
accordance with the following:
        (1) The demonstration project shall be conducted in up to 8 
    States, determined by the Secretary based on consideration of the 
    potential to lower costs under the Medicaid program while improving 
    care for Medicaid beneficiaries. A State selected to participate in 
    the demonstration project may target the demonstration project to 
    particular categories of beneficiaries, beneficiaries with 
    particular diagnoses, or particular geographic regions of the 
    State, but the Secretary shall insure that, as a whole, the 
    demonstration project is, to the greatest extent possible, 
    representative of the demographic and geographic composition of 
    Medicaid beneficiaries nationally.
        (2) The demonstration project shall focus on conditions where 
    there is evidence of an opportunity for providers of services and 
    suppliers to improve the quality of care furnished to Medicaid 
    beneficiaries while reducing total expenditures under the State 
    Medicaid programs selected to participate, as determined by the 
    Secretary.
        (3) A State selected to participate in the demonstration 
    project shall specify the 1 or more episodes of care the State 
    proposes to address in the project, the services to be included in 
    the bundled payments, and the rationale for the selection of such 
    episodes of care and services. The Secretary may modify the 
    episodes of care as well as the services to be included in the 
    bundled payments prior to or after approving the project. The 
    Secretary may also vary such factors among the different States 
    participating in the demonstration project.
        (4) The Secretary shall ensure that payments made under the 
    demonstration project are adjusted for severity of illness and 
    other characteristics of Medicaid beneficiaries within a category 
    or having a diagnosis targeted as part of the demonstration 
    project. States shall ensure that Medicaid beneficiaries are not 
    liable for any additional cost sharing than if their care had not 
    been subject to payment under the demonstration project.
        (5) Hospitals participating in the demonstration project shall 
    have or establish robust discharge planning programs to ensure that 
    Medicaid beneficiaries requiring post-acute care are appropriately 
    placed in, or have ready access to, post-acute care settings.
        (6) The Secretary and each State selected to participate in the 
    demonstration project shall ensure that the demonstration project 
    does not result in the Medicaid beneficiaries whose care is subject 
    to payment under the demonstration project being provided with less 
    items and services for which medical assistance is provided under 
    the State Medicaid program than the items and services for which 
    medical assistance would have been provided to such beneficiaries 
    under the State Medicaid program in the absence of the 
    demonstration project.
    (c) Waiver of Provisions.--Notwithstanding section 1115(a) of the 
Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such 
provisions of titles XIX, XVIII, and XI of that Act as may be necessary 
to accomplish the goals of the demonstration, ensure beneficiary access 
to acute and post-acute care, and maintain quality of care.
    (d) Evaluation and Report.--
        (1) Data.--Each State selected to participate in the 
    demonstration project under this section shall provide to the 
    Secretary, in such form and manner as the Secretary shall specify, 
    relevant data necessary to monitor outcomes, costs, and quality, 
    and evaluate the rationales for selection of the episodes of care 
    and services specified by States under subsection (b)(3).
        (2) Report.--Not later than 1 year after the conclusion of the 
    demonstration project, the Secretary shall submit a report to 
    Congress on the results of the demonstration project.

SEC. 2705. MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION PROJECT.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall, in 
coordination with the Center for Medicare and Medicaid Innovation (as 
established under section 1115A of the Social Security Act, as added by 
section 3021 of this Act), establish the Medicaid Global Payment System 
Demonstration Project under which a participating State shall adjust 
the payments made to an eligible safety net hospital system or network 
from a fee-for-service payment structure to a global capitated payment 
model.
    (b) Duration and Scope.--The demonstration project conducted under 
this section shall operate during a period of fiscal years 2010 through 
2012. The Secretary shall select not more than 5 States to participate 
in the demonstration project.
    (c) Eligible Safety Net Hospital System or Network.--For purposes 
of this section, the term ``eligible safety net hospital system or 
network'' means a large, safety net hospital system or network (as 
defined by the Secretary) that operates within a State selected by the 
Secretary under subsection (b).
    (d) Evaluation.--
        (1) Testing.--The Innovation Center shall test and evaluate the 
    demonstration project conducted under this section to examine any 
    changes in health care quality outcomes and spending by the 
    eligible safety net hospital systems or networks.
        (2) Budget neutrality.--During the testing period under 
    paragraph (1), any budget neutrality requirements under section 
    1115A(b)(3) of the Social Security Act (as so added) shall not be 
    applicable.
        (3) Modification.--During the testing period under paragraph 
    (1), the Secretary may, in the Secretary's discretion, modify or 
    terminate the demonstration project conducted under this section.
    (e) Report.--Not later than 12 months after the date of completion 
of the demonstration project under this section, the Secretary shall 
submit to Congress a report containing the results of the evaluation 
and testing conducted under subsection (d), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 2706. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION 
              PROJECT.

    (a) Authority To Conduct Demonstration.--
        (1) In general.--The Secretary of Health and Human Services 
    (referred to in this section as the ``Secretary'') shall establish 
    the Pediatric Accountable Care Organization Demonstration Project 
    to authorize a participating State to allow pediatric medical 
    providers that meet specified requirements to be recognized as an 
    accountable care organization for purposes of receiving incentive 
    payments (as described under subsection (d)), in the same manner as 
    an accountable care organization is recognized and provided with 
    incentive payments under section 1899 of the Social Security Act 
    (as added by section 3022).
        (2) Duration.--The demonstration project shall begin on January 
    1, 2012, and shall end on December 31, 2016.
    (b) Application.--A State that desires to participate in the 
demonstration project under this section shall submit to the Secretary 
an application at such time, in such manner, and containing such 
information as the Secretary may require.
    (c) Requirements.--
        (1) Performance guidelines.--The Secretary, in consultation 
    with the States and pediatric providers, shall establish guidelines 
    to ensure that the quality of care delivered to individuals by a 
    provider recognized as an accountable care organization under this 
    section is not less than the quality of care that would have 
    otherwise been provided to such individuals.
        (2) Savings requirement.--A participating State, in 
    consultation with the Secretary, shall establish an annual minimal 
    level of savings in expenditures for items and services covered 
    under the Medicaid program under title XIX of the Social Security 
    Act and the CHIP program under title XXI of such Act that must be 
    reached by an accountable care organization in order for such 
    organization to receive an incentive payment under subsection (d).
        (3) Minimum participation period.--A provider desiring to be 
    recognized as an accountable care organization under the 
    demonstration project shall enter into an agreement with the State 
    to participate in the project for not less than a 3-year period.
    (d) Incentive Payment.--An accountable care organization that meets 
the performance guidelines established by the Secretary under 
subsection (c)(1) and achieves savings greater than the annual minimal 
savings level established by the State under subsection (c)(2) shall 
receive an incentive payment for such year equal to a portion (as 
determined appropriate by the Secretary) of the amount of such excess 
savings. The Secretary may establish an annual cap on incentive 
payments for an accountable care organization.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 2707. MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration Project.--The Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall establish a demonstration project under which an 
eligible State (as described in subsection (c)) shall provide payment 
under the State Medicaid plan under title XIX of the Social Security 
Act to an institution for mental diseases that is not publicly owned or 
operated and that is subject to the requirements of section 1867 of the 
Social Security Act (42 U.S.C. 1395dd) for the provision of medical 
assistance available under such plan to individuals who--
        (1) have attained age 21, but have not attained age 65;
        (2) are eligible for medical assistance under such plan; and
        (3) require such medical assistance to stabilize an emergency 
    medical condition.
    (b) Stabilization Review.--A State shall specify in its application 
described in subsection (c)(1) establish a mechanism for how it will 
ensure that institutions participating in the demonstration will 
determine whether or not such individuals have been stabilized (as 
defined in subsection (h)(5)). This mechanism shall commence before the 
third day of the inpatient stay. States participating in the 
demonstration project may manage the provision of services for the 
stabilization of medical emergency conditions through utilization 
review, authorization, or management practices, or the application of 
medical necessity and appropriateness criteria applicable to behavioral 
health.
    (c) Eligible State Defined.--
        (1) In general.--An eligible State is a State that has made an 
    application and has been selected pursuant to paragraphs (2) and 
    (3).
        (2) Application.--A State seeking to participate in the 
    demonstration project under this section shall submit to the 
    Secretary, at such time and in such format as the Secretary 
    requires, an application that includes such information, 
    provisions, and assurances, as the Secretary may require.
        (3) Selection.--A State shall be determined eligible for the 
    demonstration by the Secretary on a competitive basis among States 
    with applications meeting the requirements of paragraph (1). In 
    selecting State applications for the demonstration project, the 
    Secretary shall seek to achieve an appropriate national balance in 
    the geographic distribution of such projects.
    (d) Length of Demonstration Project.--The demonstration project 
established under this section shall be conducted for a period of 3 
consecutive years.
    (e) Limitations on Federal Funding.--
        (1) Appropriation.--
            (A) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to carry out this 
        section, $75,000,000 for fiscal year 2011.
            (B) Budget authority.--Subparagraph (A) constitutes budget 
        authority in advance of appropriations Act and represents the 
        obligation of the Federal Government to provide for the payment 
        of the amounts appropriated under that subparagraph.
        (2) 5-year availability.--Funds appropriated under paragraph 
    (1) shall remain available for obligation through December 31, 
    2015.
        (3) Limitation on payments.--In no case may--
            (A) the aggregate amount of payments made by the Secretary 
        to eligible States under this section exceed $75,000,000; or
            (B) payments be provided by the Secretary under this 
        section after December 31, 2015.
        (4) Funds allocated to states.--Funds shall be allocated to 
    eligible States on the basis of criteria, including a State's 
    application and the availability of funds, as determined by the 
    Secretary.
        (5) Payments to states.--The Secretary shall pay to each 
    eligible State, from its allocation under paragraph (4), an amount 
    each quarter equal to the Federal medical assistance percentage of 
    expenditures in the quarter for medical assistance described in 
    subsection (a). As a condition of receiving payment, a State shall 
    collect and report information, as determined necessary by the 
    Secretary, for the purposes of providing Federal oversight and 
    conducting an evaluation under subsection (f)(1).
    (f) Evaluation and Report to Congress.--
        (1) Evaluation.--The Secretary shall conduct an evaluation of 
    the demonstration project in order to determine the impact on the 
    functioning of the health and mental health service system and on 
    individuals enrolled in the Medicaid program and shall include the 
    following:
            (A) An assessment of access to inpatient mental health 
        services under the Medicaid program; average lengths of 
        inpatient stays; and emergency room visits.
            (B) An assessment of discharge planning by participating 
        hospitals.
            (C) An assessment of the impact of the demonstration 
        project on the costs of the full range of mental health 
        services (including inpatient, emergency and ambulatory care).
            (D) An analysis of the percentage of consumers with 
        Medicaid coverage who are admitted to inpatient facilities as a 
        result of the demonstration project as compared to those 
        admitted to these same facilities through other means.
            (E) A recommendation regarding whether the demonstration 
        project should be continued after December 31, 2013, and 
        expanded on a national basis.
        (2) Report.--Not later than December 31, 2013, the Secretary 
    shall submit to Congress and make available to the public a report 
    on the findings of the evaluation under paragraph (1).
    (g) Waiver Authority.--
        (1) In general.--The Secretary shall waive the limitation of 
    subdivision (B) following paragraph (28) of section 1905(a) of the 
    Social Security Act (42 U.S.C. 1396d(a)) (relating to limitations 
    on payments for care or services for individuals under 65 years of 
    age who are patients in an institution for mental diseases) for 
    purposes of carrying out the demonstration project under this 
    section.
        (2) Limited other waiver authority.--The Secretary may waive 
    other requirements of titles XI and XIX of the Social Security Act 
    (including the requirements of sections 1902(a)(1) (relating to 
    statewideness) and 1902(1)(10)(B) (relating to comparability)) only 
    to extent necessary to carry out the demonstration project under 
    this section.
    (h) Definitions.--In this section:
        (1) Emergency medical condition.--The term ``emergency medical 
    condition'' means, with respect to an individual, an individual who 
    expresses suicidal or homicidal thoughts or gestures, if determined 
    dangerous to self or others.
        (2) Federal medical assistance percentage.--The term ``Federal 
    medical assistance percentage'' has the meaning given that term 
    with respect to a State under section 1905(b) of the Social 
    Security Act (42 U.S.C. 1396d(b)).
        (3) Institution for mental diseases.--The term ``institution 
    for mental diseases'' has the meaning given to that term in section 
    1905(i) of the Social Security Act (42 U.S.C. 1396d(i)).
        (4) Medical assistance.--The term ``medical assistance'' has 
    the meaning given that term in section 1905(a) of the Social 
    Security Act (42 U.S.C. 1396d(a)).
        (5) Stabilized.--The term ``stabilized'' means, with respect to 
    an individual, that the emergency medical condition no longer 
    exists with respect to the individual and the individual is no 
    longer dangerous to self or others.
        (6) State.--The term ``State'' has the meaning given that term 
    for purposes of title XIX of the Social Security Act (42 U.S.C. 
    1396 et seq.).

 Subtitle J--Improvements to the Medicaid and CHIP Payment and Access 
                          Commission (MACPAC)

SEC. 2801. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MEDICAID 
              BENEFICIARIES.

    (a) In General.--Section 1900 of the Social Security Act (42 U.S.C. 
1396) is amended--
        (1) in subsection (b)--
            (A) in paragraph (1)--
                (i) in the paragraph heading, by inserting ``for all 
            states'' before ``and annual''; and
                (ii) in subparagraph (A), by striking ``children's'';
                (iii) in subparagraph (B), by inserting ``, the 
            Secretary, and States'' after ``Congress'';
                (iv) in subparagraph (C), by striking ``March 1'' and 
            inserting ``March 15''; and
                (v) in subparagraph (D), by striking ``June 1'' and 
            inserting ``June 15'';
            (B) in paragraph (2)--
                (i) in subparagraph (A)--

                    (I) in clause (i)--

                        (aa) by inserting ``the efficient provision 
                    of'' after ``expenditures for''; and
                        (bb) by striking ``hospital, skilled nursing 
                    facility, physician, Federally-qualified health 
                    center, rural health center, and other fees'' and 
                    inserting ``payments to medical, dental, and health 
                    professionals, hospitals, residential and long-term 
                    care providers, providers of home and community 
                    based services, Federally-qualified health centers 
                    and rural health clinics, managed care entities, 
                    and providers of other covered items and 
                    services''; and

                    (II) in clause (iii), by inserting ``(including how 
                such factors and methodologies enable such 
                beneficiaries to obtain the services for which they are 
                eligible, affect provider supply, and affect providers 
                that serve a disproportionate share of low-income and 
                other vulnerable populations)'' after 
                ``beneficiaries'';

                (ii) by redesignating subparagraphs (B) and (C) as 
            subparagraphs (F) and (H), respectively;
                (iii) by inserting after subparagraph (A), the 
            following:
            ``(B) Eligibility policies.--Medicaid and CHIP eligibility 
        policies, including a determination of the degree to which 
        Federal and State policies provide health care coverage to 
        needy populations.
            ``(C) Enrollment and retention processes.--Medicaid and 
        CHIP enrollment and retention processes, including a 
        determination of the degree to which Federal and State policies 
        encourage the enrollment of individuals who are eligible for 
        such programs and screen out individuals who are ineligible, 
        while minimizing the share of program expenses devoted to such 
        processes.
            ``(D) Coverage policies.--Medicaid and CHIP benefit and 
        coverage policies, including a determination of the degree to 
        which Federal and State policies provide access to the services 
        enrollees require to improve and maintain their health and 
        functional status.
            ``(E) Quality of care.--Medicaid and CHIP policies as they 
        relate to the quality of care provided under those programs, 
        including a determination of the degree to which Federal and 
        State policies achieve their stated goals and interact with 
        similar goals established by other purchasers of health care 
        services.'';
                (iv) by inserting after subparagraph (F) (as 
            redesignated by clause (ii) of this subparagraph), the 
            following:
            ``(G) Interactions with medicare and medicaid.--Consistent 
        with paragraph (11), the interaction of policies under Medicaid 
        and the Medicare program under title XVIII, including with 
        respect to how such interactions affect access to services, 
        payments, and dual eligible individuals.'' and
                (v) in subparagraph (H) (as so redesignated), by 
            inserting ``and preventive, acute, and long-term services 
            and supports'' after ``barriers'';
            (C) by redesignating paragraphs (3) through (9) as 
        paragraphs (4) through (10), respectively;
            (D) by inserting after paragraph (2), the following new 
        paragraph:
        ``(3) Recommendations and reports of state-specific data.--
    MACPAC shall--
            ``(A) review national and State-specific Medicaid and CHIP 
        data; and
            ``(B) submit reports and recommendations to Congress, the 
        Secretary, and States based on such reviews.'';
            (E) in paragraph (4), as redesignated by subparagraph (C), 
        by striking ``or any other problems'' and all that follows 
        through the period and inserting ``, as well as other factors 
        that adversely affect, or have the potential to adversely 
        affect, access to care by, or the health care status of, 
        Medicaid and CHIP beneficiaries. MACPAC shall include in the 
        annual report required under paragraph (1)(D) a description of 
        all such areas or problems identified with respect to the 
        period addressed in the report.'';
            (F) in paragraph (5), as so redesignated,--
                (i) in the paragraph heading, by inserting ``and 
            regulations'' after ``reports''; and
                (ii) by striking ``If'' and inserting the following:
            ``(A) Certain secretarial reports.--If''; and
                (iii) in the second sentence, by inserting ``and the 
            Secretary'' after ``appropriate committees of Congress''; 
            and
                (iv) by adding at the end the following:
            ``(B) Regulations.--MACPAC shall review Medicaid and CHIP 
        regulations and may comment through submission of a report to 
        the appropriate committees of Congress and the Secretary, on 
        any such regulations that affect access, quality, or efficiency 
        of health care.'';
            (G) in paragraph (10), as so redesignated, by inserting ``, 
        and shall submit with any recommendations, a report on the 
        Federal and State-specific budget consequences of the 
        recommendations'' before the period; and
            (H) by adding at the end the following:
        ``(11) Consultation and coordination with medpac.--
            ``(A) In general.--MACPAC shall consult with the Medicare 
        Payment Advisory Commission (in this paragraph referred to as 
        `MedPAC') established under section 1805 in carrying out its 
        duties under this section, as appropriate and particularly with 
        respect to the issues specified in paragraph (2) as they relate 
        to those Medicaid beneficiaries who are dually eligible for 
        Medicaid and the Medicare program under title XVIII, adult 
        Medicaid beneficiaries (who are not dually eligible for 
        Medicare), and beneficiaries under Medicare. Responsibility for 
        analysis of and recommendations to change Medicare policy 
        regarding Medicare beneficiaries, including Medicare 
        beneficiaries who are dually eligible for Medicare and 
        Medicaid, shall rest with MedPAC.
            ``(B) Information sharing.--MACPAC and MedPAC shall have 
        access to deliberations and records of the other such entity, 
        respectively, upon the request of the other such entity.
        ``(12) Consultation with states.--MACPAC shall regularly 
    consult with States in carrying out its duties under this section, 
    including with respect to developing processes for carrying out 
    such duties, and shall ensure that input from States is taken into 
    account and represented in MACPAC's recommendations and reports.
        ``(13) Coordinate and consult with the federal coordinated 
    health care office.--MACPAC shall coordinate and consult with the 
    Federal Coordinated Health Care Office established under section 
    2081 of the Patient Protection and Affordable Care Act before 
    making any recommendations regarding dual eligible individuals.
        ``(14) Programmatic oversight vested in the secretary.--
    MACPAC's authority to make recommendations in accordance with this 
    section shall not affect, or be considered to duplicate, the 
    Secretary's authority to carry out Federal responsibilities with 
    respect to Medicaid and CHIP.'';
        (2) in subsection (c)(2)--
            (A) by striking subparagraphs (A) and (B) and inserting the 
        following:
            ``(A) In general.--The membership of MACPAC shall include 
        individuals who have had direct experience as enrollees or 
        parents or caregivers of enrollees in Medicaid or CHIP and 
        individuals with national recognition for their expertise in 
        Federal safety net health programs, health finance and 
        economics, actuarial science, health plans and integrated 
        delivery systems, reimbursement for health care, health 
        information technology, and other providers of health services, 
        public health, and other related fields, who provide a mix of 
        different professions, broad geographic representation, and a 
        balance between urban and rural representation.
            ``(B) Inclusion.--The membership of MACPAC shall include 
        (but not be limited to) physicians, dentists, and other health 
        professionals, employers, third-party payers, and individuals 
        with expertise in the delivery of health services. Such 
        membership shall also include representatives of children, 
        pregnant women, the elderly, individuals with disabilities, 
        caregivers, and dual eligible individuals, current or former 
        representatives of State agencies responsible for administering 
        Medicaid, and current or former representatives of State 
        agencies responsible for administering CHIP.''.
        (3) in subsection (d)(2), by inserting ``and State'' after 
    ``Federal'';
        (4) in subsection (e)(1), in the first sentence, by inserting 
    ``and, as a condition for receiving payments under sections 1903(a) 
    and 2105(a), from any State agency responsible for administering 
    Medicaid or CHIP,'' after ``United States''; and
        (5) in subsection (f)--
            (A) in the subsection heading, by striking ``Authorization 
        of Appropriations'' and inserting ``Funding'';
            (B) in paragraph (1), by inserting ``(other than for fiscal 
        year 2010)'' before ``in the same manner''; and
            (C) by adding at the end the following:
        ``(3) Funding for fiscal year 2010.--
            ``(A) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to MACPAC to 
        carry out the provisions of this section for fiscal year 2010, 
        $9,000,000.
            ``(B) Transfer of funds.--Notwithstanding section 
        2104(a)(13), from the amounts appropriated in such section for 
        fiscal year 2010, $2,000,000 is hereby transferred and made 
        available in such fiscal year to MACPAC to carry out the 
        provisions of this section.
        ``(4) Availability.--Amounts made available under paragraphs 
    (2) and (3) to MACPAC to carry out the provisions of this section 
    shall remain available until expended.''.
    (b) Conforming MedPAC Amendments.--Section 1805(b) of the Social 
Security Act (42 U.S.C. 1395b-6(b)), is amended--
        (1) in paragraph (1)(C), by striking ``March 1 of each year 
    (beginning with 1998)'' and inserting ``March 15'';
        (2) in paragraph (1)(D), by inserting ``, and (beginning with 
    2012) containing an examination of the topics described in 
    paragraph (9), to the extent feasible'' before the period; and
        (3) by adding at the end the following:
        ``(9) Review and annual report on medicaid and commercial 
    trends.--The Commission shall review and report on aggregate trends 
    in spending, utilization, and financial performance under the 
    Medicaid program under title XIX and the private market for health 
    care services with respect to providers for which, on an aggregate 
    national basis, a significant portion of revenue or services is 
    associated with the Medicaid program. Where appropriate, the 
    Commission shall conduct such review in consultation with the 
    Medicaid and CHIP Payment and Access Commission established under 
    section 1900 (in this section referred to as `MACPAC').
        ``(10) Coordinate and consult with the federal coordinated 
    health care office.--The Commission shall coordinate and consult 
    with the Federal Coordinated Health Care Office established under 
    section 2081 of the Patient Protection and Affordable Care Act 
    before making any recommendations regarding dual eligible 
    individuals.
        ``(11) Interaction of medicaid and medicare.--The Commission 
    shall consult with MACPAC in carrying out its duties under this 
    section, as appropriate. Responsibility for analysis of and 
    recommendations to change Medicare policy regarding Medicare 
    beneficiaries, including Medicare beneficiaries who are dually 
    eligible for Medicare and Medicaid, shall rest with the Commission. 
    Responsibility for analysis of and recommendations to change 
    Medicaid policy regarding Medicaid beneficiaries, including 
    Medicaid beneficiaries who are dually eligible for Medicare and 
    Medicaid, shall rest with MACPAC.''.

    Subtitle K--Protections for American Indians and Alaska Natives

SEC. 2901. SPECIAL RULES RELATING TO INDIANS.

    (a) No Cost-sharing for Indians With Income at or Below 300 Percent 
of Poverty Enrolled in Coverage Through a State Exchange.--For 
provisions prohibiting cost sharing for Indians enrolled in any 
qualified health plan in the individual market through an Exchange, see 
section 1402(d) of the Patient Protection and Affordable Care Act.
    (b) Payer of Last Resort.--Health programs operated by the Indian 
Health Service, Indian tribes, tribal organizations, and Urban Indian 
organizations (as those terms are defined in section 4 of the Indian 
Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of 
last resort for services provided by such Service, tribes, or 
organizations to individuals eligible for services through such 
programs, notwithstanding any Federal, State, or local law to the 
contrary.
    (c) Facilitating Enrollment of Indians Under the Express Lane 
Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42 
U.S.C. 1396a(e)(13)(F)(ii)) is amended--
        (1) in the clause heading, by inserting ``and indian tribes and 
    tribal organizations'' after ``agencies''; and
        (2) by adding at the end the following:

                    ``(IV) The Indian Health Service, an Indian Tribe, 
                Tribal Organization, or Urban Indian Organization (as 
                defined in section 1139(c)).''.

    (d) Technical Corrections.--Section 1139(c) of the Social Security 
Act (42 U.S.C. 1320b-9(c)) is amended by striking ``In this section'' 
and inserting ``For purposes of this section, title XIX, and title 
XXI''.

SEC. 2902. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL MEDICARE 
              PART B SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS AND 
              CLINICS.

    (a) Reimbursement for All Medicare Part B Services Furnished by 
Certain Indian Hospitals and Clinics.--Section 1880(e)(1)(A) of the 
Social Security Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by striking 
``during the 5-year period beginning on'' and inserting ``on or 
after''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items or services furnished on or after January 1, 2010.

             Subtitle L--Maternal and Child Health Services

SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING 
              PROGRAMS.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.) is 
amended by adding at the end the following new section:

``SEC. 511. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING 
              PROGRAMS.

    ``(a) Purposes.--The purposes of this section are--
        ``(1) to strengthen and improve the programs and activities 
    carried out under this title;
        ``(2) to improve coordination of services for at risk 
    communities; and
        ``(3) to identify and provide comprehensive services to improve 
    outcomes for families who reside in at risk communities.
    ``(b) Requirement for All States To Assess Statewide Needs and 
Identify at Risk Communities.--
        ``(1) In general.--Not later than 6 months after the date of 
    enactment of this section, each State shall, as a condition of 
    receiving payments from an allotment for the State under section 
    502 for fiscal year 2011, conduct a statewide needs assessment 
    (which shall be separate from the statewide needs assessment 
    required under section 505(a)) that identifies--
            ``(A) communities with concentrations of--
                ``(i) premature birth, low-birth weight infants, and 
            infant mortality, including infant death due to neglect, or 
            other indicators of at-risk prenatal, maternal, newborn, or 
            child health;
                ``(ii) poverty;
                ``(iii) crime;
                ``(iv) domestic violence;
                ``(v) high rates of high-school drop-outs;
                ``(vi) substance abuse;
                ``(vii) unemployment; or
                ``(viii) child maltreatment;
            ``(B) the quality and capacity of existing programs or 
        initiatives for early childhood home visitation in the State 
        including--
                ``(i) the number and types of individuals and families 
            who are receiving services under such programs or 
            initiatives;
                ``(ii) the gaps in early childhood home visitation in 
            the State; and
                ``(iii) the extent to which such programs or 
            initiatives are meeting the needs of eligible families 
            described in subsection (k)(2); and
            ``(C) the State's capacity for providing substance abuse 
        treatment and counseling services to individuals and families 
        in need of such treatment or services.
        ``(2) Coordination with other assessments.--In conducting the 
    statewide needs assessment required under paragraph (1), the State 
    shall coordinate with, and take into account, other appropriate 
    needs assessments conducted by the State, as determined by the 
    Secretary, including the needs assessment required under section 
    505(a) (both the most recently completed assessment and any such 
    assessment in progress), the communitywide strategic planning and 
    needs assessments conducted in accordance with section 640(g)(1)(C) 
    of the Head Start Act, and the inventory of current unmet needs and 
    current community-based and prevention-focused programs and 
    activities to prevent child abuse and neglect, and other family 
    resource services operating in the State required under section 
    205(3) of the Child Abuse Prevention and Treatment Act.
        ``(3) Submission to the secretary.--Each State shall submit to 
    the Secretary, in such form and manner as the Secretary shall 
    require--
            ``(A) the results of the statewide needs assessment 
        required under paragraph (1); and
            ``(B) a description of how the State intends to address 
        needs identified by the assessment, particularly with respect 
        to communities identified under paragraph (1)(A), which may 
        include applying for a grant to conduct an early childhood home 
        visitation program in accordance with the requirements of this 
        section.
    ``(c) Grants for Early Childhood Home Visitation Programs.--
        ``(1) Authority to make grants.--In addition to any other 
    payments made under this title to a State, the Secretary shall make 
    grants to eligible entities to enable the entities to deliver 
    services under early childhood home visitation programs that 
    satisfy the requirements of subsection (d) to eligible families in 
    order to promote improvements in maternal and prenatal health, 
    infant health, child health and development, parenting related to 
    child development outcomes, school readiness, and the socioeconomic 
    status of such families, and reductions in child abuse, neglect, 
    and injuries.
        ``(2) Authority to use initial grant funds for planning or 
    implementation.--An eligible entity that receives a grant under 
    paragraph (1) may use a portion of the funds made available to the 
    entity during the first 6 months of the period for which the grant 
    is made for planning or implementation activities to assist with 
    the establishment of early childhood home visitation programs that 
    satisfy the requirements of subsection (d).
        ``(3) Grant duration.--The Secretary shall determine the period 
    of years for which a grant is made to an eligible entity under 
    paragraph (1).
        ``(4) Technical assistance.--The Secretary shall provide an 
    eligible entity that receives a grant under paragraph (1) with 
    technical assistance in administering programs or activities 
    conducted in whole or in part with grant funds.
    ``(d) Requirements.--The requirements of this subsection for an 
early childhood home visitation program conducted with a grant made 
under this section are as follows:
        ``(1) Quantifiable, measurable improvement in benchmark 
    areas.--
            ``(A) In general.--The eligible entity establishes, subject 
        to the approval of the Secretary, quantifiable, measurable 3- 
        and 5-year benchmarks for demonstrating that the program 
        results in improvements for the eligible families participating 
        in the program in each of the following areas:
                ``(i) Improved maternal and newborn health.
                ``(ii) Prevention of child injuries, child abuse, 
            neglect, or maltreatment, and reduction of emergency 
            department visits.
                ``(iii) Improvement in school readiness and 
            achievement.
                ``(iv) Reduction in crime or domestic violence.
                ``(v) Improvements in family economic self-sufficiency.
                ``(vi) Improvements in the coordination and referrals 
            for other community resources and supports.
            ``(B) Demonstration of improvements after 3 years.--
                ``(i) Report to the secretary.--Not later than 30 days 
            after the end of the 3rd year in which the eligible entity 
            conducts the program, the entity submits to the Secretary a 
            report demonstrating improvement in at least 4 of the areas 
            specified in subparagraph (A).
                ``(ii) Corrective action plan.--If the report submitted 
            by the eligible entity under clause (i) fails to 
            demonstrate improvement in at least 4 of the areas 
            specified in subparagraph (A), the entity shall develop and 
            implement a plan to improve outcomes in each of the areas 
            specified in subparagraph (A), subject to approval by the 
            Secretary. The plan shall include provisions for the 
            Secretary to monitor implementation of the plan and conduct 
            continued oversight of the program, including through 
            submission by the entity of regular reports to the 
            Secretary.
                ``(iii) Technical assistance.--

                    ``(I) In general.--The Secretary shall provide an 
                eligible entity required to develop and implement an 
                improvement plan under clause (ii) with technical 
                assistance to develop and implement the plan. The 
                Secretary may provide the technical assistance directly 
                or through grants, contracts, or cooperative 
                agreements.
                    ``(II) Advisory panel.--The Secretary shall 
                establish an advisory panel for purposes of obtaining 
                recommendations regarding the technical assistance 
                provided to entities in accordance with subclause (I).

                ``(iv) No improvement or failure to submit report.--If 
            the Secretary determines after a period of time specified 
            by the Secretary that an eligible entity implementing an 
            improvement plan under clause (ii) has failed to 
            demonstrate any improvement in the areas specified in 
            subparagraph (A), or if the Secretary determines that an 
            eligible entity has failed to submit the report required 
            under clause (i), the Secretary shall terminate the 
            entity's grant and may include any unexpended grant funds 
            in grants made to nonprofit organizations under subsection 
            (h)(2)(B).
            ``(C) Final report.--Not later than December 31, 2015, the 
        eligible entity shall submit a report to the Secretary 
        demonstrating improvements (if any) in each of the areas 
        specified in subparagraph (A).
        ``(2) Improvements in outcomes for individual families.--
            ``(A) In general.--The program is designed, with respect to 
        an eligible family participating in the program, to result in 
        the participant outcomes described in subparagraph (B) that the 
        eligible entity identifies on the basis of an individualized 
        assessment of the family, are relevant for that family.
            ``(B) Participant outcomes.--The participant outcomes 
        described in this subparagraph are the following:
                ``(i) Improvements in prenatal, maternal, and newborn 
            health, including improved pregnancy outcomes
                ``(ii) Improvements in child health and development, 
            including the prevention of child injuries and maltreatment 
            and improvements in cognitive, language, social-emotional, 
            and physical developmental indicators.
                ``(iii) Improvements in parenting skills.
                ``(iv) Improvements in school readiness and child 
            academic achievement.
                ``(v) Reductions in crime or domestic violence.
                ``(vi) Improvements in family economic self-
            sufficiency.
                ``(vii) Improvements in the coordination of referrals 
            for, and the provision of, other community resources and 
            supports for eligible families, consistent with State child 
            welfare agency training.
        ``(3) Core components.--The program includes the following core 
    components:
            ``(A) Service delivery model or models.--
                ``(i) In general.--Subject to clause (ii), the program 
            is conducted using 1 or more of the service delivery models 
            described in item (aa) or (bb) of subclause (I) or in 
            subclause (II) selected by the eligible entity:

                    ``(I) The model conforms to a clear consistent home 
                visitation model that has been in existence for at 
                least 3 years and is research-based, grounded in 
                relevant empirically-based knowledge, linked to program 
                determined outcomes, associated with a national 
                organization or institution of higher education that 
                has comprehensive home visitation program standards 
                that ensure high quality service delivery and 
                continuous program quality improvement, and has 
                demonstrated significant, (and in the case of the 
                service delivery model described in item (aa), 
                sustained) positive outcomes, as described in the 
                benchmark areas specified in paragraph (1)(A) and the 
                participant outcomes described in paragraph (2)(B), 
                when evaluated using well-designed and rigorous--

                        ``(aa) randomized controlled research designs, 
                    and the evaluation results have been published in a 
                    peer-reviewed journal; or
                        ``(bb) quasi-experimental research designs.

                    ``(II) The model conforms to a promising and new 
                approach to achieving the benchmark areas specified in 
                paragraph (1)(A) and the participant outcomes described 
                in paragraph (2)(B), has been developed or identified 
                by a national organization or institution of higher 
                education, and will be evaluated through well-designed 
                and rigorous process.

                ``(ii) Majority of grant funds used for evidence-based 
            models.--An eligible entity shall use not more than 25 
            percent of the amount of the grant paid to the entity for a 
            fiscal year for purposes of conducting a program using the 
            service delivery model described in clause (i)(II).
                ``(iii) Criteria for evidence of effectiveness of 
            models.--The Secretary shall establish criteria for 
            evidence of effectiveness of the service delivery models 
            and shall ensure that the process for establishing the 
            criteria is transparent and provides the opportunity for 
            public comment.
            ``(B) Additional requirements.--
                ``(i) The program adheres to a clear, consistent model 
            that satisfies the requirements of being grounded in 
            empirically-based knowledge related to home visiting and 
            linked to the benchmark areas specified in paragraph (1)(A) 
            and the participant outcomes described in paragraph (2)(B) 
            related to the purposes of the program.
                ``(ii) The program employs well-trained and competent 
            staff, as demonstrated by education or training, such as 
            nurses, social workers, educators, child development 
            specialists, or other well-trained and competent staff, and 
            provides ongoing and specific training on the model being 
            delivered.
                ``(iii) The program maintains high quality supervision 
            to establish home visitor competencies.
                ``(iv) The program demonstrates strong organizational 
            capacity to implement the activities involved.
                ``(v) The program establishes appropriate linkages and 
            referral networks to other community resources and supports 
            for eligible families.
                ``(vi) The program monitors the fidelity of program 
            implementation to ensure that services are delivered 
            pursuant to the specified model.
        ``(4) Priority for serving high-risk populations.--The eligible 
    entity gives priority to providing services under the program to 
    the following:
            ``(A) Eligible families who reside in communities in need 
        of such services, as identified in the statewide needs 
        assessment required under subsection (b)(1)(A).
            ``(B) Low-income eligible families.
            ``(C) Eligible families who are pregnant women who have not 
        attained age 21.
            ``(D) Eligible families that have a history of child abuse 
        or neglect or have had interactions with child welfare 
        services.
            ``(E) Eligible families that have a history of substance 
        abuse or need substance abuse treatment.
            ``(F) Eligible families that have users of tobacco products 
        in the home.
            ``(G) Eligible families that are or have children with low 
        student achievement.
            ``(H) Eligible families with children with developmental 
        delays or disabilities.
            ``(I) Eligible families who, or that include individuals 
        who, are serving or formerly served in the Armed Forces, 
        including such families that have members of the Armed Forces 
        who have had multiple deployments outside of the United States.
    ``(e) Application Requirements.--An eligible entity desiring a 
grant under this section shall submit an application to the Secretary 
for approval, in such manner as the Secretary may require, that 
includes the following:
        ``(1) A description of the populations to be served by the 
    entity, including specific information regarding how the entity 
    will serve high risk populations described in subsection (d)(4).
        ``(2) An assurance that the entity will give priority to 
    serving low-income eligible families and eligible families who 
    reside in at risk communities identified in the statewide needs 
    assessment required under subsection (b)(1)(A).
        ``(3) The service delivery model or models described in 
    subsection (d)(3)(A) that the entity will use under the program and 
    the basis for the selection of the model or models.
        ``(4) A statement identifying how the selection of the 
    populations to be served and the service delivery model or models 
    that the entity will use under the program for such populations is 
    consistent with the results of the statewide needs assessment 
    conducted under subsection (b).
        ``(5) The quantifiable, measurable benchmarks established by 
    the State to demonstrate that the program contributes to 
    improvements in the areas specified in subsection (d)(1)(A).
        ``(6) An assurance that the entity will obtain and submit 
    documentation or other appropriate evidence from the organization 
    or entity that developed the service delivery model or models used 
    under the program to verify that the program is implemented and 
    services are delivered according to the model specifications.
        ``(7) Assurances that the entity will establish procedures to 
    ensure that--
            ``(A) the participation of each eligible family in the 
        program is voluntary; and
            ``(B) services are provided to an eligible family in 
        accordance with the individual assessment for that family.
        ``(8) Assurances that the entity will--
            ``(A) submit annual reports to the Secretary regarding the 
        program and activities carried out under the program that 
        include such information and data as the Secretary shall 
        require; and
            ``(B) participate in, and cooperate with, data and 
        information collection necessary for the evaluation required 
        under subsection (g)(2) and other research and evaluation 
        activities carried out under subsection (h)(3).
        ``(9) A description of other State programs that include home 
    visitation services, including, if applicable to the State, other 
    programs carried out under this title with funds made available 
    from allotments under section 502(c), programs funded under title 
    IV, title II of the Child Abuse Prevention and Treatment Act 
    (relating to community-based grants for the prevention of child 
    abuse and neglect), and section 645A of the Head Start Act 
    (relating to Early Head Start programs).
        ``(10) Other information as required by the Secretary.
    ``(f) Maintenance of Effort.--Funds provided to an eligible entity 
receiving a grant under this section shall supplement, and not 
supplant, funds from other sources for early childhood home visitation 
programs or initiatives.
    ``(g) Evaluation.--
        ``(1) Independent, expert advisory panel.--The Secretary, in 
    accordance with subsection (h)(1)(A), shall appoint an independent 
    advisory panel consisting of experts in program evaluation and 
    research, education, and early childhood development--
            ``(A) to review, and make recommendations on, the design 
        and plan for the evaluation required under paragraph (2) within 
        1 year after the date of enactment of this section;
            ``(B) to maintain and advise the Secretary regarding the 
        progress of the evaluation; and
            ``(C) to comment, if the panel so desires, on the report 
        submitted under paragraph (3).
        ``(2) Authority to conduct evaluation.--On the basis of the 
    recommendations of the advisory panel under paragraph (1), the 
    Secretary shall, by grant, contract, or interagency agreement, 
    conduct an evaluation of the statewide needs assessments submitted 
    under subsection (b) and the grants made under subsections (c) and 
    (h)(3)(B). The evaluation shall include--
            ``(A) an analysis, on a State-by-State basis, of the 
        results of such assessments, including indicators of maternal 
        and prenatal health and infant health and mortality, and State 
        actions in response to the assessments; and
            ``(B) an assessment of--
                ``(i) the effect of early childhood home visitation 
            programs on child and parent outcomes, including with 
            respect to each of the benchmark areas specified in 
            subsection (d)(1)(A) and the participant outcomes described 
            in subsection (d)(2)(B);
                ``(ii) the effectiveness of such programs on different 
            populations, including the extent to which the ability of 
            programs to improve participant outcomes varies across 
            programs and populations; and
                ``(iii) the potential for the activities conducted 
            under such programs, if scaled broadly, to improve health 
            care practices, eliminate health disparities, and improve 
            health care system quality, efficiencies, and reduce costs.
        ``(3) Report.--Not later than March 31, 2015, the Secretary 
    shall submit a report to Congress on the results of the evaluation 
    conducted under paragraph (2) and shall make the report publicly 
    available.
    ``(h) Other Provisions.--
        ``(1) Intra-agency collaboration.--The Secretary shall ensure 
    that the Maternal and Child Health Bureau and the Administration 
    for Children and Families collaborate with respect to carrying out 
    this section, including with respect to--
            ``(A) reviewing and analyzing the statewide needs 
        assessments required under subsection (b), the awarding and 
        oversight of grants awarded under this section, the 
        establishment of the advisory panels required under subsections 
        (d)(1)(B)(iii)(II) and (g)(1), and the evaluation and report 
        required under subsection (g); and
            ``(B) consulting with other Federal agencies with 
        responsibility for administering or evaluating programs that 
        serve eligible families to coordinate and collaborate with 
        respect to research related to such programs and families, 
        including the Office of the Assistant Secretary for Planning 
        and Evaluation of the Department of Health and Human Services, 
        the Centers for Disease Control and Prevention, the National 
        Institute of Child Health and Human Development of the National 
        Institutes of Health, the Office of Juvenile Justice and 
        Delinquency Prevention of the Department of Justice, and the 
        Institute of Education Sciences of the Department of Education.
        ``(2) Grants to eligible entities that are not states.--
            ``(A) Indian tribes, tribal organizations, or urban indian 
        organizations.--The Secretary shall specify requirements for 
        eligible entities that are Indian Tribes (or a consortium of 
        Indian Tribes), Tribal Organizations, or Urban Indian 
        Organizations to apply for and conduct an early childhood home 
        visitation program with a grant under this section. Such 
        requirements shall, to the greatest extent practicable, be 
        consistent with the requirements applicable to eligible 
        entities that are States and shall require an Indian Tribe (or 
        consortium), Tribal Organization, or Urban Indian Organization 
        to--
                ``(i) conduct a needs assessment similar to the 
            assessment required for all States under subsection (b); 
            and
                ``(ii) establish quantifiable, measurable 3- and 5-year 
            benchmarks consistent with subsection (d)(1)(A).
            ``(B) Nonprofit organizations.--If, as of the beginning of 
        fiscal year 2012, a State has not applied or been approved for 
        a grant under this section, the Secretary may use amounts 
        appropriated under paragraph (1) of subsection (j) that are 
        available for expenditure under paragraph (3) of that 
        subsection to make a grant to an eligible entity that is a 
        nonprofit organization described in subsection (k)(1)(B) to 
        conduct an early childhood home visitation program in the 
        State. The Secretary shall specify the requirements for such an 
        organization to apply for and conduct the program which shall, 
        to the greatest extent practicable, be consistent with the 
        requirements applicable to eligible entities that are States 
        and shall require the organization to--
                ``(i) carry out the program based on the needs 
            assessment conducted by the State under subsection (b); and
                ``(ii) establish quantifiable, measurable 3- and 5-year 
            benchmarks consistent with subsection (d)(1)(A).
        ``(3) Research and other evaluation activities.--
            ``(A) In general.--The Secretary shall carry out a 
        continuous program of research and evaluation activities in 
        order to increase knowledge about the implementation and 
        effectiveness of home visiting programs, using random 
        assignment designs to the maximum extent feasible. The 
        Secretary may carry out such activities directly, or through 
        grants, cooperative agreements, or contracts.
            ``(B) Requirements.--The Secretary shall ensure that--
                ``(i) evaluation of a specific program or project is 
            conducted by persons or individuals not directly involved 
            in the operation of such program or project; and
                ``(ii) the conduct of research and evaluation 
            activities includes consultation with independent 
            researchers, State officials, and developers and providers 
            of home visiting programs on topics including research 
            design and administrative data matching.
        ``(4) Report and recommendation.--Not later than December 31, 
    2015, the Secretary shall submit a report to Congress regarding the 
    programs conducted with grants under this section. The report 
    required under this paragraph shall include--
            ``(A) information regarding the extent to which eligible 
        entities receiving grants under this section demonstrated 
        improvements in each of the areas specified in subsection 
        (d)(1)(A);
            ``(B) information regarding any technical assistance 
        provided under subsection (d)(1)(B)(iii)(I), including the type 
        of any such assistance provided; and
            ``(C) recommendations for such legislative or 
        administrative action as the Secretary determines appropriate.
    ``(i) Application of Other Provisions of Title.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    other provisions of this title shall not apply to a grant made 
    under this section.
        ``(2) Exceptions.--The following provisions of this title shall 
    apply to a grant made under this section to the same extent and in 
    the same manner as such provisions apply to allotments made under 
    section 502(c):
            ``(A) Section 504(b)(6) (relating to prohibition on 
        payments to excluded individuals and entities).
            ``(B) Section 504(c) (relating to the use of funds for the 
        purchase of technical assistance).
            ``(C) Section 504(d) (relating to a limitation on 
        administrative expenditures).
            ``(D) Section 506 (relating to reports and audits), but 
        only to the extent determined by the Secretary to be 
        appropriate for grants made under this section.
            ``(E) Section 507 (relating to penalties for false 
        statements).
            ``(F) Section 508 (relating to nondiscrimination).
            ``(G) Section 509(a) (relating to the administration of the 
        grant program).
    ``(j) Appropriations.--
        ``(1) In general.--Out of any funds in the Treasury not 
    otherwise appropriated, there are appropriated to the Secretary to 
    carry out this section--
            ``(A) $100,000,000 for fiscal year 2010;
            ``(B) $250,000,000 for fiscal year 2011;
            ``(C) $350,000,000 for fiscal year 2012;
            ``(D) $400,000,000 for fiscal year 2013; and
            ``(E) $400,000,000 for fiscal year 2014.
        ``(2) Reservations.--Of the amount appropriated under this 
    subsection for a fiscal year, the Secretary shall reserve--
            ``(A) 3 percent of such amount for purposes of making 
        grants to eligible entities that are Indian Tribes (or a 
        consortium of Indian Tribes), Tribal Organizations, or Urban 
        Indian Organizations; and
            ``(B) 3 percent of such amount for purposes of carrying out 
        subsections (d)(1)(B)(iii), (g), and (h)(3).
        ``(3) Availability.--Funds made available to an eligible entity 
    under this section for a fiscal year shall remain available for 
    expenditure by the eligible entity through the end of the second 
    succeeding fiscal year after award. Any funds that are not expended 
    by the eligible entity during the period in which the funds are 
    available under the preceding sentence may be used for grants to 
    nonprofit organizations under subsection (h)(2)(B).
    ``(k) Definitions.--In this section:
        ``(1) Eligible entity.--
            ``(A) In general.--The term `eligible entity' means a 
        State, an Indian Tribe, Tribal Organization, or Urban Indian 
        Organization, Puerto Rico, Guam, the Virgin Islands, the 
        Northern Mariana Islands, and American Samoa.
            ``(B) Nonprofit organizations.--Only for purposes of 
        awarding grants under subsection (h)(2)(B), such term shall 
        include a nonprofit organization with an established record of 
        providing early childhood home visitation programs or 
        initiatives in a State or several States.
        ``(2) Eligible family.--The term `eligible family' means--
            ``(A) a woman who is pregnant, and the father of the child 
        if the father is available; or
            ``(B) a parent or primary caregiver of a child, including 
        grandparents or other relatives of the child, and foster 
        parents, who are serving as the child's primary caregiver from 
        birth to kindergarten entry, and including a noncustodial 
        parent who has an ongoing relationship with, and at times 
        provides physical care for, the child.
        ``(3) Indian tribe; tribal organization.--The terms `Indian 
    Tribe' and `Tribal Organization', and `Urban Indian Organization' 
    have the meanings given such terms in section 4 of the Indian 
    Health Care Improvement Act.''.

SEC. 2952. SUPPORT, EDUCATION, AND RESEARCH FOR POSTPARTUM DEPRESSION.

    (a) Research on Postpartum Conditions.--
        (1) Expansion and intensification of activities.--The Secretary 
    of Health and Human Services (in this subsection and subsection (c) 
    referred to as the ``Secretary'') is encouraged to continue 
    activities on postpartum depression or postpartum psychosis (in 
    this subsection and subsection (c) referred to as ``postpartum 
    conditions''), including research to expand the understanding of 
    the causes of, and treatments for, postpartum conditions. 
    Activities under this paragraph shall include conducting and 
    supporting the following:
            (A) Basic research concerning the etiology and causes of 
        the conditions.
            (B) Epidemiological studies to address the frequency and 
        natural history of the conditions and the differences among 
        racial and ethnic groups with respect to the conditions.
            (C) The development of improved screening and diagnostic 
        techniques.
            (D) Clinical research for the development and evaluation of 
        new treatments.
            (E) Information and education programs for health care 
        professionals and the public, which may include a coordinated 
        national campaign to increase the awareness and knowledge of 
        postpartum conditions. Activities under such a national 
        campaign may--
                (i) include public service announcements through 
            television, radio, and other means; and
                (ii) focus on--

                    (I) raising awareness about screening;
                    (II) educating new mothers and their families about 
                postpartum conditions to promote earlier diagnosis and 
                treatment; and
                    (III) ensuring that such education includes 
                complete information concerning postpartum conditions, 
                including its symptoms, methods of coping with the 
                illness, and treatment resources.

        (2) Sense of congress regarding longitudinal study of relative 
    mental health consequences for women of resolving a pregnancy.--
            (A) Sense of congress.--It is the sense of Congress that 
        the Director of the National Institute of Mental Health may 
        conduct a nationally representative longitudinal study (during 
        the period of fiscal years 2010 through 2019) of the relative 
        mental health consequences for women of resolving a pregnancy 
        (intended and unintended) in various ways, including carrying 
        the pregnancy to term and parenting the child, carrying the 
        pregnancy to term and placing the child for adoption, 
        miscarriage, and having an abortion. This study may assess the 
        incidence, timing, magnitude, and duration of the immediate and 
        long-term mental health consequences (positive or negative) of 
        these pregnancy outcomes.
            (B) Report.--Subject to the completion of the study under 
        subsection (a), beginning not later than 5 years after the date 
        of the enactment of this Act, and periodically thereafter for 
        the duration of the study, such Director may prepare and submit 
        to the Congress reports on the findings of the study.
    (b) Grants To Provide Services to Individuals With a Postpartum 
Condition and Their Families.--Title V of the Social Security Act (42 
U.S.C. 701 et seq.), as amended by section 2951, is amended by adding 
at the end the following new section:

``SEC. 512. SERVICES TO INDIVIDUALS WITH A POSTPARTUM CONDITION AND 
              THEIR FAMILIES.

    ``(a) In General.--In addition to any other payments made under 
this title to a State, the Secretary may make grants to eligible 
entities for projects for the establishment, operation, and 
coordination of effective and cost-efficient systems for the delivery 
of essential services to individuals with or at risk for postpartum 
conditions and their families.
    ``(b) Certain Activities.--To the extent practicable and 
appropriate, the Secretary shall ensure that projects funded under 
subsection (a) provide education and services with respect to the 
diagnosis and management of postpartum conditions for individuals with 
or at risk for postpartum conditions and their families. The Secretary 
may allow such projects to include the following:
        ``(1) Delivering or enhancing outpatient and home-based health 
    and support services, including case management and comprehensive 
    treatment services.
        ``(2) Delivering or enhancing inpatient care management 
    services that ensure the well-being of the mother and family and 
    the future development of the infant.
        ``(3) Improving the quality, availability, and organization of 
    health care and support services (including transportation 
    services, attendant care, homemaker services, day or respite care, 
    and providing counseling on financial assistance and insurance).
        ``(4) Providing education about postpartum conditions to 
    promote earlier diagnosis and treatment. Such education may 
    include--
            ``(A) providing complete information on postpartum 
        conditions, symptoms, methods of coping with the illness, and 
        treatment resources; and
            ``(B) in the case of a grantee that is a State, hospital, 
        or birthing facility--
                ``(i) providing education to new mothers and fathers, 
            and other family members as appropriate, concerning 
            postpartum conditions before new mothers leave the health 
            facility; and
                ``(ii) ensuring that training programs regarding such 
            education are carried out at the health facility.
    ``(c) Integration With Other Programs.--To the extent practicable 
and appropriate, the Secretary may integrate the grant program under 
this section with other grant programs carried out by the Secretary, 
including the program under section 330 of the Public Health Service 
Act.
    ``(d) Requirements.--The Secretary shall establish requirements for 
grants made under this section that include a limit on the amount of 
grants funds that may be used for administration, accounting, 
reporting, or program oversight functions and a requirement for each 
eligible entity that receives a grant to submit, for each grant period, 
a report to the Secretary that describes how grant funds were used 
during such period.
    ``(e) Technical Assistance.--The Secretary may provide technical 
assistance to entities seeking a grant under this section in order to 
assist such entities in complying with the requirements of this 
section.
    ``(f) Application of Other Provisions of Title.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    other provisions of this title shall not apply to a grant made 
    under this section.
        ``(2) Exceptions.--The following provisions of this title shall 
    apply to a grant made under this section to the same extent and in 
    the same manner as such provisions apply to allotments made under 
    section 502(c):
            ``(A) Section 504(b)(6) (relating to prohibition on 
        payments to excluded individuals and entities).
            ``(B) Section 504(c) (relating to the use of funds for the 
        purchase of technical assistance).
            ``(C) Section 504(d) (relating to a limitation on 
        administrative expenditures).
            ``(D) Section 506 (relating to reports and audits), but 
        only to the extent determined by the Secretary to be 
        appropriate for grants made under this section.
            ``(E) Section 507 (relating to penalties for false 
        statements).
            ``(F) Section 508 (relating to nondiscrimination).
            ``(G) Section 509(a) (relating to the administration of the 
        grant program).
    ``(g) Definitions.--In this section:
        ``(1) The term `eligible entity'--
            ``(A) means a public or nonprofit private entity; and
            ``(B) includes a State or local government, public-private 
        partnership, recipient of a grant under section 330H of the 
        Public Health Service Act (relating to the Healthy Start 
        Initiative), public or nonprofit private hospital, community-
        based organization, hospice, ambulatory care facility, 
        community health center, migrant health center, public housing 
        primary care center, or homeless health center.
        ``(2) The term `postpartum condition' means postpartum 
    depression or postpartum psychosis.''.
    (c) General Provisions.--
        (1) Authorization of appropriations.--To carry out this section 
    and the amendment made by subsection (b), there are authorized to 
    be appropriated, in addition to such other sums as may be available 
    for such purpose--
            (A) $3,000,000 for fiscal year 2010; and
            (B) such sums as may be necessary for fiscal years 2011 and 
        2012.
        (2) Report by the secretary.--
            (A) Study.--The Secretary shall conduct a study on the 
        benefits of screening for postpartum conditions.
            (B) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall complete the study 
        required by subparagraph (A) and submit a report to the 
        Congress on the results of such study.

SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.), as 
amended by sections 2951 and 2952(c), is amended by adding at the end 
the following:

``SEC. 513. PERSONAL RESPONSIBILITY EDUCATION.

    ``(a) Allotments to States.--
        ``(1) Amount.--
            ``(A) In general.--For the purpose described in subsection 
        (b), subject to the succeeding provisions of this section, for 
        each of fiscal years 2010 through 2014, the Secretary shall 
        allot to each State an amount equal to the product of--
                ``(i) the amount appropriated under subsection (f) for 
            the fiscal year and available for allotments to States 
            after the application of subsection (c); and
                ``(ii) the State youth population percentage determined 
            under paragraph (2).
            ``(B) Minimum allotment.--
                ``(i) In general.--Each State allotment under this 
            paragraph for a fiscal year shall be at least $250,000.
                ``(ii) Pro rata adjustments.--The Secretary shall 
            adjust on a pro rata basis the amount of the State 
            allotments determined under this paragraph for a fiscal 
            year to the extent necessary to comply with clause (i).
            ``(C) Application required to access allotments.--
                ``(i) In general.--A State shall not be paid from its 
            allotment for a fiscal year unless the State submits an 
            application to the Secretary for the fiscal year and the 
            Secretary approves the application (or requires changes to 
            the application that the State satisfies) and meets such 
            additional requirements as the Secretary may specify.
                ``(ii) Requirements.--The State application shall 
            contain an assurance that the State has complied with the 
            requirements of this section in preparing and submitting 
            the application and shall include the following as well as 
            such additional information as the Secretary may require:

                    ``(I) Based on data from the Centers for Disease 
                Control and Prevention National Center for Health 
                Statistics, the most recent pregnancy rates for the 
                State for youth ages 10 to 14 and youth ages 15 to 19 
                for which data are available, the most recent birth 
                rates for such youth populations in the State for which 
                data are available, and trends in those rates for the 
                most recently preceding 5-year period for which such 
                data are available.
                    ``(II) State-established goals for reducing the 
                pregnancy rates and birth rates for such youth 
                populations.
                    ``(III) A description of the State's plan for using 
                the State allotments provided under this section to 
                achieve such goals, especially among youth populations 
                that are the most high-risk or vulnerable for 
                pregnancies or otherwise have special circumstances, 
                including youth in foster care, homeless youth, youth 
                with HIV/AIDS, pregnant youth who are under 21 years of 
                age, mothers who are under 21 years of age, and youth 
                residing in areas with high birth rates for youth.

        ``(2) State youth population percentage.--
            ``(A) In general.--For purposes of paragraph (1)(A)(ii), 
        the State youth population percentage is, with respect to a 
        State, the proportion (expressed as a percentage) of--
                ``(i) the number of individuals who have attained age 
            10 but not attained age 20 in the State; to
                ``(ii) the number of such individuals in all States.
            ``(B) Determination of number of youth.--The number of 
        individuals described in clauses (i) and (ii) of subparagraph 
        (A) in a State shall be determined on the basis of the most 
        recent Bureau of the Census data.
        ``(3) Availability of state allotments.--Subject to paragraph 
    (4)(A), amounts allotted to a State pursuant to this subsection for 
    a fiscal year shall remain available for expenditure by the State 
    through the end of the second succeeding fiscal year.
        ``(4) Authority to award grants from state allotments to local 
    organizations and entities in nonparticipating states.--
            ``(A) Grants from unexpended allotments.--If a State does 
        not submit an application under this section for fiscal year 
        2010 or 2011, the State shall no longer be eligible to submit 
        an application to receive funds from the amounts allotted for 
        the State for each of fiscal years 2010 through 2014 and such 
        amounts shall be used by the Secretary to award grants under 
        this paragraph for each of fiscal years 2012 through 2014. The 
        Secretary also shall use any amounts from the allotments of 
        States that submit applications under this section for a fiscal 
        year that remain unexpended as of the end of the period in 
        which the allotments are available for expenditure under 
        paragraph (3) for awarding grants under this paragraph.
            ``(B) 3-year grants.--
                ``(i) In general.--The Secretary shall solicit 
            applications to award 3-year grants in each of fiscal years 
            2012, 2013, and 2014 to local organizations and entities to 
            conduct, consistent with subsection (b), programs and 
            activities in States that do not submit an application for 
            an allotment under this section for fiscal year 2010 or 
            2011.
                ``(ii) Faith-based organizations or consortia.--The 
            Secretary may solicit and award grants under this paragraph 
            to faith-based organizations or consortia.
            ``(C) Evaluation.--An organization or entity awarded a 
        grant under this paragraph shall agree to participate in a 
        rigorous Federal evaluation.
        ``(5) Maintenance of effort.--No payment shall be made to a 
    State from the allotment determined for the State under this 
    subsection or to a local organization or entity awarded a grant 
    under paragraph (4), if the expenditure of non-federal funds by the 
    State, organization, or entity for activities, programs, or 
    initiatives for which amounts from allotments and grants under this 
    subsection may be expended is less than the amount expended by the 
    State, organization, or entity for such programs or initiatives for 
    fiscal year 2009.
        ``(6) Data collection and reporting.--A State or local 
    organization or entity receiving funds under this section shall 
    cooperate with such requirements relating to the collection of data 
    and information and reporting on outcomes regarding the programs 
    and activities carried out with such funds, as the Secretary shall 
    specify.
    ``(b) Purpose.--
        ``(1) In general.--The purpose of an allotment under subsection 
    (a)(1) to a State is to enable the State (or, in the case of grants 
    made under subsection (a)(4)(B), to enable a local organization or 
    entity) to carry out personal responsibility education programs 
    consistent with this subsection.
        ``(2) Personal responsibility education programs.--
            ``(A) In general.--In this section, the term `personal 
        responsibility education program' means a program that is 
        designed to educate adolescents on--
                ``(i) both abstinence and contraception for the 
            prevention of pregnancy and sexually transmitted 
            infections, including HIV/AIDS, consistent with the 
            requirements of subparagraph (B); and
                ``(ii) at least 3 of the adulthood preparation subjects 
            described in subparagraph (C).
            ``(B) Requirements.--The requirements of this subparagraph 
        are the following:
                ``(i) The program replicates evidence-based effective 
            programs or substantially incorporates elements of 
            effective programs that have been proven on the basis of 
            rigorous scientific research to change behavior, which 
            means delaying sexual activity, increasing condom or 
            contraceptive use for sexually active youth, or reducing 
            pregnancy among youth.
                ``(ii) The program is medically-accurate and complete.
                ``(iii) The program includes activities to educate 
            youth who are sexually active regarding responsible sexual 
            behavior with respect to both abstinence and the use of 
            contraception.
                ``(iv) The program places substantial emphasis on both 
            abstinence and contraception for the prevention of 
            pregnancy among youth and sexually transmitted infections.
                ``(v) The program provides age-appropriate information 
            and activities.
                ``(vi) The information and activities carried out under 
            the program are provided in the cultural context that is 
            most appropriate for individuals in the particular 
            population group to which they are directed.
            ``(C) Adulthood preparation subjects.--The adulthood 
        preparation subjects described in this subparagraph are the 
        following:
                ``(i) Healthy relationships, such as positive self-
            esteem and relationship dynamics, friendships, dating, 
            romantic involvement, marriage, and family interactions.
                ``(ii) Adolescent development, such as the development 
            of healthy attitudes and values about adolescent growth and 
            development, body image, racial and ethnic diversity, and 
            other related subjects.
                ``(iii) Financial literacy.
                ``(iv) Parent-child communication.
                ``(v) Educational and career success, such as 
            developing skills for employment preparation, job seeking, 
            independent living, financial self-sufficiency, and 
            workplace productivity.
                ``(vi) Healthy life skills, such as goal-setting, 
            decision making, negotiation, communication and 
            interpersonal skills, and stress management.
    ``(c) Reservations of Funds.--
        ``(1) Grants to implement innovative strategies.--From the 
    amount appropriated under subsection (f) for the fiscal year, the 
    Secretary shall reserve $10,000,000 of such amount for purposes of 
    awarding grants to entities to implement innovative youth pregnancy 
    prevention strategies and target services to high-risk, vulnerable, 
    and culturally under-represented youth populations, including youth 
    in foster care, homeless youth, youth with HIV/AIDS, pregnant women 
    who are under 21 years of age and their partners, mothers who are 
    under 21 years of age and their partners, and youth residing in 
    areas with high birth rates for youth. An entity awarded a grant 
    under this paragraph shall agree to participate in a rigorous 
    Federal evaluation of the activities carried out with grant funds.
        ``(2) Other reservations.--From the amount appropriated under 
    subsection (f) for the fiscal year that remains after the 
    application of paragraph (1), the Secretary shall reserve the 
    following amounts:
            ``(A) Grants for indian tribes or tribal organizations.--
        The Secretary shall reserve 5 percent of such remainder for 
        purposes of awarding grants to Indian tribes and tribal 
        organizations in such manner, and subject to such requirements, 
        as the Secretary, in consultation with Indian tribes and tribal 
        organizations, determines appropriate.
            ``(B) Secretarial responsibilities.--
                ``(i) Reservation of funds.--The Secretary shall 
            reserve 10 percent of such remainder for expenditures by 
            the Secretary for the activities described in clauses (ii) 
            and (iii).
                ``(ii) Program support.--The Secretary shall provide, 
            directly or through a competitive grant process, research, 
            training and technical assistance, including dissemination 
            of research and information regarding effective and 
            promising practices, providing consultation and resources 
            on a broad array of teen pregnancy prevention strategies, 
            including abstinence and contraception, and developing 
            resources and materials to support the activities of 
            recipients of grants and other State, tribal, and community 
            organizations working to reduce teen pregnancy. In carrying 
            out such functions, the Secretary shall collaborate with a 
            variety of entities that have expertise in the prevention 
            of teen pregnancy, HIV and sexually transmitted infections, 
            healthy relationships, financial literacy, and other topics 
            addressed through the personal responsibility education 
            programs.
                ``(iii) Evaluation.--The Secretary shall evaluate the 
            programs and activities carried out with funds made 
            available through allotments or grants under this section.
    ``(d) Administration.--
        ``(1) In general.--The Secretary shall administer this section 
    through the Assistant Secretary for the Administration for Children 
    and Families within the Department of Health and Human Services.
        ``(2) Application of other provisions of title.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the other provisions of this title shall not apply to 
        allotments or grants made under this section.
            ``(B) Exceptions.--The following provisions of this title 
        shall apply to allotments and grants made under this section to 
        the same extent and in the same manner as such provisions apply 
        to allotments made under section 502(c):
                ``(i) Section 504(b)(6) (relating to prohibition on 
            payments to excluded individuals and entities).
                ``(ii) Section 504(c) (relating to the use of funds for 
            the purchase of technical assistance).
                ``(iii) Section 504(d) (relating to a limitation on 
            administrative expenditures).
                ``(iv) Section 506 (relating to reports and audits), 
            but only to the extent determined by the Secretary to be 
            appropriate for grants made under this section.
                ``(v) Section 507 (relating to penalties for false 
            statements).
                ``(vi) Section 508 (relating to nondiscrimination).
    ``(e) Definitions.--In this section:
        ``(1) Age-appropriate.--The term `age-appropriate', with 
    respect to the information in pregnancy prevention, means topics, 
    messages, and teaching methods suitable to particular ages or age 
    groups of children and adolescents, based on developing cognitive, 
    emotional, and behavioral capacity typical for the age or age 
    group.
        ``(2) Medically accurate and complete.--The term `medically 
    accurate and complete' means verified or supported by the weight of 
    research conducted in compliance with accepted scientific methods 
    and--
            ``(A) published in peer-reviewed journals, where 
        applicable; or
            ``(B) comprising information that leading professional 
        organizations and agencies with relevant expertise in the field 
        recognize as accurate, objective, and complete.
        ``(3) Indian tribes; tribal organizations.--The terms `Indian 
    tribe' and `Tribal organization' have the meanings given such terms 
    in section 4 of the Indian Health Care Improvement Act (25 U.S.C. 
    1603)).
        ``(4) Youth.--The term `youth' means an individual who has 
    attained age 10 but has not attained age 20.
    ``(f) Appropriation.--For the purpose of carrying out this section, 
there is appropriated, out of any money in the Treasury not otherwise 
appropriated, $75,000,000 for each of fiscal years 2010 through 2014. 
Amounts appropriated under this subsection shall remain available until 
expended.''.

SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

    Section 510 of the Social Security Act (42 U.S.C. 710) is amended--
        (1) in subsection (a), by striking ``fiscal year 1998 and each 
    subsequent fiscal year'' and inserting ``each of fiscal years 2010 
    through 2014''; and
        (2) in subsection (d)--
            (A) in the first sentence, by striking ``1998 through 
        2003'' and inserting ``2010 through 2014''; and
            (B) in the second sentence, by inserting ``(except that 
        such appropriation shall be made on the date of enactment of 
        the Patient Protection and Affordable Care Act in the case of 
        fiscal year 2010)'' before the period.

SEC. 2955. INCLUSION OF INFORMATION ABOUT THE IMPORTANCE OF HAVING A 
              HEALTH CARE POWER OF ATTORNEY IN TRANSITION PLANNING FOR 
              CHILDREN AGING OUT OF FOSTER CARE AND INDEPENDENT LIVING 
              PROGRAMS.

    (a) Transition Planning.--Section 475(5)(H) of the Social Security 
Act (42 U.S.C. 675(5)(H)) is amended by inserting ``includes 
information about the importance of designating another individual to 
make health care treatment decisions on behalf of the child if the 
child becomes unable to participate in such decisions and the child 
does not have, or does not want, a relative who would otherwise be 
authorized under State law to make such decisions, and provides the 
child with the option to execute a health care power of attorney, 
health care proxy, or other similar document recognized under State 
law,'' after ``employment services,''.
    (b) Independent Living Education.--Section 477(b)(3) of such Act 
(42 U.S.C. 677(b)(3)) is amended by adding at the end the following:
            ``(K) A certification by the chief executive officer of the 
        State that the State will ensure that an adolescent 
        participating in the program under this section are provided 
        with education about the importance of designating another 
        individual to make health care treatment decisions on behalf of 
        the adolescent if the adolescent becomes unable to participate 
        in such decisions and the adolescent does not have, or does not 
        want, a relative who would otherwise be authorized under State 
        law to make such decisions, whether a health care power of 
        attorney, health care proxy, or other similar document is 
        recognized under State law, and how to execute such a document 
        if the adolescent wants to do so.''.
    (c) Health Oversight and Coordination Plan.--Section 422(b)(15)(A) 
of such Act (42 U.S.C. 622(b)(15)(A)) is amended--
        (1) in clause (v), by striking ``and'' at the end; and
        (2) by adding at the end the following:
                ``(vii) steps to ensure that the components of the 
            transition plan development process required under section 
            475(5)(H) that relate to the health care needs of children 
            aging out of foster care, including the requirements to 
            include options for health insurance, information about a 
            health care power of attorney, health care proxy, or other 
            similar document recognized under State law, and to provide 
            the child with the option to execute such a document, are 
            met; and''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2010.

     TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE
        Subtitle A--Transforming the Health Care Delivery System

 PART I--LINKING PAYMENT TO QUALITY OUTCOMES UNDER THE MEDICARE PROGRAM

SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM.

    (a) Program.--
        (1) In general.--Section 1886 of the Social Security Act (42 
    U.S.C. 1395ww), as amended by section 4102(a) of the HITECH Act 
    (Public Law 111-5), is amended by adding at the end the following 
    new subsection:
    ``(o) Hospital Value-Based Purchasing Program.--
        ``(1) Establishment.--
            ``(A) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary shall establish a hospital 
        value-based purchasing program (in this subsection referred to 
        as the `Program') under which value-based incentive payments 
        are made in a fiscal year to hospitals that meet the 
        performance standards under paragraph (3) for the performance 
        period for such fiscal year (as established under paragraph 
        (4)).
            ``(B) Program to begin in fiscal year 2013.--The Program 
        shall apply to payments for discharges occurring on or after 
        October 1, 2012.
            ``(C) Applicability of program to hospitals.--
                ``(i) In general.--For purposes of this subsection, 
            subject to clause (ii), the term `hospital' means a 
            subsection (d) hospital (as defined in subsection 
            (d)(1)(B)).
                ``(ii) Exclusions.--The term `hospital' shall not 
            include, with respect to a fiscal year, a hospital--

                    ``(I) that is subject to the payment reduction 
                under subsection (b)(3)(B)(viii)(I) for such fiscal 
                year;
                    ``(II) for which, during the performance period for 
                such fiscal year, the Secretary has cited deficiencies 
                that pose immediate jeopardy to the health or safety of 
                patients;
                    ``(III) for which there are not a minimum number 
                (as determined by the Secretary) of measures that apply 
                to the hospital for the performance period for such 
                fiscal year; or
                    ``(IV) for which there are not a minimum number (as 
                determined by the Secretary) of cases for the measures 
                that apply to the hospital for the performance period 
                for such fiscal year.

                ``(iii) Independent analysis.--For purposes of 
            determining the minimum numbers under subclauses (III) and 
            (IV) of clause (ii), the Secretary shall have conducted an 
            independent analysis of what numbers are appropriate.
                ``(iv) Exemption.--In the case of a hospital that is 
            paid under section 1814(b)(3), the Secretary may exempt 
            such hospital from the application of this subsection if 
            the State which is paid under such section submits an 
            annual report to the Secretary describing how a similar 
            program in the State for a participating hospital or 
            hospitals achieves or surpasses the measured results in 
            terms of patient health outcomes and cost savings 
            established under this subsection.
        ``(2) Measures.--
            ``(A) In general.--The Secretary shall select measures for 
        purposes of the Program. Such measures shall be selected from 
        the measures specified under subsection (b)(3)(B)(viii).
            ``(B) Requirements.--
                ``(i) For fiscal year 2013.--For value-based incentive 
            payments made with respect to discharges occurring during 
            fiscal year 2013, the Secretary shall ensure the following:

                    ``(I) Conditions or procedures.--Measures are 
                selected under subparagraph (A) that cover at least the 
                following 5 specific conditions or procedures:

                        ``(aa) Acute myocardial infarction (AMI).
                        ``(bb) Heart failure.
                        ``(cc) Pneumonia.
                        ``(dd) Surgeries, as measured by the Surgical 
                    Care Improvement Project (formerly referred to as 
                    `Surgical Infection Prevention' for discharges 
                    occurring before July 2006).
                        ``(ee) Healthcare-associated infections, as 
                    measured by the prevention metrics and targets 
                    established in the HHS Action Plan to Prevent 
                    Healthcare-Associated Infections (or any successor 
                    plan) of the Department of Health and Human 
                    Services.

                    ``(II) HCAHPS.--Measures selected under 
                subparagraph (A) shall be related to the Hospital 
                Consumer Assessment of Healthcare Providers and Systems 
                survey (HCAHPS).

                ``(ii) Inclusion of efficiency measures.--For value-
            based incentive payments made with respect to discharges 
            occurring during fiscal year 2014 or a subsequent fiscal 
            year, the Secretary shall ensure that measures selected 
            under subparagraph (A) include efficiency measures, 
            including measures of `Medicare spending per beneficiary'. 
            Such measures shall be adjusted for factors such as age, 
            sex, race, severity of illness, and other factors that the 
            Secretary determines appropriate.
            ``(C) Limitations.--
                ``(i) Time requirement for prior reporting and 
            notice.--The Secretary may not select a measure under 
            subparagraph (A) for use under the Program with respect to 
            a performance period for a fiscal year (as established 
            under paragraph (4)) unless such measure has been specified 
            under subsection (b)(3)(B)(viii) and included on the 
            Hospital Compare Internet website for at least 1 year prior 
            to the beginning of such performance period.
                ``(ii) Measure not applicable unless hospital furnishes 
            services appropriate to the measure.--A measure selected 
            under subparagraph (A) shall not apply to a hospital if 
            such hospital does not furnish services appropriate to such 
            measure.
            ``(D) Replacing measures.--Subclause (VI) of subsection 
        (b)(3)(B)(viii) shall apply to measures selected under 
        subparagraph (A) in the same manner as such subclause applies 
        to measures selected under such subsection.
        ``(3) Performance standards.--
            ``(A) Establishment.--The Secretary shall establish 
        performance standards with respect to measures selected under 
        paragraph (2) for a performance period for a fiscal year (as 
        established under paragraph (4)).
            ``(B) Achievement and improvement.--The performance 
        standards established under subparagraph (A) shall include 
        levels of achievement and improvement.
            ``(C) Timing.--The Secretary shall establish and announce 
        the performance standards under subparagraph (A) not later than 
        60 days prior to the beginning of the performance period for 
        the fiscal year involved.
            ``(D) Considerations in establishing standards.--In 
        establishing performance standards with respect to measures 
        under this paragraph, the Secretary shall take into account 
        appropriate factors, such as--
                ``(i) practical experience with the measures involved, 
            including whether a significant proportion of hospitals 
            failed to meet the performance standard during previous 
            performance periods;
                ``(ii) historical performance standards;
                ``(iii) improvement rates; and
                ``(iv) the opportunity for continued improvement.
        ``(4) Performance period.--For purposes of the Program, the 
    Secretary shall establish the performance period for a fiscal year. 
    Such performance period shall begin and end prior to the beginning 
    of such fiscal year.
        ``(5) Hospital performance score.--
            ``(A) In general.--Subject to subparagraph (B), the 
        Secretary shall develop a methodology for assessing the total 
        performance of each hospital based on performance standards 
        with respect to the measures selected under paragraph (2) for a 
        performance period (as established under paragraph (4)). Using 
        such methodology, the Secretary shall provide for an assessment 
        (in this subsection referred to as the `hospital performance 
        score') for each hospital for each performance period.
            ``(B) Application.--
                ``(i) Appropriate distribution.--The Secretary shall 
            ensure that the application of the methodology developed 
            under subparagraph (A) results in an appropriate 
            distribution of value-based incentive payments under 
            paragraph (6) among hospitals achieving different levels of 
            hospital performance scores, with hospitals achieving the 
            highest hospital performance scores receiving the largest 
            value-based incentive payments.
                ``(ii) Higher of achievement or improvement.--The 
            methodology developed under subparagraph (A) shall provide 
            that the hospital performance score is determined using the 
            higher of its achievement or improvement score for each 
            measure.
                ``(iii) Weights.--The methodology developed under 
            subparagraph (A) shall provide for the assignment of 
            weights for categories of measures as the Secretary 
            determines appropriate.
                ``(iv) No minimum performance standard.--The Secretary 
            shall not set a minimum performance standard in determining 
            the hospital performance score for any hospital.
                ``(v) Reflection of measures applicable to the 
            hospital.--The hospital performance score for a hospital 
            shall reflect the measures that apply to the hospital.
        ``(6) Calculation of value-based incentive payments.--
            ``(A) In general.--In the case of a hospital that the 
        Secretary determines meets (or exceeds) the performance 
        standards under paragraph (3) for the performance period for a 
        fiscal year (as established under paragraph (4)), the Secretary 
        shall increase the base operating DRG payment amount (as 
        defined in paragraph (7)(D)), as determined after application 
        of paragraph (7)(B)(i), for a hospital for each discharge 
        occurring in such fiscal year by the value-based incentive 
        payment amount.
            ``(B) Value-based incentive payment amount.--The value-
        based incentive payment amount for each discharge of a hospital 
        in a fiscal year shall be equal to the product of--
                ``(i) the base operating DRG payment amount (as defined 
            in paragraph (7)(D)) for the discharge for the hospital for 
            such fiscal year; and
                ``(ii) the value-based incentive payment percentage 
            specified under subparagraph (C) for the hospital for such 
            fiscal year.
            ``(C) Value-based incentive payment percentage.--
                ``(i) In general.--The Secretary shall specify a value-
            based incentive payment percentage for a hospital for a 
            fiscal year.
                ``(ii) Requirements.--In specifying the value-based 
            incentive payment percentage for each hospital for a fiscal 
            year under clause (i), the Secretary shall ensure that--

                    ``(I) such percentage is based on the hospital 
                performance score of the hospital under paragraph (5); 
                and
                    ``(II) the total amount of value-based incentive 
                payments under this paragraph to all hospitals in such 
                fiscal year is equal to the total amount available for 
                value-based incentive payments for such fiscal year 
                under paragraph (7)(A), as estimated by the Secretary.

        ``(7) Funding for value-based incentive payments.--
            ``(A) Amount.--The total amount available for value-based 
        incentive payments under paragraph (6) for all hospitals for a 
        fiscal year shall be equal to the total amount of reduced 
        payments for all hospitals under subparagraph (B) for such 
        fiscal year, as estimated by the Secretary.
            ``(B) Adjustment to payments.--
                ``(i) In general.--The Secretary shall reduce the base 
            operating DRG payment amount (as defined in subparagraph 
            (D)) for a hospital for each discharge in a fiscal year 
            (beginning with fiscal year 2013) by an amount equal to the 
            applicable percent (as defined in subparagraph (C)) of the 
            base operating DRG payment amount for the discharge for the 
            hospital for such fiscal year. The Secretary shall make 
            such reductions for all hospitals in the fiscal year 
            involved, regardless of whether or not the hospital has 
            been determined by the Secretary to have earned a value-
            based incentive payment under paragraph (6) for such fiscal 
            year.
                ``(ii) No effect on other payments.--Payments described 
            in items (aa) and (bb) of subparagraph (D)(i)(II) for a 
            hospital shall be determined as if this subsection had not 
            been enacted.
            ``(C) Applicable percent defined.--For purposes of 
        subparagraph (B), the term `applicable percent' means--
                ``(i) with respect to fiscal year 2013, 1.0 percent;
                ``(ii) with respect to fiscal year 2014, 1.25 percent;
                ``(iii) with respect to fiscal year 2015, 1.5 percent;
                ``(iv) with respect to fiscal year 2016, 1.75 percent; 
            and
                ``(v) with respect to fiscal year 2017 and succeeding 
            fiscal years, 2 percent.
            ``(D) Base operating drg payment amount defined.--
                ``(i) In general.--Except as provided in clause (ii), 
            in this subsection, the term `base operating DRG payment 
            amount' means, with respect to a hospital for a fiscal 
            year--

                    ``(I) the payment amount that would otherwise be 
                made under subsection (d) (determined without regard to 
                subsection (q)) for a discharge if this subsection did 
                not apply; reduced by
                    ``(II) any portion of such payment amount that is 
                attributable to--

                        ``(aa) payments under paragraphs (5)(A), 
                    (5)(B), (5)(F), and (12) of subsection (d); and
                        ``(bb) such other payments under subsection (d) 
                    determined appropriate by the Secretary.
                ``(ii) Special rules for certain hospitals.--

                    ``(I) Sole community hospitals and medicare-
                dependent, small rural hospitals.--In the case of a 
                medicare-dependent, small rural hospital (with respect 
                to discharges occurring during fiscal year 2012 and 
                2013) or a sole community hospital, in applying 
                subparagraph (A)(i), the payment amount that would 
                otherwise be made under subsection (d) shall be 
                determined without regard to subparagraphs (I) and (L) 
                of subsection (b)(3) and subparagraphs (D) and (G) of 
                subsection (d)(5).
                    ``(II) Hospitals paid under section 1814.--In the 
                case of a hospital that is paid under section 
                1814(b)(3), the term `base operating DRG payment 
                amount' means the payment amount under such section.

        ``(8) Announcement of net result of adjustments.--Under the 
    Program, the Secretary shall, not later than 60 days prior to the 
    fiscal year involved, inform each hospital of the adjustments to 
    payments to the hospital for discharges occurring in such fiscal 
    year under paragraphs (6) and (7)(B)(i).
        ``(9) No effect in subsequent fiscal years.--The value-based 
    incentive payment under paragraph (6) and the payment reduction 
    under paragraph (7)(B)(i) shall each apply only with respect to the 
    fiscal year involved, and the Secretary shall not take into account 
    such value-based incentive payment or payment reduction in making 
    payments to a hospital under this section in a subsequent fiscal 
    year.
        ``(10) Public reporting.--
            ``(A) Hospital specific information.--
                ``(i) In general.--The Secretary shall make information 
            available to the public regarding the performance of 
            individual hospitals under the Program, including--

                    ``(I) the performance of the hospital with respect 
                to each measure that applies to the hospital;
                    ``(II) the performance of the hospital with respect 
                to each condition or procedure; and
                    ``(III) the hospital performance score assessing 
                the total performance of the hospital.

                ``(ii) Opportunity to review and submit corrections.--
            The Secretary shall ensure that a hospital has the 
            opportunity to review, and submit corrections for, the 
            information to be made public with respect to the hospital 
            under clause (i) prior to such information being made 
            public.
                ``(iii) Website.--Such information shall be posted on 
            the Hospital Compare Internet website in an easily 
            understandable format.
            ``(B) Aggregate information.--The Secretary shall 
        periodically post on the Hospital Compare Internet website 
        aggregate information on the Program, including--
                ``(i) the number of hospitals receiving value-based 
            incentive payments under paragraph (6) and the range and 
            total amount of such value-based incentive payments; and
                ``(ii) the number of hospitals receiving less than the 
            maximum value-based incentive payment available to the 
            hospital for the fiscal year involved and the range and 
            amount of such payments.
        ``(11) Implementation.--
            ``(A) Appeals.--The Secretary shall establish a process by 
        which hospitals may appeal the calculation of a hospital's 
        performance assessment with respect to the performance 
        standards established under paragraph (3)(A) and the hospital 
        performance score under paragraph (5). The Secretary shall 
        ensure that such process provides for resolution of such 
        appeals in a timely manner.
            ``(B) Limitation on review.--Except as provided in 
        subparagraph (A), there shall be no administrative or judicial 
        review under section 1869, section 1878, or otherwise of the 
        following:
                ``(i) The methodology used to determine the amount of 
            the value-based incentive payment under paragraph (6) and 
            the determination of such amount.
                ``(ii) The determination of the amount of funding 
            available for such value-based incentive payments under 
            paragraph (7)(A) and the payment reduction under paragraph 
            (7)(B)(i).
                ``(iii) The establishment of the performance standards 
            under paragraph (3) and the performance period under 
            paragraph (4).
                ``(iv) The measures specified under subsection 
            (b)(3)(B)(viii) and the measures selected under paragraph 
            (2).
                ``(v) The methodology developed under paragraph (5) 
            that is used to calculate hospital performance scores and 
            the calculation of such scores.
                ``(vi) The validation methodology specified in 
            subsection (b)(3)(B)(viii)(XI).
            ``(C) Consultation with small hospitals.--The Secretary 
        shall consult with small rural and urban hospitals on the 
        application of the Program to such hospitals.
        ``(12) Promulgation of regulations.--The Secretary shall 
    promulgate regulations to carry out the Program, including the 
    selection of measures under paragraph (2), the methodology 
    developed under paragraph (5) that is used to calculate hospital 
    performance scores, and the methodology used to determine the 
    amount of value-based incentive payments under paragraph (6).''.
        (2) Amendments for reporting of hospital quality information.--
    Section 1886(b)(3)(B)(viii) of the Social Security Act (42 U.S.C. 
    1395ww(b)(3)(B)(viii)) is amended--
            (A) in subclause (II), by adding at the end the following 
        sentence: ``The Secretary may require hospitals to submit data 
        on measures that are not used for the determination of value-
        based incentive payments under subsection (o).'';
            (B) in subclause (V), by striking ``beginning with fiscal 
        year 2008'' and inserting ``for fiscal years 2008 through 
        2012'';
            (C) in subclause (VII), in the first sentence, by striking 
        ``data submitted'' and inserting ``information regarding 
        measures submitted''; and
            (D) by adding at the end the following new subclauses:
    ``(VIII) Effective for payments beginning with fiscal year 2013, 
with respect to quality measures for outcomes of care, the Secretary 
shall provide for such risk adjustment as the Secretary determines to 
be appropriate to maintain incentives for hospitals to treat patients 
with severe illnesses or conditions.
    ``(IX)(aa) Subject to item (bb), effective for payments beginning 
with fiscal year 2013, each measure specified by the Secretary under 
this clause shall be endorsed by the entity with a contract under 
section 1890(a).
    ``(bb) In the case of a specified area or medical topic determined 
appropriate by the Secretary for which a feasible and practical measure 
has not been endorsed by the entity with a contract under section 
1890(a), the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary.
    ``(X) To the extent practicable, the Secretary shall, with input 
from consensus organizations and other stakeholders, take steps to 
ensure that the measures specified by the Secretary under this clause 
are coordinated and aligned with quality measures applicable to--
        ``(aa) physicians under section 1848(k); and
        ``(bb) other providers of services and suppliers under this 
    title.
    ``(XI) The Secretary shall establish a process to validate measures 
specified under this clause as appropriate. Such process shall include 
the auditing of a number of randomly selected hospitals sufficient to 
ensure validity of the reporting program under this clause as a whole 
and shall provide a hospital with an opportunity to appeal the 
validation of measures reported by such hospital.''.
        (3) Website improvements.--Section 1886(b)(3)(B) of the Social 
    Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 
    4102(b) of the HITECH Act (Public Law 111-5), is amended by adding 
    at the end the following new clause:
    ``(x)(I) The Secretary shall develop standard Internet website 
reports tailored to meet the needs of various stakeholders such as 
hospitals, patients, researchers, and policymakers. The Secretary shall 
seek input from such stakeholders in determining the type of 
information that is useful and the formats that best facilitate the use 
of the information.
    ``(II) The Secretary shall modify the Hospital Compare Internet 
website to make the use and navigation of that website readily 
available to individuals accessing it.''.
        (4) GAO study and report.--
            (A) Study.--The Comptroller General of the United States 
        shall conduct a study on the performance of the hospital value-
        based purchasing program established under section 1886(o) of 
        the Social Security Act, as added by paragraph (1). Such study 
        shall include an analysis of the impact of such program on--
                (i) the quality of care furnished to Medicare 
            beneficiaries, including diverse Medicare beneficiary 
            populations (such as diverse in terms of race, ethnicity, 
            and socioeconomic status);
                (ii) expenditures under the Medicare program, including 
            any reduced expenditures under Part A of title XVIII of 
            such Act that are attributable to the improvement in the 
            delivery of inpatient hospital services by reason of such 
            hospital value-based purchasing program;
                (iii) the quality performance among safety net 
            hospitals and any barriers such hospitals face in meeting 
            the performance standards applicable under such hospital 
            value-based purchasing program; and
                (iv) the quality performance among small rural and 
            small urban hospitals and any barriers such hospitals face 
            in meeting the performance standards applicable under such 
            hospital value-based purchasing program.
            (B) Reports.--
                (i) Interim report.--Not later than October 1, 2015, 
            the Comptroller General of the United States shall submit 
            to Congress an interim report containing the results of the 
            study conducted under subparagraph (A), together with 
            recommendations for such legislation and administrative 
            action as the Comptroller General determines appropriate.
                (ii) Final report.--Not later than July 1, 2017, the 
            Comptroller General of the United States shall submit to 
            Congress a report containing the results of the study 
            conducted under subparagraph (A), together with 
            recommendations for such legislation and administrative 
            action as the Comptroller General determines appropriate.
        (5) HHS study and report.--
            (A) Study.--The Secretary of Health and Human Services 
        shall conduct a study on the performance of the hospital value-
        based purchasing program established under section 1886(o) of 
        the Social Security Act, as added by paragraph (1). Such study 
        shall include an analysis--
                (i) of ways to improve the hospital value-based 
            purchasing program and ways to address any unintended 
            consequences that may occur as a result of such program;
                (ii) of whether the hospital value-based purchasing 
            program resulted in lower spending under the Medicare 
            program under title XVIII of such Act or other financial 
            savings to hospitals;
                (iii) the appropriateness of the Medicare program 
            sharing in any savings generated through the hospital 
            value-based purchasing program; and
                (iv) any other area determined appropriate by the 
            Secretary.
            (B) Report.--Not later than January 1, 2016, the Secretary 
        of Health and Human Services shall submit to Congress a report 
        containing the results of the study conducted under 
        subparagraph (A), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
    (b) Value-Based Purchasing Demonstration Programs.--
        (1) Value-based purchasing demonstration program for inpatient 
    critical access hospitals.--
            (A) Establishment.--
                (i) In general.--Not later than 2 years after the date 
            of enactment of this Act, the Secretary of Health and Human 
            Services (in this subsection referred to as the 
            ``Secretary'') shall establish a demonstration program 
            under which the Secretary establishes a value-based 
            purchasing program under the Medicare program under title 
            XVIII of the Social Security Act for critical access 
            hospitals (as defined in paragraph (1) of section 1861(mm) 
            of such Act (42 U.S.C. 1395x(mm))) with respect to 
            inpatient critical access hospital services (as defined in 
            paragraph (2) of such section) in order to test innovative 
            methods of measuring and rewarding quality and efficient 
            health care furnished by such hospitals.
                (ii) Duration.--The demonstration program under this 
            paragraph shall be conducted for a 3-year period.
                (iii) Sites.--The Secretary shall conduct the 
            demonstration program under this paragraph at an 
            appropriate number (as determined by the Secretary) of 
            critical access hospitals. The Secretary shall ensure that 
            such hospitals are representative of the spectrum of such 
            hospitals that participate in the Medicare program.
            (B) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII of the Social Security Act 
        as may be necessary to carry out the demonstration program 
        under this paragraph.
            (C) Budget neutrality requirement.--In conducting the 
        demonstration program under this section, the Secretary shall 
        ensure that the aggregate payments made by the Secretary do not 
        exceed the amount which the Secretary would have paid if the 
        demonstration program under this section was not implemented.
            (D) Report.--Not later than 18 months after the completion 
        of the demonstration program under this paragraph, the 
        Secretary shall submit to Congress a report on the 
        demonstration program together with--
                (i) recommendations on the establishment of a permanent 
            value-based purchasing program under the Medicare program 
            for critical access hospitals with respect to inpatient 
            critical access hospital services; and
                (ii) recommendations for such other legislation and 
            administrative action as the Secretary determines 
            appropriate.
        (2) Value-based purchasing demonstration program for hospitals 
    excluded from hospital value-based purchasing program as a result 
    of insufficient numbers of measures and cases.--
            (A) Establishment.--
                (i) In general.--Not later than 2 years after the date 
            of enactment of this Act, the Secretary shall establish a 
            demonstration program under which the Secretary establishes 
            a value-based purchasing program under the Medicare program 
            under title XVIII of the Social Security Act for applicable 
            hospitals (as defined in clause (ii)) with respect to 
            inpatient hospital services (as defined in section 1861(b) 
            of the Social Security Act (42 U.S.C. 1395x(b))) in order 
            to test innovative methods of measuring and rewarding 
            quality and efficient health care furnished by such 
            hospitals.
                (ii) Applicable hospital defined.--For purposes of this 
            paragraph, the term ``applicable hospital'' means a 
            hospital described in subclause (III) or (IV) of section 
            1886(o)(1)(C)(ii) of the Social Security Act, as added by 
            subsection (a)(1).
                (iii) Duration.--The demonstration program under this 
            paragraph shall be conducted for a 3-year period.
                (iv) Sites.--The Secretary shall conduct the 
            demonstration program under this paragraph at an 
            appropriate number (as determined by the Secretary) of 
            applicable hospitals. The Secretary shall ensure that such 
            hospitals are representative of the spectrum of such 
            hospitals that participate in the Medicare program.
            (B) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII of the Social Security Act 
        as may be necessary to carry out the demonstration program 
        under this paragraph.
            (C) Budget neutrality requirement.--In conducting the 
        demonstration program under this section, the Secretary shall 
        ensure that the aggregate payments made by the Secretary do not 
        exceed the amount which the Secretary would have paid if the 
        demonstration program under this section was not implemented.
            (D) Report.--Not later than 18 months after the completion 
        of the demonstration program under this paragraph, the 
        Secretary shall submit to Congress a report on the 
        demonstration program together with--
                (i) recommendations on the establishment of a permanent 
            value-based purchasing program under the Medicare program 
            for applicable hospitals with respect to inpatient hospital 
            services; and
                (ii) recommendations for such other legislation and 
            administrative action as the Secretary determines 
            appropriate.

SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) Extension.--Section 1848(m) of the Social Security Act (42 
U.S.C. 1395w-4(m)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``2010'' and inserting ``2014''; and
            (B) in subparagraph (B)--
                (i) in clause (i), by striking ``and'' at the end;
                (ii) in clause (ii), by striking the period at the end 
            and inserting a semicolon; and
                (iii) by adding at the end the following new clauses:
                ``(iii) for 2011, 1.0 percent; and
                ``(iv) for 2012, 2013, and 2014, 0.5 percent.'';
        (2) in paragraph (3)--
            (A) in subparagraph (A), in the matter preceding clause 
        (i), by inserting ``(or, for purposes of subsection (a)(8), for 
        the quality reporting period for the year)'' after ``reporting 
        period''; and
            (B) in subparagraph (C)(i), by inserting ``, or, for 
        purposes of subsection (a)(8), for a quality reporting period 
        for the year'' after ``(a)(5), for a reporting period for a 
        year'';
        (3) in paragraph (5)(E)(iv), by striking ``subsection 
    (a)(5)(A)'' and inserting ``paragraphs (5)(A) and (8)(A) of 
    subsection (a)''; and
        (4) in paragraph (6)(C)--
            (A) in clause (i)(II), by striking ``, 2009, 2010, and 
        2011'' and inserting ``and subsequent years''; and
            (B) in clause (iii)--
                (i) by inserting ``(a)(8)'' after ``(a)(5)''; and
                (ii) by striking ``under subparagraph (D)(iii) of such 
            subsection'' and inserting ``under subsection 
            (a)(5)(D)(iii) or the quality reporting period under 
            subsection (a)(8)(D)(iii), respectively''.
    (b) Incentive Payment Adjustment for Quality Reporting.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) is amended by 
adding at the end the following new paragraph:
        ``(8) Incentives for quality reporting.--
            ``(A) Adjustment.--
                ``(i) In general.--With respect to covered professional 
            services furnished by an eligible professional during 2015 
            or any subsequent year, if the eligible professional does 
            not satisfactorily submit data on quality measures for 
            covered professional services for the quality reporting 
            period for the year (as determined under subsection 
            (m)(3)(A)), the fee schedule amount for such services 
            furnished by such professional during the year (including 
            the fee schedule amount for purposes of determining a 
            payment based on such amount) shall be equal to the 
            applicable percent of the fee schedule amount that would 
            otherwise apply to such services under this subsection 
            (determined after application of paragraphs (3), (5), and 
            (7), but without regard to this paragraph).
                ``(ii) Applicable percent.--For purposes of clause (i), 
            the term `applicable percent' means--

                    ``(I) for 2015, 98.5 percent; and
                    ``(II) for 2016 and each subsequent year, 98 
                percent.

            ``(B) Application.--
                ``(i) Physician reporting system rules.--Paragraphs 
            (5), (6), and (8) of subsection (k) shall apply for 
            purposes of this paragraph in the same manner as they apply 
            for purposes of such subsection.
                ``(ii) Incentive payment validation rules.--Clauses 
            (ii) and (iii) of subsection (m)(5)(D) shall apply for 
            purposes of this paragraph in a similar manner as they 
            apply for purposes of such subsection.
            ``(C) Definitions.--For purposes of this paragraph:
                ``(i) Eligible professional; covered professional 
            services.--The terms `eligible professional' and `covered 
            professional services' have the meanings given such terms 
            in subsection (k)(3).
                ``(ii) Physician reporting system.--The term `physician 
            reporting system' means the system established under 
            subsection (k).
                ``(iii) Quality reporting period.--The term `quality 
            reporting period' means, with respect to a year, a period 
            specified by the Secretary.''.
    (c) Maintenance of Certification Programs.--
        (1) In general.--Section 1848(k)(4) of the Social Security Act 
    (42 U.S.C. 1395w-4(k)(4)) is amended by inserting ``or through a 
    Maintenance of Certification program operated by a specialty body 
    of the American Board of Medical Specialties that meets the 
    criteria for such a registry'' after ``Database)''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply for years after 2010.
    (d) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of the Social Security Act (42 U.S.C. 1395w-4(m)) is 
amended by adding at the end the following new paragraph:
        ``(7) Integration of physician quality reporting and ehr 
    reporting.--Not later than January 1, 2012, the Secretary shall 
    develop a plan to integrate reporting on quality measures under 
    this subsection with reporting requirements under subsection (o) 
    relating to the meaningful use of electronic health records. Such 
    integration shall consist of the following:
            ``(A) The selection of measures, the reporting of which 
        would both demonstrate--
                ``(i) meaningful use of an electronic health record for 
            purposes of subsection (o); and
                ``(ii) quality of care furnished to an individual.
            ``(B) Such other activities as specified by the 
        Secretary.''.
    (e) Feedback.--Section 1848(m)(5) of the Social Security Act (42 
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new 
subparagraph:
            ``(H) Feedback.--The Secretary shall provide timely 
        feedback to eligible professionals on the performance of the 
        eligible professional with respect to satisfactorily submitting 
        data on quality measures under this subsection.''.
    (f) Appeals.--Such section is further amended--
        (1) in subparagraph (E), by striking ``There shall'' and 
    inserting ``Except as provided in subparagraph (I), there shall''; 
    and
        (2) by adding at the end the following new subparagraph:
            ``(I) Informal appeals process.--The Secretary shall, by 
        not later than January 1, 2011, establish and have in place an 
        informal process for eligible professionals to seek a review of 
        the determination that an eligible professional did not 
        satisfactorily submit data on quality measures under this 
        subsection.''.

SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

    (a) In General.--Section 1848(n) of the Social Security Act (42 
U.S.C. 1395w-4(n)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (A)--
                (i) by striking ``general.--The Secretary'' and 
            inserting ``general.--
                ``(i) Establishment.--The Secretary'';
                (ii) in clause (i), as added by clause (i), by striking 
            ``the `Program')'' and all that follows through the period 
            at the end of the second sentence and inserting ``the 
            `Program').''; and
                (iii) by adding at the end the following new clauses:
                ``(ii) Reports on resources.--The Secretary shall use 
            claims data under this title (and may use other data) to 
            provide confidential reports to physicians (and, as 
            determined appropriate by the Secretary, to groups of 
            physicians) that measure the resources involved in 
            furnishing care to individuals under this title.
                ``(iii) Inclusion of certain information.--If 
            determined appropriate by the Secretary, the Secretary may 
            include information on the quality of care furnished to 
            individuals under this title by the physician (or group of 
            physicians) in such reports.''; and
            (B) in subparagraph (B), by striking ``subparagraph (A)'' 
        and inserting ``subparagraph (A)(ii)'';
        (2) in paragraph (4)--
            (A) in the heading, by inserting ``initial'' after 
        ``focus''; and
            (B) in the matter preceding subparagraph (A), by inserting 
        ``initial'' after ``focus the'';
        (3) in paragraph (6), by adding at the end the following new 
    sentence: ``For adjustments for reports on utilization under 
    paragraph (9), see subparagraph (D) of such paragraph.''; and
        (4) by adding at the end the following new paragraphs:
        ``(9) Reports on utilization.--
            ``(A) Development of episode grouper.--
                ``(i) In general.--The Secretary shall develop an 
            episode grouper that combines separate but clinically 
            related items and services into an episode of care for an 
            individual, as appropriate.
                ``(ii) Timeline for development.--The episode grouper 
            described in subparagraph (A) shall be developed by not 
            later than January 1, 2012.
                ``(iii) Public availability.--The Secretary shall make 
            the details of the episode grouper described in 
            subparagraph (A) available to the public.
                ``(iv) Endorsement.--The Secretary shall seek 
            endorsement of the episode grouper described in 
            subparagraph (A) by the entity with a contract under 
            section 1890(a).
            ``(B) Reports on utilization.--Effective beginning with 
        2012, the Secretary shall provide reports to physicians that 
        compare, as determined appropriate by the Secretary, patterns 
        of resource use of the individual physician to such patterns of 
        other physicians.
            ``(C) Analysis of data.--The Secretary shall, for purposes 
        of preparing reports under this paragraph, establish 
        methodologies as appropriate, such as to--
                ``(i) attribute episodes of care, in whole or in part, 
            to physicians;
                ``(ii) identify appropriate physicians for purposes of 
            comparison under subparagraph (B); and
                ``(iii) aggregate episodes of care attributed to a 
            physician under clause (i) into a composite measure per 
            individual.
            ``(D) Data adjustment.--In preparing reports under this 
        paragraph, the Secretary shall make appropriate adjustments, 
        including adjustments--
                ``(i) to account for differences in socioeconomic and 
            demographic characteristics, ethnicity, and health status 
            of individuals (such as to recognize that less healthy 
            individuals may require more intensive interventions); and
                ``(ii) to eliminate the effect of geographic 
            adjustments in payment rates (as described in subsection 
            (e)).
            ``(E) Public availability of methodology.--The Secretary 
        shall make available to the public--
                ``(i) the methodologies established under subparagraph 
            (C);
                ``(ii) information regarding any adjustments made to 
            data under subparagraph (D); and
                ``(iii) aggregate reports with respect to physicians.
            ``(F) Definition of physician.--In this paragraph:
                ``(i) In general.--The term `physician' has the meaning 
            given that term in section 1861(r)(1).
                ``(ii) Treatment of groups.--Such term includes, as the 
            Secretary determines appropriate, a group of physicians.
            ``(G) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the establishment of the methodology 
        under subparagraph (C), including the determination of an 
        episode of care under such methodology.
        ``(10) Coordination with other value-based purchasing 
    reforms.--The Secretary shall coordinate the Program with the 
    value-based payment modifier established under subsection (p) and, 
    as the Secretary determines appropriate, other similar provisions 
    of this title.''.
    (b) Conforming Amendment.--Section 1890(b) of the Social Security 
Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the 
following new paragraph:
        ``(6) Review and endorsement of episode grouper under the 
    physician feedback program.--The entity shall provide for the 
    review and, as appropriate, the endorsement of the episode grouper 
    developed by the Secretary under section 1848(n)(9)(A). Such review 
    shall be conducted on an expedited basis.''.

SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE HOSPITALS, INPATIENT 
              REHABILITATION HOSPITALS, AND HOSPICE PROGRAMS.

    (a) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is 
amended by adding at the end the following new paragraph:
        ``(5) Quality reporting.--
            ``(A) Reduction in update for failure to report.--
                ``(i) In general.--Under the system described in 
            paragraph (1), for rate year 2014 and each subsequent rate 
            year, in the case of a long-term care hospital that does 
            not submit data to the Secretary in accordance with 
            subparagraph (C) with respect to such a rate year, any 
            annual update to a standard Federal rate for discharges for 
            the hospital during the rate year, and after application of 
            paragraph (3), shall be reduced by 2 percentage points.
                ``(ii) Special rule.--The application of this 
            subparagraph may result in such annual update being less 
            than 0.0 for a rate year, and may result in payment rates 
            under the system described in paragraph (1) for a rate year 
            being less than such payment rates for the preceding rate 
            year.
            ``(B) Noncumulative application.--Any reduction under 
        subparagraph (A) shall apply only with respect to the rate year 
        involved and the Secretary shall not take into account such 
        reduction in computing the payment amount under the system 
        described in paragraph (1) for a subsequent rate year.
            ``(C) Submission of quality data.--For rate year 2014 and 
        each subsequent rate year, each long-term care hospital shall 
        submit to the Secretary data on quality measures specified 
        under subparagraph (D). Such data shall be submitted in a form 
        and manner, and at a time, specified by the Secretary for 
        purposes of this subparagraph.
            ``(D) Quality measures.--
                ``(i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under this subparagraph must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
                ``(iii) Time frame.--Not later than October 1, 2012, 
            the Secretary shall publish the measures selected under 
            this subparagraph that will be applicable with respect to 
            rate year 2014.
            ``(E) Public availability of data submitted.--The Secretary 
        shall establish procedures for making data submitted under 
        subparagraph (C) available to the public. Such procedures shall 
        ensure that a long-term care hospital has the opportunity to 
        review the data that is to be made public with respect to the 
        hospital prior to such data being made public. The Secretary 
        shall report quality measures that relate to services furnished 
        in inpatient settings in long-term care hospitals on the 
        Internet website of the Centers for Medicare & Medicaid 
        Services.''.
    (b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the 
Social Security Act (42 U.S.C. 1395ww(j)) is amended--
        (1) by redesignating paragraph (7) as paragraph (8); and
        (2) by inserting after paragraph (6) the following new 
    paragraph:
        ``(7) Quality reporting.--
            ``(A) Reduction in update for failure to report.--
                ``(i) In general.--For purposes of fiscal year 2014 and 
            each subsequent fiscal year, in the case of a 
            rehabilitation facility that does not submit data to the 
            Secretary in accordance with subparagraph (C) with respect 
            to such a fiscal year, after determining the increase 
            factor described in paragraph (3)(C), and after application 
            of paragraph (3)(D), the Secretary shall reduce such 
            increase factor for payments for discharges occurring 
            during such fiscal year by 2 percentage points.
                ``(ii) Special rule.--The application of this 
            subparagraph may result in the increase factor described in 
            paragraph (3)(C) being less than 0.0 for a fiscal year, and 
            may result in payment rates under this subsection for a 
            fiscal year being less than such payment rates for the 
            preceding fiscal year.
            ``(B) Noncumulative application.--Any reduction under 
        subparagraph (A) shall apply only with respect to the fiscal 
        year involved and the Secretary shall not take into account 
        such reduction in computing the payment amount under this 
        subsection for a subsequent fiscal year.
            ``(C) Submission of quality data.--For fiscal year 2014 and 
        each subsequent rate year, each rehabilitation facility shall 
        submit to the Secretary data on quality measures specified 
        under subparagraph (D). Such data shall be submitted in a form 
        and manner, and at a time, specified by the Secretary for 
        purposes of this subparagraph.
            ``(D) Quality measures.--
                ``(i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under this subparagraph must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
                ``(iii) Time frame.--Not later than October 1, 2012, 
            the Secretary shall publish the measures selected under 
            this subparagraph that will be applicable with respect to 
            fiscal year 2014.
            ``(E) Public availability of data submitted.--The Secretary 
        shall establish procedures for making data submitted under 
        subparagraph (C) available to the public. Such procedures shall 
        ensure that a rehabilitation facility has the opportunity to 
        review the data that is to be made public with respect to the 
        facility prior to such data being made public. The Secretary 
        shall report quality measures that relate to services furnished 
        in inpatient settings in rehabilitation facilities on the 
        Internet website of the Centers for Medicare & Medicaid 
        Services.''.
    (c) Hospice Programs.--Section 1814(i) of the Social Security Act 
(42 U.S.C. 1395f(i)) is amended--
        (1) by redesignating paragraph (5) as paragraph (6); and
        (2) by inserting after paragraph (4) the following new 
    paragraph:
        ``(5) Quality reporting.--
            ``(A) Reduction in update for failure to report.--
                ``(i) In general.--For purposes of fiscal year 2014 and 
            each subsequent fiscal year, in the case of a hospice 
            program that does not submit data to the Secretary in 
            accordance with subparagraph (C) with respect to such a 
            fiscal year, after determining the market basket percentage 
            increase under paragraph (1)(C)(ii)(VII) or paragraph 
            (1)(C)(iii), as applicable, and after application of 
            paragraph (1)(C)(iv), with respect to the fiscal year, the 
            Secretary shall reduce such market basket percentage 
            increase by 2 percentage points.
                ``(ii) Special rule.--The application of this 
            subparagraph may result in the market basket percentage 
            increase under paragraph (1)(C)(ii)(VII) or paragraph 
            (1)(C)(iii), as applicable, being less than 0.0 for a 
            fiscal year, and may result in payment rates under this 
            subsection for a fiscal year being less than such payment 
            rates for the preceding fiscal year.
            ``(B) Noncumulative application.--Any reduction under 
        subparagraph (A) shall apply only with respect to the fiscal 
        year involved and the Secretary shall not take into account 
        such reduction in computing the payment amount under this 
        subsection for a subsequent fiscal year.
            ``(C) Submission of quality data.--For fiscal year 2014 and 
        each subsequent fiscal year, each hospice program shall submit 
        to the Secretary data on quality measures specified under 
        subparagraph (D). Such data shall be submitted in a form and 
        manner, and at a time, specified by the Secretary for purposes 
        of this subparagraph.
            ``(D) Quality measures.--
                ``(i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under this subparagraph must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
                ``(iii) Time frame.--Not later than October 1, 2012, 
            the Secretary shall publish the measures selected under 
            this subparagraph that will be applicable with respect to 
            fiscal year 2014.
            ``(E) Public availability of data submitted.--The Secretary 
        shall establish procedures for making data submitted under 
        subparagraph (C) available to the public. Such procedures shall 
        ensure that a hospice program has the opportunity to review the 
        data that is to be made public with respect to the hospice 
        program prior to such data being made public. The Secretary 
        shall report quality measures that relate to hospice care 
        provided by hospice programs on the Internet website of the 
        Centers for Medicare & Medicaid Services.''.

SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER HOSPITALS.

    Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is 
amended--
        (1) in subsection (a)(1)--
            (A) in subparagraph (U), by striking ``and'' at the end;
            (B) in subparagraph (V), by striking the period at the end 
        and inserting ``, and''; and
            (C) by adding at the end the following new subparagraph:
            ``(W) in the case of a hospital described in section 
        1886(d)(1)(B)(v), to report quality data to the Secretary in 
        accordance with subsection (k).''; and
        (2) by adding at the end the following new subsection:
    ``(k) Quality Reporting by Cancer Hospitals.--
        ``(1) In general.--For purposes of fiscal year 2014 and each 
    subsequent fiscal year, a hospital described in section 
    1886(d)(1)(B)(v) shall submit data to the Secretary in accordance 
    with paragraph (2) with respect to such a fiscal year.
        ``(2) Submission of quality data.--For fiscal year 2014 and 
    each subsequent fiscal year, each hospital described in such 
    section shall submit to the Secretary data on quality measures 
    specified under paragraph (3). Such data shall be submitted in a 
    form and manner, and at a time, specified by the Secretary for 
    purposes of this subparagraph.
        ``(3) Quality measures.--
            ``(A) In general.--Subject to subparagraph (B), any measure 
        specified by the Secretary under this paragraph must have been 
        endorsed by the entity with a contract under section 1890(a).
            ``(B) Exception.--In the case of a specified area or 
        medical topic determined appropriate by the Secretary for which 
        a feasible and practical measure has not been endorsed by the 
        entity with a contract under section 1890(a), the Secretary may 
        specify a measure that is not so endorsed as long as due 
        consideration is given to measures that have been endorsed or 
        adopted by a consensus organization identified by the 
        Secretary.
            ``(C) Time frame.--Not later than October 1, 2012, the 
        Secretary shall publish the measures selected under this 
        paragraph that will be applicable with respect to fiscal year 
        2014.
        ``(4) Public availability of data submitted.--The Secretary 
    shall establish procedures for making data submitted under 
    paragraph (4) available to the public. Such procedures shall ensure 
    that a hospital described in section 1886(d)(1)(B)(v) has the 
    opportunity to review the data that is to be made public with 
    respect to the hospital prior to such data being made public. The 
    Secretary shall report quality measures of process, structure, 
    outcome, patients' perspective on care, efficiency, and costs of 
    care that relate to services furnished in such hospitals on the 
    Internet website of the Centers for Medicare & Medicaid 
    Services.''.

SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR SKILLED 
              NURSING FACILITIES AND HOME HEALTH AGENCIES.

    (a) Skilled Nursing Facilities.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall develop a plan 
    to implement a value-based purchasing program for payments under 
    the Medicare program under title XVIII of the Social Security Act 
    for skilled nursing facilities (as defined in section 1819(a) of 
    such Act (42 U.S.C. 1395i-3(a))).
        (2) Details.--In developing the plan under paragraph (1), the 
    Secretary shall consider the following issues:
            (A) The ongoing development, selection, and modification 
        process for measures (including under section 1890 of the 
        Social Security Act (42 U.S.C. 1395aaa) and section 1890A such 
        Act, as added by section 3014), to the extent feasible and 
        practicable, of all dimensions of quality and efficiency in 
        skilled nursing facilities.
                (i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under subparagraph (A)(iii) must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                (ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
            (B) The reporting, collection, and validation of quality 
        data.
            (C) The structure of value-based payment adjustments, 
        including the determination of thresholds or improvements in 
        quality that would substantiate a payment adjustment, the size 
        of such payments, and the sources of funding for the value-
        based bonus payments.
            (D) Methods for the public disclosure of information on the 
        performance of skilled nursing facilities.
            (E) Any other issues determined appropriate by the 
        Secretary.
        (3) Consultation.--In developing the plan under paragraph (1), 
    the Secretary shall--
            (A) consult with relevant affected parties; and
            (B) consider experience with such demonstrations that the 
        Secretary determines are relevant to the value-based purchasing 
        program described in paragraph (1).
        (4) Report to congress.--Not later than October 1, 2011, the 
    Secretary shall submit to Congress a report containing the plan 
    developed under paragraph (1).
    (b) Home Health Agencies.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall develop a plan 
    to implement a value-based purchasing program for payments under 
    the Medicare program under title XVIII of the Social Security Act 
    for home health agencies (as defined in section 1861(o) of such Act 
    (42 U.S.C. 1395x(o))).
        (2) Details.--In developing the plan under paragraph (1), the 
    Secretary shall consider the following issues:
            (A) The ongoing development, selection, and modification 
        process for measures (including under section 1890 of the 
        Social Security Act (42 U.S.C. 1395aaa) and section 1890A such 
        Act, as added by section 3014), to the extent feasible and 
        practicable, of all dimensions of quality and efficiency in 
        home health agencies.
            (B) The reporting, collection, and validation of quality 
        data.
            (C) The structure of value-based payment adjustments, 
        including the determination of thresholds or improvements in 
        quality that would substantiate a payment adjustment, the size 
        of such payments, and the sources of funding for the value-
        based bonus payments.
            (D) Methods for the public disclosure of information on the 
        performance of home health agencies.
            (E) Any other issues determined appropriate by the 
        Secretary.
        (3) Consultation.--In developing the plan under paragraph (1), 
    the Secretary shall--
            (A) consult with relevant affected parties; and
            (B) consider experience with such demonstrations that the 
        Secretary determines are relevant to the value-based purchasing 
        program described in paragraph (1).
        (4) Report to congress.--Not later than October 1, 2011, the 
    Secretary shall submit to Congress a report containing the plan 
    developed under paragraph (1).

SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE 
              SCHEDULE.

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is 
amended--
        (1) in subsection (b)(1), by inserting ``subject to subsection 
    (p),'' after ``1998,''; and
        (2) by adding at the end the following new subsection:
    ``(p) Establishment of Value-based Payment Modifier.--
        ``(1) In general.--The Secretary shall establish a payment 
    modifier that provides for differential payment to a physician or a 
    group of physicians under the fee schedule established under 
    subsection (b) based upon the quality of care furnished compared to 
    cost (as determined under paragraphs (2) and (3), respectively) 
    during a performance period. Such payment modifier shall be 
    separate from the geographic adjustment factors established under 
    subsection (e).
        ``(2) Quality.--
            ``(A) In general.--For purposes of paragraph (1), quality 
        of care shall be evaluated, to the extent practicable, based on 
        a composite of measures of the quality of care furnished (as 
        established by the Secretary under subparagraph (B)).
            ``(B) Measures.--
                ``(i) The Secretary shall establish appropriate 
            measures of the quality of care furnished by a physician or 
            group of physicians to individuals enrolled under this 
            part, such as measures that reflect health outcomes. Such 
            measures shall be risk adjusted as determined appropriate 
            by the Secretary.
                ``(ii) The Secretary shall seek endorsement of the 
            measures established under this subparagraph by the entity 
            with a contract under section 1890(a).
        ``(3) Costs.--For purposes of paragraph (1), costs shall be 
    evaluated, to the extent practicable, based on a composite of 
    appropriate measures of costs established by the Secretary (such as 
    the composite measure under the methodology established under 
    subsection (n)(9)(C)(iii)) that eliminate the effect of geographic 
    adjustments in payment rates (as described in subsection (e)), and 
    take into account risk factors (such as socioeconomic and 
    demographic characteristics, ethnicity, and health status of 
    individuals (such as to recognize that less healthy individuals may 
    require more intensive interventions) and other factors determined 
    appropriate by the Secretary.
        ``(4) Implementation.--
            ``(A) Publication of measures, dates of implementation, 
        performance period.--Not later than January 1, 2012, the 
        Secretary shall publish the following:
                ``(i) The measures of quality of care and costs 
            established under paragraphs (2) and (3), respectively.
                ``(ii) The dates for implementation of the payment 
            modifier (as determined under subparagraph (B)).
                ``(iii) The initial performance period (as specified 
            under subparagraph (B)(ii)).
            ``(B) Deadlines for implementation.--
                ``(i) Initial implementation.--Subject to the preceding 
            provisions of this subparagraph, the Secretary shall begin 
            implementing the payment modifier established under this 
            subsection through the rulemaking process during 2013 for 
            the physician fee schedule established under subsection 
            (b).
                ``(ii) Initial performance period.--

                    ``(I) In general.--The Secretary shall specify an 
                initial performance period for application of the 
                payment modifier established under this subsection with 
                respect to 2015.
                    ``(II) Provision of information during initial 
                performance period.--During the initial performance 
                period, the Secretary shall, to the extent practicable, 
                provide information to physicians and groups of 
                physicians about the quality of care furnished by the 
                physician or group of physicians to individuals 
                enrolled under this part compared to cost (as 
                determined under paragraphs (2) and (3), respectively) 
                with respect to the performance period.

                ``(iii) Application.--The Secretary shall apply the 
            payment modifier established under this subsection for 
            items and services furnished--

                    ``(I) beginning on January 1, 2015, with respect to 
                specific physicians and groups of physicians the 
                Secretary determines appropriate; and
                    ``(II) beginning not later than January 1, 2017, 
                with respect to all physicians and groups of 
                physicians.

            ``(C) Budget neutrality.--The payment modifier established 
        under this subsection shall be implemented in a budget neutral 
        manner.
        ``(5) Systems-based care.--The Secretary shall, as appropriate, 
    apply the payment modifier established under this subsection in a 
    manner that promotes systems-based care.
        ``(6) Consideration of special circumstances of certain 
    providers.--In applying the payment modifier under this subsection, 
    the Secretary shall, as appropriate, take into account the special 
    circumstances of physicians or groups of physicians in rural areas 
    and other underserved communities.
        ``(7) Application.--For purposes of the initial application of 
    the payment modifier established under this subsection during the 
    period beginning on January 1, 2015, and ending on December 31, 
    2016, the term `physician' has the meaning given such term in 
    section 1861(r). On or after January 1, 2017, the Secretary may 
    apply this subsection to eligible professionals (as defined in 
    subsection (k)(3)(B)) as the Secretary determines appropriate.
        ``(8) Definitions.--For purposes of this subsection:
            ``(A) Costs.--The term `costs' means expenditures per 
        individual as determined appropriate by the Secretary. In 
        making the determination under the preceding sentence, the 
        Secretary may take into account the amount of growth in 
        expenditures per individual for a physician compared to the 
        amount of such growth for other physicians.
            ``(B) Performance period.--The term `performance period' 
        means a period specified by the Secretary.
        ``(9) Coordination with other value-based purchasing reforms.--
    The Secretary shall coordinate the value-based payment modifier 
    established under this subsection with the Physician Feedback 
    Program under subsection (n) and, as the Secretary determines 
    appropriate, other similar provisions of this title.
        ``(10) Limitations on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of--
            ``(A) the establishment of the value-based payment modifier 
        under this subsection;
            ``(B) the evaluation of quality of care under paragraph 
        (2), including the establishment of appropriate measures of the 
        quality of care under paragraph (2)(B);
            ``(C) the evaluation of costs under paragraph (3), 
        including the establishment of appropriate measures of costs 
        under such paragraph;
            ``(D) the dates for implementation of the value-based 
        payment modifier;
            ``(E) the specification of the initial performance period 
        and any other performance period under paragraphs (4)(B)(ii) 
        and (8)(B), respectively;
            ``(F) the application of the value-based payment modifier 
        under paragraph (7); and
            ``(G) the determination of costs under paragraph (8)(A).''.

SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS ACQUIRED IN HOSPITALS.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww), as amended by section 3001, is amended by adding at the end 
the following new subsection:
    ``(p) Adjustment to Hospital Payments for Hospital Acquired 
Conditions.--
        ``(1) In general.--In order to provide an incentive for 
    applicable hospitals to reduce hospital acquired conditions under 
    this title, with respect to discharges from an applicable hospital 
    occurring during fiscal year 2015 or a subsequent fiscal year, the 
    amount of payment under this section or section 1814(b)(3), as 
    applicable, for such discharges during the fiscal year shall be 
    equal to 99 percent of the amount of payment that would otherwise 
    apply to such discharges under this section or section 1814(b)(3) 
    (determined after the application of subsections (o) and (q) and 
    section 1814(l)(4) but without regard to this subsection).
        ``(2) Applicable hospitals.--
            ``(A) In general.--For purposes of this subsection, the 
        term `applicable hospital' means a subsection (d) hospital that 
        meets the criteria described in subparagraph (B).
            ``(B) Criteria described.--
                ``(i) In general.--The criteria described in this 
            subparagraph, with respect to a subsection (d) hospital, is 
            that the subsection (d) hospital is in the top quartile of 
            all subsection (d) hospitals, relative to the national 
            average, of hospital acquired conditions during the 
            applicable period, as determined by the Secretary.
                ``(ii) Risk adjustment.--In carrying out clause (i), 
            the Secretary shall establish and apply an appropriate risk 
            adjustment methodology.
            ``(C) Exemption.--In the case of a hospital that is paid 
        under section 1814(b)(3), the Secretary may exempt such 
        hospital from the application of this subsection if the State 
        which is paid under such section submits an annual report to 
        the Secretary describing how a similar program in the State for 
        a participating hospital or hospitals achieves or surpasses the 
        measured results in terms of patient health outcomes and cost 
        savings established under this subsection.
        ``(3) Hospital acquired conditions.--For purposes of this 
    subsection, the term `hospital acquired condition' means a 
    condition identified for purposes of subsection (d)(4)(D)(iv) and 
    any other condition determined appropriate by the Secretary that an 
    individual acquires during a stay in an applicable hospital, as 
    determined by the Secretary.
        ``(4) Applicable period.--In this subsection, the term 
    `applicable period' means, with respect to a fiscal year, a period 
    specified by the Secretary.
        ``(5) Reporting to hospitals.--Prior to fiscal year 2015 and 
    each subsequent fiscal year, the Secretary shall provide 
    confidential reports to applicable hospitals with respect to 
    hospital acquired conditions of the applicable hospital during the 
    applicable period.
        ``(6) Reporting hospital specific information.--
            ``(A) In general.--The Secretary shall make information 
        available to the public regarding hospital acquired conditions 
        of each applicable hospital.
            ``(B) Opportunity to review and submit corrections.--The 
        Secretary shall ensure that an applicable hospital has the 
        opportunity to review, and submit corrections for, the 
        information to be made public with respect to the hospital 
        under subparagraph (A) prior to such information being made 
        public.
            ``(C) Website.--Such information shall be posted on the 
        Hospital Compare Internet website in an easily understandable 
        format.
        ``(7) Limitations on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of the following:
            ``(A) The criteria described in paragraph (2)(A).
            ``(B) The specification of hospital acquired conditions 
        under paragraph (3).
            ``(C) The specification of the applicable period under 
        paragraph (4).
            ``(D) The provision of reports to applicable hospitals 
        under paragraph (5) and the information made available to the 
        public under paragraph (6).''.
    (b) Study and Report on Expansion of Healthcare Acquired Conditions 
Policy to Other Providers.--
        (1) Study.--The Secretary of Health and Human Services shall 
    conduct a study on expanding the healthcare acquired conditions 
    policy under subsection (d)(4)(D) of section 1886 of the Social 
    Security Act (42 U.S.C. 1395ww) to payments made to other 
    facilities under the Medicare program under title XVIII of the 
    Social Security Act, including such payments made to inpatient 
    rehabilitation facilities, long-term care hospitals (as described 
    in subsection(d)(1)(B)(iv) of such section), hospital outpatient 
    departments, and other hospitals excluded from the inpatient 
    prospective payment system under such section, skilled nursing 
    facilities, ambulatory surgical centers, and health clinics. Such 
    study shall include an analysis of how such policies could impact 
    quality of patient care, patient safety, and spending under the 
    Medicare program.
        (2) Report.--Not later than January 1, 2012, the Secretary 
    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 Secretary 
    determines appropriate.

       PART II--NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY

SEC. 3011. NATIONAL STRATEGY.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) 
is amended by adding at the end the following:

                 ``PART S--HEALTH CARE QUALITY PROGRAMS

 ``Subpart I--National Strategy for Quality Improvement in Health Care

``SEC. 399HH. NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN HEALTH CARE.

    ``(a) Establishment of National Strategy and Priorities.--
        ``(1) National strategy.--The Secretary, through a transparent 
    collaborative process, shall establish a national strategy to 
    improve the delivery of health care services, patient health 
    outcomes, and population health.
        ``(2) Identification of priorities.--
            ``(A) In general.--The Secretary shall identify national 
        priorities for improvement in developing the strategy under 
        paragraph (1).
            ``(B) Requirements.--The Secretary shall ensure that 
        priorities identified under subparagraph (A) will--
                ``(i) have the greatest potential for improving the 
            health outcomes, efficiency, and patient-centeredness of 
            health care for all populations, including children and 
            vulnerable populations;
                ``(ii) identify areas in the delivery of health care 
            services that have the potential for rapid improvement in 
            the quality and efficiency of patient care;
                ``(iii) address gaps in quality, efficiency, 
            comparative effectiveness information, and health outcomes 
            measures and data aggregation techniques;
                ``(iv) improve Federal payment policy to emphasize 
            quality and efficiency;
                ``(v) enhance the use of health care data to improve 
            quality, efficiency, transparency, and outcomes;
                ``(vi) address the health care provided to patients 
            with high-cost chronic diseases;
                ``(vii) improve research and dissemination of 
            strategies and best practices to improve patient safety and 
            reduce medical errors, preventable admissions and 
            readmissions, and health care-associated infections;
                ``(viii) reduce health disparities across health 
            disparity populations (as defined in section 485E) and 
            geographic areas; and
                ``(ix) address other areas as determined appropriate by 
            the Secretary.
            ``(C) Considerations.--In identifying priorities under 
        subparagraph (A), the Secretary shall take into consideration 
        the recommendations submitted by the entity with a contract 
        under section 1890(a) of the Social Security Act and other 
        stakeholders.
            ``(D) Coordination with state agencies.--The Secretary 
        shall collaborate, coordinate, and consult with State agencies 
        responsible for administering the Medicaid program under title 
        XIX of the Social Security Act and the Children's Health 
        Insurance Program under title XXI of such Act with respect to 
        developing and disseminating strategies, goals, models, and 
        timetables that are consistent with the national priorities 
        identified under subparagraph (A).
    ``(b) Strategic Plan.--
        ``(1) In general.--The national strategy shall include a 
    comprehensive strategic plan to achieve the priorities described in 
    subsection (a).
        ``(2) Requirements.--The strategic plan shall include 
    provisions for addressing, at a minimum, the following:
            ``(A) Coordination among agencies within the Department, 
        which shall include steps to minimize duplication of efforts 
        and utilization of common quality measures, where available. 
        Such common quality measures shall be measures identified by 
        the Secretary under section 1139A or 1139B of the Social 
        Security Act or endorsed under section 1890 of such Act.
            ``(B) Agency-specific strategic plans to achieve national 
        priorities.
            ``(C) Establishment of annual benchmarks for each relevant 
        agency to achieve national priorities.
            ``(D) A process for regular reporting by the agencies to 
        the Secretary on the implementation of the strategic plan.
            ``(E) Strategies to align public and private payers with 
        regard to quality and patient safety efforts.
            ``(F) Incorporating quality improvement and measurement in 
        the strategic plan for health information technology required 
        by the American Recovery and Reinvestment Act of 2009 (Public 
        Law 111-5).
    ``(c) Periodic Update of National Strategy.--The Secretary shall 
update the national strategy not less than annually. Any such update 
shall include a review of short- and long-term goals.
    ``(d) Submission and Availability of National Strategy and 
Updates.--
        ``(1) Deadline for initial submission of national strategy.--
    Not later than January 1, 2011, the Secretary shall submit to the 
    relevant committees of Congress the national strategy described in 
    subsection (a).
        ``(2) Updates.--
            ``(A) In general.--The Secretary shall submit to the 
        relevant committees of Congress an annual update to the 
        strategy described in paragraph (1).
            ``(B) Information submitted.--Each update submitted under 
        subparagraph (A) shall include--
                ``(i) a review of the short- and long-term goals of the 
            national strategy and any gaps in such strategy;
                ``(ii) an analysis of the progress, or lack of 
            progress, in meeting such goals and any barriers to such 
            progress;
                ``(iii) the information reported under section 1139A of 
            the Social Security Act, consistent with the reporting 
            requirements of such section; and
                ``(iv) in the case of an update required to be 
            submitted on or after January 1, 2014, the information 
            reported under section 1139B(b)(4) of the Social Security 
            Act, consistent with the reporting requirements of such 
            section.
            ``(C) Satisfaction of other reporting requirements.--
        Compliance with the requirements of clauses (iii) and (iv) of 
        subparagraph (B) shall satisfy the reporting requirements under 
        sections 1139A(a)(6) and 1139B(b)(4), respectively, of the 
        Social Security Act.
    ``(e) Health Care Quality Internet Website.--Not later than January 
1, 2011, the Secretary shall create an Internet website to make public 
information regarding--
        ``(1) the national priorities for health care quality 
    improvement established under subsection (a)(2);
        ``(2) the agency-specific strategic plans for health care 
    quality described in subsection (b)(2)(B); and
        ``(3) other information, as the Secretary determines to be 
    appropriate.''.

SEC. 3012. INTERAGENCY WORKING GROUP ON HEALTH CARE QUALITY.

    (a) In General.--The President shall convene a working group to be 
known as the Interagency Working Group on Health Care Quality (referred 
to in this section as the ``Working Group'').
    (b) Goals.--The goals of the Working Group shall be to achieve the 
following:
        (1) Collaboration, cooperation, and consultation between 
    Federal departments and agencies with respect to developing and 
    disseminating strategies, goals, models, and timetables that are 
    consistent with the national priorities identified under section 
    399HH(a)(2) of the Public Health Service Act (as added by section 
    3011).
        (2) Avoidance of inefficient duplication of quality improvement 
    efforts and resources, where practicable, and a streamlined process 
    for quality reporting and compliance requirements.
        (3) Assess alignment of quality efforts in the public sector 
    with private sector initiatives.
    (c) Composition.--
        (1) In general.--The Working Group shall be composed of senior 
    level representatives of--
            (A) the Department of Health and Human Services;
            (B) the Centers for Medicare & Medicaid Services;
            (C) the National Institutes of Health;
            (D) the Centers for Disease Control and Prevention;
            (E) the Food and Drug Administration;
            (F) the Health Resources and Services Administration;
            (G) the Agency for Healthcare Research and Quality;
            (H) the Office of the National Coordinator for Health 
        Information Technology;
            (I) the Substance Abuse and Mental Health Services 
        Administration;
            (J) the Administration for Children and Families;
            (K) the Department of Commerce;
            (L) the Office of Management and Budget;
            (M) the United States Coast Guard;
            (N) the Federal Bureau of Prisons;
            (O) the National Highway Traffic Safety Administration;
            (P) the Federal Trade Commission;
            (Q) the Social Security Administration;
            (R) the Department of Labor;
            (S) the United States Office of Personnel Management;
            (T) the Department of Defense;
            (U) the Department of Education;
            (V) the Department of Veterans Affairs;
            (W) the Veterans Health Administration; and
            (X) any other Federal agencies and departments with 
        activities relating to improving health care quality and 
        safety, as determined by the President.
        (2) Chair and vice-chair.--
            (A) Chair.--The Working Group shall be chaired by the 
        Secretary of Health and Human Services.
            (B) Vice chair.--Members of the Working Group, other than 
        the Secretary of Health and Human Services, shall serve as Vice 
        Chair of the Group on a rotating basis, as determined by the 
        Group.
    (d) Report to Congress.--Not later than December 31, 2010, and 
annually thereafter, the Working Group shall submit to the relevant 
Committees of Congress, and make public on an Internet website, a 
report describing the progress and recommendations of the Working Group 
in meeting the goals described in subsection (b).

SEC. 3013. QUALITY MEASURE DEVELOPMENT.

    (a) Public Health Service Act.--Title IX of the Public Health 
Service Act (42 U.S.C. 299 et seq.) is amended--
        (1) by redesignating part D as part E;
        (2) by redesignating sections 931 through 938 as sections 941 
    through 948, respectively;
        (3) in section 948(1), as so redesignated, by striking ``931'' 
    and inserting ``941''; and
        (4) by inserting after section 926 the following:

               ``PART D--HEALTH CARE QUALITY IMPROVEMENT

                ``Subpart I--Quality Measure Development

``SEC. 931. QUALITY MEASURE DEVELOPMENT.

    ``(a) Quality Measure.--In this subpart, the term `quality measure' 
means a standard for measuring the performance and improvement of 
population health or of health plans, providers of services, and other 
clinicians in the delivery of health care services.
    ``(b) Identification of Quality Measures.--
        ``(1) Identification.--The Secretary, in consultation with the 
    Director of the Agency for Healthcare Research and Quality and the 
    Administrator of the Centers for Medicare & Medicaid Services, 
    shall identify, not less often than triennially, gaps where no 
    quality measures exist and existing quality measures that need 
    improvement, updating, or expansion, consistent with the national 
    strategy under section 399HH, to the extent available, for use in 
    Federal health programs. In identifying such gaps and existing 
    quality measures that need improvement, the Secretary shall take 
    into consideration--
            ``(A) the gaps identified by the entity with a contract 
        under section 1890(a) of the Social Security Act and other 
        stakeholders;
            ``(B) quality measures identified by the pediatric quality 
        measures program under section 1139A of the Social Security 
        Act; and
            ``(C) quality measures identified through the Medicaid 
        Quality Measurement Program under section 1139B of the Social 
        Security Act.
        ``(2) Publication.--The Secretary shall make available to the 
    public on an Internet website a report on any gaps identified under 
    paragraph (1) and the process used to make such identification.
    ``(c) Grants or Contracts for Quality Measure Development.--
        ``(1) In general.--The Secretary shall award grants, contracts, 
    or intergovernmental agreements to eligible entities for purposes 
    of developing, improving, updating, or expanding quality measures 
    identified under subsection (b).
        ``(2) Prioritization in the development of quality measures.--
    In awarding grants, contracts, or agreements under this subsection, 
    the Secretary shall give priority to the development of quality 
    measures that allow the assessment of--
            ``(A) health outcomes and functional status of patients;
            ``(B) the management and coordination of health care across 
        episodes of care and care transitions for patients across the 
        continuum of providers, health care settings, and health plans;
            ``(C) the experience, quality, and use of information 
        provided to and used by patients, caregivers, and authorized 
        representatives to inform decisionmaking about treatment 
        options, including the use of shared decisionmaking tools and 
        preference sensitive care (as defined in section 936);
            ``(D) the meaningful use of health information technology;
            ``(E) the safety, effectiveness, patient-centeredness, 
        appropriateness, and timeliness of care;
            ``(F) the efficiency of care;
            ``(G) the equity of health services and health disparities 
        across health disparity populations (as defined in section 
        485E) and geographic areas;
            ``(H) patient experience and satisfaction;
            ``(I) the use of innovative strategies and methodologies 
        identified under section 933; and
            ``(J) other areas determined appropriate by the Secretary.
        ``(3) Eligible entities.--To be eligible for a grant or 
    contract under this subsection, an entity shall--
            ``(A) have demonstrated expertise and capacity in the 
        development and evaluation of quality measures;
            ``(B) have adopted procedures to include in the quality 
        measure development process--
                ``(i) the views of those providers or payers whose 
            performance will be assessed by the measure; and
                ``(ii) the views of other parties who also will use the 
            quality measures (such as patients, consumers, and health 
            care purchasers);
            ``(C) collaborate with the entity with a contract under 
        section 1890(a) of the Social Security Act and other 
        stakeholders, as practicable, and the Secretary so that quality 
        measures developed by the eligible entity will meet the 
        requirements to be considered for endorsement by the entity 
        with a contract under such section 1890(a);
            ``(D) have transparent policies regarding governance and 
        conflicts of interest; and
            ``(E) submit an application to the Secretary at such time 
        and in such manner, as the Secretary may require.
        ``(4) Use of funds.--An entity that receives a grant, contract, 
    or agreement under this subsection shall use such award to develop 
    quality measures that meet the following requirements:
            ``(A) Such measures support measures required to be 
        reported under the Social Security Act, where applicable, and 
        in support of gaps and existing quality measures that need 
        improvement, as described in subsection (b)(1)(A).
            ``(B) Such measures support measures developed under 
        section 1139A of the Social Security Act and the Medicaid 
        Quality Measurement Program under section 1139B of such Act, 
        where applicable.
            ``(C) To the extent practicable, data on such quality 
        measures is able to be collected using health information 
        technologies.
            ``(D) Each quality measure is free of charge to users of 
        such measure.
            ``(E) Each quality measure is publicly available on an 
        Internet website.
    ``(d) Other Activities by the Secretary.--The Secretary may use 
amounts available under this section to update and test, where 
applicable, quality measures endorsed by the entity with a contract 
under section 1890(a) of the Social Security Act or adopted by the 
Secretary.
    ``(e) Coordination of Grants.--The Secretary shall ensure that 
grants or contracts awarded under this section are coordinated with 
grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of 
the Social Security Act.''.
    (b) Social Security Act.--Section 1890A of the Social Security Act, 
as added by section 3014(b), is amended by adding at the end the 
following new subsection:
    ``(e) Development of Quality Measures.--The Administrator of the 
Center for Medicare & Medicaid Services shall through contracts develop 
quality measures (as determined appropriate by the Administrator) for 
use under this Act. In developing such measures, the Administrator 
shall consult with the Director of the Agency for Healthcare Research 
and Quality.''.
    (c) Funding.--There are authorized to be appropriated to the 
Secretary of Health and Human Services to carry out this section, 
$75,000,000 for each of fiscal years 2010 through 2014. Of the amounts 
appropriated under the preceding sentence in a fiscal year, not less 
than 50 percent of such amounts shall be used pursuant to subsection 
(e) of section 1890A of the Social Security Act, as added by subsection 
(b), with respect to programs under such Act. Amounts appropriated 
under this subsection for a fiscal year shall remain available until 
expended.

SEC. 3014. QUALITY MEASUREMENT.

    (a) New Duties for Consensus-based Entity.--
        (1) Multi-stakeholder group input.--Section 1890(b) of the 
    Social Security Act (42 U.S.C. 1395aaa(b)), as amended by section 
    3003, is amended by adding at the end the following new paragraphs:
        ``(7) Convening multi-stakeholder groups.--
            ``(A) In general.--The entity shall convene multi-
        stakeholder groups to provide input on--
                ``(i) the selection of quality measures described in 
            subparagraph (B), from among--

                    ``(I) such measures that have been endorsed by the 
                entity; and
                    ``(II) such measures that have not been considered 
                for endorsement by such entity but are used or proposed 
                to be used by the Secretary for the collection or 
                reporting of quality measures; and

                ``(ii) national priorities (as identified under section 
            399HH of the Public Health Service Act) for improvement in 
            population health and in the delivery of health care 
            services for consideration under the national strategy 
            established under section 399HH of the Public Health 
            Service Act.
            ``(B) Quality measures.--
                ``(i) In general.--Subject to clause (ii), the quality 
            measures described in this subparagraph are quality 
            measures--

                    ``(I) for use pursuant to sections 1814(i)(5)(D), 
                1833(i)(7), 1833(t)(17), 1848(k)(2)(C), 1866(k)(3), 
                1881(h)(2)(A)(iii), 1886(b)(3)(B)(viii), 1886(j)(7)(D), 
                1886(m)(5)(D), 1886(o)(2), and 1895(b)(3)(B)(v);
                    ``(II) for use in reporting performance information 
                to the public; and
                    ``(III) for use in health care programs other than 
                for use under this Act.

                ``(ii) Exclusion.--Data sets (such as the outcome and 
            assessment information set for home health services and the 
            minimum data set for skilled nursing facility services) 
            that are used for purposes of classification systems used 
            in establishing payment rates under this title shall not be 
            quality measures described in this subparagraph.
            ``(C) Requirement for transparency in process.--
                ``(i) In general.--In convening multi-stakeholder 
            groups under subparagraph (A) with respect to the selection 
            of quality measures, the entity shall provide for an open 
            and transparent process for the activities conducted 
            pursuant to such convening.
                ``(ii) Selection of organizations participating in 
            multi-stakeholder groups.--The process described in clause 
            (i) shall ensure that the selection of representatives 
            comprising such groups provides for public nominations for, 
            and the opportunity for public comment on, such selection.
            ``(D) Multi-stakeholder group defined.--In this paragraph, 
        the term `multi-stakeholder group' means, with respect to a 
        quality measure, a voluntary collaborative of organizations 
        representing a broad group of stakeholders interested in or 
        affected by the use of such quality measure.
        ``(8) Transmission of multi-stakeholder input.--Not later than 
    February 1 of each year (beginning with 2012), the entity shall 
    transmit to the Secretary the input of multi-stakeholder groups 
    provided under paragraph (7).''.
        (2) Annual report.--Section 1890(b)(5)(A) of the Social 
    Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended--
            (A) in clause (ii), by striking ``and'' at the end;
            (B) in clause (iii), by striking the period at the end and 
        inserting a semicolon; and
            (C) by adding at the end the following new clauses:
                ``(iv) gaps in endorsed quality measures, which shall 
            include measures that are within priority areas identified 
            by the Secretary under the national strategy established 
            under section 399HH of the Public Health Service Act, and 
            where quality measures are unavailable or inadequate to 
            identify or address such gaps;
                ``(v) areas in which evidence is insufficient to 
            support endorsement of quality measures in priority areas 
            identified by the Secretary under the national strategy 
            established under section 399HH of the Public Health 
            Service Act and where targeted research may address such 
            gaps; and
                ``(vi) the matters described in clauses (i) and (ii) of 
            paragraph (7)(A).''.
    (b) Multi-stakeholder Group Input Into Selection of Quality 
Measures.--Title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.) is amended by inserting after section 1890 the following:


                          ``quality measurement

    ``Sec. 1890A.  (a) Multi-stakeholder Group Input Into Selection of 
Quality Measures.--The Secretary shall establish a pre-rulemaking 
process under which the following steps occur with respect to the 
selection of quality measures described in section 1890(b)(7)(B):
        ``(1) Input.--Pursuant to section 1890(b)(7), the entity with a 
    contract under section 1890 shall convene multi-stakeholder groups 
    to provide input to the Secretary on the selection of quality 
    measures described in subparagraph (B) of such paragraph.
        ``(2) Public availability of measures considered for 
    selection.--Not later than December 1 of each year (beginning with 
    2011), the Secretary shall make available to the public a list of 
    quality measures described in section 1890(b)(7)(B) that the 
    Secretary is considering under this title.
        ``(3) Transmission of multi-stakeholder input.--Pursuant to 
    section 1890(b)(8), not later than February 1 of each year 
    (beginning with 2012), the entity shall transmit to the Secretary 
    the input of multi-stakeholder groups described in paragraph (1).
        ``(4) Consideration of multi-stakeholder input.--The Secretary 
    shall take into consideration the input from multi-stakeholder 
    groups described in paragraph (1) in selecting quality measures 
    described in section 1890(b)(7)(B) that have been endorsed by the 
    entity with a contract under section 1890 and measures that have 
    not been endorsed by such entity.
        ``(5) Rationale for use of quality measures.--The Secretary 
    shall publish in the Federal Register the rationale for the use of 
    any quality measure described in section 1890(b)(7)(B) that has not 
    been endorsed by the entity with a contract under section 1890.
        ``(6) Assessment of impact.--Not later than March 1, 2012, and 
    at least once every three years thereafter, the Secretary shall--
            ``(A) conduct an assessment of the quality impact of the 
        use of endorsed measures described in section 1890(b)(7)(B); 
        and
            ``(B) make such assessment available to the public.
    ``(b) Process for Dissemination of Measures Used by the 
Secretary.--
        ``(1) In general.--The Secretary shall establish a process for 
    disseminating quality measures used by the Secretary. Such process 
    shall include the following:
            ``(A) The incorporation of such measures, where applicable, 
        in workforce programs, training curricula, and any other means 
        of dissemination determined appropriate by the Secretary.
            ``(B) The dissemination of such quality measures through 
        the national strategy developed under section 399HH of the 
        Public Health Service Act.
        ``(2) Existing methods.--To the extent practicable, the 
    Secretary shall utilize and expand existing dissemination methods 
    in disseminating quality measures under the process established 
    under paragraph (1).
    ``(c) Review of Quality Measures Used by the Secretary.--
        ``(1) In general.--The Secretary shall--
            ``(A) periodically (but in no case less often than once 
        every 3 years) review quality measures described in section 
        1890(b)(7)(B); and
            ``(B) with respect to each such measure, determine whether 
        to--
                ``(i) maintain the use of such measure; or
                ``(ii) phase out such measure.
        ``(2) Considerations.--In conducting the review under paragraph 
    (1), the Secretary shall take steps to--
            ``(A) seek to avoid duplication of measures used; and
            ``(B) take into consideration current innovative 
        methodologies and strategies for quality improvement practices 
        in the delivery of health care services that represent best 
        practices for such quality improvement and measures endorsed by 
        the entity with a contract under section 1890 since the 
        previous review by the Secretary.
    ``(d) Rule of Construction.--Nothing in this section shall preclude 
a State from using the quality measures identified under sections 1139A 
and 1139B.''.
    (c) Funding.--For purposes of carrying out the amendments made by 
this section, the Secretary shall provide for the transfer, from the 
Federal Hospital Insurance Trust Fund under section 1817 of the Social 
Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), 
in such proportion as the Secretary determines appropriate, of 
$20,000,000, to the Centers for Medicare & Medicaid Services Program 
Management Account for each of fiscal years 2010 through 2014. Amounts 
transferred under the preceding sentence shall remain available until 
expended.

SEC. 3015. DATA COLLECTION; PUBLIC REPORTING.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), 
as amended by section 3011, is further amended by adding at the end the 
following:

``SEC. 399II. COLLECTION AND ANALYSIS OF DATA FOR QUALITY AND RESOURCE 
              USE MEASURES.

    ``(a) In General.--The Secretary shall collect and aggregate 
consistent data on quality and resource use measures from information 
systems used to support health care delivery to implement the public 
reporting of performance information, as described in section 399JJ, 
and may award grants or contracts for this purpose. The Secretary shall 
ensure that such collection, aggregation, and analysis systems span an 
increasingly broad range of patient populations, providers, and 
geographic areas over time.
    ``(b) Grants or Contracts for Data Collection.--
        ``(1) In general.--The Secretary may award grants or contracts 
    to eligible entities to support new, or improve existing, efforts 
    to collect and aggregate quality and resource use measures 
    described under subsection (c).
        ``(2) Eligible entities.--To be eligible for a grant or 
    contract under this subsection, an entity shall--
            ``(A) be--
                ``(i) a multi-stakeholder entity that coordinates the 
            development of methods and implementation plans for the 
            consistent reporting of summary quality and cost 
            information;
                ``(ii) an entity capable of submitting such summary 
            data for a particular population and providers, such as a 
            disease registry, regional collaboration, health plan 
            collaboration, or other population-wide source; or
                ``(iii) a Federal Indian Health Service program or a 
            health program operated by an Indian tribe (as defined in 
            section 4 of the Indian Health Care Improvement Act);
            ``(B) promote the use of the systems that provide data to 
        improve and coordinate patient care;
            ``(C) support the provision of timely, consistent quality 
        and resource use information to health care providers, and 
        other groups and organizations as appropriate, with an 
        opportunity for providers to correct inaccurate measures; and
            ``(D) agree to report, as determined by the Secretary, 
        measures on quality and resource use to the public in 
        accordance with the public reporting process established under 
        section 399JJ.
    ``(c) Consistent Data Aggregation.--The Secretary may award grants 
or contracts under this section only to entities that enable summary 
data that can be integrated and compared across multiple sources. The 
Secretary shall provide standards for the protection of the security 
and privacy of patient data.
    ``(d) Matching Funds.--The Secretary may not award a grant or 
contract under this section to an entity unless the entity agrees that 
it will make available (directly or through contributions from other 
public or private entities) non-Federal contributions toward the 
activities to be carried out under the grant or contract in an amount 
equal to $1 for each $5 of Federal funds provided under the grant or 
contract. Such non-Federal matching funds may be provided directly or 
through donations from public or private entities and may be in cash or 
in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for fiscal years 2010 through 2014.

``SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE INFORMATION.

    ``(a) Development of Performance Websites.--The Secretary shall 
make available to the public, through standardized Internet websites, 
performance information summarizing data on quality measures. Such 
information shall be tailored to respond to the differing needs of 
hospitals and other institutional health care providers, physicians and 
other clinicians, patients, consumers, researchers, policymakers, 
States, and other stakeholders, as the Secretary may specify.
    ``(b) Information on Conditions.--The performance information made 
publicly available on an Internet website, as described in subsection 
(a), shall include information regarding clinical conditions to the 
extent such information is available, and the information shall, where 
appropriate, be provider-specific and sufficiently disaggregated and 
specific to meet the needs of patients with different clinical 
conditions.
    ``(c) Consultation.--
        ``(1) In general.--In carrying out this section, the Secretary 
    shall consult with the entity with a contract under section 1890(a) 
    of the Social Security Act, and other entities, as appropriate, to 
    determine the type of information that is useful to stakeholders 
    and the format that best facilitates use of the reports and of 
    performance reporting Internet websites.
        ``(2) Consultation with stakeholders.--The entity with a 
    contract under section 1890(a) of the Social Security Act shall 
    convene multi-stakeholder groups, as described in such section, to 
    review the design and format of each Internet website made 
    available under subsection (a) and shall transmit to the Secretary 
    the views of such multi-stakeholder groups with respect to each 
    such design and format.
    ``(d) Coordination.--Where appropriate, the Secretary shall 
coordinate the manner in which data are presented through Internet 
websites described in subsection (a) and for public reporting of other 
quality measures by the Secretary, including such quality measures 
under title XVIII of the Social Security Act.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for fiscal years 2010 through 2014.''.

      PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE AND MEDICAID INNOVATION 
              WITHIN CMS.

    (a) In General.--Title XI of the Social Security Act is amended by 
inserting after section 1115 the following new section:


              ``center for medicare and medicaid innovation

    ``Sec. 1115A.  (a) Center for Medicare and Medicaid Innovation 
Established.--
        ``(1) In general.--There is created within the Centers for 
    Medicare & Medicaid Services a Center for Medicare and Medicaid 
    Innovation (in this section referred to as the `CMI') to carry out 
    the duties described in this section. The purpose of the CMI is to 
    test innovative payment and service delivery models to reduce 
    program expenditures under the applicable titles while preserving 
    or enhancing the quality of care furnished to individuals under 
    such titles. In selecting such models, the Secretary shall give 
    preference to models that also improve the coordination, quality, 
    and efficiency of health care services furnished to applicable 
    individuals defined in paragraph (4)(A).
        ``(2) Deadline.--The Secretary shall ensure that the CMI is 
    carrying out the duties described in this section by not later than 
    January 1, 2011.
        ``(3) Consultation.--In carrying out the duties under this 
    section, the CMI shall consult representatives of relevant Federal 
    agencies, and clinical and analytical experts with expertise in 
    medicine and health care management. The CMI shall use open door 
    forums or other mechanisms to seek input from interested parties.
        ``(4) Definitions.--In this section:
            ``(A) Applicable individual.--The term `applicable 
        individual' means--
                ``(i) an individual who is entitled to, or enrolled 
            for, benefits under part A of title XVIII or enrolled for 
            benefits under part B of such title;
                ``(ii) an individual who is eligible for medical 
            assistance under title XIX, under a State plan or waiver; 
            or
                ``(iii) an individual who meets the criteria of both 
            clauses (i) and (ii).
            ``(B) Applicable title.--The term `applicable title' means 
        title XVIII, title XIX, or both.
    ``(b) Testing of Models (Phase I).--
        ``(1) In general.--The CMI shall test payment and service 
    delivery models in accordance with selection criteria under 
    paragraph (2) to determine the effect of applying such models under 
    the applicable title (as defined in subsection (a)(4)(B)) on 
    program expenditures under such titles and the quality of care 
    received by individuals receiving benefits under such title.
        ``(2) Selection of models to be tested.--
            ``(A) In general.--The Secretary shall select models to be 
        tested from models where the Secretary determines that there is 
        evidence that the model addresses a defined population for 
        which there are deficits in care leading to poor clinical 
        outcomes or potentially avoidable expenditures. The models 
        selected under the preceding sentence may include the models 
        described in subparagraph (B).
            ``(B) Opportunities.--The models described in this 
        subparagraph are the following models:
                ``(i) Promoting broad payment and practice reform in 
            primary care, including patient-centered medical home 
            models for high-need applicable individuals, medical homes 
            that address women's unique health care needs, and models 
            that transition primary care practices away from fee-for-
            service based reimbursement and toward comprehensive 
            payment or salary-based payment.
                ``(ii) Contracting directly with groups of providers of 
            services and suppliers to promote innovative care delivery 
            models, such as through risk-based comprehensive payment or 
            salary-based payment.
                ``(iii) Utilizing geriatric assessments and 
            comprehensive care plans to coordinate the care (including 
            through interdisciplinary teams) of applicable individuals 
            with multiple chronic conditions and at least one of the 
            following:

                    ``(I) An inability to perform 2 or more activities 
                of daily living.
                    ``(II) Cognitive impairment, including dementia.

                ``(iv) Promote care coordination between providers of 
            services and suppliers that transition health care 
            providers away from fee-for-service based reimbursement and 
            toward salary-based payment.
                ``(v) Supporting care coordination for chronically-ill 
            applicable individuals at high risk of hospitalization 
            through a health information technology-enabled provider 
            network that includes care coordinators, a chronic disease 
            registry, and home tele-health technology.
                ``(vi) Varying payment to physicians who order advanced 
            diagnostic imaging services (as defined in section 
            1834(e)(1)(B)) according to the physician's adherence to 
            appropriateness criteria for the ordering of such services, 
            as determined in consultation with physician specialty 
            groups and other relevant stakeholders.
                ``(vii) Utilizing medication therapy management 
            services, such as those described in section 935 of the 
            Public Health Service Act.
                ``(viii) Establishing community-based health teams to 
            support small-practice medical homes by assisting the 
            primary care practitioner in chronic care management, 
            including patient self-management, activities.
                ``(ix) Assisting applicable individuals in making 
            informed health care choices by paying providers of 
            services and suppliers for using patient decision-support 
            tools, including tools that meet the standards developed 
            and identified under section 936(c)(2)(A) of the Public 
            Health Service Act, that improve applicable individual and 
            caregiver understanding of medical treatment options.
                ``(x) Allowing States to test and evaluate fully 
            integrating care for dual eligible individuals in the 
            State, including the management and oversight of all funds 
            under the applicable titles with respect to such 
            individuals.
                ``(xi) Allowing States to test and evaluate systems of 
            all-payer payment reform for the medical care of residents 
            of the State, including dual eligible individuals.
                ``(xii) Aligning nationally recognized, evidence-based 
            guidelines of cancer care with payment incentives under 
            title XVIII in the areas of treatment planning and follow-
            up care planning for applicable individuals described in 
            clause (i) or (iii) of subsection (a)(4)(A) with cancer, 
            including the identification of gaps in applicable quality 
            measures.
                ``(xiii) Improving post-acute care through continuing 
            care hospitals that offer inpatient rehabilitation, long-
            term care hospitals, and home health or skilled nursing 
            care during an inpatient stay and the 30 days immediately 
            following discharge.
                ``(xiv) Funding home health providers who offer chronic 
            care management services to applicable individuals in 
            cooperation with interdisciplinary teams.
                ``(xv) Promoting improved quality and reduced cost by 
            developing a collaborative of high-quality, low-cost health 
            care institutions that is responsible for--

                    ``(I) developing, documenting, and disseminating 
                best practices and proven care methods;
                    ``(II) implementing such best practices and proven 
                care methods within such institutions to demonstrate 
                further improvements in quality and efficiency; and
                    ``(III) providing assistance to other health care 
                institutions on how best to employ such best practices 
                and proven care methods to improve health care quality 
                and lower costs.

                ``(xvi) Facilitate inpatient care, including intensive 
            care, of hospitalized applicable individuals at their local 
            hospital through the use of electronic monitoring by 
            specialists, including intensivists and critical care 
            specialists, based at integrated health systems.
                ``(xvii) Promoting greater efficiencies and timely 
            access to outpatient services (such as outpatient physical 
            therapy services) through models that do not require a 
            physician or other health professional to refer the service 
            or be involved in establishing the plan of care for the 
            service, when such service is furnished by a health 
            professional who has the authority to furnish the service 
            under existing State law.
                ``(xviii) Establishing comprehensive payments to 
            Healthcare Innovation Zones, consisting of groups of 
            providers that include a teaching hospital, physicians, and 
            other clinical entities, that, through their structure, 
            operations, and joint-activity deliver a full spectrum of 
            integrated and comprehensive health care services to 
            applicable individuals while also incorporating innovative 
            methods for the clinical training of future health care 
            professionals.
            ``(C) Additional factors for consideration.--In selecting 
        models for testing under subparagraph (A), the CMI may consider 
        the following additional factors:
                ``(i) Whether the model includes a regular process for 
            monitoring and updating patient care plans in a manner that 
            is consistent with the needs and preferences of applicable 
            individuals.
                ``(ii) Whether the model places the applicable 
            individual, including family members and other informal 
            caregivers of the applicable individual, at the center of 
            the care team of the applicable individual.
                ``(iii) Whether the model provides for in-person 
            contact with applicable individuals.
                ``(iv) Whether the model utilizes technology, such as 
            electronic health records and patient-based remote 
            monitoring systems, to coordinate care over time and across 
            settings.
                ``(v) Whether the model provides for the maintenance of 
            a close relationship between care coordinators, primary 
            care practitioners, specialist physicians, community-based 
            organizations, and other providers of services and 
            suppliers.
                ``(vi) Whether the model relies on a team-based 
            approach to interventions, such as comprehensive care 
            assessments, care planning, and self-management coaching.
                ``(vii) Whether, under the model, providers of services 
            and suppliers are able to share information with patients, 
            caregivers, and other providers of services and suppliers 
            on a real time basis.
        ``(3) Budget neutrality.--
            ``(A) Initial period.--The Secretary shall not require, as 
        a condition for testing a model under paragraph (1), that the 
        design of such model ensure that such model is budget neutral 
        initially with respect to expenditures under the applicable 
        title.
            ``(B) Termination or modification.--The Secretary shall 
        terminate or modify the design and implementation of a model 
        unless the Secretary determines (and the Chief Actuary of the 
        Centers for Medicare & Medicaid Services, with respect to 
        program spending under the applicable title, certifies), after 
        testing has begun, that the model is expected to--
                ``(i) improve the quality of care (as determined by the 
            Administrator of the Centers for Medicare & Medicaid 
            Services) without increasing spending under the applicable 
            title;
                ``(ii) reduce spending under the applicable title 
            without reducing the quality of care; or
                ``(iii) improve the quality of care and reduce 
            spending.
        Such termination may occur at any time after such testing has 
        begun and before completion of the testing.
        ``(4) Evaluation.--
            ``(A) In general.--The Secretary shall conduct an 
        evaluation of each model tested under this subsection. Such 
        evaluation shall include an analysis of--
                ``(i) the quality of care furnished under the model, 
            including the measurement of patient-level outcomes and 
            patient-centeredness criteria determined appropriate by the 
            Secretary; and
                ``(ii) the changes in spending under the applicable 
            titles by reason of the model.
            ``(B) Information.--The Secretary shall make the results of 
        each evaluation under this paragraph available to the public in 
        a timely fashion and may establish requirements for States and 
        other entities participating in the testing of models under 
        this section to collect and report information that the 
        Secretary determines is necessary to monitor and evaluate such 
        models.
    ``(c) Expansion of Models (Phase II).--Taking into account the 
evaluation under subsection (b)(4), the Secretary may, through 
rulemaking, expand (including implementation on a nationwide basis) the 
duration and the scope of a model that is being tested under subsection 
(b) or a demonstration project under section 1866C, to the extent 
determined appropriate by the Secretary, if--
        ``(1) the Secretary determines that such expansion is expected 
    to--
            ``(A) reduce spending under applicable title without 
        reducing the quality of care; or
            ``(B) improve the quality of care and reduce spending; and
        ``(2) the Chief Actuary of the Centers for Medicare & Medicaid 
    Services certifies that such expansion would reduce program 
    spending under applicable titles.
    ``(d) Implementation.--
        ``(1) Waiver authority.--The Secretary may waive such 
    requirements of titles XI and XVIII and of sections 1902(a)(1), 
    1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely for 
    purposes of carrying out this section with respect to testing 
    models described in subsection (b).
        ``(2) Limitations on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of--
            ``(A) the selection of models for testing or expansion 
        under this section;
            ``(B) the selection of organizations, sites, or 
        participants to test those models selected;
            ``(C) the elements, parameters, scope, and duration of such 
        models for testing or dissemination;
            ``(D) determinations regarding budget neutrality under 
        subsection (b)(3);
            ``(E) the termination or modification of the design and 
        implementation of a model under subsection (b)(3)(B); and
            ``(F) determinations about expansion of the duration and 
        scope of a model under subsection (c), including the 
        determination that a model is not expected to meet criteria 
        described in paragraph (1) or (2) of such subsection.
        ``(3) Administration.--Chapter 35 of title 44, United States 
    Code, shall not apply to the testing and evaluation of models or 
    expansion of such models under this section.
    ``(e) Application to CHIP.--The Center may carry out activities 
under this section with respect to title XXI in the same manner as 
provided under this section with respect to the program under the 
applicable titles.
    ``(f) Funding.--
        ``(1) In general.--There are appropriated, from amounts in the 
    Treasury not otherwise appropriated--
            ``(A) $5,000,000 for the design, implementation, and 
        evaluation of models under subsection (b) for fiscal year 2010;
            ``(B) $10,000,000,000 for the activities initiated under 
        this section for the period of fiscal years 2011 through 2019; 
        and
            ``(C) the amount described in subparagraph (B) for the 
        activities initiated under this section for each subsequent 10-
        year fiscal period (beginning with the 10-year fiscal period 
        beginning with fiscal year 2020).
    Amounts appropriated under the preceding sentence shall remain 
    available until expended.
        ``(2) Use of certain funds.--Out of amounts appropriated under 
    subparagraphs (B) and (C) of paragraph (1), not less than 
    $25,000,000 shall be made available each such fiscal year to 
    design, implement, and evaluate models under subsection (b).
    ``(g) Report to Congress.--Beginning in 2012, and not less than 
once every other year thereafter, the Secretary shall submit to 
Congress a report on activities under this section. Each such report 
shall describe the models tested under subsection (b), including the 
number of individuals described in subsection (a)(4)(A)(i) and of 
individuals described in subsection (a)(4)(A)(ii) participating in such 
models and payments made under applicable titles for services on behalf 
of such individuals, any models chosen for expansion under subsection 
(c), and the results from evaluations under subsection (b)(4). In 
addition, each such report shall provide such recommendations as the 
Secretary determines are appropriate for legislative action to 
facilitate the development and expansion of successful payment 
models.''.
    (b) Medicaid Conforming Amendment.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is 
amended--
        (1) in paragraph (81), by striking ``and'' at the end;
        (2) in paragraph (82), by striking the period at the end and 
    inserting ``; and''; and
        (3) by inserting after paragraph (82) the following new 
    paragraph:
        ``(83) provide for implementation of the payment models 
    specified by the Secretary under section 1115A(c) for 
    implementation on a nationwide basis unless the State demonstrates 
    to the satisfaction of the Secretary that implementation would not 
    be administratively feasible or appropriate to the health care 
    delivery system of the State.''.
    (c) Revisions to Health Care Quality Demonstration Program.--
Subsections (b) and (f) of section 1866C of the Social Security Act (42 
U.S.C. 1395cc-3) are amended by striking ``5-year'' each place it 
appears.

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by adding at the end the following new section:


                         ``shared savings program

    ``Sec. 1899.  (a) Establishment.--
        ``(1) In general.--Not later than January 1, 2012, the 
    Secretary shall establish a shared savings program (in this section 
    referred to as the `program') that promotes accountability for a 
    patient population and coordinates items and services under parts A 
    and B, and encourages investment in infrastructure and redesigned 
    care processes for high quality and efficient service delivery. 
    Under such program--
            ``(A) groups of providers of services and suppliers meeting 
        criteria specified by the Secretary may work together to manage 
        and coordinate care for Medicare fee-for-service beneficiaries 
        through an accountable care organization (referred to in this 
        section as an `ACO'); and
            ``(B) ACOs that meet quality performance standards 
        established by the Secretary are eligible to receive payments 
        for shared savings under subsection (d)(2).
    ``(b) Eligible ACOs.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, as determined appropriate by the Secretary, the 
    following groups of providers of services and suppliers which have 
    established a mechanism for shared governance are eligible to 
    participate as ACOs under the program under this section:
            ``(A) ACO professionals in group practice arrangements.
            ``(B) Networks of individual practices of ACO 
        professionals.
            ``(C) Partnerships or joint venture arrangements between 
        hospitals and ACO professionals.
            ``(D) Hospitals employing ACO professionals.
            ``(E) Such other groups of providers of services and 
        suppliers as the Secretary determines appropriate.
        ``(2) Requirements.--An ACO shall meet the following 
    requirements:
            ``(A) The ACO shall be willing to become accountable for 
        the quality, cost, and overall care of the Medicare fee-for-
        service beneficiaries assigned to it.
            ``(B) The ACO shall enter into an agreement with the 
        Secretary to participate in the program for not less than a 3-
        year period (referred to in this section as the `agreement 
        period').
            ``(C) The ACO shall have a formal legal structure that 
        would allow the organization to receive and distribute payments 
        for shared savings under subsection (d)(2) to participating 
        providers of services and suppliers.
            ``(D) The ACO shall include primary care ACO professionals 
        that are sufficient for the number of Medicare fee-for-service 
        beneficiaries assigned to the ACO under subsection (c). At a 
        minimum, the ACO shall have at least 5,000 such beneficiaries 
        assigned to it under subsection (c) in order to be eligible to 
        participate in the ACO program.
            ``(E) The ACO shall provide the Secretary with such 
        information regarding ACO professionals participating in the 
        ACO as the Secretary determines necessary to support the 
        assignment of Medicare fee-for-service beneficiaries to an ACO, 
        the implementation of quality and other reporting requirements 
        under paragraph (3), and the determination of payments for 
        shared savings under subsection (d)(2).
            ``(F) The ACO shall have in place a leadership and 
        management structure that includes clinical and administrative 
        systems.
            ``(G) The ACO shall define processes to promote evidence-
        based medicine and patient engagement, report on quality and 
        cost measures, and coordinate care, such as through the use of 
        telehealth, remote patient monitoring, and other such enabling 
        technologies.
            ``(H) The ACO shall demonstrate to the Secretary that it 
        meets patient-centeredness criteria specified by the Secretary, 
        such as the use of patient and caregiver assessments or the use 
        of individualized care plans.
        ``(3) Quality and other reporting requirements.--
            ``(A) In general.--The Secretary shall determine 
        appropriate measures to assess the quality of care furnished by 
        the ACO, such as measures of--
                ``(i) clinical processes and outcomes;
                ``(ii) patient and, where practicable, caregiver 
            experience of care; and
                ``(iii) utilization (such as rates of hospital 
            admissions for ambulatory care sensitive conditions).
            ``(B) Reporting requirements.--An ACO shall submit data in 
        a form and manner specified by the Secretary on measures the 
        Secretary determines necessary for the ACO to report in order 
        to evaluate the quality of care furnished by the ACO. Such data 
        may include care transitions across health care settings, 
        including hospital discharge planning and post-hospital 
        discharge follow-up by ACO professionals, as the Secretary 
        determines appropriate.
            ``(C) Quality performance standards.--The Secretary shall 
        establish quality performance standards to assess the quality 
        of care furnished by ACOs. The Secretary shall seek to improve 
        the quality of care furnished by ACOs over time by specifying 
        higher standards, new measures, or both for purposes of 
        assessing such quality of care.
            ``(D) Other reporting requirements.--The Secretary may, as 
        the Secretary determines appropriate, incorporate reporting 
        requirements and incentive payments related to the physician 
        quality reporting initiative (PQRI) under section 1848, 
        including such requirements and such payments related to 
        electronic prescribing, electronic health records, and other 
        similar initiatives under section 1848, and may use alternative 
        criteria than would otherwise apply under such section for 
        determining whether to make such payments. The incentive 
        payments described in the preceding sentence shall not be taken 
        into consideration when calculating any payments otherwise made 
        under subsection (d).
        ``(4) No duplication in participation in shared savings 
    programs.--A provider of services or supplier that participates in 
    any of the following shall not be eligible to participate in an ACO 
    under this section:
            ``(A) A model tested or expanded under section 1115A that 
        involves shared savings under this title, or any other program 
        or demonstration project that involves such shared savings.
            ``(B) The independence at home medical practice pilot 
        program under section 1866E.
    ``(c) Assignment of Medicare Fee-for-service Beneficiaries to 
ACOs.--The Secretary shall determine an appropriate method to assign 
Medicare fee-for-service beneficiaries to an ACO based on their 
utilization of primary care services provided under this title by an 
ACO professional described in subsection (h)(1)(A).
    ``(d) Payments and Treatment of Savings.--
        ``(1) Payments.--
            ``(A) In general.--Under the program, subject to paragraph 
        (3), payments shall continue to be made to providers of 
        services and suppliers participating in an ACO under the 
        original Medicare fee-for-service program under parts A and B 
        in the same manner as they would otherwise be made except that 
        a participating ACO is eligible to receive payment for shared 
        savings under paragraph (2) if--
                ``(i) the ACO meets quality performance standards 
            established by the Secretary under subsection (b)(3); and
                ``(ii) the ACO meets the requirement under subparagraph 
            (B)(i).
            ``(B) Savings requirement and benchmark.--
                ``(i) Determining savings.--In each year of the 
            agreement period, an ACO shall be eligible to receive 
            payment for shared savings under paragraph (2) only if the 
            estimated average per capita Medicare expenditures under 
            the ACO for Medicare fee-for-service beneficiaries for 
            parts A and B services, adjusted for beneficiary 
            characteristics, is at least the percent specified by the 
            Secretary below the applicable benchmark under clause (ii). 
            The Secretary shall determine the appropriate percent 
            described in the preceding sentence to account for normal 
            variation in expenditures under this title, based upon the 
            number of Medicare fee-for-service beneficiaries assigned 
            to an ACO.
                ``(ii) Establish and update benchmark.--The Secretary 
            shall estimate a benchmark for each agreement period for 
            each ACO using the most recent available 3 years of per-
            beneficiary expenditures for parts A and B services for 
            Medicare fee-for-service beneficiaries assigned to the ACO. 
            Such benchmark shall be adjusted for beneficiary 
            characteristics and such other factors as the Secretary 
            determines appropriate and updated by the projected 
            absolute amount of growth in national per capita 
            expenditures for parts A and B services under the original 
            Medicare fee-for-service program, as estimated by the 
            Secretary. Such benchmark shall be reset at the start of 
            each agreement period.
        ``(2) Payments for shared savings.--Subject to performance with 
    respect to the quality performance standards established by the 
    Secretary under subsection (b)(3), if an ACO meets the requirements 
    under paragraph (1), a percent (as determined appropriate by the 
    Secretary) of the difference between such estimated average per 
    capita Medicare expenditures in a year, adjusted for beneficiary 
    characteristics, under the ACO and such benchmark for the ACO may 
    be paid to the ACO as shared savings and the remainder of such 
    difference shall be retained by the program under this title. The 
    Secretary shall establish limits on the total amount of shared 
    savings that may be paid to an ACO under this paragraph.
        ``(3) Monitoring avoidance of at-risk patients.--If the 
    Secretary determines that an ACO has taken steps to avoid patients 
    at risk in order to reduce the likelihood of increasing costs to 
    the ACO the Secretary may impose an appropriate sanction on the 
    ACO, including termination from the program.
        ``(4) Termination.--The Secretary may terminate an agreement 
    with an ACO if it does not meet the quality performance standards 
    established by the Secretary under subsection (b)(3).
    ``(e) Administration.--Chapter 35 of title 44, United States Code, 
shall not apply to the program.
    ``(f) Waiver Authority.--The Secretary may waive such requirements 
of sections 1128A and 1128B and title XVIII of this Act as may be 
necessary to carry out the provisions of this section.
    ``(g) Limitations on Review.--There shall be no administrative or 
judicial review under section 1869, section 1878, or otherwise of--
        ``(1) the specification of criteria under subsection (a)(1)(B);
        ``(2) the assessment of the quality of care furnished by an ACO 
    and the establishment of performance standards under subsection 
    (b)(3);
        ``(3) the assignment of Medicare fee-for-service beneficiaries 
    to an ACO under subsection (c);
        ``(4) the determination of whether an ACO is eligible for 
    shared savings under subsection (d)(2) and the amount of such 
    shared savings, including the determination of the estimated 
    average per capita Medicare expenditures under the ACO for Medicare 
    fee-for-service beneficiaries assigned to the ACO and the average 
    benchmark for the ACO under subsection (d)(1)(B);
        ``(5) the percent of shared savings specified by the Secretary 
    under subsection (d)(2) and any limit on the total amount of shared 
    savings established by the Secretary under such subsection; and
        ``(6) the termination of an ACO under subsection (d)(4).
    ``(h) Definitions.--In this section:
        ``(1) ACO professional.--The term `ACO professional' means--
            ``(A) a physician (as defined in section 1861(r)(1)); and
            ``(B) a practitioner described in section 
        1842(b)(18)(C)(i).
        ``(2) Hospital.--The term `hospital' means a subsection (d) 
    hospital (as defined in section 1886(d)(1)(B)).
        ``(3) Medicare fee-for-service beneficiary.--The term `Medicare 
    fee-for-service beneficiary' means an individual who is enrolled in 
    the original Medicare fee-for-service program under parts A and B 
    and is not enrolled in an MA plan under part C, an eligible 
    organization under section 1876, or a PACE program under section 
    1894.''.

SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    Title XVIII of the Social Security Act, as amended by section 3021, 
is amended by inserting after section 1886C the following new section:


               ``national pilot program on payment bundling

    ``Sec. 1866D.  (a) Implementation.--
        ``(1) In general.--The Secretary shall establish a pilot 
    program for integrated care during an episode of care provided to 
    an applicable beneficiary around a hospitalization in order to 
    improve the coordination, quality, and efficiency of health care 
    services under this title.
        ``(2) Definitions.--In this section:
            ``(A) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who--
                ``(i) is entitled to, or enrolled for, benefits under 
            part A and enrolled for benefits under part B of such 
            title, but not enrolled under part C or a PACE program 
            under section 1894; and
                ``(ii) is admitted to a hospital for an applicable 
            condition.
            ``(B) Applicable condition.--The term `applicable 
        condition' means 1 or more of 8 conditions selected by the 
        Secretary. In selecting conditions under the preceding 
        sentence, the Secretary shall take into consideration the 
        following factors:
                ``(i) Whether the conditions selected include a mix of 
            chronic and acute conditions.
                ``(ii) Whether the conditions selected include a mix of 
            surgical and medical conditions.
                ``(iii) Whether a condition is one for which there is 
            evidence of an opportunity for providers of services and 
            suppliers to improve the quality of care furnished while 
            reducing total expenditures under this title.
                ``(iv) Whether a condition has significant variation 
            in--

                    ``(I) the number of readmissions; and
                    ``(II) the amount of expenditures for post-acute 
                care spending under this title.

                ``(v) Whether a condition is high-volume and has high 
            post-acute care expenditures under this title.
                ``(vi) Which conditions the Secretary determines are 
            most amenable to bundling across the spectrum of care given 
            practice patterns under this title.
            ``(C) Applicable services.--The term `applicable services' 
        means the following:
                ``(i) Acute care inpatient services.
                ``(ii) Physicians' services delivered in and outside of 
            an acute care hospital setting.
                ``(iii) Outpatient hospital services, including 
            emergency department services.
                ``(iv) Post-acute care services, including home health 
            services, skilled nursing services, inpatient 
            rehabilitation services, and inpatient hospital services 
            furnished by a long-term care hospital.
                ``(v) Other services the Secretary determines 
            appropriate.
            ``(D) Episode of care.--
                ``(i) In general.--Subject to clause (ii), the term 
            `episode of care' means, with respect to an applicable 
            condition and an applicable beneficiary, the period that 
            includes--

                    ``(I) the 3 days prior to the admission of the 
                applicable beneficiary to a hospital for the applicable 
                condition;
                    ``(II) the length of stay of the applicable 
                beneficiary in such hospital; and
                    ``(III) the 30 days following the discharge of the 
                applicable beneficiary from such hospital.

                ``(ii) Establishment of period by the secretary.--The 
            Secretary, as appropriate, may establish a period (other 
            than the period described in clause (i)) for an episode of 
            care under the pilot program.
            ``(E) Physicians' services.--The term `physicians' 
        services' has the meaning given such term in section 1861(q).
            ``(F) Pilot program.--The term `pilot program' means the 
        pilot program under this section.
            ``(G) Provider of services.--The term `provider of 
        services' has the meaning given such term in section 1861(u).
            ``(H) Readmission.--The term `readmission' has the meaning 
        given such term in section 1886(q)(5)(E).
            ``(I) Supplier.--The term `supplier' has the meaning given 
        such term in section 1861(d).
        ``(3) Deadline for implementation.--The Secretary shall 
    establish the pilot program not later than January 1, 2013.
    ``(b) Developmental Phase.--
        ``(1) Determination of patient assessment instrument.--The 
    Secretary shall determine which patient assessment instrument (such 
    as the Continuity Assessment Record and Evaluation (CARE) tool) 
    shall be used under the pilot program to evaluate the applicable 
    condition of an applicable beneficiary for purposes of determining 
    the most clinically appropriate site for the provision of post-
    acute care to the applicable beneficiary.
        ``(2) Development of quality measures for an episode of care 
    and for post-acute care.--
            ``(A) In general.--The Secretary, in consultation with the 
        Agency for Healthcare Research and Quality and the entity with 
        a contract under section 1890(a) of the Social Security Act, 
        shall develop quality measures for use in the pilot program--
                ``(i) for episodes of care; and
                ``(ii) for post-acute care.
            ``(B) Site-neutral post-acute care quality measures.--Any 
        quality measures developed under subparagraph (A)(ii) shall be 
        site-neutral.
            ``(C) Coordination with quality measure development and 
        endorsement procedures.--The Secretary shall ensure that the 
        development of quality measures under subparagraph (A) is done 
        in a manner that is consistent with the measures developed and 
        endorsed under section 1890 and 1890A that are applicable to 
        all post-acute care settings.
    ``(c) Details.--
        ``(1) Duration.--
            ``(A) In general.--Subject to subparagraph (B), the pilot 
        program shall be conducted for a period of 5 years.
            ``(B) Extension.--The Secretary may extend the duration of 
        the pilot program for providers of services and suppliers 
        participating in the pilot program as of the day before the end 
        of the 5-year period described in subparagraph (A), for a 
        period determined appropriate by the Secretary, if the 
        Secretary determines that such extension will result in 
        improving or not reducing the quality of patient care and 
        reducing spending under this title.
        ``(2) Participating providers of services and suppliers.--
            ``(A) In general.--An entity comprised of providers of 
        services and suppliers, including a hospital, a physician 
        group, a skilled nursing facility, and a home health agency, 
        who are otherwise participating under this title, may submit an 
        application to the Secretary to provide applicable services to 
        applicable individuals under this section.
            ``(B) Requirements.--The Secretary shall develop 
        requirements for entities to participate in the pilot program 
        under this section. Such requirements shall ensure that 
        applicable beneficiaries have an adequate choice of providers 
        of services and suppliers under the pilot program.
        ``(3) Payment methodology.--
            ``(A) In general.--
                ``(i) Establishment of payment methods.--The Secretary 
            shall develop payment methods for the pilot program for 
            entities participating in the pilot program. Such payment 
            methods may include bundled payments and bids from entities 
            for episodes of care. The Secretary shall make payments to 
            the entity for services covered under this section.
                ``(ii) No additional program expenditures.--Payments 
            under this section for applicable items and services under 
            this title (including payment for services described in 
            subparagraph (B)) for applicable beneficiaries for a year 
            shall be established in a manner that does not result in 
            spending more for such entity for such beneficiaries than 
            would otherwise be expended for such entity for such 
            beneficiaries for such year if the pilot program were not 
            implemented, as estimated by the Secretary.
            ``(B) Inclusion of certain services.--A payment methodology 
        tested under the pilot program shall include payment for the 
        furnishing of applicable services and other appropriate 
        services, such as care coordination, medication reconciliation, 
        discharge planning, transitional care services, and other 
        patient-centered activities as determined appropriate by the 
        Secretary.
            ``(C) Bundled payments.--
                ``(i) In general.--A bundled payment under the pilot 
            program shall--

                    ``(I) be comprehensive, covering the costs of 
                applicable services and other appropriate services 
                furnished to an individual during an episode of care 
                (as determined by the Secretary); and
                    ``(II) be made to the entity which is participating 
                in the pilot program.

                ``(ii) Requirement for provision of applicable services 
            and other appropriate services.--Applicable services and 
            other appropriate services for which payment is made under 
            this subparagraph shall be furnished or directed by the 
            entity which is participating in the pilot program.
            ``(D) Payment for post-acute care services after the 
        episode of care.--The Secretary shall establish procedures, in 
        the case where an applicable beneficiary requires continued 
        post-acute care services after the last day of the episode of 
        care, under which payment for such services shall be made.
        ``(4) Quality measures.--
            ``(A) In general.--The Secretary shall establish quality 
        measures (including quality measures of process, outcome, and 
        structure) related to care provided by entities participating 
        in the pilot program. Quality measures established under the 
        preceding sentence shall include measures of the following:
                ``(i) Functional status improvement.
                ``(ii) Reducing rates of avoidable hospital 
            readmissions.
                ``(iii) Rates of discharge to the community.
                ``(iv) Rates of admission to an emergency room after a 
            hospitalization.
                ``(v) Incidence of health care acquired infections.
                ``(vi) Efficiency measures.
                ``(vii) Measures of patient-centeredness of care.
                ``(viii) Measures of patient perception of care.
                ``(ix) Other measures, including measures of patient 
            outcomes, determined appropriate by the Secretary.
            ``(B) Reporting on quality measures.--
                ``(i) In general.--A entity shall submit data to the 
            Secretary on quality measures established under 
            subparagraph (A) during each year of the pilot program (in 
            a form and manner, subject to clause (iii), specified by 
            the Secretary).
                ``(ii) Submission of data through electronic health 
            record.--To the extent practicable, the Secretary shall 
            specify that data on measures be submitted under clause (i) 
            through the use of an qualified electronic health record 
            (as defined in section 3000(13) of the Public Health 
            Service Act (42 U.S.C. 300jj-11(13)) in a manner specified 
            by the Secretary.
    ``(d) Waiver.--The Secretary may waive such provisions of this 
title and title XI as may be necessary to carry out the pilot program.
    ``(e) Independent Evaluation and Reports on Pilot Program.--
        ``(1) Independent evaluation.--The Secretary shall conduct an 
    independent evaluation of the pilot program, including the extent 
    to which the pilot program has--
            ``(A) improved quality measures established under 
        subsection (c)(4)(A);
            ``(B) improved health outcomes;
            ``(C) improved applicable beneficiary access to care; and
            ``(D) reduced spending under this title.
        ``(2) Reports.--
            ``(A) Interim report.--Not later than 2 years after the 
        implementation of the pilot program, the Secretary shall submit 
        to Congress a report on the initial results of the independent 
        evaluation conducted under paragraph (1).
            ``(B) Final report.--Not later than 3 years after the 
        implementation of the pilot program, the Secretary shall submit 
        to Congress a report on the final results of the independent 
        evaluation conducted under paragraph (1).
    ``(f) Consultation.--The Secretary shall consult with 
representatives of small rural hospitals, including critical access 
hospitals (as defined in section 1861(mm)(1)), regarding their 
participation in the pilot program. Such consultation shall include 
consideration of innovative methods of implementing bundled payments in 
hospitals described in the preceding sentence, taking into 
consideration any difficulties in doing so as a result of the low 
volume of services provided by such hospitals.
    ``(g) Implementation Plan.--
        ``(1) In general.--Not later than January 1, 2016, the 
    Secretary shall submit a plan for the implementation of an 
    expansion of the pilot program if the Secretary determines that 
    such expansion will result in improving or not reducing the quality 
    of patient care and reducing spending under this title.
    ``(h) Administration.--Chapter 35 of title 44, United States Code, 
shall not apply to the selection, testing, and evaluation of models or 
the expansion of such models under this section.''.

SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM.

    Title XVIII of the Social Security Act is amended by inserting 
after section 1866D, as inserted by section 3023, the following new 
section:


      ``independence at home medical practice demonstration program

    ``Sec. 1866D.  (a) Establishment.--
        ``(1) In general.--The Secretary shall conduct a demonstration 
    program (in this section referred to as the `demonstration 
    program') to test a payment incentive and service delivery model 
    that utilizes physician and nurse practitioner directed home-based 
    primary care teams designed to reduce expenditures and improve 
    health outcomes in the provision of items and services under this 
    title to applicable beneficiaries (as defined in subsection (d)).
        ``(2) Requirement.--The demonstration program shall test 
    whether a model described in paragraph (1), which is accountable 
    for providing comprehensive, coordinated, continuous, and 
    accessible care to high-need populations at home and coordinating 
    health care across all treatment settings, results in--
            ``(A) reducing preventable hospitalizations;
            ``(B) preventing hospital readmissions;
            ``(C) reducing emergency room visits;
            ``(D) improving health outcomes commensurate with the 
        beneficiaries' stage of chronic illness;
            ``(E) improving the efficiency of care, such as by reducing 
        duplicative diagnostic and laboratory tests;
            ``(F) reducing the cost of health care services covered 
        under this title; and
            ``(G) achieving beneficiary and family caregiver 
        satisfaction.
    ``(b) Independence at Home Medical Practice.--
        ``(1) Independence at home medical practice defined.--In this 
    section:
            ``(A) In general.--The term `independence at home medical 
        practice' means a legal entity that--
                ``(i) is comprised of an individual physician or nurse 
            practitioner or group of physicians and nurse practitioners 
            that provides care as part of a team that includes 
            physicians, nurses, physician assistants, pharmacists, and 
            other health and social services staff as appropriate who 
            have experience providing home-based primary care to 
            applicable beneficiaries, make in-home visits, and are 
            available 24 hours per day, 7 days per week to carry out 
            plans of care that are tailored to the individual 
            beneficiary's chronic conditions and designed to achieve 
            the results in subsection (a);
                ``(ii) is organized at least in part for the purpose of 
            providing physicians' services;
                ``(iii) has documented experience in providing home-
            based primary care services to high-cost chronically ill 
            beneficiaries, as determined appropriate by the Secretary;
                ``(iv) furnishes services to at least 200 applicable 
            beneficiaries (as defined in subsection (d)) during each 
            year of the demonstration program;
                ``(v) has entered into an agreement with the Secretary;
                ``(vi) uses electronic health information systems, 
            remote monitoring, and mobile diagnostic technology; and
                ``(vii) meets such other criteria as the Secretary 
            determines to be appropriate to participate in the 
            demonstration program.
        The entity shall report on quality measures (in such form, 
        manner, and frequency as specified by the Secretary, which may 
        be for the group, for providers of services and suppliers, or 
        both) and report to the Secretary (in a form, manner, and 
        frequency as specified by the Secretary) such data as the 
        Secretary determines appropriate to monitor and evaluate the 
        demonstration program.
            ``(B) Physician.--The term `physician' includes, except as 
        the Secretary may otherwise provide, any individual who 
        furnishes services for which payment may be made as physicians' 
        services and has the medical training or experience to fulfill 
        the physician's role described in subparagraph (A)(i).
        ``(2) Participation of nurse practitioners and physician 
    assistants.--Nothing in this section shall be construed to prevent 
    a nurse practitioner or physician assistant from participating in, 
    or leading, a home-based primary care team as part of an 
    independence at home medical practice if--
            ``(A) all the requirements of this section are met;
            ``(B) the nurse practitioner or physician assistant, as the 
        case may be, is acting consistent with State law; and
            ``(C) the nurse practitioner or physician assistant has the 
        medical training or experience to fulfill the nurse 
        practitioner or physician assistant role described in paragraph 
        (1)(A)(i).
        ``(3) Inclusion of providers and practitioners.--Nothing in 
    this subsection shall be construed as preventing an independence at 
    home medical practice from including a provider of services or a 
    participating practitioner described in section 1842(b)(18)(C) that 
    is affiliated with the practice under an arrangement structured so 
    that such provider of services or practitioner participates in the 
    demonstration program and shares in any savings under the 
    demonstration program.
        ``(4) Quality and performance standards.--The Secretary shall 
    develop quality performance standards for independence at home 
    medical practices participating in the demonstration program.
    ``(c) Payment Methodology.--
        ``(1) Establishment of target spending level.--The Secretary 
    shall establish an estimated annual spending target, for the amount 
    the Secretary estimates would have been spent in the absence of the 
    demonstration, for items and services covered under parts A and B 
    furnished to applicable beneficiaries for each qualifying 
    independence at home medical practice under this section. Such 
    spending targets shall be determined on a per capita basis. Such 
    spending targets shall include a risk corridor that takes into 
    account normal variation in expenditures for items and services 
    covered under parts A and B furnished to such beneficiaries with 
    the size of the corridor being related to the number of applicable 
    beneficiaries furnished services by each independence at home 
    medical practice. The spending targets may also be adjusted for 
    other factors as the Secretary determines appropriate.
        ``(2) Incentive payments.--Subject to performance on quality 
    measures, a qualifying independence at home medical practice is 
    eligible to receive an incentive payment under this section if 
    actual expenditures for a year for the applicable beneficiaries it 
    enrolls are less than the estimated spending target established 
    under paragraph (1) for such year. An incentive payment for such 
    year shall be equal to a portion (as determined by the Secretary) 
    of the amount by which actual expenditures (including incentive 
    payments under this paragraph) for applicable beneficiaries under 
    parts A and B for such year are estimated to be less than 5 percent 
    less than the estimated spending target for such year, as 
    determined under paragraph (1).
    ``(d) Applicable Beneficiaries.--
        ``(1) Definition.--In this section, the term `applicable 
    beneficiary' means, with respect to a qualifying independence at 
    home medical practice, an individual who the practice has 
    determined--
            ``(A) is entitled to benefits under part A and enrolled for 
        benefits under part B;
            ``(B) is not enrolled in a Medicare Advantage plan under 
        part C or a PACE program under section 1894;
            ``(C) has 2 or more chronic illnesses, such as congestive 
        heart failure, diabetes, other dementias designated by the 
        Secretary, chronic obstructive pulmonary disease, ischemic 
        heart disease, stroke, Alzheimer's Disease and 
        neurodegenerative diseases, and other diseases and conditions 
        designated by the Secretary which result in high costs under 
        this title;
            ``(D) within the past 12 months has had a nonelective 
        hospital admission;
            ``(E) within the past 12 months has received acute or 
        subacute rehabilitation services;
            ``(F) has 2 or more functional dependencies requiring the 
        assistance of another person (such as bathing, dressing, 
        toileting, walking, or feeding); and
            ``(G) meets such other criteria as the Secretary determines 
        appropriate.
        ``(2) Patient election to participate.--The Secretary shall 
    determine an appropriate method of ensuring that applicable 
    beneficiaries have agreed to enroll in an independence at home 
    medical practice under the demonstration program. Enrollment in the 
    demonstration program shall be voluntary.
        ``(3) Beneficiary access to services.--Nothing in this section 
    shall be construed as encouraging physicians or nurse practitioners 
    to limit applicable beneficiary access to services covered under 
    this title and applicable beneficiaries shall not be required to 
    relinquish access to any benefit under this title as a condition of 
    receiving services from an independence at home medical practice.
    ``(e) Implementation.--
        ``(1) Starting date.--The demonstration program shall begin no 
    later than January 1, 2012. An agreement with an independence at 
    home medical practice under the demonstration program may cover not 
    more than a 3-year period.
        ``(2) No physician duplication in demonstration 
    participation.--The Secretary shall not pay an independence at home 
    medical practice under this section that participates in section 
    1899.
        ``(3) No beneficiary duplication in demonstration 
    participation.--The Secretary shall ensure that no applicable 
    beneficiary enrolled in an independence at home medical practice 
    under this section is participating in the programs under section 
    1899.
        ``(4) Preference.--In approving an independence at home medical 
    practice, the Secretary shall give preference to practices that 
    are--
            ``(A) located in high-cost areas of the country;
            ``(B) have experience in furnishing health care services to 
        applicable beneficiaries in the home; and
            ``(C) use electronic medical records, health information 
        technology, and individualized plans of care.
        ``(5) Limitation on number of practices.--In selecting 
    qualified independence at home medical practices to participate 
    under the demonstration program, the Secretary shall limit the 
    number of such practices so that the number of applicable 
    beneficiaries that may participate in the demonstration program 
    does not exceed 10,000.
        ``(6) Waiver.--The Secretary may waive such provisions of this 
    title and title XI as the Secretary determines necessary in order 
    to implement the demonstration program.
        ``(7) Administration.--Chapter 35 of title 44, United States 
    Code, shall not apply to this section.
    ``(f) Evaluation and Monitoring.--
        ``(1) In general.--The Secretary shall evaluate each 
    independence at home medical practice under the demonstration 
    program to assess whether the practice achieved the results 
    described in subsection (a).
        ``(2) Monitoring applicable beneficiaries.--The Secretary may 
    monitor data on expenditures and quality of services under this 
    title after an applicable beneficiary discontinues receiving 
    services under this title through a qualifying independence at home 
    medical practice.
    ``(g) Reports to Congress.--The Secretary shall conduct an 
independent evaluation of the demonstration program and submit to 
Congress a final report, including best practices under the 
demonstration program. Such report shall include an analysis of the 
demonstration program on coordination of care, expenditures under this 
title, applicable beneficiary access to services, and the quality of 
health care services provided to applicable beneficiaries.
    ``(h) Funding.--For purposes of administering and carrying out the 
demonstration program, other than for payments for items and services 
furnished under this title and incentive payments under subsection (c), 
in addition to funds otherwise appropriated, there shall be transferred 
to the Secretary for the Center for Medicare & Medicaid Services 
Program Management Account from the Federal Hospital Insurance Trust 
Fund under section 1817 and the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 (in proportions determined appropriate by 
the Secretary) $5,000,000 for each of fiscal years 2010 through 2015. 
Amounts transferred under this subsection for a fiscal year shall be 
available until expended.
    ``(i) Termination.--
        ``(1) Mandatory termination.--The Secretary shall terminate an 
    agreement with an independence at home medical practice if--
            ``(A) the Secretary estimates or determines that such 
        practice will not receive an incentive payment for the second 
        of 2 consecutive years under the demonstration program; or
            ``(B) such practice fails to meet quality standards during 
        any year of the demonstration program.
        ``(2) Permissive termination.--The Secretary may terminate an 
    agreement with an independence at home medical practice for such 
    other reasons determined appropriate by the Secretary.''.

SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww), as amended by sections 3001 and 3008, is amended by adding at 
the end the following new subsection:
    ``(q) Hospital Readmissions Reduction Program.--
        ``(1) In general.--With respect to payment for discharges from 
    an applicable hospital (as defined in paragraph (5)(C)) occurring 
    during a fiscal year beginning on or after October 1, 2012, in 
    order to account for excess readmissions in the hospital, the 
    Secretary shall reduce the payments that would otherwise be made to 
    such hospital under subsection (d) (or section 1814(b)(3), as the 
    case may be) for such a discharge by an amount equal to the product 
    of--
            ``(A) the base operating DRG payment amount (as defined in 
        paragraph (2)) for the discharge; and
            ``(B) the adjustment factor (described in paragraph (3)(A)) 
        for the hospital for the fiscal year.
        ``(2) Base operating drg payment amount defined.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        in this subsection, the term `base operating DRG payment 
        amount' means, with respect to a hospital for a fiscal year--
                ``(i) the payment amount that would otherwise be made 
            under subsection (d) (determined without regard to 
            subsection (o)) for a discharge if this subsection did not 
            apply; reduced by
                ``(ii) any portion of such payment amount that is 
            attributable to payments under paragraphs (5)(A), (5)(B), 
            (5)(F), and (12) of subsection (d).
            ``(B) Special rules for certain hospitals.--
                ``(i) Sole community hospitals and medicare-dependent, 
            small rural hospitals.--In the case of a medicare-
            dependent, small rural hospital (with respect to discharges 
            occurring during fiscal years 2012 and 2013) or a sole 
            community hospital, in applying subparagraph (A)(i), the 
            payment amount that would otherwise be made under 
            subsection (d) shall be determined without regard to 
            subparagraphs (I) and (L) of subsection (b)(3) and 
            subparagraphs (D) and (G) of subsection (d)(5).
                ``(ii) Hospitals paid under section 1814.--In the case 
            of a hospital that is paid under section 1814(b)(3), the 
            Secretary may exempt such hospitals provided that States 
            paid under such section submit an annual report to the 
            Secretary describing how a similar program in the State for 
            a participating hospital or hospitals achieves or surpasses 
            the measured results in terms of patient health outcomes 
            and cost savings established herein with respect to this 
            section.
        ``(3) Adjustment factor.--
            ``(A) In general.--For purposes of paragraph (1), the 
        adjustment factor under this paragraph for an applicable 
        hospital for a fiscal year is equal to the greater of--
                ``(i) the ratio described in subparagraph (B) for the 
            hospital for the applicable period (as defined in paragraph 
            (5)(D)) for such fiscal year; or
                ``(ii) the floor adjustment factor specified in 
            subparagraph (C).
            ``(B) Ratio.--The ratio described in this subparagraph for 
        a hospital for an applicable period is equal to 1 minus the 
        ratio of--
                ``(i) the aggregate payments for excess readmissions 
            (as defined in paragraph (4)(A)) with respect to an 
            applicable hospital for the applicable period; and
                ``(ii) the aggregate payments for all discharges (as 
            defined in paragraph (4)(B)) with respect to such 
            applicable hospital for such applicable period.
            ``(C) Floor adjustment factor.--For purposes of 
        subparagraph (A), the floor adjustment factor specified in this 
        subparagraph for--
                ``(i) fiscal year 2013 is 0.99;
                ``(ii) fiscal year 2014 is 0.98; or
                ``(iii) fiscal year 2015 and subsequent fiscal years is 
            0.97.
        ``(4) Aggregate payments, excess readmission ratio defined.--
    For purposes of this subsection:
            ``(A) Aggregate payments for excess readmissions.--The term 
        `aggregate payments for excess readmissions' means, for a 
        hospital for an applicable period, the sum, for applicable 
        conditions (as defined in paragraph (5)(A)), of the product, 
        for each applicable condition, of--
                ``(i) the base operating DRG payment amount for such 
            hospital for such applicable period for such condition;
                ``(ii) the number of admissions for such condition for 
            such hospital for such applicable period; and
                ``(iii) the excess readmissions ratio (as defined in 
            subparagraph (C)) for such hospital for such applicable 
            period minus 1.
            ``(B) Aggregate payments for all discharges.--The term 
        `aggregate payments for all discharges' means, for a hospital 
        for an applicable period, the sum of the base operating DRG 
        payment amounts for all discharges for all conditions from such 
        hospital for such applicable period.
            ``(C) Excess readmission ratio.--
                ``(i) In general.--Subject to clause (ii), the term 
            `excess readmissions ratio' means, with respect to an 
            applicable condition for a hospital for an applicable 
            period, the ratio (but not less than 1.0) of--

                    ``(I) the risk adjusted readmissions based on 
                actual readmissions, as determined consistent with a 
                readmission measure methodology that has been endorsed 
                under paragraph (5)(A)(ii)(I), for an applicable 
                hospital for such condition with respect to such 
                applicable period; to
                    ``(II) the risk adjusted expected readmissions (as 
                determined consistent with such a methodology) for such 
                hospital for such condition with respect to such 
                applicable period.

                ``(ii) Exclusion of certain readmissions.--For purposes 
            of clause (i), with respect to a hospital, excess 
            readmissions shall not include readmissions for an 
            applicable condition for which there are fewer than a 
            minimum number (as determined by the Secretary) of 
            discharges for such applicable condition for the applicable 
            period and such hospital.
        ``(5) Definitions.--For purposes of this subsection:
            ``(A) Applicable condition.--The term `applicable 
        condition' means, subject to subparagraph (B), a condition or 
        procedure selected by the Secretary among conditions and 
        procedures for which--
                ``(i) readmissions (as defined in subparagraph (E)) 
            that represent conditions or procedures that are high 
            volume or high expenditures under this title (or other 
            criteria specified by the Secretary); and
                ``(ii) measures of such readmissions--

                    ``(I) have been endorsed by the entity with a 
                contract under section 1890(a); and
                    ``(II) such endorsed measures have exclusions for 
                readmissions that are unrelated to the prior discharge 
                (such as a planned readmission or transfer to another 
                applicable hospital).

            ``(B) Expansion of applicable conditions.--Beginning with 
        fiscal year 2015, the Secretary shall, to the extent 
        practicable, expand the applicable conditions beyond the 3 
        conditions for which measures have been endorsed as described 
        in subparagraph (A)(ii)(I) as of the date of the enactment of 
        this subsection to the additional 4 conditions that have been 
        identified by the Medicare Payment Advisory Commission in its 
        report to Congress in June 2007 and to other conditions and 
        procedures as determined appropriate by the Secretary. In 
        expanding such applicable conditions, the Secretary shall seek 
        the endorsement described in subparagraph (A)(ii)(I) but may 
        apply such measures without such an endorsement in the case of 
        a specified area or medical topic determined appropriate by the 
        Secretary for which a feasible and practical measure has not 
        been endorsed by the entity with a contract under section 
        1890(a) as long as due consideration is given to measures that 
        have been endorsed or adopted by a consensus organization 
        identified by the Secretary.
            ``(C) Applicable hospital.--The term `applicable hospital' 
        means a subsection (d) hospital or a hospital that is paid 
        under section 1814(b)(3), as the case may be.
            ``(D) Applicable period.--The term `applicable period' 
        means, with respect to a fiscal year, such period as the 
        Secretary shall specify.
            ``(E) Readmission.--The term `readmission' means, in the 
        case of an individual who is discharged from an applicable 
        hospital, the admission of the individual to the same or 
        another applicable hospital within a time period specified by 
        the Secretary from the date of such discharge. Insofar as the 
        discharge relates to an applicable condition for which there is 
        an endorsed measure described in subparagraph (A)(ii)(I), such 
        time period (such as 30 days) shall be consistent with the time 
        period specified for such measure.
        ``(6) Reporting hospital specific information.--
            ``(A) In general.--The Secretary shall make information 
        available to the public regarding readmission rates of each 
        subsection (d) hospital under the program.
            ``(B) Opportunity to review and submit corrections.--The 
        Secretary shall ensure that a subsection (d) hospital has the 
        opportunity to review, and submit corrections for, the 
        information to be made public with respect to the hospital 
        under subparagraph (A) prior to such information being made 
        public.
            ``(C) Website.--Such information shall be posted on the 
        Hospital Compare Internet website in an easily understandable 
        format.
        ``(7) Limitations on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of the following:
            ``(A) The determination of base operating DRG payment 
        amounts.
            ``(B) The methodology for determining the adjustment factor 
        under paragraph (3), including excess readmissions ratio under 
        paragraph (4)(C), aggregate payments for excess readmissions 
        under paragraph (4)(A), and aggregate payments for all 
        discharges under paragraph (4)(B), and applicable periods and 
        applicable conditions under paragraph (5).
            ``(C) The measures of readmissions as described in 
        paragraph (5)(A)(ii).
        ``(8) Readmission rates for all patients.--
            ``(A) Calculation of readmission.--The Secretary shall 
        calculate readmission rates for all patients (as defined in 
        subparagraph (D)) for a specified hospital (as defined in 
        subparagraph (D)(ii)) for an applicable condition (as defined 
        in paragraph (5)(B)) and other conditions deemed appropriate by 
        the Secretary for an applicable period (as defined in paragraph 
        (5)(D)) in the same manner as used to calculate such 
        readmission rates for hospitals with respect to this title and 
        posted on the CMS Hospital Compare website.
            ``(B) Posting of hospital specific all patient readmission 
        rates.--The Secretary shall make information on all patient 
        readmission rates calculated under subparagraph (A) available 
        on the CMS Hospital Compare website in a form and manner 
        determined appropriate by the Secretary. The Secretary may also 
        make other information determined appropriate by the Secretary 
        available on such website.
            ``(C) Hospital submission of all patient data.--
                ``(i) Except as provided for in clause (ii), each 
            specified hospital (as defined in subparagraph (D)(ii)) 
            shall submit to the Secretary, in a form, manner and time 
            specified by the Secretary, data and information determined 
            necessary by the Secretary for the Secretary to calculate 
            the all patient readmission rates described in subparagraph 
            (A).
                ``(ii) Instead of a specified hospital submitting to 
            the Secretary the data and information described in clause 
            (i), such data and information may be submitted to the 
            Secretary, on behalf of such a specified hospital, by a 
            state or an entity determined appropriate by the Secretary.
            ``(D) Definitions.--For purposes of this paragraph:
                ``(i) The term `all patients' means patients who are 
            treated on an inpatient basis and discharged from a 
            specified hospital (as defined in clause (ii)).
                ``(ii) The term `specified hospital' means a subsection 
            (d) hospital, hospitals described in clauses (i) through 
            (v) of subsection (d)(1)(B) and, as determined feasible and 
            appropriate by the Secretary, other hospitals not otherwise 
            described in this subparagraph.''.
    (b) Quality Improvement.--Part S of title III of the Public Health 
Service Act, as amended by section 3015, is further amended by adding 
at the end the following:

``SEC. 399KK. QUALITY IMPROVEMENT PROGRAM FOR HOSPITALS WITH A HIGH 
              SEVERITY ADJUSTED READMISSION RATE.

    ``(a) Establishment.--
        ``(1) In general.--Not later than 2 years after the date of 
    enactment of this section, the Secretary shall make available a 
    program for eligible hospitals to improve their readmission rates 
    through the use of patient safety organizations (as defined in 
    section 921(4)).
        ``(2) Eligible hospital defined.--In this subsection, the term 
    `eligible hospital' means a hospital that the Secretary determines 
    has a high rate of risk adjusted readmissions for the conditions 
    described in section 1886(q)(8)(A) of the Social Security Act and 
    has not taken appropriate steps to reduce such readmissions and 
    improve patient safety as evidenced through historically high rates 
    of readmissions, as determined by the Secretary.
        ``(3) Risk adjustment.--The Secretary shall utilize appropriate 
    risk adjustment measures to determine eligible hospitals.
    ``(b) Report to the Secretary.--As determined appropriate by the 
Secretary, eligible hospitals and patient safety organizations working 
with those hospitals shall report to the Secretary on the processes 
employed by the hospital to improve readmission rates and the impact of 
such processes on readmission rates.''.

SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PROGRAM.

    (a) In General.--The Secretary shall establish a Community-Based 
Care Transitions Program under which the Secretary provides funding to 
eligible entities that furnish improved care transition services to 
high-risk Medicare beneficiaries.
    (b) Definitions.--In this section:
        (1) Eligible entity.--The term ``eligible entity'' means the 
    following:
            (A) A subsection (d) hospital (as defined in section 
        1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
        1395ww(d)(1)(B))) identified by the Secretary as having a high 
        readmission rate, such as under section 1886(q) of the Social 
        Security Act, as added by section 3025.
            (B) An appropriate community-based organization that 
        provides care transition services under this section across a 
        continuum of care through arrangements with subsection (d) 
        hospitals (as so defined) to furnish the services described in 
        subsection (c)(2)(B)(i) and whose governing body includes 
        sufficient representation of multiple health care stakeholders 
        (including consumers).
        (2) High-risk medicare beneficiary.--The term ``high-risk 
    Medicare beneficiary'' means a Medicare beneficiary who has 
    attained a minimum hierarchical condition category score, as 
    determined by the Secretary, based on a diagnosis of multiple 
    chronic conditions or other risk factors associated with a hospital 
    readmission or substandard transition into post-hospitalization 
    care, which may include 1 or more of the following:
            (A) Cognitive impairment.
            (B) Depression.
            (C) A history of multiple readmissions.
            (D) Any other chronic disease or risk factor as determined 
        by the Secretary.
        (3) Medicare beneficiary.--The term ``Medicare beneficiary'' 
    means an individual who is entitled to benefits under part A of 
    title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and 
    enrolled under part B of such title, but not enrolled under part C 
    of such title.
        (4) Program.--The term ``program'' means the program conducted 
    under this section.
        (5) Readmission.--The term ``readmission'' has the meaning 
    given such term in section 1886(q)(5)(E) of the Social Security 
    Act, as added by section 3025.
        (6) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.
    (c) Requirements.--
        (1) Duration.--
            (A) In general.--The program shall be conducted for a 5-
        year period, beginning January 1, 2011.
            (B) Expansion.--The Secretary may expand the duration and 
        the scope of the program, to the extent determined appropriate 
        by the Secretary, if the Secretary determines (and the Chief 
        Actuary of the Centers for Medicare & Medicaid Services, with 
        respect to spending under this title, certifies) that such 
        expansion would reduce spending under this title without 
        reducing quality.
        (2) Application; participation.--
            (A) In general.--
                (i) Application.--An eligible entity seeking to 
            participate in the program shall submit an application to 
            the Secretary at such time, in such manner, and containing 
            such information as the Secretary may require.
                (ii) Partnership.--If an eligible entity is a hospital, 
            such hospital shall enter into a partnership with a 
            community-based organization to participate in the program.
            (B) Intervention proposal.--Subject to subparagraph (C), an 
        application submitted under subparagraph (A)(i) shall include a 
        detailed proposal for at least 1 care transition intervention, 
        which may include the following:
                (i) Initiating care transition services for a high-risk 
            Medicare beneficiary not later than 24 hours prior to the 
            discharge of the beneficiary from the eligible entity.
                (ii) Arranging timely post-discharge follow-up services 
            to the high-risk Medicare beneficiary to provide the 
            beneficiary (and, as appropriate, the primary caregiver of 
            the beneficiary) with information regarding responding to 
            symptoms that may indicate additional health problems or a 
            deteriorating condition.
                (iii) Providing the high-risk Medicare beneficiary 
            (and, as appropriate, the primary caregiver of the 
            beneficiary) with assistance to ensure productive and 
            timely interactions between patients and post-acute and 
            outpatient providers.
                (iv) Assessing and actively engaging with a high-risk 
            Medicare beneficiary (and, as appropriate, the primary 
            caregiver of the beneficiary) through the provision of 
            self-management support and relevant information that is 
            specific to the beneficiary's condition.
                (v) Conducting comprehensive medication review and 
            management (including, if appropriate, counseling and self-
            management support).
            (C) Limitation.--A care transition intervention proposed 
        under subparagraph (B) may not include payment for services 
        required under the discharge planning process described in 
        section 1861(ee) of the Social Security Act (42 U.S.C. 
        1395x(ee)).
        (3) Selection.--In selecting eligible entities to participate 
    in the program, the Secretary shall give priority to eligible 
    entities that--
            (A) participate in a program administered by the 
        Administration on Aging to provide concurrent care transitions 
        interventions with multiple hospitals and practitioners; or
            (B) provide services to medically underserved populations, 
        small communities, and rural areas.
    (d) Implementation.--Notwithstanding any other provision of law, 
the Secretary may implement the provisions of this section by program 
instruction or otherwise.
    (e) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act as may be necessary to 
carry out the program.
    (f) Funding.--For purposes of carrying out this section, the 
Secretary of Health and Human Services shall provide for the transfer, 
from the Federal Hospital Insurance Trust Fund under section 1817 of 
the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 
1395t), in such proportion as the Secretary determines appropriate, of 
$500,000,000, to the Centers for Medicare & Medicaid Services Program 
Management Account for the period of fiscal years 2011 through 2015. 
Amounts transferred under the preceding sentence shall remain available 
until expended.

SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109-171) is amended by inserting 
``(or September 30, 2011, in the case of a demonstration project in 
operation as of October 1, 2008)'' after ``December 31, 2009''.
    (b) Funding.--
        (1) In general.--Subsection (f)(1) of such section is amended 
    by inserting ``and for fiscal year 2010, $1,600,000,'' after 
    ``$6,000,000,''.
        (2) Availability.--Subsection (f)(2) of such section is amended 
    by striking ``2010'' and inserting ``2014 or until expended''.
    (c) Reports.--
        (1) Quality improvement and savings.--Subsection (e)(3) of such 
    section is amended by striking ``December 1, 2008'' and inserting 
    ``March 31, 2011''.
        (2) Final report.--Subsection (e)(4) of such section is amended 
    by striking ``May 1, 2010'' and inserting ``March 31, 2013''.

       Subtitle B--Improving Medicare for Patients and Providers

    PART I--ENSURING BENEFICIARY ACCESS TO PHYSICIAN CARE AND OTHER 
                                SERVICES

SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE.

    Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) 
is amended by adding at the end the following new paragraph:
        ``(10) Update for 2010.--
            ``(A) In general.--Subject to paragraphs (7)(B), (8)(B), 
        and (9)(B), in lieu of the update to the single conversion 
        factor established in paragraph (1)(C) that would otherwise 
        apply for 2010, the update to the single conversion factor 
        shall be 0.5 percent.
            ``(B) No effect on computation of conversion factor for 
        2011 and subsequent years.--The conversion factor under this 
        subsection shall be computed under paragraph (1)(A) for 2011 
        and subsequent years as if subparagraph (A) had never 
        applied.''.

SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR AND REVISIONS 
              TO THE PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT UNDER THE 
              MEDICARE PHYSICIAN FEE SCHEDULE.

    (a) Extension of Work GPCI Floor.--Section 1848(e)(1)(E) of the 
Social Security Act (42 U.S.C. 1395w-4(e)(1)(E)) is amended by striking 
``before January 1, 2010'' and inserting ``before January 1, 2011''.
    (b) Practice Expense Geographic Adjustment for 2010 and Subsequent 
Years.--Section 1848(e)(1) of the Social Security Act (42 U.S.C. 
1395w4(e)(1)) is amended--
        (1) in subparagraph (A), by striking ``and (G)'' and inserting 
    ``(G), and (H)''; and
        (2) by adding at the end the following new subparagraph:
            ``(H) Practice expense geographic adjustment for 2010 and 
        subsequent years.--
                ``(i) For 2010.--Subject to clause (iii), for services 
            furnished during 2010, the employee wage and rent portions 
            of the practice expense geographic index described in 
            subparagraph (A)(i) shall reflect \3/4\ of the difference 
            between the relative costs of employee wages and rents in 
            each of the different fee schedule areas and the national 
            average of such employee wages and rents.
                ``(ii) For 2011.--Subject to clause (iii), for services 
            furnished during 2011, the employee wage and rent portions 
            of the practice expense geographic index described in 
            subparagraph (A)(i) shall reflect \1/2\ of the difference 
            between the relative costs of employee wages and rents in 
            each of the different fee schedule areas and the national 
            average of such employee wages and rents.
                ``(iii) Hold harmless.--The practice expense portion of 
            the geographic adjustment factor applied in a fee schedule 
            area for services furnished in 2010 or 2011 shall not, as a 
            result of the application of clause (i) or (ii), be reduced 
            below the practice expense portion of the geographic 
            adjustment factor under subparagraph (A)(i) (as calculated 
            prior to the application of such clause (i) or (ii), 
            respectively) for such area for such year.
                ``(iv) Analysis.--The Secretary shall analyze current 
            methods of establishing practice expense geographic 
            adjustments under subparagraph (A)(i) and evaluate data 
            that fairly and reliably establishes distinctions in the 
            costs of operating a medical practice in the different fee 
            schedule areas. Such analysis shall include an evaluation 
            of the following:

                    ``(I) The feasibility of using actual data or 
                reliable survey data developed by medical organizations 
                on the costs of operating a medical practice, including 
                office rents and non-physician staff wages, in 
                different fee schedule areas.
                    ``(II) The office expense portion of the practice 
                expense geographic adjustment described in subparagraph 
                (A)(i), including the extent to which types of office 
                expenses are determined in local markets instead of 
                national markets.
                    ``(III) The weights assigned to each of the 
                categories within the practice expense geographic 
                adjustment described in subparagraph (A)(i).

                ``(v) Revision for 2012 and subsequent years.--As a 
            result of the analysis described in clause (iv), the 
            Secretary shall, not later than January 1, 2012, make 
            appropriate adjustments to the practice expense geographic 
            adjustment described in subparagraph (A)(i) to ensure 
            accurate geographic adjustments across fee schedule areas, 
            including--

                    ``(I) basing the office rents component and its 
                weight on office expenses that vary among fee schedule 
                areas; and
                    ``(II) considering a representative range of 
                professional and non-professional personnel employed in 
                a medical office based on the use of the American 
                Community Survey data or other reliable data for wage 
                adjustments.

            Such adjustments shall be made without regard to 
            adjustments made pursuant to clauses (i) and (ii) and shall 
            be made in a budget neutral manner.''.

SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ``December 31, 2009'' and inserting 
``December 31, 2010''.

SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
              PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), and section 136 of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275), is amended by striking 
``and 2009'' and inserting ``2009, and 2010''.

SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended--
        (1) in the matter preceding clause (i)--
            (A) by striking ``2007, and for'' and inserting ``2007, 
        for''; and
            (B) by striking ``2010'' and inserting ``2010, and for such 
        services furnished on or after April 1, 2010, and before 
        January 1, 2011,''; and
        (2) in each of clauses (i) and (ii), by inserting ``, and on or 
    after April 1, 2010, and before January 1, 2011'' after ``January 
    1, 2010'' each place it appears.
    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275) is amended 
by striking ``December 31, 2009'' and inserting ``December 31, 2009, 
and during the period beginning on April 1, 2010, and ending on January 
1, 2011''.
    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking 
``2010'' and inserting ``2010, and on or after April 1, 2010, and 
before January 1, 2011''.

SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR LONG-TERM CARE 
              HOSPITAL SERVICES AND OF MORATORIUM ON THE ESTABLISHMENT 
              OF CERTAIN HOSPITALS AND FACILITIES.

    (a) Extension of Certain Payment Rules.--Section 114(c) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww 
note), as amended by section 4302(a) of the American Recovery and 
Reinvestment Act (Public Law 111-5), is further amended by striking 
``3-year period'' each place it appears and inserting ``4-year 
period''.
    (b) Extension of Moratorium.--Section 114(d)(1) of such Act (42 
U.S.C. 1395ww note), in the matter preceding subparagraph (A), is 
amended by striking ``3-year period'' and inserting ``4-year period''.

SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2010''.

SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER POST-HOSPITAL 
              EXTENDED CARE SERVICES.

    (a) Ordering Post-Hospital Extended Care Services.--
        (1) In general.--Section 1814(a)(2) of the Social Security Act 
    (42 U.S.C. 1395f(a)(2)), in the matter preceding subparagraph (A), 
    is amended by striking ``or clinical nurse specialist'' and 
    inserting ``, a clinical nurse specialist, or a physician assistant 
    (as those terms are defined in section 1861(aa)(5))'' after ``nurse 
    practitioner''.
        (2) Conforming amendment.--Section 1814(a) of the Social 
    Security Act (42 U.S.C. 1395f(a)) is amended, in the second 
    sentence, by striking ``or clinical nurse specialist'' and 
    inserting ``clinical nurse specialist, or physician assistant'' 
    after ``nurse practitioner,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 3109. EXEMPTION OF CERTAIN PHARMACIES FROM ACCREDITATION 
              REQUIREMENTS.

    (a) In General.--Section 1834(a)(20) of the Social Security Act (42 
U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 100-
275), is amended--
        (1) in subparagraph (F)(i)--
            (A) by inserting ``and subparagraph (G)'' after ``clause 
        (ii)''; and
            (B) by inserting ``, except that the Secretary shall not 
        require a pharmacy to have submitted to the Secretary such 
        evidence of accreditation prior to January 1, 2011'' before the 
        semicolon at the end; and
        (2) by adding at the end the following new subparagraph:
            ``(G) Application of accreditation requirement to certain 
        pharmacies.--
                ``(i) In general.--With respect to items and services 
            furnished on or after January 1, 2011, in implementing 
            quality standards under this paragraph--

                    ``(I) subject to subclause (II), in applying such 
                standards and the accreditation requirement of 
                subparagraph (F)(i) with respect to pharmacies 
                described in clause (ii) furnishing such items and 
                services, such standards and accreditation requirement 
                shall not apply to such pharmacies; and
                    ``(II) the Secretary may apply to such pharmacies 
                an alternative accreditation requirement established by 
                the Secretary if the Secretary determines such 
                alternative accreditation requirement is more 
                appropriate for such pharmacies.

                ``(ii) Pharmacies described.--A pharmacy described in 
            this clause is a pharmacy that meets each of the following 
            criteria:

                    ``(I) The total billings by the pharmacy for such 
                items and services under this title are less than 5 
                percent of total pharmacy sales, as determined based on 
                the average total pharmacy sales for the previous 3 
                calendar years, 3 fiscal years, or other yearly period 
                specified by the Secretary.
                    ``(II) The pharmacy has been enrolled under section 
                1866(j) as a supplier of durable medical equipment, 
                prosthetics, orthotics, and supplies, has been issued 
                (which may include the renewal of) a provider number 
                for at least 5 years, and for which a final adverse 
                action (as defined in section 424.57(a) of title 42, 
                Code of Federal Regulations) has not been imposed in 
                the past 5 years.
                    ``(III) The pharmacy submits to the Secretary an 
                attestation, in a form and manner, and at a time, 
                specified by the Secretary, that the pharmacy meets the 
                criteria described in subclauses (I) and (II). Such 
                attestation shall be subject to section 1001 of title 
                18, United States Code.
                    ``(IV) The pharmacy agrees to submit materials as 
                requested by the Secretary, or during the course of an 
                audit conducted on a random sample of pharmacies 
                selected annually, to verify that the pharmacy meets 
                the criteria described in subclauses (I) and (II). 
                Materials submitted under the preceding sentence shall 
                include a certification by an accountant on behalf of 
                the pharmacy or the submission of tax returns filed by 
                the pharmacy during the relevant periods, as requested 
                by the Secretary.''.

    (b) Administration.--Notwithstanding any other provision of law, 
the Secretary may implement the amendments made by subsection (a) by 
program instruction or otherwise.
    (c) Rule of Construction.--Nothing in the provisions of or 
amendments made by this section shall be construed as affecting the 
application of an accreditation requirement for pharmacies to qualify 
for bidding in a competitive acquisition area under section 1847 of the 
Social Security Act (42 U.S.C. 1395w-3).

SEC. 3110. PART B SPECIAL ENROLLMENT PERIOD FOR DISABLED TRICARE 
              BENEFICIARIES.

    (a) In General.--
        (1) In general.--Section 1837 of the Social Security Act (42 
    U.S.C. 1395p) is amended by adding at the end the following new 
    subsection:
    ``(l)(1) In the case of any individual who is a covered beneficiary 
(as defined in section 1072(5) of title 10, United States Code) at the 
time the individual is entitled to part A under section 226(b) or 
section 226A and who is eligible to enroll but who has elected not to 
enroll (or to be deemed enrolled) during the individual's initial 
enrollment period, there shall be a special enrollment period described 
in paragraph (2).
    ``(2) The special enrollment period described in this paragraph, 
with respect to an individual, is the 12-month period beginning on the 
day after the last day of the initial enrollment period of the 
individual or, if later, the 12-month period beginning with the month 
the individual is notified of enrollment under this section.
    ``(3) In the case of an individual who enrolls during the special 
enrollment period provided under paragraph (1), the coverage period 
under this part shall begin on the first day of the month in which the 
individual enrolls, or, at the option of the individual, the first 
month after the end of the individual's initial enrollment period.
    ``(4) An individual may only enroll during the special enrollment 
period provided under paragraph (1) one time during the individual's 
lifetime.
    ``(5) The Secretary shall ensure that the materials relating to 
coverage under this part that are provided to an individual described 
in paragraph (1) prior to the individual's initial enrollment period 
contain information concerning the impact of not enrolling under this 
part, including the impact on health care benefits under the TRICARE 
program under chapter 55 of title 10, United States Code.
    ``(6) The Secretary of Defense shall collaborate with the Secretary 
of Health and Human Services and the Commissioner of Social Security to 
provide for the accurate identification of individuals described in 
paragraph (1). The Secretary of Defense shall provide such individuals 
with notification with respect to this subsection. The Secretary of 
Defense shall collaborate with the Secretary of Health and Human 
Services and the Commissioner of Social Security to ensure appropriate 
follow up pursuant to any notification provided under the preceding 
sentence.''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply to elections made with respect to initial enrollment periods 
    that end after the date of the enactment of this Act.
    (b) Waiver of Increase of Premium.--Section 1839(b) of the Social 
Security Act (42 U.S.C. 1395r(b)) is amended by striking ``section 
1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of section 
1837''.

SEC. 3111. PAYMENT FOR BONE DENSITY TESTS.

    (a) Payment.--
        (1) In general.--Section 1848 of the Social Security Act (42 
    U.S.C. 1395w-4) is amended--
            (A) in subsection (b)--
                (i) in paragraph (4)(B), by inserting ``, and for 2010 
            and 2011, dual-energy x-ray absorptiometry services (as 
            described in paragraph (6))'' before the period at the end; 
            and
                (ii) by adding at the end the following new paragraph:
        ``(6) Treatment of bone mass scans.--For dual-energy x-ray 
    absorptiometry services (identified in 2006 by HCPCS codes 76075 
    and 76077 (and any succeeding codes)) furnished during 2010 and 
    2011, instead of the payment amount that would otherwise be 
    determined under this section for such years, the payment amount 
    shall be equal to 70 percent of the product of--
            ``(A) the relative value for the service (as determined in 
        subsection (c)(2)) for 2006;
            ``(B) the conversion factor (established under subsection 
        (d)) for 2006; and
            ``(C) the geographic adjustment factor (established under 
        subsection (e)(2)) for the service for the fee schedule area 
        for 2010 and 2011, respectively.''; and
            (B) in subsection (c)(2)(B)(iv)--
                (i) in subclause (II), by striking ``and'' at the end;
                (ii) in subclause (III), by striking the period at the 
            end and inserting ``; and''; and
                (iii) by adding at the end the following new subclause:

                    ``(IV) subsection (b)(6) shall not be taken into 
                account in applying clause (ii)(II) for 2010 or 
                2011.''.

        (2) Implementation.--Notwithstanding any other provision of 
    law, the Secretary may implement the amendments made by paragraph 
    (1) by program instruction or otherwise.
    (b) Study and Report by the Institute of Medicine.--
        (1) In general.--The Secretary of Health and Human Services is 
    authorized to enter into an agreement with the Institute of 
    Medicine of the National Academies to conduct a study on the 
    ramifications of Medicare payment reductions for dual-energy x-ray 
    absorptiometry (as described in section 1848(b)(6) of the Social 
    Security Act, as added by subsection (a)(1)) during 2007, 2008, and 
    2009 on beneficiary access to bone mass density tests.
        (2) Report.--An agreement entered into under paragraph (1) 
    shall provide for the Institute of Medicine to submit to the 
    Secretary and to Congress a report containing the results of the 
    study conducted under such paragraph.

SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND.

    Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 
1395iii) is amended by striking ``$22,290,000,000'' and inserting 
``$0''.

SEC. 3113. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC LABORATORY TESTS.

    (a) Demonstration Project.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall conduct a 
    demonstration project under part B title XVIII of the Social 
    Security Act under which separate payments are made under such part 
    for complex diagnostic laboratory tests provided to individuals 
    under such part. Under the demonstration project, the Secretary 
    shall establish appropriate payment rates for such tests.
        (2) Covered complex diagnostic laboratory test defined.--In 
    this section, the term ``complex diagnostic laboratory test'' means 
    a diagnostic laboratory test--
            (A) that is an analysis of gene protein expression, 
        topographic genotyping, or a cancer chemotherapy sensitivity 
        assay;
            (B) that is determined by the Secretary to be a laboratory 
        test for which there is not an alternative test having 
        equivalent performance characteristics;
            (C) which is billed using a Health Care Procedure Coding 
        System (HCPCS) code other than a not otherwise classified code 
        under such Coding System;
            (D) which is approved or cleared by the Food and Drug 
        Administration or is covered under title XVIII of the Social 
        Security Act; and
            (E) is described in section 1861(s)(3) of the Social 
        Security Act (42 U.S.C. 1395x(s)(3)).
        (3) Separate payment defined.--In this section, the term 
    ``separate payment'' means direct payment to a laboratory 
    (including a hospital-based or independent laboratory) that 
    performs a complex diagnostic laboratory test with respect to a 
    specimen collected from an individual during a period in which the 
    individual is a patient of a hospital if the test is performed 
    after such period of hospitalization and if separate payment would 
    not otherwise be made under title XVIII of the Social Security Act 
    by reason of sections 1862(a)(14) and 1866(a)(1)(H)(i) of the such 
    Act (42 U.S.C. 1395y(a)(14); 42 U.S.C. 1395cc(a)(1)(H)(i)).
    (b) Duration.--Subject to subsection (c)(2), the Secretary shall 
conduct the demonstration project under this section for the 2-year 
period beginning on July 1, 2011.
    (c) Payments and Limitation.--Payments under the demonstration 
project under this section shall--
        (1) be made from the Federal Supplemental Medical Insurance 
    Trust Fund under section 1841 of the Social Security Act (42 U.S.C. 
    1395t); and
        (2) may not exceed $100,000,000.
    (d) Report.--Not later than 2 years after the completion of the 
demonstration project under this section, the Secretary shall submit to 
Congress a report on the project. Such report shall include--
        (1) an assessment of the impact of the demonstration project on 
    access to care, quality of care, health outcomes, and expenditures 
    under title XVIII of the Social Security Act (including any savings 
    under such title); and
        (2) such recommendations as the Secretary determines 
    appropriate.
    (e) Implementation Funding.--For purposes of administering this 
section (including preparing and submitting the report under subsection 
(d)), the Secretary shall provide for the transfer, from the Federal 
Supplemental Medical Insurance Trust Fund under section 1841 of the 
Social Security Act (42 U.S.C. 1395t), to the Centers for Medicare & 
Medicaid Services Program Management Account, of $5,000,000. Amounts 
transferred under the preceding sentence shall remain available until 
expended.

SEC. 3114. IMPROVED ACCESS FOR CERTIFIED NURSE-MIDWIFE SERVICES.

    Section 1833(a)(1)(K) of the Social Security Act (42 U.S.C. 
1395l(a)(1)(K)) is amended by inserting ``(or 100 percent for services 
furnished on or after January 1, 2011)'' after ``1992, 65 percent''.

                       PART II--RURAL PROTECTIONS

SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

    (a) In General.--Section 1833(t)(7)(D)(i) of the Social Security 
Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended--
        (1) in subclause (II)--
            (A) in the first sentence, by striking ``2010''and 
        inserting ``2011''; and
            (B) in the second sentence, by striking ``or 2009'' and 
        inserting ``, 2009, or 2010''; and
        (2) in subclause (III), by striking ``January 1, 2010'' and 
    inserting ``January 1, 2011''.
    (b) Permitting All Sole Community Hospitals To Be Eligible for Hold 
Harmless.--Section 1833(t)(7)(D)(i)(III) of the Social Security Act (42 
U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at the end the 
following new sentence: ``In the case of covered OPD services furnished 
on or after January 1, 2010, and before January 1, 2011, the preceding 
sentence shall be applied without regard to the 100-bed limitation.''.

SEC. 3122. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN 
              CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO 
              HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

    Section 416(b) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section 
105 of division B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395l note) and section 107 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (42 U.S.C. 1395l note), is amended by inserting 
``or during the 1-year period beginning on July 1, 2010'' before the 
period at the end.

SEC. 3123. EXTENSION OF THE RURAL COMMUNITY HOSPITAL DEMONSTRATION 
              PROGRAM.

    (a) One-year Extension.--Section 410A of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 
117 Stat. 2272) is amended by adding at the end the following new 
subsection:
    ``(g) One-Year Extension of Demonstration Program.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, the Secretary shall conduct the demonstration program 
    under this section for an additional 1-year period (in this section 
    referred to as the `1-year extension period') that begins on the 
    date immediately following the last day of the initial 5-year 
    period under subsection (a)(5).
        ``(2) Expansion of demonstration states.--Notwithstanding 
    subsection (a)(2), during the 1-year extension period, the 
    Secretary shall expand the number of States with low population 
    densities determined by the Secretary under such subsection to 20. 
    In determining which States to include in such expansion, the 
    Secretary shall use the same criteria and data that the Secretary 
    used to determine the States under such subsection for purposes of 
    the initial 5-year period.
        ``(3) Increase in maximum number of hospitals participating in 
    the demonstration program.--Notwithstanding subsection (a)(4), 
    during the 1-year extension period, not more than 30 rural 
    community hospitals may participate in the demonstration program 
    under this section.
        ``(4) No affect on hospitals in demonstration program on date 
    of enactment.--In the case of a rural community hospital that is 
    participating in the demonstration program under this section as of 
    the last day of the initial 5-year period, the Secretary shall 
    provide for the continued participation of such rural community 
    hospital in the demonstration program during the 1-year extension 
    period unless the rural community hospital makes an election, in 
    such form and manner as the Secretary may specify, to discontinue 
    such participation.''.
    (b) Conforming Amendments.--Subsection (a)(5) of section 410A of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173; 117 Stat. 2272) is amended by inserting ``(in 
this section referred to as the `initial 5-year period') and, as 
provided in subsection (g), for the 1-year extension period'' after 
``5-year period''.
    (c) Technical Amendments.--
        (1) Subsection (b) of section 410A of the Medicare Prescription 
    Drug, Improvement, and Modernization Act of 2003 (Public Law 108-
    173; 117 Stat. 2272) is amended--
            (A) in paragraph (1)(B)(ii), by striking ``2)'' and 
        inserting ``2))''; and
            (B) in paragraph (2), by inserting ``cost'' before 
        ``reporting period'' the first place such term appears in each 
        of subparagraphs (A) and (B).
        (2) Subsection (f)(1) of section 410A of the Medicare 
    Prescription Drug, Improvement, and Modernization Act of 2003 
    (Public Law 108-173; 117 Stat. 2272) is amended--
            (A) in subparagraph (A)(ii), by striking ``paragraph (2)'' 
        and inserting ``subparagraph (B)''; and
            (B) in subparagraph (B), by striking ``paragraph (1)(B)'' 
        and inserting ``subparagraph (A)(ii)''.

SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM.

    (a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
        (1) in clause (i), by striking ``October 1, 2011'' and 
    inserting ``October 1, 2012''; and
        (2) in clause (ii)(II), by striking ``October 1, 2011'' and 
    inserting ``October 1, 2012''.
    (b) Conforming Amendments.--
        (1) Extension of target amount.--Section 1886(b)(3)(D) of the 
    Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended--
            (A) in the matter preceding clause (i), by striking 
        ``October 1, 2011'' and inserting ``October 1, 2012''; and
            (B) in clause (iv), by striking ``through fiscal year 
        2011'' and inserting ``through fiscal year 2012''.
        (2) Permitting hospitals to decline reclassification.--Section 
    13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 
    U.S.C. 1395ww note) is amended by striking ``through fiscal year 
    2011'' and inserting ``through fiscal year 2012''.

SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
              PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
        (1) in subparagraph (A), by inserting ``or (D)'' after 
    ``subparagraph (B)'';
        (2) in subparagraph (B), in the matter preceding clause (i), by 
    striking ``The Secretary'' and inserting ``For discharges occurring 
    in fiscal years 2005 through 2010 and for discharges occurring in 
    fiscal year 2013 and subsequent fiscal years, the Secretary'';
        (3) in subparagraph (C)(i)--
            (A) by inserting ``(or, with respect to fiscal years 2011 
        and 2012, 15 road miles)'' after ``25 road miles''; and
            (B) by inserting ``(or, with respect to fiscal years 2011 
        and 2012, 1,500 discharges of individuals entitled to, or 
        enrolled for, benefits under part A)'' after ``800 
        discharges''; and
        (4) by adding at the end the following new subparagraph:
            ``(D) Temporary applicable percentage increase.--For 
        discharges occurring in fiscal years 2011 and 2012, the 
        Secretary shall determine an applicable percentage increase for 
        purposes of subparagraph (A) using a continuous linear sliding 
        scale ranging from 25 percent for low-volume hospitals with 200 
        or fewer discharges of individuals entitled to, or enrolled 
        for, benefits under part A in the fiscal year to 0 percent for 
        low-volume hospitals with greater than 1,500 discharges of such 
        individuals in the fiscal year.''.

SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION PROJECT ON COMMUNITY 
              HEALTH INTEGRATION MODELS IN CERTAIN RURAL COUNTIES.

    (a) Removal of Limitation on Number of Eligible Counties 
Selected.--Subsection (d)(3) of section 123 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395i-4 
note) is amended by striking ``not more than 6''.
    (b) Removal of References to Rural Health Clinic Services and 
Inclusion of Physicians' Services in Scope of Demonstration Project.--
Such section 123 is amended--
        (1) in subsection (d)(4)(B)(i)(3), by striking subclause (III); 
    and
        (2) in subsection (j)--
            (A) in paragraph (8), by striking subparagraph (B) and 
        inserting the following:
            ``(B) Physicians' services (as defined in section 1861(q) 
        of the Social Security Act (42 U.S.C. 1395x(q)).'';
            (B) by striking paragraph (9); and
            (C) by redesignating paragraph (10) as paragraph (9).

SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE PAYMENTS FOR HEALTH 
              CARE PROVIDERS SERVING IN RURAL AREAS.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on the adequacy of payments for items and services furnished by 
providers of services and suppliers in rural areas under the Medicare 
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.). Such study shall include an analysis of--
        (1) any adjustments in payments to providers of services and 
    suppliers that furnish items and services in rural areas;
        (2) access by Medicare beneficiaries to items and services in 
    rural areas;
        (3) the adequacy of payments to providers of services and 
    suppliers that furnish items and services in rural areas; and
        (4) the quality of care furnished in rural areas.
    (b) Report.--Not later than January 1, 2011, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a). Such report shall 
include recommendations on appropriate modifications to any adjustments 
in payments to providers of services and suppliers that furnish items 
and services in rural areas, together with recommendations for such 
legislation and administrative action as the Medicare Payment Advisory 
Commission determines appropriate.

SEC. 3128. TECHNICAL CORRECTION RELATED TO CRITICAL ACCESS HOSPITAL 
              SERVICES.

    (a) In General.--Subsections (g)(2)(A) and (l)(8) of section 1834 
of the Social Security Act (42 U.S.C. 1395m) are each amended by 
inserting ``101 percent of'' before ``the reasonable costs''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 405(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2266).

SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE RURAL HOSPITAL 
              FLEXIBILITY PROGRAM.

    (a) Authorization.--Section 1820(j) of the Social Security Act (42 
U.S.C. 1395i-4(j)) is amended--
        (1) by striking ``2010, and for'' and inserting ``2010, for''; 
    and
        (2) by inserting ``and for making grants to all States under 
    subsection (g), such sums as may be necessary in each of fiscal 
    years 2011 and 2012, to remain available until expended'' before 
    the period at the end.
    (b) Use of Funds.--Section 1820(g)(3) of the Social Security Act 
(42 U.S.C. 1395i-4(g)(3)) is amended--
        (1) in subparagraph (A), by inserting ``and to assist such 
    hospitals in participating in delivery system reforms under the 
    provisions of and amendments made by the Patient Protection and 
    Affordable Care Act, such as value-based purchasing programs, 
    accountable care organizations under section 1899, the National 
    pilot program on payment bundling under section 1866D, and other 
    delivery system reform programs determined appropriate by the 
    Secretary'' before the period at the end; and
        (2) in subparagraph (E)--
            (A) by striking ``, and to offset'' and inserting ``, to 
        offset''; and
            (B) by inserting ``and to participate in delivery system 
        reforms under the provisions of and amendments made by the 
        Patient Protection and Affordable Care Act, such as value-based 
        purchasing programs, accountable care organizations under 
        section 1899, the National pilot program on payment bundling 
        under section 1866D, and other delivery system reform programs 
        determined appropriate by the Secretary'' before the period at 
        the end.
    (c) Effective Date.--The amendments made by this section shall 
apply to grants made on or after January 1, 2010.

                  PART III--IMPROVING PAYMENT ACCURACY

SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (a) Rebasing Home Health Prospective Payment Amount.--
        (1) In general.--Section 1895(b)(3)(A) of the Social Security 
    Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
            (A) in clause (i)(III), by striking ``For periods'' and 
        inserting ``Subject to clause (iii), for periods''; and
            (B) by adding at the end the following new clause:
                ``(iii) Adjustment for 2013 and subsequent years.--

                    ``(I) In general.--Subject to subclause (II), for 
                2013 and subsequent years, the amount (or amounts) that 
                would otherwise be applicable under clause (i)(III) 
                shall be adjusted by a percentage determined 
                appropriate by the Secretary to reflect such factors as 
                changes in the number of visits in an episode, the mix 
                of services in an episode, the level of intensity of 
                services in an episode, the average cost of providing 
                care per episode, and other factors that the Secretary 
                considers to be relevant. In conducting the analysis 
                under the preceding sentence, the Secretary may 
                consider differences between hospital-based and 
                freestanding agencies, between for-profit and nonprofit 
                agencies, and between the resource costs of urban and 
                rural agencies. Such adjustment shall be made before 
                the update under subparagraph (B) is applied for the 
                year.
                    ``(II) Transition.--The Secretary shall provide for 
                a 4-year phase-in (in equal increments) of the 
                adjustment under subclause (I), with such adjustment 
                being fully implemented for 2016. During each year of 
                such phase-in, the amount of any adjustment under 
                subclause (I) for the year may not exceed 3.5 percent 
                of the amount (or amounts) applicable under clause 
                (i)(III) as of the date of enactment of the Patient 
                Protection and Affordable Care Act.''.

        (2) MedPAC study and report.--
            (A) Study.--The Medicare Payment Advisory Commission shall 
        conduct a study on the implementation of the amendments made by 
        paragraph (1). Such study shall include an analysis of the 
        impact of such amendments on--
                (i) access to care;
                (ii) quality outcomes;
                (iii) the number of home health agencies; and
                (iv) rural agencies, urban agencies, for-profit 
            agencies, and nonprofit agencies.
            (B) Report.--Not later than January 1, 2015, the Medicare 
        Payment Advisory Commission shall submit to Congress a report 
        on the study conducted under subparagraph (A), together with 
        recommendations for such legislation and administrative action 
        as the Commission determines appropriate.
    (b) Program-specific Outlier Cap.--Section 1895(b) of the Social 
Security Act (42 U.S.C. 1395fff(b)) is amended--
        (1) in paragraph (3)(C), by striking ``the aggregate'' and all 
    that follows through the period at the end and inserting ``5 
    percent of the total payments estimated to be made based on the 
    prospective payment system under this subsection for the period.''; 
    and
        (2) in paragraph (5)--
            (A) by striking ``Outliers.--The Secretary'' and inserting 
        the following: ``Outliers.--
            ``(A) In general.--Subject to subparagraph (B), the 
        Secretary'';
            (B) in subparagraph (A), as added by subparagraph (A), by 
        striking ``5 percent'' and inserting ``2.5 percent''; and
            (C) by adding at the end the following new subparagraph:
            ``(B) Program specific outlier cap.--The estimated total 
        amount of additional payments or payment adjustments made under 
        subparagraph (A) with respect to a home health agency for a 
        year (beginning with 2011) may not exceed an amount equal to 10 
        percent of the estimated total amount of payments made under 
        this section (without regard to this paragraph) with respect to 
        the home health agency for the year.''.
    (c) Application of the Medicare Rural Home Health Add-on Policy.--
Section 421 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283), as 
amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public 
Law 109-171; 120 Stat. 46), is amended--
        (1) in the section heading, by striking ``one-year'' and 
    inserting ``temporary''; and
        (2) in subsection (a)--
            (A) by striking ``, and episodes'' and inserting ``, 
        episodes'';
            (B) by inserting ``and episodes and visits ending on or 
        after April 1, 2010, and before January 1, 2016,'' after 
        ``January 1, 2007,''; and
            (C) by inserting ``(or, in the case of episodes and visits 
        ending on or after April 1, 2010, and before January 1, 2016, 3 
        percent)'' before the period at the end.
    (d) Study and Report on the Development of Home Health Payment 
Reforms in Order To Ensure Access to Care and Quality Services.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall conduct a 
    study to evaluate the costs and quality of care among efficient 
    home health agencies relative to other such agencies in providing 
    ongoing access to care and in treating Medicare beneficiaries with 
    varying severity levels of illness. Such study shall include an 
    analysis of the following:
            (A) Methods to revise the home health prospective payment 
        system under section 1895 of the Social Security Act (42 U.S.C. 
        1395fff) to more accurately account for the costs related to 
        patient severity of illness or to improving beneficiary access 
        to care, including--
                (i) payment adjustments for services that may be under- 
            or over-valued;
                (ii) necessary changes to reflect the resource use 
            relative to providing home health services to low-income 
            Medicare beneficiaries or Medicare beneficiaries living in 
            medically underserved areas;
                (iii) ways the outlier payment may be improved to more 
            accurately reflect the cost of treating Medicare 
            beneficiaries with high severity levels of illness;
                (iv) the role of quality of care incentives and 
            penalties in driving provider and patient behavior;
                (v) improvements in the application of a wage index; 
            and
                (vi) other areas determined appropriate by the 
            Secretary.
            (B) The validity and reliability of responses on the OASIS 
        instrument with particular emphasis on questions that relate to 
        higher payment under the home health prospective payment system 
        and higher outcome scores under Home Care Compare.
            (C) Additional research or payment revisions under the home 
        health prospective payment system that may be necessary to set 
        the payment rates for home health services based on costs of 
        high-quality and efficient home health agencies or to improve 
        Medicare beneficiary access to care.
            (D) A timetable for implementation of any appropriate 
        changes based on the analysis of the matters described in 
        subparagraphs (A), (B), and (C).
            (E) Other areas determined appropriate by the Secretary.
        (2) Considerations.--In conducting the study under paragraph 
    (1), the Secretary shall consider whether certain factors should be 
    used to measure patient severity of illness and access to care, 
    such as--
            (A) population density and relative patient access to care;
            (B) variations in service costs for providing care to 
        individuals who are dually eligible under the Medicare and 
        Medicaid programs;
            (C) the presence of severe or chronic diseases, as 
        evidenced by multiple, discontinuous home health episodes;
            (D) poverty status, as evidenced by the receipt of 
        Supplemental Security Income under title XVI of the Social 
        Security Act;
            (E) the absence of caregivers;
            (F) language barriers;
            (G) atypical transportation costs;
            (H) security costs; and
            (I) other factors determined appropriate by the Secretary.
        (3) Report.--Not later than March 1, 2011, the Secretary shall 
    submit to Congress a report on the study conducted under paragraph 
    (1), together with recommendations for such legislation and 
    administrative action as the Secretary determines appropriate.
        (4) Consultations.--In conducting the study under paragraph (1) 
    and preparing the report under paragraph (3), the Secretary shall 
    consult with--
            (A) stakeholders representing home health agencies;
            (B) groups representing Medicare beneficiaries;
            (C) the Medicare Payment Advisory Commission;
            (D) the Inspector General of the Department of Health and 
        Human Services; and
            (E) the Comptroller General of the United States.

SEC. 3132. HOSPICE REFORM.

    (a) Hospice Care Payment Reforms.--
        (1) In general.--Section 1814(i) of the Social Security Act (42 
    U.S.C. 1395f(i)), as amended by section 3004(c), is amended--
            (A) by redesignating paragraph (6) as paragraph (7); and
            (B) by inserting after paragraph (5) the following new 
        paragraph:
        ``(6)(A) The Secretary shall collect additional data and 
    information as the Secretary determines appropriate to revise 
    payments for hospice care under this subsection pursuant to 
    subparagraph (D) and for other purposes as determined appropriate 
    by the Secretary. The Secretary shall begin to collect such data by 
    not later than January 1, 2011.
        ``(B) The additional data and information to be collected under 
    subparagraph (A) may include data and information on--
            ``(i) charges and payments;
            ``(ii) the number of days of hospice care which are 
        attributable to individuals who are entitled to, or enrolled 
        for, benefits under part A; and
            ``(iii) with respect to each type of service included in 
        hospice care--
                ``(I) the number of days of hospice care attributable 
            to the type of service;
                ``(II) the cost of the type of service; and
                ``(III) the amount of payment for the type of service;
            ``(iv) charitable contributions and other revenue of the 
        hospice program;
            ``(v) the number of hospice visits;
            ``(vi) the type of practitioner providing the visit; and
            ``(vii) the length of the visit and other basic information 
        with respect to the visit.
        ``(C) The Secretary may collect the additional data and 
    information under subparagraph (A) on cost reports, claims, or 
    other mechanisms as the Secretary determines to be appropriate.
        ``(D)(i) Notwithstanding the preceding paragraphs of this 
    subsection, not earlier than October 1, 2013, the Secretary shall, 
    by regulation, implement revisions to the methodology for 
    determining the payment rates for routine home care and other 
    services included in hospice care under this part, as the Secretary 
    determines to be appropriate. Such revisions may be based on an 
    analysis of data and information collected under subparagraph (A). 
    Such revisions may include adjustments to per diem payments that 
    reflect changes in resource intensity in providing such care and 
    services during the course of the entire episode of hospice care.
        ``(ii) Revisions in payment implemented pursuant to clause (i) 
    shall result in the same estimated amount of aggregate expenditures 
    under this title for hospice care furnished in the fiscal year in 
    which such revisions in payment are implemented as would have been 
    made under this title for such care in such fiscal year if such 
    revisions had not been implemented.
        ``(E) The Secretary shall consult with hospice programs and the 
    Medicare Payment Advisory Commission regarding the additional data 
    and information to be collected under subparagraph (A) and the 
    payment revisions under subparagraph (D).''.
        (2) Conforming amendments.--Section 1814(i)(1)(C) of the Social 
    Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
            (A) in clause (ii)--
                (i) in the matter preceding subclause (I), by inserting 
            ``(before the first fiscal year in which the payment 
            revisions described in paragraph (6)(D) are implemented)'' 
            after ``subsequent fiscal year''; and
                (ii) in subclause (VII), by inserting ``(before the 
            first fiscal year in which the payment revisions described 
            in paragraph (6)(D) are implemented), subject to clause 
            (iv),'' after ``subsequent fiscal year''; and
            (B) by adding at the end the following new clause:
                ``(iii) With respect to routine home care and other 
            services included in hospice care furnished during fiscal 
            years subsequent to the first fiscal year in which payment 
            revisions described in paragraph (6)(D) are implemented, 
            the payment rates for such care and services shall be the 
            payment rates in effect under this clause during the 
            preceding fiscal year increased by, subject to clause (iv), 
            the market basket percentage increase (as defined in 
            section 1886(b)(3)(B)(iii)) for the fiscal year.''.
    (b) Adoption of MedPAC Hospice Program Eligibility Recertification 
Recommendations.--Section 1814(a)(7) of the Social Security Act (42 
U.S.C. 1395f(a)(7)) is amended--
        (1) in subparagraph (B), by striking ``and'' at the end; and
        (2) by adding at the end the following new subparagraph:
            ``(D) on and after January 1, 2011--
                ``(i) a hospice physician or nurse practitioner has a 
            face-to-face encounter with the individual to determine 
            continued eligibility of the individual for hospice care 
            prior to the 180th-day recertification and each subsequent 
            recertification under subparagraph (A)(ii) and attests that 
            such visit took place (in accordance with procedures 
            established by the Secretary); and
                ``(ii) in the case of hospice care provided an 
            individual for more than 180 days by a hospice program for 
            which the number of such cases for such program comprises 
            more than a percent (specified by the Secretary) of the 
            total number of such cases for all programs under this 
            title, the hospice care provided to such individual is 
            medically reviewed (in accordance with procedures 
            established by the Secretary); and''.

SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPORTIONATE SHARE HOSPITAL 
              (DSH) PAYMENTS.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as 
amended by sections 3001, 3008, and 3025, is amended--
        (1) in subsection (d)(5)(F)(i), by striking ``For'' and 
    inserting ``Subject to subsection (r), for''; and
        (2) by adding at the end the following new subsection:
    ``(r) Adjustments to Medicare DSH Payments.--
        ``(1) Empirically justified dsh payments.--For fiscal year 2015 
    and each subsequent fiscal year, instead of the amount of 
    disproportionate share hospital payment that would otherwise be 
    made under subsection (d)(5)(F) to a subsection (d) hospital for 
    the fiscal year, the Secretary shall pay to the subsection (d) 
    hospital 25 percent of such amount (which represents the 
    empirically justified amount for such payment, as determined by the 
    Medicare Payment Advisory Commission in its March 2007 Report to 
    the Congress).
        ``(2) Additional payment.--In addition to the payment made to a 
    subsection (d) hospital under paragraph (1), for fiscal year 2015 
    and each subsequent fiscal year, the Secretary shall pay to such 
    subsection (d) hospitals an additional amount equal to the product 
    of the following factors:
            ``(A) Factor one.--A factor equal to the difference 
        between--
                ``(i) the aggregate amount of payments that would be 
            made to subsection (d) hospitals under subsection (d)(5)(F) 
            if this subsection did not apply for such fiscal year (as 
            estimated by the Secretary); and
                ``(ii) the aggregate amount of payments that are made 
            to subsection (d) hospitals under paragraph (1) for such 
            fiscal year (as so estimated).
            ``(B) Factor two.--
                ``(i) Fiscal years 2015, 2016, and 2017.--For each of 
            fiscal years 2015, 2016, and 2017, a factor equal to 1 
            minus the percent change (divided by 100) in the percent of 
            individuals under the age of 65 who are uninsured, as 
            determined by comparing the percent of such individuals--

                    ``(I) who are uninsured in 2012, the last year 
                before coverage expansion under the Patient Protection 
                and Affordable Care Act (as calculated by the Secretary 
                based on the most recent estimates available from the 
                Director of the Congressional Budget Office before a 
                vote in either House on such Act that, if determined in 
                the affirmative, would clear such Act for enrollment); 
                and
                    ``(II) who are uninsured in the most recent period 
                for which data is available (as so calculated).

                ``(ii) 2018 and subsequent years.--For fiscal year 2018 
            and each subsequent fiscal year, a factor equal to 1 minus 
            the percent change (divided by 100) in the percent of 
            individuals who are uninsured, as determined by comparing 
            the percent of individuals--

                    ``(I) who are uninsured in 2012 (as estimated by 
                the Secretary, based on data from the Census Bureau or 
                other sources the Secretary determines appropriate, and 
                certified by the Chief Actuary of the Centers for 
                Medicare & Medicaid Services); and
                    ``(II) who are uninsured in the most recent period 
                for which data is available (as so estimated and 
                certified).

            ``(C) Factor three.--A factor equal to the percent, for 
        each subsection (d) hospital, that represents the quotient of--
                ``(i) the amount of uncompensated care for such 
            hospital for a period selected by the Secretary (as 
            estimated by the Secretary, based on appropriate data 
            (including, in the case where the Secretary determines that 
            alternative data is available which is a better proxy for 
            the costs of subsection (d) hospitals for treating the 
            uninsured, the use of such alternative data)); and
                ``(ii) the aggregate amount of uncompensated care for 
            all subsection (d) hospitals that receive a payment under 
            this subsection for such period (as so estimated, based on 
            such data).
        ``(3) Limitations on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of the following:
            ``(A) Any estimate of the Secretary for purposes of 
        determining the factors described in paragraph (2).
            ``(B) Any period selected by the Secretary for such 
        purposes.''.

SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new 
subparagraphs:
            ``(K) Potentially misvalued codes.--
                ``(i) In general.--The Secretary shall--

                    ``(I) periodically identify services as being 
                potentially misvalued using criteria specified in 
                clause (ii); and
                    ``(II) review and make appropriate adjustments to 
                the relative values established under this paragraph 
                for services identified as being potentially misvalued 
                under subclause (I).

                ``(ii) Identification of potentially misvalued codes.--
            For purposes of identifying potentially misvalued services 
            pursuant to clause (i)(I), the Secretary shall examine (as 
            the Secretary determines to be appropriate) codes (and 
            families of codes as appropriate) for which there has been 
            the fastest growth; codes (and families of codes as 
            appropriate) that have experienced substantial changes in 
            practice expenses; codes for new technologies or services 
            within an appropriate period (such as 3 years) after the 
            relative values are initially established for such codes; 
            multiple codes that are frequently billed in conjunction 
            with furnishing a single service; codes with low relative 
            values, particularly those that are often billed multiple 
            times for a single treatment; codes which have not been 
            subject to review since the implementation of the RBRVS 
            (the so-called `Harvard-valued codes'); and such other 
            codes determined to be appropriate by the Secretary.
                ``(iii) Review and adjustments.--

                    ``(I) The Secretary may use existing processes to 
                receive recommendations on the review and appropriate 
                adjustment of potentially misvalued services described 
                in clause (i)(II).
                    ``(II) The Secretary may conduct surveys, other 
                data collection activities, studies, or other analyses 
                as the Secretary determines to be appropriate to 
                facilitate the review and appropriate adjustment 
                described in clause (i)(II).
                    ``(III) The Secretary may use analytic contractors 
                to identify and analyze services identified under 
                clause (i)(I), conduct surveys or collect data, and 
                make recommendations on the review and appropriate 
                adjustment of services described in clause (i)(II).
                    ``(IV) The Secretary may coordinate the review and 
                appropriate adjustment described in clause (i)(II) with 
                the periodic review described in subparagraph (B).
                    ``(V) As part of the review and adjustment 
                described in clause (i)(II), including with respect to 
                codes with low relative values described in clause 
                (ii), the Secretary may make appropriate coding 
                revisions (including using existing processes for 
                consideration of coding changes) which may include 
                consolidation of individual services into bundled codes 
                for payment under the fee schedule under subsection 
                (b).
                    ``(VI) The provisions of subparagraph (B)(ii)(II) 
                shall apply to adjustments to relative value units made 
                pursuant to this subparagraph in the same manner as 
                such provisions apply to adjustments under subparagraph 
                (B)(ii)(II).

            ``(L) Validating relative value units.--
                ``(i) In general.--The Secretary shall establish a 
            process to validate relative value units under the fee 
            schedule under subsection (b).
                ``(ii) Components and elements of work.--The process 
            described in clause (i) may include validation of work 
            elements (such as time, mental effort and professional 
            judgment, technical skill and physical effort, and stress 
            due to risk) involved with furnishing a service and may 
            include validation of the pre-, post-, and intra-service 
            components of work.
                ``(iii) Scope of codes.--The validation of work 
            relative value units shall include a sampling of codes for 
            services that is the same as the codes listed under 
            subparagraph (K)(ii).
                ``(iv) Methods.--The Secretary may conduct the 
            validation under this subparagraph using methods described 
            in subclauses (I) through (V) of subparagraph (K)(iii) as 
            the Secretary determines to be appropriate.
                ``(v) Adjustments.--The Secretary shall make 
            appropriate adjustments to the work relative value units 
            under the fee schedule under subsection (b). The provisions 
            of subparagraph (B)(ii)(II) shall apply to adjustments to 
            relative value units made pursuant to this subparagraph in 
            the same manner as such provisions apply to adjustments 
            under subparagraph (B)(ii)(II).''.
    (b) Implementation.--
        (1) Administration.--
            (A) Chapter 35 of title 44, United States Code and the 
        provisions of the Federal Advisory Committee Act (5 U.S.C. 
        App.) shall not apply to this section or the amendment made by 
        this section.
            (B) Notwithstanding any other provision of law, the 
        Secretary may implement subparagraphs (K) and (L) of 1848(c)(2) 
        of the Social Security Act, as added by subsection (a), by 
        program instruction or otherwise.
            (C) Section 4505(d) of the Balanced Budget Act of 1997 is 
        repealed.
            (D) Except for provisions related to confidentiality of 
        information, the provisions of the Federal Acquisition 
        Regulation shall not apply to this section or the amendment 
        made by this section.
        (2) Focusing cms resources on potentially overvalued codes.--
    Section 1868(a) of the Social Security Act (42 U.S.C. 1395ee(a)) is 
    repealed.

SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION FACTOR FOR ADVANCED 
              IMAGING SERVICES.

    (a) Adjustment in Practice Expense To Reflect Higher Presumed 
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w-
4) is amended--
        (1) in subsection (b)(4)--
            (A) in subparagraph (B), by striking ``subparagraph (A)'' 
        and inserting ``this paragraph''; and
            (B) by adding at the end the following new subparagraph:
            ``(C) Adjustment in practice expense to reflect higher 
        presumed utilization.--Consistent with the methodology for 
        computing the number of practice expense relative value units 
        under subsection (c)(2)(C)(ii) with respect to advanced 
        diagnostic imaging services (as defined in section 
        1834(e)(1)(B)) furnished on or after January 1, 2010, the 
        Secretary shall adjust such number of units so it reflects--
                ``(i) in the case of services furnished on or after 
            January 1, 2010, and before January 1, 2013, a 65 percent 
            (rather than 50 percent) presumed rate of utilization of 
            imaging equipment;
                ``(ii) in the case of services furnished on or after 
            January 1, 2013, and before January 1, 2014, a 70 percent 
            (rather than 50 percent) presumed rate of utilization of 
            imaging equipment; and
                ``(iii) in the case of services furnished on or after 
            January 1, 2014, a 75 percent (rather than 50 percent) 
            presumed rate of utilization of imaging equipment.''; and
        (2) in subsection (c)(2)(B)(v), by adding at the end the 
    following new subclauses:

                    ``(III) Change in presumed utilization level of 
                certain advanced diagnostic imaging services for 2010 
                through 2012.--Effective for fee schedules established 
                beginning with 2010 and ending with 2012, reduced 
                expenditures attributable to the presumed rate of 
                utilization of imaging equipment of 65 percent under 
                subsection (b)(4)(C)(i) instead of a presumed rate of 
                utilization of such equipment of 50 percent.
                    ``(IV) Change in presumed utilization level of 
                certain advanced diagnostic imaging services for 
                2013.--Effective for fee schedules established for 
                2013, reduced expenditures attributable to the presumed 
                rate of utilization of imaging equipment of 70 percent 
                under subsection (b)(4)(C)(ii) instead of a presumed 
                rate of utilization of such equipment of 50 percent.
                    ``(V) Change in presumed utilization level of 
                certain advanced diagnostic imaging services for 2014 
                and subsequent years.--Effective for fee schedules 
                established beginning with 2014, reduced expenditures 
                attributable to the presumed rate of utilization of 
                imaging equipment of 75 percent under subsection 
                (b)(4)(C)(iii) instead of a presumed rate of 
                utilization of such equipment of 50 percent.''.

    (b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848 of the Social 
Security Act (42 U.S.C. 1395w-4), as amended by subsection (a), is 
amended--
        (1) in subsection (b)(4), by adding at the end the following 
    new subparagraph:
            ``(D) Adjustment in technical component discount on single-
        session imaging involving consecutive body parts.--For services 
        furnished on or after July 1, 2010, the Secretary shall 
        increase the reduction in payments attributable to the multiple 
        procedure payment reduction applicable to the technical 
        component for imaging under the final rule published by the 
        Secretary in the Federal Register on November 21, 2005 (part 
        405 of title 42, Code of Federal Regulations) from 25 percent 
        to 50 percent.''; and
        (2) in subsection (c)(2)(B)(v), by adding at the end the 
    following new subclause:

                    ``(VI) Additional reduced payment for multiple 
                imaging procedures.--Effective for fee schedules 
                established beginning with 2010 (but not applied for 
                services furnished prior to July 1, 2010), reduced 
                expenditures attributable to the increase in the 
                multiple procedure payment reduction from 25 to 50 
                percent (as described in subsection (b)(4)(D)).''.

    (c) Analysis by the Chief Actuary of the Centers for Medicare & 
Medicaid Services.--Not later than January 1, 2013, the Chief Actuary 
of the Centers for Medicare & Medicaid Services shall make publicly 
available an analysis of whether, for the period of 2010 through 2019, 
the cumulative expenditure reductions under title XVIII of the Social 
Security Act that are attributable to the adjustments under the 
amendments made by this section are projected to exceed $3,000,000,000.

SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN WHEELCHAIRS.

    (a) In General.--Section 1834(a)(7)(A) of the Social Security Act 
(42 U.S.C. 1395m(a)(7)(A)) is amended--
        (1) in clause (i)--
            (A) in subclause (II), by inserting ``subclause (III) and'' 
        after ``Subject to''; and
            (B) by adding at the end the following new subclause:

                    ``(III) Special rule for power-driven 
                wheelchairs.--For purposes of payment for power-driven 
                wheelchairs, subclause (II) shall be applied by 
                substituting `15 percent' and `6 percent' for `10 
                percent' and `7.5 percent', respectively.''; and

        (2) in clause (iii)--
            (A) in the heading, by inserting ``complex, 
        rehabilitative'' before ``power-driven''; and
            (B) by inserting ``complex, rehabilitative'' before 
        ``power-driven''.
    (b) Technical Amendment.--Section 1834(a)(7)(C)(ii)(II) of the 
Social Security Act (42 U.S.C. 1395m(a)(7)(C)(ii)(II)) is amended by 
striking ``(A)(ii) or''.
    (c) Effective Date.--
        (1) In general.--Subject to paragraph (2), the amendments made 
    by subsection (a) shall take effect on January 1, 2011, and shall 
    apply to power-driven wheelchairs furnished on or after such date.
        (2) Application to competitive bidding.--The amendments made by 
    subsection (a) shall not apply to payment made for items and 
    services furnished pursuant to contracts entered into under section 
    1847 of the Social Security Act (42 U.S.C. 1395w-3) prior to 
    January 1, 2011, pursuant to the implementation of subsection 
    (a)(1)(B)(i)(I) of such section 1847.

SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

    (a) Extension of Section 508 Hospital Reclassifications.--
        (1) In general.--Subsection (a) of section 106 of division B of 
    the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), 
    as amended by section 117 of the Medicare, Medicaid, and SCHIP 
    Extension Act of 2007 (Public Law 110-173) and section 124 of the 
    Medicare Improvements for Patients and Providers Act of 2008 
    (Public Law 110-275), is amended by striking ``September 30, 2009'' 
    and inserting ``September 30, 2010''.
        (2) Use of particular wage index in fiscal year 2010.--For 
    purposes of implementation of the amendment made by this subsection 
    during fiscal year 2010, the Secretary shall use the hospital wage 
    index that was promulgated by the Secretary in the Federal Register 
    on August 27, 2009 (74 Fed. Reg. 43754), and any subsequent 
    corrections.
    (b) Plan for Reforming the Medicare Hospital Wage Index System.--
        (1) In general.--Not later than December 31, 2011, the 
    Secretary of Health and Human Services (in this section referred to 
    as the ``Secretary'') shall submit to Congress a report that 
    includes a plan to reform the hospital wage index system under 
    section 1886 of the Social Security Act.
        (2) Details.--In developing the plan under paragraph (1), the 
    Secretary shall take into account the goals for reforming such 
    system set forth in the Medicare Payment Advisory Commission June 
    2007 report entitled ``Report to Congress: Promoting Greater 
    Efficiency in Medicare'', including establishing a new hospital 
    compensation index system that--
            (A) uses Bureau of Labor Statistics data, or other data or 
        methodologies, to calculate relative wages for each geographic 
        area involved;
            (B) minimizes wage index adjustments between and within 
        metropolitan statistical areas and statewide rural areas;
            (C) includes methods to minimize the volatility of wage 
        index adjustments that result from implementation of policy, 
        while maintaining budget neutrality in applying such 
        adjustments;
            (D) takes into account the effect that implementation of 
        the system would have on health care providers and on each 
        region of the country;
            (E) addresses issues related to occupational mix, such as 
        staffing practices and ratios, and any evidence on the effect 
        on quality of care or patient safety as a result of the 
        implementation of the system; and
            (F) provides for a transition.
        (3) Consultation.--In developing the plan under paragraph (1), 
    the Secretary shall consult with relevant affected parties.
    (c) Use of Particular Criteria for Determining Reclassifications.--
Notwithstanding any other provision of law, in making decisions on 
applications for reclassification of a subsection (d) hospital (as 
defined in paragraph (1)(B) of section 1886(d) of the Social Security 
Act (42 U.S.C. 1395ww(d)) for the purposes described in paragraph 
(10)(D)(v) of such section for fiscal year 2011 and each subsequent 
fiscal year (until the first fiscal year beginning on or after the date 
that is 1 year after the Secretary of Health and Human Services submits 
the report to Congress under subsection (b)), the Geographic 
Classification Review Board established under paragraph (10) of such 
section shall use the average hourly wage comparison criteria used in 
making such decisions as of September 30, 2008. The preceding sentence 
shall be effected in a budget neutral manner.

SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended by adding at the end the following new paragraph:
        ``(18) Authorization of adjustment for cancer hospitals.--
            ``(A) Study.--The Secretary shall conduct a study to 
        determine if, under the system under this subsection, costs 
        incurred by hospitals described in section 1886(d)(1)(B)(v) 
        with respect to ambulatory payment classification groups exceed 
        those costs incurred by other hospitals furnishing services 
        under this subsection (as determined appropriate by the 
        Secretary). In conducting the study under this subparagraph, 
        the Secretary shall take into consideration the cost of drugs 
        and biologicals incurred by such hospitals.
            ``(B) Authorization of adjustment.--Insofar as the 
        Secretary determines under subparagraph (A) that costs incurred 
        by hospitals described in section 1886(d)(1)(B)(v) exceed those 
        costs incurred by other hospitals furnishing services under 
        this subsection, the Secretary shall provide for an appropriate 
        adjustment under paragraph (2)(E) to reflect those higher costs 
        effective for services furnished on or after January 1, 
        2011.''.

SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) In General.--Section 1847A of the Social Security Act (42 
U.S.C. 1395w-3a) is amended--
        (1) in subsection (b)--
            (A) in paragraph (1)--
                (i) in subparagraph (A), by striking ``or'' at the end;
                (ii) in subparagraph (B), by striking the period at the 
            end and inserting ``; or''; and
                (iii) by adding at the end the following new 
            subparagraph:
            ``(C) in the case of a biosimilar biological product (as 
        defined in subsection (c)(6)(H)), the amount determined under 
        paragraph (8).''; and
            (B) by adding at the end the following new paragraph:
        ``(8) Biosimilar biological product.--The amount specified in 
    this paragraph for a biosimilar biological product described in 
    paragraph (1)(C) is the sum of--
            ``(A) the average sales price as determined using the 
        methodology described under paragraph (6) applied to a 
        biosimilar biological product for all National Drug Codes 
        assigned to such product in the same manner as such paragraph 
        is applied to drugs described in such paragraph; and
            ``(B) 6 percent of the amount determined under paragraph 
        (4) for the reference biological product (as defined in 
        subsection (c)(6)(I)).''; and
        (2) in subsection (c)(6), by adding at the end the following 
    new subparagraph:
            ``(H) Biosimilar biological product.--The term `biosimilar 
        biological product' means a biological product approved under 
        an abbreviated application for a license of a biological 
        product that relies in part on data or information in an 
        application for another biological product licensed under 
        section 351 of the Public Health Service Act.
            ``(I) Reference biological product.--The term `reference 
        biological product' means the biological product licensed under 
        such section 351 that is referred to in the application 
        described in subparagraph (H) of the biosimilar biological 
        product.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to payments for biosimilar biological products beginning with the 
first day of the second calendar quarter after enactment of legislation 
providing for a biosimilar pathway (as determined by the Secretary).

SEC. 3140. MEDICARE HOSPICE CONCURRENT CARE DEMONSTRATION PROGRAM.

    (a) Establishment.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall establish a 
    Medicare Hospice Concurrent Care demonstration program at 
    participating hospice programs under which Medicare beneficiaries 
    are furnished, during the same period, hospice care and any other 
    items or services covered under title XVIII of the Social Security 
    Act (42 U.S.C. 1395 et seq.) from funds otherwise paid under such 
    title to such hospice programs.
        (2) Duration.--The demonstration program under this section 
    shall be conducted for a 3-year period.
        (3) Sites.--The Secretary shall select not more than 15 hospice 
    programs at which the demonstration program under this section 
    shall be conducted. Such hospice programs shall be located in urban 
    and rural areas.
    (b) Independent Evaluation and Reports.--
        (1) Independent evaluation.--The Secretary shall provide for 
    the conduct of an independent evaluation of the demonstration 
    program under this section. Such independent evaluation shall 
    determine whether the demonstration program has improved patient 
    care, quality of life, and cost-effectiveness for Medicare 
    beneficiaries participating in the demonstration program.
        (2) Reports.--The Secretary shall submit to Congress a report 
    containing the results of the evaluation conducted under paragraph 
    (1), together with such recommendations as the Secretary determines 
    appropriate.
    (c) Budget Neutrality.--With respect to the 3-year period of the 
demonstration program under this section, the Secretary shall ensure 
that the aggregate expenditures under title XVIII for such period shall 
not exceed the aggregate expenditures that would have been expended 
under such title if the demonstration program under this section had 
not been implemented.

SEC. 3141. APPLICATION OF BUDGET NEUTRALITY ON A NATIONAL BASIS IN THE 
              CALCULATION OF THE MEDICARE HOSPITAL WAGE INDEX FLOOR.

    In the case of discharges occurring on or after October 1, 2010, 
for purposes of applying section 4410 of the Balanced Budget Act of 
1997 (42 U.S.C. 1395ww note) and paragraph (h)(4) of section 412.64 of 
title 42, Code of Federal Regulations, the Secretary of Health and 
Human Services shall administer subsection (b) of such section 4410 and 
paragraph (e) of such section 412.64 in the same manner as the 
Secretary administered such subsection (b) and paragraph (e) for 
discharges occurring during fiscal year 2008 (through a uniform, 
national adjustment to the area wage index).

SEC. 3142. HHS STUDY ON URBAN MEDICARE-DEPENDENT HOSPITALS.

    (a) Study.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall conduct a 
    study on the need for an additional payment for urban Medicare-
    dependent hospitals for inpatient hospital services under section 
    1886 of the Social Security Act (42 U.S.C. 1395ww). Such study 
    shall include an analysis of--
            (A) the Medicare inpatient margins of urban Medicare-
        dependent hospitals, as compared to other hospitals which 
        receive 1 or more additional payments or adjustments under such 
        section (including those payments or adjustments described in 
        paragraph (2)(A)); and
            (B) whether payments to medicare-dependent, small rural 
        hospitals under subsection (d)(5)(G) of such section should be 
        applied to urban Medicare-dependent hospitals.
        (2) Urban medicare-dependent hospital defined.--For purposes of 
    this section, the term ``urban Medicare-dependent hospital'' means 
    a subsection (d) hospital (as defined in subsection (d)(1)(B) of 
    such section) that--
            (A) does not receive any additional payment or adjustment 
        under such section, such as payments for indirect medical 
        education costs under subsection (d)(5)(B) of such section, 
        disproportionate share payments under subsection (d)(5)(A) of 
        such section, payments to a rural referral center under 
        subsection (d)(5)(C) of such section, payments to a critical 
        access hospital under section 1814(l) of such Act (42 U.S.C. 
        1395f(l)), payments to a sole community hospital under 
        subsection (d)(5)(D) of such section 1886, or payments to a 
        medicare-dependent, small rural hospital under subsection 
        (d)(5)(G) of such section 1886; and
            (B) for which more than 60 percent of its inpatient days or 
        discharges during 2 of the 3 most recently audited cost 
        reporting periods for which the Secretary has a settled cost 
        report were attributable to inpatients entitled to benefits 
        under part A of title XVIII of such Act.
    (b) Report.--Not later than 9 months after the date of enactment of 
this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

SEC. 3143. PROTECTING HOME HEALTH BENEFITS.

    Nothing in the provisions of, or amendments made by, this Act shall 
result in the reduction of guaranteed home health benefits under title 
XVIII of the Social Security Act.

               Subtitle C--Provisions Relating to Part C

SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

    (a) MA Benchmark Based on Plan's Competitive Bids.--
        (1) In general.--Section 1853(j) of the Social Security Act (42 
    U.S.C. 1395w-23(j)) is amended--
            (A) by striking ``Amounts.--For purposes'' and inserting 
        ``Amounts.--
        ``(1) In general.--For purposes'';
            (B) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and indenting the 
        subparagraphs appropriately;
            (C) in subparagraph (A), as redesignated by subparagraph 
        (B)--
                (i) by redesignating subparagraphs (A) and (B) as 
            clauses (i) and (ii), respectively, and indenting the 
            clauses appropriately; and
                (ii) in clause (i), as redesignated by clause (i), by 
            striking ``an amount equal to'' and all that follows 
            through the end and inserting ``an amount equal to--

                    ``(I) for years before 2007, \1/12\ of the annual 
                MA capitation rate under section 1853(c)(1) for the 
                area for the year, adjusted as appropriate for the 
                purpose of risk adjustment;
                    ``(II) for 2007 through 2011, \1/12\ of the 
                applicable amount determined under subsection (k)(1) 
                for the area for the year;
                    ``(III) for 2012, the sum of--

                        ``(aa) \2/3\ of the quotient of--
                            ``(AA) the applicable amount determined 
                        under subsection (k)(1) for the area for the 
                        year; and
                            ``(BB) 12; and
                        ``(bb) \1/3\ of the MA competitive benchmark 
                    amount (determined under paragraph (2)) for the 
                    area for the month;

                    ``(IV) for 2013, the sum of--

                        ``(aa) \1/3\ of the quotient of--
                            ``(AA) the applicable amount determined 
                        under subsection (k)(1) for the area for the 
                        year; and
                            ``(BB) 12; and
                        ``(bb) \2/3\ of the MA competitive benchmark 
                    amount (as so determined) for the area for the 
                    month;

                    ``(V) for 2014, the MA competitive benchmark amount 
                for the area for a month in 2013 (as so determined), 
                increased by the national per capita MA growth 
                percentage, described in subsection (c)(6) for 2014, 
                but not taking into account any adjustment under 
                subparagraph (C) of such subsection for a year before 
                2004; and
                    ``(VI) for 2015 and each subsequent year, the MA 
                competitive benchmark amount (as so determined) for the 
                area for the month; or'';

                (iii) in clause (ii), as redesignated by clause (i), by 
            striking ``subparagraph (A)'' and inserting ``clause (i)'';
            (D) by adding at the end the following new paragraphs:
        ``(2) Computation of ma competitive benchmark amount.--
            ``(A) In general.--Subject to subparagraph (B) and 
        paragraph (3), for months in each year (beginning with 2012) 
        for each MA payment area the Secretary shall compute an MA 
        competitive benchmark amount equal to the weighted average of 
        the unadjusted MA statutory non-drug monthly bid amount (as 
        defined in section 1854(b)(2)(E)) for each MA plan in the area, 
        with the weight for each plan being equal to the average number 
        of beneficiaries enrolled under such plan in the reference 
        month (as defined in section 1858(f)(4), except that, in 
        applying such definition for purposes of this paragraph, `to 
        compute the MA competitive benchmark amount under section 
        1853(j)(2)' shall be substituted for `to compute the percentage 
        specified in subparagraph (A) and other relevant percentages 
        under this part').
            ``(B) Weighting rules.--
                ``(i) Single plan rule.--In the case of an MA payment 
            area in which only a single MA plan is being offered, the 
            weight under subparagraph (A) shall be equal to 1.
                ``(ii) Use of simple average among multiple plans if no 
            plans offered in previous year.--In the case of an MA 
            payment area in which no MA plan was offered in the 
            previous year and more than 1 MA plan is offered in the 
            current year, the Secretary shall use a simple average of 
            the unadjusted MA statutory non-drug monthly bid amount (as 
            so defined) for purposes of computing the MA competitive 
            benchmark amount under subparagraph (A).
        ``(3) Cap on ma competitive benchmark amount.--In no case shall 
    the MA competitive benchmark amount for an area for a month in a 
    year be greater than the applicable amount that would (but for the 
    application of this subsection) be determined under subsection 
    (k)(1) for the area for the month in the year.''; and
            (E) in subsection (k)(2)(B)(ii)(III), by striking 
        ``(j)(1)(A)'' and inserting ``(j)(1)(A)(i)''.
        (2) Conforming amendments.--
            (A) Section 1853(k)(2) of the Social Security Act (42 
        U.S.C. 1395w-23(k)(2)) is amended--
                (i) in subparagraph (A), by striking ``through 2010'' 
            and inserting ``and subsequent years''; and
                (ii) in subparagraph (C)--

                    (I) in clause (iii), by striking ``and'' at the 
                end;
                    (II) in clause (iv), by striking the period at the 
                end and inserting ``; and''; and
                    (III) by adding at the end the following new 
                clause:

                ``(v) for 2011 and subsequent years, 0.00.''.
            (B) Section 1854(b) of the Social Security Act (42 U.S.C. 
        1395w-24(b)) is amended--
                (i) in paragraph (3)(B)(i), by striking ``1853(j)(1)'' 
            and inserting ``1853(j)(1)(A)''; and
                (ii) in paragraph (4)(B)(i), by striking ``1853(j)(2)'' 
            and inserting ``1853(j)(1)(B)''.
            (C) Section 1858(f) of the Social Security Act (42 U.S.C. 
        1395w-27(f)) is amended--
                (i) in paragraph (1), by striking ``1853(j)(2)'' and 
            inserting ``1853(j)(1)(B)''; and
                (ii) in paragraph (3)(A), by striking ``1853(j)(1)(A)'' 
            and inserting ``1853(j)(1)(A)(i)''.
            (D) Section 1860C-1(d)(1)(A) of the Social Security Act (42 
        U.S.C. 1395w-29(d)(1)(A)) is amended by striking 
        ``1853(j)(1)(A)'' and inserting ``1853(j)(1)(A)(i)''.
    (b) Reduction of National Per Capita Growth Percentage for 2011.--
Section 1853(c)(6) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)) is amended--
        (1) in clause (v), by striking ``and'' at the end;
        (2) in clause (vi)--
            (A) by striking ``for a year after 2002'' and inserting 
        ``for 2003 through 2010''; and
            (B) by striking the period at the end and inserting a 
        comma; and
            (C) by adding at the end the following new clauses:
                ``(vii) for 2011, 3 percentage points; and
                ``(viii) for a year after 2011, 0 percentage points.''.
    (c) Enhancement of Beneficiary Rebates.--Section 1854(b)(1)(C)(i) 
of the Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)(i)) is amended 
by inserting ``(or 100 percent in the case of plan years beginning on 
or after January 1, 2014)'' after ``75 percent''.
    (d) Bidding Rules.--
        (1) Requirements for information submitted.--Section 
    1854(a)(6)(A) of the Social Security Act (42 U.S.C. 1395w-
    24(a)(6)(A)) is amended, in the flush matter following clause (v), 
    by adding at the end the following sentence: ``Information to be 
    submitted under this paragraph shall be certified by a qualified 
    member of the American Academy of Actuaries and shall meet 
    actuarial guidelines and rules established by the Secretary under 
    subparagraph (B)(v).''.
        (2) Establishment of actuarial guidelines.--Section 
    1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
    24(a)(6)(B)) is amended--
            (A) in clause (i), by striking ``(iii) and (iv)'' and 
        inserting ``(iii), (iv), and (v)''; and
            (B) by adding at the end the following new clause:
                ``(v) Establishment of actuarial guidelines.--

                    ``(I) In general.--In order to establish fair MA 
                competitive benchmarks under section 1853(j)(1)(A)(i), 
                the Secretary, acting through the Chief Actuary of the 
                Centers for Medicare & Medicaid Services (in this 
                clause referred to as the `Chief Actuary'), shall 
                establish--

                        ``(aa) actuarial guidelines for the submission 
                    of bid information under this paragraph; and
                        ``(bb) bidding rules that are appropriate to 
                    ensure accurate bids and fair competition among MA 
                    plans.

                    ``(II) Denial of bid amounts.--The Secretary shall 
                deny monthly bid amounts submitted under subparagraph 
                (A) that do not meet the actuarial guidelines and rules 
                established under subclause (I).
                    ``(III) Refusal to accept certain bids due to 
                misrepresentations and failures to adequately meet 
                requirements.--In the case where the Secretary 
                determines that information submitted by an MA 
                organization under subparagraph (A) contains consistent 
                misrepresentations and failures to adequately meet 
                requirements of the organization, the Secretary may 
                refuse to accept any additional such bid amounts from 
                the organization for the plan year and the Chief 
                Actuary shall, if the Chief Actuary determines that the 
                actuaries of the organization were complicit in those 
                misrepresentations and failures, report those actuaries 
                to the Actuarial Board for Counseling and 
                Discipline.''.

        (3) Effective date.--The amendments made by this subsection 
    shall apply to bid amounts submitted on or after January 1, 2012.
    (e) MA Local Plan Service Areas.--
        (1) In general.--Section 1853(d) of the Social Security Act (42 
    U.S.C. 1395w-23(d)) is amended--
            (A) in the subsection heading, by striking ``MA Region'' 
        and inserting ``MA Region; MA Local Plan Service Area'';
            (B) in paragraph (1), by striking subparagraph (A) and 
        inserting the following:
            ``(A) with respect to an MA local plan--
                ``(i) for years before 2012, an MA local area (as 
            defined in paragraph (2)); and
                ``(ii) for 2012 and succeeding years, a service area 
            that is an entire urban or rural area, as applicable (as 
            described in paragraph (5)); and''; and
            (C) by adding at the end the following new paragraph:
        ``(5) MA local plan service area.--For 2012 and succeeding 
    years, the service area for an MA local plan shall be an entire 
    urban or rural area in each State as follows:
            ``(A) Urban areas.--
                ``(i) In general.--Subject to clause (ii) and 
            subparagraphs (C) and (D), the service area for an MA local 
            plan in an urban area shall be the Core Based Statistical 
            Area (in this paragraph referred to as a `CBSA') or, if 
            applicable, a conceptually similar alternative 
            classification, as defined by the Director of the Office of 
            Management and Budget.
                ``(ii) CBSA covering more than one state.--In the case 
            of a CBSA (or alternative classification) that covers more 
            than one State, the Secretary shall divide the CBSA (or 
            alternative classification) into separate service areas 
            with respect to each State covered by the CBSA (or 
            alternative classification).
            ``(B) Rural areas.--Subject to subparagraphs (C) and (D), 
        the service area for an MA local plan in a rural area shall be 
        a county that does not qualify for inclusion in a CBSA (or 
        alternative classification), as defined by the Director of the 
        Office of Management and Budget.
            ``(C) Refinements to service areas.--For 2015 and 
        succeeding years, in order to reflect actual patterns of health 
        care service utilization, the Secretary may adjust the 
        boundaries of service areas for MA local plans in urban areas 
        and rural areas under subparagraphs (A) and (B), respectively, 
        but may only do so based on recent analyses of actual patterns 
        of care.
            ``(D) Additional authority to make limited exceptions to 
        service area requirements for ma local plans.--The Secretary 
        may, in addition to any adjustments under subparagraph (C), 
        make limited exceptions to service area requirements otherwise 
        applicable under this part for MA local plans that have in 
        effect (as of the date of enactment of the Patient Protection 
        and Affordable Care Act)--
                ``(i) agreements with another MA organization or MA 
            plan that preclude the offering of benefits throughout an 
            entire service area; or
                ``(ii) limitations in their structural capacity to 
            support adequate networks throughout an entire service area 
            as a result of the delivery system model of the MA local 
            plan.''.
        (2) Conforming amendments.--
            (A) In general.--
                (i) Section 1851(b)(1) of the Social Security Act (42 
            U.S.C. 1395w-21(b)(1)) is amended by striking subparagraph 
            (C).
                (ii) Section 1853(b)(1)(B)(i) of such Act (42 U.S.C. 
            1395w-23(b)(1)(B)(i))--

                    (I) in the matter preceding subclause (I), by 
                striking ``MA payment area'' and inserting ``MA local 
                area (as defined in subsection (d)(2))''; and
                    (II) in subclause (I), by striking ``MA payment 
                area'' and inserting ``MA local area (as so defined)''.

                (iii) Section 1853(b)(4) of such Act (42 U.S.C. 1395w-
            23(b)(4)) is amended by striking ``Medicare Advantage 
            payment area'' and inserting ``MA local area (as so 
            defined)''.
                (iv) Section 1853(c)(1) of such Act (42 U.S.C. 1395w-
            23(c)(1)) is amended--

                    (I) in the matter preceding subparagraph (A), by 
                striking ``a Medicare Advantage payment area that is''; 
                and
                    (II) in subparagraph (D)(i), by striking ``MA 
                payment area'' and inserting ``MA local area (as 
                defined in subsection (d)(2))''.

                (v) Section 1854 of such Act (42 U.S.C. 1395w-24) is 
            amended by striking subsection (h).
            (B) Effective date.--The amendments made by this paragraph 
        shall take effect on January 1, 2012.
    (f) Performance Bonuses.--
        (1) MA plans.--
            (A) In general.--Section 1853 of the Social Security Act 
        (42 U.S.C. 1395w-23) is amended by adding at the end the 
        following new subsection:
    ``(n) Performance Bonuses.--
        ``(1) Care coordination and management performance bonus.--
            ``(A) In general.--For years beginning with 2014, subject 
        to subparagraph (B), in the case of an MA plan that conducts 1 
        or more programs described in subparagraph (C) with respect to 
        the year, the Secretary shall, in addition to any other payment 
        provided under this part, make monthly payments, with respect 
        to coverage of an individual under this part, to the MA plan in 
        an amount equal to the product of--
                ``(i) 0.5 percent of the national monthly per capita 
            cost for expenditures for individuals enrolled under the 
            original medicare fee-for-service program for the year; and
                ``(ii) the total number of programs described in 
            clauses (i) through (ix) of subparagraph (C) that the 
            Secretary determines the plan is conducting for the year 
            under such subparagraph.
            ``(B) Limitation.--In no case may the total amount of 
        payment with respect to a year under subparagraph (A) be 
        greater than 2 percent of the national monthly per capita cost 
        for expenditures for individuals enrolled under the original 
        medicare fee-for-service program for the year, as determined 
        prior to the application of risk adjustment under paragraph 
        (4).
            ``(C) Programs described.--The following programs are 
        described in this paragraph:
                ``(i) Care management programs that--

                    ``(I) target individuals with 1 or more chronic 
                conditions;
                    ``(II) identify gaps in care; and
                    ``(III) facilitate improved care by using 
                additional resources like nurses, nurse practitioners, 
                and physician assistants.

                ``(ii) Programs that focus on patient education and 
            self-management of health conditions, including 
            interventions that--

                    ``(I) help manage chronic conditions;
                    ``(II) reduce declines in health status; and
                    ``(III) foster patient and provider collaboration.

                ``(iii) Transitional care interventions that focus on 
            care provided around a hospital inpatient episode, 
            including programs that target post-discharge patient care 
            in order to reduce unnecessary health complications and 
            readmissions.
                ``(iv) Patient safety programs, including provisions 
            for hospital-based patient safety programs in contracts 
            that the Medicare Advantage organization offering the MA 
            plan has with hospitals.
                ``(v) Financial policies that promote systematic 
            coordination of care by primary care physicians across the 
            full spectrum of specialties and sites of care, such as 
            medical homes, capitation arrangements, or pay-for-
            performance programs.
                ``(vi) Programs that address, identify, and ameliorate 
            health care disparities among principal at-risk 
            subpopulations.
                ``(vii) Medication therapy management programs that are 
            more extensive than is required under section 1860D-4(c) 
            (as determined by the Secretary).
                ``(viii) Health information technology programs, 
            including clinical decision support and other tools to 
            facilitate data collection and ensure patient-centered, 
            appropriate care.
                ``(ix) Such other care management and coordination 
            programs as the Secretary determines appropriate.
            ``(D) Conduct of program in urban and rural areas.--An MA 
        plan may conduct a program described in subparagraph (C) in a 
        manner appropriate for an urban or rural area, as applicable.
            ``(E) Reporting of data.--Each Medicare Advantage 
        organization shall provide to the Secretary the information 
        needed to determine whether they are eligible for a care 
        coordination and management performance bonus at a time and in 
        a manner specified by the Secretary.
            ``(F) Periodic auditing.--The Secretary shall provide for 
        the annual auditing of programs described in subparagraph (C) 
        for which an MA plan receives a care coordination and 
        management performance bonus under this paragraph. The 
        Comptroller General shall monitor auditing activities conducted 
        under this subparagraph.
        ``(2) Quality performance bonuses.--
            ``(A) Quality bonus.--For years beginning with 2014, the 
        Secretary shall, in addition to any other payment provided 
        under this part, make monthly payments, with respect to 
        coverage of an individual under this part, to an MA plan that 
        achieves at least a 3 star rating (or comparable rating) on a 
        rating system described in subparagraph (C) in an amount equal 
        to--
                ``(i) in the case of a plan that achieves a 3 star 
            rating (or comparable rating) on such system 2 percent of 
            the national monthly per capita cost for expenditures for 
            individuals enrolled under the original medicare fee-for-
            service program for the year; and
                ``(ii) in the case of a plan that achieves a 4 or 5 
            star rating (or comparable rating on such system, 4 percent 
            of such national monthly per capita cost for the year.
            ``(B) Improved quality bonus.--For years beginning with 
        2014, in the case of an MA plan that does not receive a quality 
        bonus under subparagraph (A) and is an improved quality MA plan 
        with respect to the year (as identified by the Secretary), the 
        Secretary shall, in addition to any other payment provided 
        under this part, make monthly payments, with respect to 
        coverage of an individual under this part, to the MA plan in an 
        amount equal to 1 percent of such national monthly per capita 
        cost for the year.
            ``(C) Use of rating system.--For purposes of subparagraph 
        (A), a rating system described in this paragraph is--
                ``(i) a rating system that uses up to 5 stars to rate 
            clinical quality and enrollee satisfaction and performance 
            at the Medicare Advantage contract or MA plan level; or
                ``(ii) such other system established by the Secretary 
            that provides for the determination of a comparable quality 
            performance rating to the rating system described in clause 
            (i).
            ``(D) Data used in determining score.--
                ``(i) In general.--The rating of an MA plan under the 
            rating system described in subparagraph (C) with respect to 
            a year shall be based on based on the most recent data 
            available.
                ``(ii) Plans that fail to report data.--An MA plan 
            which does not report data that enables the Secretary to 
            rate the plan for purposes of subparagraph (A) or identify 
            the plan for purposes of subparagraph (B) shall be counted, 
            for purposes of such rating or identification, as having 
            the lowest plan performance rating and the lowest 
            percentage improvement, respectively.
        ``(3) Quality bonus for new and low enrollment ma plans.--
            ``(A) New ma plans.--For years beginning with 2014, in the 
        case of an MA plan that first submits a bid under section 
        1854(a)(1)(A) for 2012 or a subsequent year, only receives 
        enrollments made during the coverage election periods described 
        in section 1851(e), and is not able to receive a bonus under 
        subparagraph (A) or (B) of paragraph (2) for the year, the 
        Secretary shall, in addition to any other payment provided 
        under this part, make monthly payments, with respect to 
        coverage of an individual under this part, to the MA plan in an 
        amount equal to 2 percent of national monthly per capita cost 
        for expenditures for individuals enrolled under the original 
        medicare fee-for-service program for the year. In its fourth 
        year of operation, the MA plan shall be paid in the same manner 
        as other MA plans with comparable enrollment.
            ``(B) Low enrollment plans.--For years beginning with 2014, 
        in the case of an MA plan that has low enrollment (as defined 
        by the Secretary) and would not otherwise be able to receive a 
        bonus under subparagraph (A) or (B) of paragraph (2) or 
        subparagraph (A) of this paragraph for the year (referred to in 
        this subparagraph as a `low enrollment plan'), the Secretary 
        shall use a regional or local mean of the rating of all MA 
        plans in the region or local area, as determined appropriate by 
        the Secretary, on measures used to determine whether MA plans 
        are eligible for a quality or an improved quality bonus, as 
        applicable, to determine whether the low enrollment plan is 
        eligible for a bonus under such a subparagraph.
        ``(4) Risk adjustment.--The Secretary shall risk adjust a 
    performance bonus under this subsection in the same manner as the 
    Secretary risk adjusts beneficiary rebates described in section 
    1854(b)(1)(C).
        ``(5) Notification.--The Secretary, in the annual announcement 
    required under subsection (b)(1)(B) for 2014 and each succeeding 
    year, shall notify the Medicare Advantage organization of any 
    performance bonus (including a care coordination and management 
    performance bonus under paragraph (1), a quality performance bonus 
    under paragraph (2), and a quality bonus for new and low enrollment 
    plans under paragraph (3)) that the organization will receive under 
    this subsection with respect to the year. The Secretary shall 
    provide for the publication of the information described in the 
    previous sentence on the Internet website of the Centers for 
    Medicare & Medicaid Services.''
            (B) Conforming amendment.--Section 1853(a)(1)(B) of the 
        Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) is amended--
                (i) in clause (i), by inserting ``and any performance 
            bonus under subsection (n)'' before the period at the end; 
            and
                (ii) in clause (ii), by striking ``(G)'' and inserting 
            ``(G), plus the amount (if any) of any performance bonus 
            under subsection (n)''.
        (2) Application of performance bonuses to ma regional plans.--
    Section 1858 of the Social Security Act (42 U.S.C. 1395w-27a) is 
    amended--
            (A) in subsection (f)(1), by striking ``subsection (e)'' 
        and inserting ``subsections (e) and (i)''; and
            (B) by adding at the end the following new subsection:
    ``(i) Application of Performance Bonuses to MA Regional Plans.--For 
years beginning with 2014, the Secretary shall apply the performance 
bonuses under section 1853(n) (relating to bonuses for care 
coordination and management, quality performance, and new and low 
enrollment MA plans) to MA regional plans in a similar manner as such 
performance bonuses apply to MA plans under such subsection.''.
    (g) Grandfathering Supplemental Benefits for Current Enrollees 
After Implementation of Competitive Bidding.--Section 1853 of the 
Social Security Act (42 U.S.C. 1395w-23), as amended by subsection (f), 
is amended by adding at the end the following new subsection:
    ``(o) Grandfathering Supplemental Benefits for Current Enrolles 
After Implementation of Competitive Bidding.--
        ``(1) Identification of areas.--The Secretary shall identify MA 
    local areas in which, with respect to 2009, average bids submitted 
    by an MA organization under section 1854(a) for MA local plans in 
    the area are not greater than 75 percent of the adjusted average 
    per capita cost for the year involved, determined under section 
    1876(a)(4), for the area for individuals who are not enrolled in an 
    MA plan under this part for the year, but adjusted to exclude costs 
    attributable to payments under section 1848(o), 1886(n), and 
    1886(h).
        ``(2) Election to provide rebates to grandfathered enrollees.--
            ``(A) In general.--For years beginning with 2012, each 
        Medicare Advantage organization offering an MA local plan in an 
        area identified by the Secretary under paragraph (1) may elect 
        to provide rebates to grandfathered enrollees under section 
        1854(b)(1)(C). In the case where an MA organization makes such 
        an election, the monthly per capita dollar amount of such 
        rebates shall not exceed the applicable amount for the year (as 
        defined in subparagraph (B)).
            ``(B) Applicable amount.--For purposes of this subsection, 
        the term `applicable amount' means--
                ``(i) for 2012, the monthly per capita dollar amount of 
            such rebates provided to enrollees under the MA local plan 
            with respect to 2011; and
                ``(ii) for a subsequent year, 95 percent of the amount 
            determined under this subparagraph for the preceding year.
        ``(3) Special rules for plans in identified areas.--
    Notwithstanding any other provision of this part, the following 
    shall apply with respect to each Medicare Advantage organization 
    offering an MA local plan in an area identified by the Secretary 
    under paragraph (1) that makes an election described in paragraph 
    (2):
            ``(A) Payments.--The amount of the monthly payment under 
        this section to the Medicare Advantage organization, with 
        respect to coverage of a grandfathered enrollee under this part 
        in the area for a month, shall be equal to--
                ``(i) for 2012 and 2013, the sum of--

                    ``(I) the bid amount under section 1854(a) for the 
                MA local plan; and
                    ``(II) the applicable amount (as defined in 
                paragraph (2)(B)) for the MA local plan for the year.

                ``(ii) for 2014 and subsequent years, the sum of--

                    ``(I) the MA competitive benchmark amount under 
                subsection (j)(1)(A)(i) for the area for the month, 
                adjusted, only to the extent the Secretary determines 
                necessary, to account for induced utilization as a 
                result of rebates provided to grandfathered enrollees 
                (except that such adjustment shall not exceed 0.5 
                percent of such MA competitive benchmark amount); and
                    ``(II) the applicable amount (as so defined) for 
                the MA local plan for the year.

            ``(B) Requirement to submit bids under competitive 
        bidding.--The Medicare Advantage organization shall submit a 
        single bid amount under section 1854(a) for the MA local plan. 
        The Medicare Advantage organization shall remove from such bid 
        amount any effects of induced demand for care that may result 
        from the higher rebates available to grandfathered enrollees 
        under this subsection.
            ``(C) Nonapplication of bonus payments and any other 
        rebates.--The Medicare Advantage organization offering the MA 
        local plan shall not be eligible for any bonus payment under 
        subsection (n) or any rebate under this part (other than as 
        provided under this subsection) with respect to grandfathered 
        enrollees.
            ``(D) Nonapplication of uniform bid and premium amounts to 
        grandfathered enrollees.--Section 1854(c) shall not apply with 
        respect to the MA local plan.
            ``(E) Nonapplication of limitation on application of plan 
        rebates toward payment of part b premium.--Notwithstanding 
        clause (iii) of section 1854(b)(1)(C), in the case of a 
        grandfathered enrollee, a rebate under such section may be used 
        for the purpose described in clause (ii)(III) of such section.
            ``(F) Risk adjustment.--The Secretary shall risk adjust 
        rebates to grandfathered enrollees under this subsection in the 
        same manner as the Secretary risk adjusts beneficiary rebates 
        described in section 1854(b)(1)(C).
        ``(4) Definition of grandfathered enrollee.--In this 
    subsection, the term `grandfathered enrollee' means an individual 
    who is enrolled (effective as of the date of enactment of this 
    subsection) in an MA local plan in an area that is identified by 
    the Secretary under paragraph (1).''.
    (h) Transitional Extra Benefits.--Section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23), as amended by subsections (f) and 
(g), is amended by adding at the end the following new subsection:
    ``(p) Transitional Extra Benefits.--
        ``(1) In general.--For years beginning with 2012, the Secretary 
    shall provide transitional rebates under section 1854(b)(1)(C) for 
    the provision of extra benefits (as specified by the Secretary) to 
    enrollees described in paragraph (2).
        ``(2) Enrollees described.--An enrollee described in this 
    paragraph is an individual who--
            ``(A) enrolls in an MA local plan in an applicable area; 
        and
            ``(B) experiences a significant reduction in extra benefits 
        described in clause (ii) of section 1854(b)(1)(C) as a result 
        of competitive bidding under this part (as determined by the 
        Secretary).
        ``(3) Applicable areas.--In this subsection, the term 
    `applicable area' means the following:
            ``(A) The 2 largest metropolitan statistical areas, if the 
        Secretary determines that the total amount of such extra 
        benefits for each enrollee for the month in those areas is 
        greater than $100.
            ``(B) A county where--
                ``(i) the MA area-specific non-drug monthly benchmark 
            amount for a month in 2011 is equal to the legacy urban 
            floor amount (as described in subsection (c)(1)(B)(iii)), 
            as determined by the Secretary for the area for 2011;
                ``(ii) the percentage of Medicare Advantage eligible 
            beneficiaries in the county who are enrolled in an MA plan 
            for 2009 is greater than 30 percent (as determined by the 
            Secretary); and
                ``(iii) average bids submitted by an MA organization 
            under section 1854(a) for MA local plans in the county for 
            2011 are not greater than the adjusted average per capita 
            cost for the year involved, determined under section 
            1876(a)(4), for the county for individuals who are not 
            enrolled in an MA plan under this part for the year, but 
            adjusted to exclude costs attributable to payments under 
            section 1848(o), 1886(n), and 1886(h).
            ``(C) If the Secretary determines appropriate, a county 
        contiguous to an area or county described in subparagraph (A) 
        or (B), respectively.
        ``(4) Review of plan bids.--In the case of a bid submitted by 
    an MA organization under section 1854(a) for an MA local plan in an 
    applicable area, the Secretary shall review such bid in order to 
    ensure that extra benefits (as specified by the Secretary) are 
    provided to enrollees described in paragraph (2).
        ``(5) Funding.--The Secretary shall provide for the transfer 
    from the Federal Hospital Insurance Trust Fund under section 1817 
    and the Federal Supplementary Medical Insurance Trust Fund 
    established under section 1841, in such proportion as the Secretary 
    determines appropriate, of an amount not to exceed $5,000,000,000 
    for the period of fiscal years 2012 through 2019 for the purpose of 
    providing transitional rebates under section 1854(b)(1)(C) for the 
    provision of extra benefits under this subsection.''.
    (i) Nonapplication of Competitive Bidding and Related Provisions 
and Clarification of MA Payment Area for PACE Programs.--
        (1) Nonapplication of competitive bidding and related 
    provisions for pace programs.--Section 1894 of the Social Security 
    Act (42 U.S.C. 1395eee) is amended--
            (A) by redesignating subsections (h) and (i) as subsections 
        (i) and (j), respectively;
            (B) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Nonapplication of Competitive Bidding and Related Provisions 
Under Part C.--With respect to a PACE program under this section, the 
following provisions (and regulations relating to such provisions) 
shall not apply:
        ``(1) Section 1853(j)(1)(A)(i), relating to MA area-specific 
    non-drug monthly benchmark amount being based on competitive bids.
        ``(2) Section 1853(d)(5), relating to the establishment of MA 
    local plan service areas.
        ``(3) Section 1853(n), relating to the payment of performance 
    bonuses.
        ``(4) Section 1853(o), relating to grandfathering supplemental 
    benefits for current enrollees after implementation of competitive 
    bidding.
        ``(5) Section 1853(p), relating to transitional extra 
    benefits.''.
        (2) Special rule for ma payment area for pace programs.--
    Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-23(d)), 
    as amended by subsection (e), is amended by adding at the end the 
    following new paragraph:
        ``(6) Special rule for ma payment area for pace programs.--For 
    years beginning with 2012, in the case of a PACE program under 
    section 1894, the MA payment area shall be the MA local area (as 
    defined in paragraph (2)).''.

SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

    (a) Limitation on Variation of Cost Sharing for Certain Benefits.--
        (1) In general.--Section 1852(a)(1)(B) of the Social Security 
    Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
            (A) in clause (i), by inserting ``, subject to clause 
        (iii),'' after ``and B or''; and
            (B) by adding at the end the following new clauses:
                ``(iii) Limitation on variation of cost sharing for 
            certain benefits.--Subject to clause (v), cost-sharing for 
            services described in clause (iv) shall not exceed the 
            cost-sharing required for those services under parts A and 
            B.
                ``(iv) Services described.--The following services are 
            described in this clause:

                    ``(I) Chemotherapy administration services.
                    ``(II) Renal dialysis services (as defined in 
                section 1881(b)(14)(B)).
                    ``(III) Skilled nursing care.
                    ``(IV) Such other services that the Secretary 
                determines appropriate (including services that the 
                Secretary determines require a high level of 
                predictability and transparency for beneficiaries).

                ``(v) Exception.--In the case of services described in 
            clause (iv) for which there is no cost-sharing required 
            under parts A and B, cost-sharing may be required for those 
            services in accordance with clause (i).''.
        (2) Effective date.--The amendments made by this subsection 
    shall apply to plan years beginning on or after January 1, 2011.
    (b) Application of Rebates, Performance Bonuses, and Premiums.--
        (1) Application of rebates.--Section 1854(b)(1)(C) of the 
    Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)) is amended--
            (A) in clause (ii), by striking ``rebate.--A rebate'' and 
        inserting ``rebate for plan years before 2012.--For plan years 
        before 2012, a rebate'';
            (B) by redesignating clauses (iii) and (iv) as clauses (iv) 
        and (v); and
            (C) by inserting after clause (ii) the following new 
        clause:
                ``(iii) Form of rebate for plan year 2012 and 
            subsequent plan years.--For plan years beginning on or 
            after January 1, 2012, a rebate required under this 
            subparagraph may not be used for the purpose described in 
            clause (ii)(III) and shall be provided through the 
            application of the amount of the rebate in the following 
            priority order:

                    ``(I) First, to use the most significant share to 
                meaningfully reduce cost-sharing otherwise applicable 
                for benefits under the original medicare fee-for-
                service program under parts A and B and for qualified 
                prescription drug coverage under part D, including the 
                reduction of any deductibles, copayments, and maximum 
                limitations on out-of-pocket expenses otherwise 
                applicable. Any reduction of maximum limitations on 
                out-of-pocket expenses under the preceding sentence 
                shall apply to all benefits under the original medicare 
                fee-for-service program option. The Secretary may 
                provide guidance on meaningfully reducing cost-sharing 
                under this subclause, except that such guidance may not 
                require a particular amount of cost-sharing or 
                reduction in cost-sharing.
                    ``(II) Second, to use the next most significant 
                share to meaningfully provide coverage of preventive 
                and wellness health care benefits (as defined by the 
                Secretary) which are not benefits under the original 
                medicare fee-for-service program, such as smoking 
                cessation, a free flu shot, and an annual physical 
                examination.
                    ``(III) Third, to use the remaining share to 
                meaningfully provide coverage of other health care 
                benefits which are not benefits under the original 
                medicare fee-for-service program, such as eye 
                examinations and dental coverage, and are not benefits 
                described in subclause (II).''.

        (2) Application of performance bonuses.--Section 1853(n) of the 
    Social Security Act, as added by section 3201(f), is amended by 
    adding at the end the following new paragraph:
        ``(6) Application of performance bonuses.--For plan years 
    beginning on or after January 1, 2014, any performance bonus paid 
    to an MA plan under this subsection shall be used for the purposes, 
    and in the priority order, described in subclauses (I) through 
    (III) of section 1854(b)(1)(C)(iii).''.
        (3) Application of ma monthly supplementary beneficiary 
    premium.--Section 1854(b)(2)(C) of the Social Security Act (42 
    U.S.C. 1395w-24(b)(2)(C)) is amended--
            (A) by striking ``Premium.--The term'' and inserting 
        ``premium.--
                ``(i) In general.--The term''; and
            (B) by adding at the end the following new clause:
                ``(ii) Application of ma monthly supplementary 
            beneficiary premium.--For plan years beginning on or after 
            January 1, 2012, any MA monthly supplementary beneficiary 
            premium charged to an individual enrolled in an MA plan 
            shall be used for the purposes, and in the priority order, 
            described in subclauses (I) through (III) of paragraph 
            (1)(C)(iii).''.

SEC. 3203. APPLICATION OF CODING INTENSITY ADJUSTMENT DURING MA PAYMENT 
              TRANSITION.

    Section 1853(a)(1)(C) of the Social Security Act (42 U.S.C. 1395w-
23(a)(1)(C)) is amended by adding at the end the following new clause:
                ``(iii) Application of coding intensity adjustment for 
            2011 and subsequent years.--

                    ``(I) Requirement to apply in 2011 through 2013.--
                In order to ensure payment accuracy, the Secretary 
                shall conduct an analysis of the differences described 
                in clause (ii)(I). The Secretary shall ensure that the 
                results of such analysis are incorporated into the risk 
                scores for 2011, 2012, and 2013.
                    ``(II) Authority to apply in 2014 and subsequent 
                years.--The Secretary may, as appropriate, incorporate 
                the results of such analysis into the risk scores for 
                2014 and subsequent years.''.

SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) Annual 45-day Period for Disenrollment From MA Plans To Elect 
To Receive Benefits Under the Original Medicare Fee-for-service 
Program.--
        (1) In general.--Section 1851(e)(2)(C) of the Social Security 
    Act (42 U.S.C. 1395w-1(e)(2)(C)) is amended to read as follows:
            ``(C) Annual 45-day period for disenrollment from ma plans 
        to elect to receive benefits under the original medicare fee-
        for-service program.--Subject to subparagraph (D), at any time 
        during the first 45 days of a year (beginning with 2011), an 
        individual who is enrolled in a Medicare Advantage plan may 
        change the election under subsection (a)(1), but only with 
        respect to coverage under the original medicare fee-for-service 
        program under parts A and B, and may elect qualified 
        prescription drug coverage in accordance with section 1860D-
        1.''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply with respect to 2011 and succeeding years.
    (b) Timing of the Annual, Coordinated Election Period Under Parts C 
and D.--Section 1851(e)(3)(B) of the Social Security Act (42 U.S.C. 
1395w-1(e)(3)(B)) is amended--
        (1) in clause (iii), by striking ``and'' at the end;
        (2) in clause (iv)--
            (A) by striking ``and succeeding years'' and inserting ``, 
        2008, 2009, and 2010''; and
            (B) by striking the period at the end and inserting ``; 
        and''; and
        (3) by adding at the end the following new clause:
                ``(v) with respect to 2012 and succeeding years, the 
            period beginning on October 15 and ending on December 7 of 
            the year before such year.''.

SEC. 3205. EXTENSION FOR SPECIALIZED MA PLANS FOR SPECIAL NEEDS 
              INDIVIDUALS.

    (a) Extension of SNP Authority.--Section 1859(f)(1) of the Social 
Security Act (42 U.S.C. 1395w-28(f)(1)), as amended by section 164(a) 
of the Medicare Improvements for Patients and Providers Act of 2008 
(Public Law 110-275), is amended by striking ``2011'' and inserting 
``2014''.
    (b) Authority To Apply Frailty Adjustment Under PACE Payment 
Rules.--Section 1853(a)(1)(B) of the Social Security Act (42 U.S.C. 
1395w-23(a)(1)(B)) is amended by adding at the end the following new 
clause:
                ``(iv) Authority to apply frailty adjustment under pace 
            payment rules for certain specialized ma plans for special 
            needs individuals.--

                    ``(I) In general.--Notwithstanding the preceding 
                provisions of this paragraph, for plan year 2011 and 
                subsequent plan years, in the case of a plan described 
                in subclause (II), the Secretary may apply the payment 
                rules under section 1894(d) (other than paragraph (3) 
                of such section) rather than the payment rules that 
                would otherwise apply under this part, but only to the 
                extent necessary to reflect the costs of treating high 
                concentrations of frail individuals.
                    ``(II) Plan described.--A plan described in this 
                subclause is a specialized MA plan for special needs 
                individuals described in section 1859(b)(6)(B)(ii) that 
                is fully integrated with capitated contracts with 
                States for Medicaid benefits, including long-term care, 
                and that have similar average levels of frailty (as 
                determined by the Secretary) as the PACE program.''.

    (c) Transition and Exception Regarding Restriction on Enrollment.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)) is 
amended by adding at the end the following new paragraph:
        ``(6) Transition and exception regarding restriction on 
    enrollment.--
            ``(A) In general.--Subject to subparagraph (C), the 
        Secretary shall establish procedures for the transition of 
        applicable individuals to--
                ``(i) a Medicare Advantage plan that is not a 
            specialized MA plan for special needs individuals (as 
            defined in subsection (b)(6)); or
                ``(ii) the original medicare fee-for-service program 
            under parts A and B.
            ``(B) Applicable individuals.--For purposes of clause (i), 
        the term `applicable individual' means an individual who--
                ``(i) is enrolled under a specialized MA plan for 
            special needs individuals (as defined in subsection 
            (b)(6)); and
                ``(ii) is not within the 1 or more of the classes of 
            special needs individuals to which enrollment under the 
            plan is restricted to.
            ``(C) Exception.--The Secretary shall provide for an 
        exception to the transition described in subparagraph (A) for a 
        limited period of time for individuals enrolled under a 
        specialized MA plan for special needs individuals described in 
        subsection (b)(6)(B)(ii) who are no longer eligible for medical 
        assistance under title XIX.
            ``(D) Timeline for initial transition.--The Secretary shall 
        ensure that applicable individuals enrolled in a specialized MA 
        plan for special needs individuals (as defined in subsection 
        (b)(6)) prior to January 1, 2010, are transitioned to a plan or 
        the program described in subparagraph (A) by not later than 
        January 1, 2013.''.
    (d) Temporary Extension of Authority To Operate but No Service Area 
Expansion for Dual Special Needs Plans That Do Not Meet Certain 
Requirements.--Section 164(c)(2) of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110-275) is amended by 
striking ``December 31, 2010'' and inserting ``December 31, 2012''.
    (e) Authority To Require Special Needs Plans Be NCQA Approved.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)), as 
amended by subsections (a) and (c), is amended--
        (1) in paragraph (2), by adding at the end the following new 
    subparagraph:
            ``(C) If applicable, the plan meets the requirement 
        described in paragraph (7).'';
        (2) in paragraph (3), by adding at the end the following new 
    subparagraph:
            ``(E) If applicable, the plan meets the requirement 
        described in paragraph (7).'';
        (3) in paragraph (4), by adding at the end the following new 
    subparagraph:
            ``(C) If applicable, the plan meets the requirement 
        described in paragraph (7).''; and
        (4) by adding at the end the following new paragraph:
        ``(7) Authority to require special needs plans be ncqa 
    approved.--For 2012 and subsequent years, the Secretary shall 
    require that a Medicare Advantage organization offering a 
    specialized MA plan for special needs individuals be approved by 
    the National Committee for Quality Assurance (based on standards 
    established by the Secretary).''.
    (f) Risk Adjustment.--Section 1853(a)(1)(C) of the Social Security 
Act (42 U.S.C. 1395i-23(a)(1)(C)) is amended by adding at the end the 
following new clause:
                ``(iii) Improvements to risk adjustment for special 
            needs individuals with chronic health conditions.--

                    ``(I) In general.--For 2011 and subsequent years, 
                for purposes of the adjustment under clause (i) with 
                respect to individuals described in subclause (II), the 
                Secretary shall use a risk score that reflects the 
                known underlying risk profile and chronic health status 
                of similar individuals. Such risk score shall be used 
                instead of the default risk score for new enrollees in 
                Medicare Advantage plans that are not specialized MA 
                plans for special needs individuals (as defined in 
                section 1859(b)(6)).
                    ``(II) Individuals described.--An individual 
                described in this subclause is a special needs 
                individual described in subsection (b)(6)(B)(iii) who 
                enrolls in a specialized MA plan for special needs 
                individuals on or after January 1, 2011.
                    ``(III) Evaluation.--For 2011 and periodically 
                thereafter, the Secretary shall evaluate and revise the 
                risk adjustment system under this subparagraph in order 
                to, as accurately as possible, account for higher 
                medical and care coordination costs associated with 
                frailty, individuals with multiple, comorbid chronic 
                conditions, and individuals with a diagnosis of mental 
                illness, and also to account for costs that may be 
                associated with higher concentrations of beneficiaries 
                with those conditions.
                    ``(IV) Publication of evaluation and revisions.--
                The Secretary shall publish, as part of an announcement 
                under subsection (b), a description of any evaluation 
                conducted under subclause (III) during the preceding 
                year and any revisions made under such subclause as a 
                result of such evaluation.''.

    (g) Technical Correction.--Section 1859(f)(5) of the Social 
Security Act (42 U.S.C. 1395w-28(f)(5)) is amended, in the matter 
preceding subparagraph (A), by striking ``described in subsection 
(b)(6)(B)(i)''.

SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), 
by striking ``January 1, 2010'' and inserting ``January 1, 2013''.

SEC. 3207. TECHNICAL CORRECTION TO MA PRIVATE FEE-FOR-SERVICE PLANS.

    For plan year 2011 and subsequent plan years, to the extent that 
the Secretary of Health and Human Services is applying the 2008 service 
area extension waiver policy (as modified in the April 11, 2008, 
Centers for Medicare & Medicaid Services' memorandum with the subject 
``2009 Employer Group Waiver-Modification of the 2008 Service Area 
Extension Waiver Granted to Certain MA Local Coordinated Care Plans'') 
to Medicare Advantage coordinated care plans, the Secretary shall 
extend the application of such waiver policy to employers who contract 
directly with the Secretary as a Medicare Advantage private fee-for-
service plan under section 1857(i)(2) of the Social Security Act (42 
U.S.C. 1395w-27(i)(2)) and that had enrollment as of October 1, 2009.

SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION PERMANENT.

    (a) In General.--Section 1859 of the Social Security Act (42 U.S.C. 
1395w-28) is amended by adding at the end the following new subsection:
    ``(g) Special Rules for Senior Housing Facility Plans.--
        ``(1) In general.--In the case of a Medicare Advantage senior 
    housing facility plan described in paragraph (2), notwithstanding 
    any other provision of this part to the contrary and in accordance 
    with regulations of the Secretary, the service area of such plan 
    may be limited to a senior housing facility in a geographic area.
        ``(2) Medicare advantage senior housing facility plan 
    described.--For purposes of this subsection, a Medicare Advantage 
    senior housing facility plan is a Medicare Advantage plan that--
            ``(A) restricts enrollment of individuals under this part 
        to individuals who reside in a continuing care retirement 
        community (as defined in section 1852(l)(4)(B));
            ``(B) provides primary care services onsite and has a ratio 
        of accessible physicians to beneficiaries that the Secretary 
        determines is adequate;
            ``(C) provides transportation services for beneficiaries to 
        specialty providers outside of the facility; and
            ``(D) has participated (as of December 31, 2009) in a 
        demonstration project established by the Secretary under which 
        such a plan was offered for not less than 1 year.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 2010, and shall apply to plan years beginning on 
or after such date.

SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

    (a) In General.--Section 1854(a)(5) of the Social Security Act (42 
U.S.C. 1395w-24(a)(5)) is amended by adding at the end the following 
new subparagraph:
            ``(C) Rejection of bids.--
                ``(i) In general.--Nothing in this section shall be 
            construed as requiring the Secretary to accept any or every 
            bid submitted by an MA organization under this subsection.
                ``(ii) Authority to deny bids that propose significant 
            increases in cost sharing or decreases in benefits.--The 
            Secretary may deny a bid submitted by an MA organization 
            for an MA plan if it proposes significant increases in cost 
            sharing or decreases in benefits offered under the plan.''.
    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42 
U.S.C. 1395w-111(d)) is amended by adding at the end the following new 
paragraph:
        ``(3) Rejection of bids.--Paragraph (5)(C) of section 1854(a) 
    shall apply with respect to bids submitted by a PDP sponsor under 
    subsection (b) in the same manner as such paragraph applies to bids 
    submitted by an MA organization under such section 1854(a).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bids submitted for contract years beginning on or after 
January 1, 2011.

SEC. 3210. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN MEDIGAP PLANS.

    (a) In General.--Section 1882 of the Social Security Act (42 U.S.C. 
1395ss) is amended by adding at the end the following new subsection:
    ``(y) Development of New Standards for Certain Medicare 
Supplemental Policies.--
        ``(1) In general.--The Secretary shall request the National 
    Association of Insurance Commissioners to review and revise the 
    standards for benefit packages described in paragraph (2) under 
    subsection (p)(1), to otherwise update standards to include 
    requirements for nominal cost sharing to encourage the use of 
    appropriate physicians' services under part B. Such revisions shall 
    be based on evidence published in peer-reviewed journals or current 
    examples used by integrated delivery systems and made consistent 
    with the rules applicable under subsection (p)(1)(E) with the 
    reference to the `1991 NAIC Model Regulation' deemed a reference to 
    the NAIC Model Regulation as published in the Federal Register on 
    December 4, 1998, and as subsequently updated by the National 
    Association of Insurance Commissioners to reflect previous changes 
    in law and the reference to `date of enactment of this subsection' 
    deemed a reference to the date of enactment of the Patient 
    Protection and Affordable Care Act. To the extent practicable, such 
    revision shall provide for the implementation of revised standards 
    for benefit packages as of January 1, 2015.
        ``(2) Benefit packages described.--The benefit packages 
    described in this paragraph are benefit packages classified as `C' 
    and `F'.''.
    (b) Conforming Amendment.--Section 1882(o)(1) of the Social 
Security Act (42 U.S.C. 1395ss(o)(1)) is amended by striking ``, and 
(w)'' and inserting ``(w), and (y)''.

 Subtitle D--Medicare Part D Improvements for Prescription Drug Plans 
                            and MA-PD Plans

SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM.

    (a) Condition for Coverage of Drugs Under Part D.--Part D of Title 
XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.), is 
amended by adding at the end the following new section:


            ``condition for coverage of drugs under this part

    ``Sec. 1860D-43.  (a) In General.--In order for coverage to be 
available under this part for covered part D drugs (as defined in 
section 1860D-2(e)) of a manufacturer, the manufacturer must--
        ``(1) participate in the Medicare coverage gap discount program 
    under section 1860D-14A;
        ``(2) have entered into and have in effect an agreement 
    described in subsection (b) of such section with the Secretary; and
        ``(3) have entered into and have in effect, under terms and 
    conditions specified by the Secretary, a contract with a third 
    party that the Secretary has entered into a contract with under 
    subsection (d)(3) of such section.
    ``(b) Effective Date.--Subsection (a) shall apply to covered part D 
drugs dispensed under this part on or after July 1, 2010.
    ``(c) Authorizing Coverage for Drugs Not Covered Under 
Agreements.--Subsection (a) shall not apply to the dispensing of a 
covered part D drug if--
        ``(1) the Secretary has made a determination that the 
    availability of the drug is essential to the health of 
    beneficiaries under this part; or
        ``(2) the Secretary determines that in the period beginning on 
    July 1, 2010, and ending on December 31, 2010, there were 
    extenuating circumstances.
    ``(d) Definition of Manufacturer.--In this section, the term 
`manufacturer' has the meaning given such term in section 1860D-
14A(g)(5).''.
    (b) Medicare Coverage Gap Discount Program.--Part D of title XVIII 
of the Social Security Act (42 U.S.C. 1395w-101) is amended by 
inserting after section 1860D-14 the following new section:


                 ``medicare coverage gap discount program

    ``Sec. 1860D-14A.  (a) Establishment.--The Secretary shall 
establish a Medicare coverage gap discount program (in this section 
referred to as the `program') by not later than July 1, 2010. Under the 
program, the Secretary shall enter into agreements described in 
subsection (b) with manufacturers and provide for the performance of 
the duties described in subsection (c)(1). The Secretary shall 
establish a model agreement for use under the program by not later than 
April 1, 2010, in consultation with manufacturers, and allow for 
comment on such model agreement.
    ``(b) Terms of Agreement.--
        ``(1) In general.--
            ``(A) Agreement.--An agreement under this section shall 
        require the manufacturer to provide applicable beneficiaries 
        access to discounted prices for applicable drugs of the 
        manufacturer.
            ``(B) Provision of discounted prices at the point-of-
        sale.--Except as provided in subsection (c)(1)(A)(iii), such 
        discounted prices shall be provided to the applicable 
        beneficiary at the pharmacy or by the mail order service at the 
        point-of-sale of an applicable drug.
            ``(C) Timing of agreement.--
                ``(i) Special rule for 2010 and 2011.--In order for an 
            agreement with a manufacturer to be in effect under this 
            section with respect to the period beginning on July 1, 
            2010, and ending on December 31, 2011, the manufacturer 
            shall enter into such agreement not later than May 1, 2010.
                ``(ii) 2012 and subsequent years.--In order for an 
            agreement with a manufacturer to be in effect under this 
            section with respect to plan year 2012 or a subsequent plan 
            year, the manufacturer shall enter into such agreement (or 
            such agreement shall be renewed under paragraph (4)(A)) not 
            later than January 30 of the preceding year.
        ``(2) Provision of appropriate data.--Each manufacturer with an 
    agreement in effect under this section shall collect and have 
    available appropriate data, as determined by the Secretary, to 
    ensure that it can demonstrate to the Secretary compliance with the 
    requirements under the program.
        ``(3) Compliance with requirements for administration of 
    program.--Each manufacturer with an agreement in effect under this 
    section shall comply with requirements imposed by the Secretary or 
    a third party with a contract under subsection (d)(3), as 
    applicable, for purposes of administering the program, including 
    any determination under clause (i) of subsection (c)(1)(A) or 
    procedures established under such subsection (c)(1)(A).
        ``(4) Length of agreement.--
            ``(A) In general.--An agreement under this section shall be 
        effective for an initial period of not less than 18 months and 
        shall be automatically renewed for a period of not less than 1 
        year unless terminated under subparagraph (B).
            ``(B) Termination.--
                ``(i) By the secretary.--The Secretary may provide for 
            termination of an agreement under this section for a 
            knowing and willful violation of the requirements of the 
            agreement or other good cause shown. Such termination shall 
            not be effective earlier than 30 days after the date of 
            notice to the manufacturer of such termination. The 
            Secretary shall provide, upon request, a manufacturer with 
            a hearing concerning such a termination, and such hearing 
            shall take place prior to the effective date of the 
            termination with sufficient time for such effective date to 
            be repealed if the Secretary determines appropriate.
                ``(ii) By a manufacturer.--A manufacturer may terminate 
            an agreement under this section for any reason. Any such 
            termination shall be effective, with respect to a plan 
            year--

                    ``(I) if the termination occurs before January 30 
                of a plan year, as of the day after the end of the plan 
                year; and
                    ``(II) if the termination occurs on or after 
                January 30 of a plan year, as of the day after the end 
                of the succeeding plan year.

                ``(iii) Effectiveness of termination.--Any termination 
            under this subparagraph shall not affect discounts for 
            applicable drugs of the manufacturer that are due under the 
            agreement before the effective date of its termination.
                ``(iv) Notice to third party.--The Secretary shall 
            provide notice of such termination to a third party with a 
            contract under subsection (d)(3) within not less than 30 
            days before the effective date of such termination.
    ``(c) Duties Described and Special Rule for Supplemental 
Benefits.--
        ``(1) Duties described.--The duties described in this 
    subsection are the following:
            ``(A) Administration of program.--Administering the 
        program, including--
                ``(i) the determination of the amount of the discounted 
            price of an applicable drug of a manufacturer;
                ``(ii) except as provided in clause (iii), the 
            establishment of procedures under which discounted prices 
            are provided to applicable beneficiaries at pharmacies or 
            by mail order service at the point-of-sale of an applicable 
            drug;
                ``(iii) in the case where, during the period beginning 
            on July 1, 2010, and ending on December 31, 2011, it is not 
            practicable to provide such discounted prices at the point-
            of-sale (as described in clause (ii)), the establishment of 
            procedures to provide such discounted prices as soon as 
            practicable after the point-of-sale;
                ``(iv) the establishment of procedures to ensure that, 
            not later than the applicable number of calendar days after 
            the dispensing of an applicable drug by a pharmacy or mail 
            order service, the pharmacy or mail order service is 
            reimbursed for an amount equal to the difference between--

                    ``(I) the negotiated price of the applicable drug; 
                and
                    ``(II) the discounted price of the applicable drug;

                ``(v) the establishment of procedures to ensure that 
            the discounted price for an applicable drug under this 
            section is applied before any coverage or financial 
            assistance under other health benefit plans or programs 
            that provide coverage or financial assistance for the 
            purchase or provision of prescription drug coverage on 
            behalf of applicable beneficiaries as the Secretary may 
            specify;
                ``(vi) the establishment of procedures to implement the 
            special rule for supplemental benefits under paragraph (2); 
            and
                ``(vii) providing a reasonable dispute resolution 
            mechanism to resolve disagreements between manufacturers, 
            applicable beneficiaries, and the third party with a 
            contract under subsection (d)(3).
            ``(B) Monitoring compliance.--
                ``(i) In general.--The Secretary shall monitor 
            compliance by a manufacturer with the terms of an agreement 
            under this section.
                ``(ii) Notification.--If a third party with a contract 
            under subsection (d)(3) determines that the manufacturer is 
            not in compliance with such agreement, the third party 
            shall notify the Secretary of such noncompliance for 
            appropriate enforcement under subsection (e).
            ``(C) Collection of data from prescription drug plans and 
        ma-pd plans.--The Secretary may collect appropriate data from 
        prescription drug plans and MA-PD plans in a timeframe that 
        allows for discounted prices to be provided for applicable 
        drugs under this section.
        ``(2) Special rule for supplemental benefits.--For plan year 
    2010 and each subsequent plan year, in the case where an applicable 
    beneficiary has supplemental benefits with respect to applicable 
    drugs under the prescription drug plan or MA-PD plan that the 
    applicable beneficiary is enrolled in, the applicable beneficiary 
    shall not be provided a discounted price for an applicable drug 
    under this section until after such supplemental benefits have been 
    applied with respect to the applicable drug.
    ``(d) Administration.--
        ``(1) In general.--Subject to paragraph (2), the Secretary 
    shall provide for the implementation of this section, including the 
    performance of the duties described in subsection (c)(1).
        ``(2) Limitation.--
            ``(A) In general.--Subject to subparagraph (B), in 
        providing for such implementation, the Secretary shall not 
        receive or distribute any funds of a manufacturer under the 
        program.
            ``(B) Exception.--The limitation under subparagraph (A) 
        shall not apply to the Secretary with respect to drugs 
        dispensed during the period beginning on July 1, 2010, and 
        ending on December 31, 2010, but only if the Secretary 
        determines that the exception to such limitation under this 
        subparagraph is necessary in order for the Secretary to begin 
        implementation of this section and provide applicable 
        beneficiaries timely access to discounted prices during such 
        period.
        ``(3) Contract with third parties.--The Secretary shall enter 
    into a contract with 1 or more third parties to administer the 
    requirements established by the Secretary in order to carry out 
    this section. At a minimum, the contract with a third party under 
    the preceding sentence shall require that the third party--
            ``(A) receive and transmit information between the 
        Secretary, manufacturers, and other individuals or entities the 
        Secretary determines appropriate;
            ``(B) receive, distribute, or facilitate the distribution 
        of funds of manufacturers to appropriate individuals or 
        entities in order to meet the obligations of manufacturers 
        under agreements under this section;
            ``(C) provide adequate and timely information to 
        manufacturers, consistent with the agreement with the 
        manufacturer under this section, as necessary for the 
        manufacturer to fulfill its obligations under this section; and
            ``(D) permit manufacturers to conduct periodic audits, 
        directly or through contracts, of the data and information used 
        by the third party to determine discounts for applicable drugs 
        of the manufacturer under the program.
        ``(4) Performance requirements.--The Secretary shall establish 
    performance requirements for a third party with a contract under 
    paragraph (3) and safeguards to protect the independence and 
    integrity of the activities carried out by the third party under 
    the program under this section.
        ``(5) Implementation.--The Secretary may implement the program 
    under this section by program instruction or otherwise.
        ``(6) Administration.--Chapter 35 of title 44, United States 
    Code, shall not apply to the program under this section.
    ``(e) Enforcement.--
        ``(1) Audits.--Each manufacturer with an agreement in effect 
    under this section shall be subject to periodic audit by the 
    Secretary.
        ``(2) Civil money penalty.--
            ``(A) In general.--The Secretary shall impose a civil money 
        penalty on a manufacturer that fails to provide applicable 
        beneficiaries discounts for applicable drugs of the 
        manufacturer in accordance with such agreement for each such 
        failure in an amount the Secretary determines is commensurate 
        with the sum of--
                ``(i) the amount that the manufacturer would have paid 
            with respect to such discounts under the agreement, which 
            will then be used to pay the discounts which the 
            manufacturer had failed to provide; and
                ``(ii) 25 percent of such amount.
            ``(B) Application.--The provisions of section 1128A (other 
        than subsections (a) and (b)) shall apply to a civil money 
        penalty under this paragraph in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a).
    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not an applicable drug 
(including a generic drug or a drug that is not on the formulary of the 
prescription drug plan or MA-PD plan that the applicable beneficiary is 
enrolled in).
    ``(g) Definitions.--In this section:
        ``(1) Applicable beneficiary.--The term `applicable 
    beneficiary' means an individual who, on the date of dispensing an 
    applicable drug--
            ``(A) is enrolled in a prescription drug plan or an MA-PD 
        plan;
            ``(B) is not enrolled in a qualified retiree prescription 
        drug plan;
            ``(C) is not entitled to an income-related subsidy under 
        section 1860D-14(a);
            ``(D) is not subject to a reduction in premium subsidy 
        under section 1839(i); and
            ``(E) who--
                ``(i) has reached or exceeded the initial coverage 
            limit under section 1860D-2(b)(3) during the year; and
                ``(ii) has not incurred costs for covered part D drugs 
            in the year equal to the annual out-of-pocket threshold 
            specified in section 1860D-2(b)(4)(B).
        ``(2) Applicable drug.--The term `applicable drug' means, with 
    respect to an applicable beneficiary, a covered part D drug--
            ``(A) approved under a new drug application under section 
        505(b) of the Federal Food, Drug, and Cosmetic Act or, in the 
        case of a biologic product, licensed under section 351 of the 
        Public Health Service Act (other than a product licensed under 
        subsection (k) of such section 351); and
            ``(B)(i) if the PDP sponsor of the prescription drug plan 
        or the MA organization offering the MA-PD plan uses a 
        formulary, which is on the formulary of the prescription drug 
        plan or MA-PD plan that the applicable beneficiary is enrolled 
        in;
            ``(ii) if the PDP sponsor of the prescription drug plan or 
        the MA organization offering the MA-PD plan does not use a 
        formulary, for which benefits are available under the 
        prescription drug plan or MA-PD plan that the applicable 
        beneficiary is enrolled in; or
            ``(iii) is provided through an exception or appeal.
        ``(3) Applicable number of calendar days.--The term `applicable 
    number of calendar days' means--
            ``(A) with respect to claims for reimbursement submitted 
        electronically, 14 days; and
            ``(B) with respect to claims for reimbursement submitted 
        otherwise, 30 days.
        ``(4) Discounted price.--
            ``(A) In general.--The term `discounted price' means 50 
        percent of the negotiated price of the applicable drug of a 
        manufacturer.
            ``(B) Clarification.--Nothing in this section shall be 
        construed as affecting the responsibility of an applicable 
        beneficiary for payment of a dispensing fee for an applicable 
        drug.
            ``(C) Special case for certain claims.--In the case where 
        the entire amount of the negotiated price of an individual 
        claim for an applicable drug with respect to an applicable 
        beneficiary does not fall at or above the initial coverage 
        limit under section 1860D-2(b)(3) and below the annual out-of-
        pocket threshold specified in section 1860D-2(b)(4)(B) for the 
        year, the manufacturer of the applicable drug shall provide the 
        discounted price under this section on only the portion of the 
        negotiated price of the applicable drug that falls at or above 
        such initial coverage limit and below such annual out-of-pocket 
        threshold.
        ``(5) Manufacturer.--The term `manufacturer' means any entity 
    which is engaged in the production, preparation, propagation, 
    compounding, conversion, or processing of prescription drug 
    products, either directly or indirectly by extraction from 
    substances of natural origin, or independently by means of chemical 
    synthesis, or by a combination of extraction and chemical 
    synthesis. Such term does not include a wholesale distributor of 
    drugs or a retail pharmacy licensed under State law.
        ``(6) Negotiated price.--The term `negotiated price' has the 
    meaning given such term in section 423.100 of title 42, Code of 
    Federal Regulations (as in effect on the date of enactment of this 
    section), except that such negotiated price shall not include any 
    dispensing fee for the applicable drug.
        ``(7) Qualified retiree prescription drug plan.--The term 
    `qualified retiree prescription drug plan' has the meaning given 
    such term in section 1860D-22(a)(2).''.
    (c) Inclusion in Incurred Costs.--
        (1) In general.--Section 1860D-2(b)(4) of the Social Security 
    Act (42 U.S.C. 1395w-102(b)(4)) is amended--
            (A) in subparagraph (C), in the matter preceding clause 
        (i), by striking ``In applying'' and inserting ``Except as 
        provided in subparagraph (E), in applying''; and
            (B) by adding at the end the following new subparagraph:
            ``(E) Inclusion of costs of applicable drugs under medicare 
        coverage gap discount program.--In applying subparagraph (A), 
        incurred costs shall include the negotiated price (as defined 
        in paragraph (6) of section 1860D-14A(g)) of an applicable drug 
        (as defined in paragraph (2) of such section) of a manufacturer 
        that is furnished to an applicable beneficiary (as defined in 
        paragraph (1) of such section) under the Medicare coverage gap 
        discount program under section 1860D-14A, regardless of whether 
        part of such costs were paid by a manufacturer under such 
        program.''.
        (2) Effective date.--The amendments made by this subsection 
    shall apply to costs incurred on or after July 1, 2010.
    (d) Conforming Amendment Permitting Prescription Drug Discounts.--
        (1) In general.--Section 1128B(b)(3) of the Social Security Act 
    (42 U.S.C. 1320a-7b(b)(3)) is amended--
            (A) by striking ``and'' at the end of subparagraph (G);
            (B) in the subparagraph (H) added by section 237(d) of the 
        Medicare Prescription Drug, Improvement, and Modernization Act 
        of 2003 (Public Law 108-173; 117 Stat. 2213)--
                (i) by moving such subparagraph 2 ems to the left; and
                (ii) by striking the period at the end and inserting a 
            semicolon;
            (C) in the subparagraph (H) added by section 431(a) of such 
        Act (117 Stat. 2287)--
                (i) by redesignating such subparagraph as subparagraph 
            (I);
                (ii) by moving such subparagraph 2 ems to the left; and
                (iii) by striking the period at the end and inserting 
            ``; and''; and
            (D) by adding at the end the following new subparagraph:
            ``(J) a discount in the price of an applicable drug (as 
        defined in paragraph (2) of section 1860D-14A(g)) of a 
        manufacturer that is furnished to an applicable beneficiary (as 
        defined in paragraph (1) of such section) under the Medicare 
        coverage gap discount program under section 1860D-14A.''.
        (2) Conforming amendment to definition of best price under 
    medicaid.--Section 1927(c)(1)(C)(i)(VI) of the Social Security Act 
    (42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)) is amended by inserting ``, or 
    any discounts provided by manufacturers under the Medicare coverage 
    gap discount program under section 1860D-14A'' before the period at 
    the end.
        (3) Effective date.--The amendments made by this subsection 
    shall apply to drugs dispensed on or after July 1, 2010.

SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART D LOW-INCOME 
              BENCHMARK PREMIUM.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by 
inserting ``, determined without regard to any reduction in such 
premium as a result of any beneficiary rebate under section 
1854(b)(1)(C) or bonus payment under section 1853(n)'' before the 
period at the end.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to premiums for months beginning on or after January 1, 2011.

SEC. 3303. VOLUNTARY DE MINIMIS POLICY FOR SUBSIDY ELIGIBLE INDIVIDUALS 
              UNDER PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-14(a) of the Social Security Act (42 
U.S.C. 1395w-114(a)) is amended by adding at the end the following new 
paragraph:
        ``(5) Waiver of de minimis premiums.--The Secretary shall, 
    under procedures established by the Secretary, permit a 
    prescription drug plan or an MA-PD plan to waive the monthly 
    beneficiary premium for a subsidy eligible individual if the amount 
    of such premium is de minimis. If such premium is waived under the 
    plan, the Secretary shall not reassign subsidy eligible individuals 
    enrolled in the plan to other plans based on the fact that the 
    monthly beneficiary premium under the plan was greater than the 
    low-income benchmark premium amount.''.
    (b) Authorizing the Secretary To Auto-enroll Subsidy Eligible 
Individuals in Plans That Waive De Minimis Premiums.--Section 1860D-
1(b)(1) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)) is 
amended--
        (1) in subparagraph (C), by inserting ``except as provided in 
    subparagraph (D),'' after ``shall include,''
        (2) by adding at the end the following new subparagraph:
            ``(D) Special rule for plans that waive de minimis 
        premiums.--The process established under subparagraph (A) may 
        include, in the case of a part D eligible individual who is a 
        subsidy eligible individual (as defined in section 1860D-
        14(a)(3)) who has failed to enroll in a prescription drug plan 
        or an MA-PD plan, for the enrollment in a prescription drug 
        plan or MA-PD plan that has waived the monthly beneficiary 
        premium for such subsidy eligible individual under section 
        1860D-14(a)(5). If there is more than one such plan available, 
        the Secretary shall enroll such an individual under the 
        preceding sentence on a random basis among all such plans in 
        the PDP region. Nothing in the previous sentence shall prevent 
        such an individual from declining or changing such 
        enrollment.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to premiums for months, and enrollments for plan years, beginning 
on or after January 1, 2011.

SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING ELIGIBILITY 
              FOR LOW-INCOME ASSISTANCE.

    (a) In General.--Section 1860D-14(a)(3)(B) of the Social Security 
Act (42 U.S.C. 1395w-114(a)(3)(B)) is amended by adding at the end the 
following new clause:
                ``(vi) Special rule for widows and widowers.--
            Notwithstanding the preceding provisions of this 
            subparagraph, in the case of an individual whose spouse 
            dies during the effective period for a determination or 
            redetermination that has been made under this subparagraph, 
            such effective period shall be extended through the date 
            that is 1 year after the date on which the determination or 
            redetermination would (but for the application of this 
            clause) otherwise cease to be effective.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2011.

SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVIDUALS 
              REASSIGNED TO PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    Section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114) 
is amended--
        (1) by redesignating subsection (d) as subsection (e); and
        (2) by inserting after subsection (c) the following new 
    subsection:
    ``(d) Facilitation of Reassignments.--Beginning not later than 
January 1, 2011, the Secretary shall, in the case of a subsidy eligible 
individual who is enrolled in one prescription drug plan and is 
subsequently reassigned by the Secretary to a new prescription drug 
plan, provide the individual, within 30 days of such reassignment, 
with--
        ``(1) information on formulary differences between the 
    individual's former plan and the plan to which the individual is 
    reassigned with respect to the individual's drug regimens; and
        ``(2) a description of the individual's right to request a 
    coverage determination, exception, or reconsideration under section 
    1860D-4(g), bring an appeal under section 1860D-4(h), or resolve a 
    grievance under section 1860D-4(f).''.

SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
Subsection (a)(1)(B) of section 119 of the Medicare Improvements for 
Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note) is amended 
by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows through 
the period at the end and inserting ``(42 U.S.C. 1395w-23(f)), to the 
Centers for Medicare & Medicaid Services Program Management Account--
                ``(i) for fiscal year 2009, of $7,500,000; and
                ``(ii) for the period of fiscal years 2010 through 
            2012, of $15,000,000.
        Amounts appropriated under this subparagraph shall remain 
        available until expended.''.
    (b) Additional Funding for Area Agencies on Aging.--Subsection 
(b)(1)(B) of such section 119 is amended by striking ``(42 U.S.C. 
1395w-23(f))'' and all that follows through the period at the end and 
inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on Aging--
                ``(i) for fiscal year 2009, of $7,500,000; and
                ``(ii) for the period of fiscal years 2010 through 
            2012, of $15,000,000.
        Amounts appropriated under this subparagraph shall remain 
        available until expended.''.
    (c) Additional Funding for Aging and Disability Resource Centers.--
Subsection (c)(1)(B) of such section 119 is amended by striking ``(42 
U.S.C. 1395w-23(f))'' and all that follows through the period at the 
end and inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on 
Aging--
                ``(i) for fiscal year 2009, of $5,000,000; and
                ``(ii) for the period of fiscal years 2010 through 
            2012, of $10,000,000.
        Amounts appropriated under this subparagraph shall remain 
        available until expended.''.
    (d) Additional Funding for Contract With the National Center for 
Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 
119 is amended by striking ``(42 U.S.C. 1395w-23(f))'' and all that 
follows through the period at the end and inserting ``(42 U.S.C. 1395w-
23(f)), to the Administration on Aging--
                ``(i) for fiscal year 2009, of $5,000,000; and
                ``(ii) for the period of fiscal years 2010 through 
            2012, of $5,000,000.
        Amounts appropriated under this subparagraph shall remain 
        available until expended.''.
    (e) Secretarial Authority To Enlist Support in Conducting Certain 
Outreach Activities.--Such section 119 is amended by adding at the end 
the following new subsection:
    ``(g) Secretarial Authority To Enlist Support in Conducting Certain 
Outreach Activities.--The Secretary may request that an entity awarded 
a grant under this section support the conduct of outreach activities 
aimed at preventing disease and promoting wellness. Notwithstanding any 
other provision of this section, an entity may use a grant awarded 
under this subsection to support the conduct of activities described in 
the preceding sentence.''.

SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIPTION DRUG PLANS 
              AND MA-PD PLANS WITH RESPECT TO CERTAIN CATEGORIES OR 
              CLASSES OF DRUGS.

    (a) Improving Formulary Requirements.--Section 1860D-4(b)(3)(G) of 
the Social Security Act is amended to read as follows:
            ``(G) Required inclusion of drugs in certain categories and 
        classes.--
                ``(i) Formulary requirements.--

                    ``(I) In general.--Subject to subclause (II), a PDP 
                sponsor offering a prescription drug plan shall be 
                required to include all covered part D drugs in the 
                categories and classes identified by the Secretary 
                under clause (ii)(I).
                    ``(II) Exceptions.--The Secretary may establish 
                exceptions that permit a PDP sponsor offering a 
                prescription drug plan to exclude from its formulary a 
                particular covered part D drug in a category or class 
                that is otherwise required to be included in the 
                formulary under subclause (I) (or to otherwise limit 
                access to such a drug, including through prior 
                authorization or utilization management).

                ``(ii) Identification of drugs in certain categories 
            and classes.--

                    ``(I) In general.--Subject to clause (iv), the 
                Secretary shall identify, as appropriate, categories 
                and classes of drugs for which the Secretary determines 
                are of clinical concern.
                    ``(II) Criteria.--The Secretary shall use criteria 
                established by the Secretary in making any 
                determination under subclause (I).

                ``(iii) Implementation.--The Secretary shall establish 
            the criteria under clause (ii)(II) and any exceptions under 
            clause (i)(II) through the promulgation of a regulation 
            which includes a public notice and comment period.
                ``(iv) Requirement for certain categories and classes 
            until criteria established.--Until such time as the 
            Secretary establishes the criteria under clause (ii)(II) 
            the following categories and classes of drugs shall be 
            identified under clause (ii)(I):

                    ``(I) Anticonvulsants.
                    ``(II) Antidepressants.
                    ``(III) Antineoplastics.
                    ``(IV) Antipsychotics.
                    ``(V) Antiretrovirals.
                    ``(VI) Immunosuppressants for the treatment of 
                transplant rejection.''.

    (b) Effective Date.--The amendments made by this section shall 
apply to plan year 2011 and subsequent plan years.

SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME 
              BENEFICIARIES.

    (a) Income-Related Increase in Part D Premium.--
        (1) In general.--Section 1860D-13(a) of the Social Security Act 
    (42 U.S.C. 1395w-113(a)) is amended by adding at the end the 
    following new paragraph:
        ``(7) Increase in base beneficiary premium based on income.--
            ``(A) In general.--In the case of an individual whose 
        modified adjusted gross income exceeds the threshold amount 
        applicable under paragraph (2) of section 1839(i) (including 
        application of paragraph (5) of such section) for the calendar 
        year, the monthly amount of the beneficiary premium applicable 
        under this section for a month after December 2010 shall be 
        increased by the monthly adjustment amount specified in 
        subparagraph (B).
            ``(B) Monthly adjustment amount.--The monthly adjustment 
        amount specified in this subparagraph for an individual for a 
        month in a year is equal to the product of--
                ``(i) the quotient obtained by dividing--

                    ``(I) the applicable percentage determined under 
                paragraph (3)(C) of section 1839(i) (including 
                application of paragraph (5) of such section) for the 
                individual for the calendar year reduced by 25.5 
                percent; by
                    ``(II) 25.5 percent; and

                ``(ii) the base beneficiary premium (as computed under 
            paragraph (2)).
            ``(C) Modified adjusted gross income.--For purposes of this 
        paragraph, the term `modified adjusted gross income' has the 
        meaning given such term in subparagraph (A) of section 
        1839(i)(4), determined for the taxable year applicable under 
        subparagraphs (B) and (C) of such section.
            ``(D) Determination by commissioner of social security.--
        The Commissioner of Social Security shall make any 
        determination necessary to carry out the income-related 
        increase in the base beneficiary premium under this paragraph.
            ``(E) Procedures to assure correct income-related increase 
        in base beneficiary premium.--
                ``(i) Disclosure of base beneficiary premium.--Not 
            later than September 15 of each year beginning with 2010, 
            the Secretary shall disclose to the Commissioner of Social 
            Security the amount of the base beneficiary premium (as 
            computed under paragraph (2)) for the purpose of carrying 
            out the income-related increase in the base beneficiary 
            premium under this paragraph with respect to the following 
            year.
                ``(ii) Additional disclosure.--Not later than October 
            15 of each year beginning with 2010, the Secretary shall 
            disclose to the Commissioner of Social Security the 
            following information for the purpose of carrying out the 
            income-related increase in the base beneficiary premium 
            under this paragraph with respect to the following year:

                    ``(I) The modified adjusted gross income threshold 
                applicable under paragraph (2) of section 1839(i) 
                (including application of paragraph (5) of such 
                section).
                    ``(II) The applicable percentage determined under 
                paragraph (3)(C) of section 1839(i) (including 
                application of paragraph (5) of such section).
                    ``(III) The monthly adjustment amount specified in 
                subparagraph (B).
                    ``(IV) Any other information the Commissioner of 
                Social Security determines necessary to carry out the 
                income-related increase in the base beneficiary premium 
                under this paragraph.

            ``(F) Rule of construction.--The formula used to determine 
        the monthly adjustment amount specified under subparagraph (B) 
        shall only be used for the purpose of determining such monthly 
        adjustment amount under such subparagraph.''.
        (2) Collection of monthly adjustment amount.--Section 1860D-
    13(c) of the Social Security Act (42 U.S.C. 1395w-113(c)) is 
    amended--
            (A) in paragraph (1), by striking ``(2) and (3)'' and 
        inserting ``(2), (3), and (4)''; and
            (B) by adding at the end the following new paragraph:
        ``(4) Collection of monthly adjustment amount.--
            ``(A) In general.--Notwithstanding any provision of this 
        subsection or section 1854(d)(2), subject to subparagraph (B), 
        the amount of the income-related increase in the base 
        beneficiary premium for an individual for a month (as 
        determined under subsection (a)(7)) shall be paid through 
        withholding from benefit payments in the manner provided under 
        section 1840.
            ``(B) Agreements.--In the case where the monthly benefit 
        payments of an individual that are withheld under subparagraph 
        (A) are insufficient to pay the amount described in such 
        subparagraph, the Commissioner of Social Security shall enter 
        into agreements with the Secretary, the Director of the Office 
        of Personnel Management, and the Railroad Retirement Board as 
        necessary in order to allow other agencies to collect the 
        amount described in subparagraph (A) that was not withheld 
        under such subparagraph.''.
    (b) Conforming Amendments.--
        (1) Medicare.--Section 1860D-13(a)(1) of the Social Security 
    Act (42 U.S.C. 1395w-113(a)(1)) is amended--
            (A) by redesignating subparagraph (F) as subparagraph (G);
            (B) in subparagraph (G), as redesignated by subparagraph 
        (A), by striking ``(D) and (E)'' and inserting ``(D), (E), and 
        (F)''; and
            (C) by inserting after subparagraph (E) the following new 
        subparagraph:
            ``(F) Increase based on income.--The monthly beneficiary 
        premium shall be increased pursuant to paragraph (7).''.
        (2) Internal revenue code.--Section 6103(l)(20) of the Internal 
    Revenue Code of 1986 (relating to disclosure of return information 
    to carry out Medicare part B premium subsidy adjustment) is 
    amended--
            (A) in the heading, by inserting ``and part d base 
        beneficiary premium increase'' after ``part b premium subsidy 
        adjustment'';
            (B) in subparagraph (A)--
                (i) in the matter preceding clause (i), by inserting 
            ``or increase under section 1860D-13(a)(7)'' after 
            ``1839(i)''; and
                (ii) in clause (vii), by inserting after ``subsection 
            (i) of such section'' the following: ``or increase under 
            section 1860D-13(a)(7) of such Act''; and
            (C) in subparagraph (B)--
                (i) by striking ``Return information'' and inserting 
            the following:
                ``(i) In general.--Return information'';
                (ii) by inserting ``or increase under such section 
            1860D-13(a)(7)'' before the period at the end;
                (iii) as amended by clause (i), by inserting ``or for 
            the purpose of resolving taxpayer appeals with respect to 
            any such premium adjustment or increase'' before the period 
            at the end; and
                (iv) by adding at the end the following new clause:
                ``(ii) Disclosure to other agencies.--Officers, 
            employees, and contractors of the Social Security 
            Administration may disclose--

                    ``(I) the taxpayer identity information and the 
                amount of the premium subsidy adjustment or premium 
                increase with respect to a taxpayer described in 
                subparagraph (A) to officers, employees, and 
                contractors of the Centers for Medicare and Medicaid 
                Services, to the extent that such disclosure is 
                necessary for the collection of the premium subsidy 
                amount or the increased premium amount,
                    ``(II) the taxpayer identity information and the 
                amount of the premium subsidy adjustment or the 
                increased premium amount with respect to a taxpayer 
                described in subparagraph (A) to officers and employees 
                of the Office of Personnel Management and the Railroad 
                Retirement Board, to the extent that such disclosure is 
                necessary for the collection of the premium subsidy 
                amount or the increased premium amount,
                    ``(III) return information with respect to a 
                taxpayer described in subparagraph (A) to officers and 
                employees of the Department of Health and Human 
                Services to the extent necessary to resolve 
                administrative appeals of such premium subsidy 
                adjustment or increased premium, and
                    ``(IV) return information with respect to a 
                taxpayer described in subparagraph (A) to officers and 
                employees of the Department of Justice for use in 
                judicial proceedings to the extent necessary to carry 
                out the purposes described in clause (i).''.

SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL ELIGIBLE 
              INDIVIDUALS.

    Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C. 
1395w-114(a)(1)(D)(i)) is amended by inserting ``or, effective on a 
date specified by the Secretary (but in no case earlier than January 1, 
2012), who would be such an institutionalized individual or couple, if 
the full-benefit dual eligible individual were not receiving services 
under a home and community-based waiver authorized for a State under 
section 1115 or subsection (c) or (d) of section 1915 or under a State 
plan amendment under subsection (i) of such section or services 
provided through enrollment in a medicaid managed care organization 
with a contract under section 1903(m) or under section 1932'' after 
``1902(q)(1)(B))''.

SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT PRESCRIPTION 
              DRUGS IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION 
              DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(c) of the Social Security Act (42 
U.S.C. 1395w-104(c)) is amended by adding at the end the following new 
paragraph:
        ``(3) Reducing wasteful dispensing of outpatient prescription 
    drugs in long-term care facilities.--The Secretary shall require 
    PDP sponsors of prescription drug plans to utilize specific, 
    uniform dispensing techniques, as determined by the Secretary, in 
    consultation with relevant stakeholders (including representatives 
    of nursing facilities, residents of nursing facilities, 
    pharmacists, the pharmacy industry (including retail and long-term 
    care pharmacy), prescription drug plans, MA-PD plans, and any other 
    stakeholders the Secretary determines appropriate), such as weekly, 
    daily, or automated dose dispensing, when dispensing covered part D 
    drugs to enrollees who reside in a long-term care facility in order 
    to reduce waste associated with 30-day fills.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2012.

SEC. 3311. IMPROVED MEDICARE PRESCRIPTION DRUG PLAN AND MA-PD PLAN 
              COMPLAINT SYSTEM.

    (a) In General.--The Secretary shall develop and maintain a 
complaint system, that is widely known and easy to use, to collect and 
maintain information on MA-PD plan and prescription drug plan 
complaints that are received (including by telephone, letter, e-mail, 
or any other means) by the Secretary (including by a regional office of 
the Department of Health and Human Services, the Medicare Beneficiary 
Ombudsman, a subcontractor, a carrier, a fiscal intermediary, and a 
Medicare administrative contractor under section 1874A of the Social 
Security Act (42 U.S.C. 1395kk)) through the date on which the 
complaint is resolved. The system shall be able to report and initiate 
appropriate interventions and monitoring based on substantial 
complaints and to guide quality improvement.
    (b) Model Electronic Complaint Form.--The Secretary shall develop a 
model electronic complaint form to be used for reporting plan 
complaints under the system. Such form shall be prominently displayed 
on the front page of the Medicare.gov Internet website and on the 
Internet website of the Medicare Beneficiary Ombudsman.
    (c) Annual Reports by the Secretary.--The Secretary shall submit to 
Congress annual reports on the system. Such reports shall include an 
analysis of the number and types of complaints reported in the system, 
geographic variations in such complaints, the timeliness of agency or 
plan responses to such complaints, and the resolution of such 
complaints.
    (d) Definitions.--In this section:
        (1) MA-PD plan.--The term ``MA-PD plan'' has the meaning given 
    such term in section 1860D-41(a)(9) of such Act (42 U.S.C. 1395w-
    151(a)(9)).
        (2) Prescription drug plan.--The term ``prescription drug 
    plan'' has the meaning given such term in section 1860D-41(a)(14) 
    of such Act (42 U.S.C. 1395w-151(a)(14)).
        (3) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.
        (4) System.--The term ``system'' means the plan complaint 
    system developed and maintained under subsection (a).

SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR PRESCRIPTION DRUG 
              PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(3)) is amended by adding at the end the 
following new subparagraph:
            ``(H) Use of single, uniform exceptions and appeals 
        process.--Notwithstanding any other provision of this part, 
        each PDP sponsor of a prescription drug plan shall--
                ``(i) use a single, uniform exceptions and appeals 
            process (including, to the extent the Secretary determines 
            feasible, a single, uniform model form for use under such 
            process) with respect to the determination of prescription 
            drug coverage for an enrollee under the plan; and
                ``(ii) provide instant access to such process by 
            enrollees through a toll-free telephone number and an 
            Internet website.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to exceptions and appeals on or after January 1, 2012.

SEC. 3313. OFFICE OF THE INSPECTOR GENERAL STUDIES AND REPORTS.

    (a) Study and Annual Report on Part D Formularies' Inclusion of 
Drugs Commonly Used by Dual Eligibles.--
        (1) Study.--The Inspector General of the Department of Health 
    and Human Services shall conduct a study of the extent to which 
    formularies used by prescription drug plans and MA-PD plans under 
    part D include drugs commonly used by full-benefit dual eligible 
    individuals (as defined in section 1935(c)(6) of the Social 
    Security Act (42 U.S.C. 1396u-5(c)(6))).
        (2) Annual reports.--Not later than July 1 of each year 
    (beginning with 2011), the Inspector General shall submit to 
    Congress a report on the study conducted under paragraph (1), 
    together with such recommendations as the Inspector General 
    determines appropriate.
    (b) Study and Report on Prescription Drug Prices Under Medicare 
Part D and Medicaid.--
        (1) Study.--
            (A) In general.--The Inspector General of the Department of 
        Health and Human Services shall conduct a study on prices for 
        covered part D drugs under the Medicare prescription drug 
        program under part D of title XVIII of the Social Security Act 
        and for covered outpatient drugs under title XIX. Such study 
        shall include the following:
                (i) A comparison, with respect to the 200 most 
            frequently dispensed covered part D drugs under such 
            program and covered outpatient drugs under such title (as 
            determined by the Inspector General based on volume and 
            expenditures), of--

                    (I) the prices paid for covered part D drugs by PDP 
                sponsors of prescription drug plans and Medicare 
                Advantage organizations offering MA-PD plans; and
                    (II) the prices paid for covered outpatient drugs 
                by a State plan under title XIX.

                (ii) An assessment of--

                    (I) the financial impact of any discrepancies in 
                such prices on the Federal Government; and
                    (II) the financial impact of any such discrepancies 
                on enrollees under part D or individuals eligible for 
                medical assistance under a State plan under title XIX.

            (B) Price.--For purposes of subparagraph (A), the price of 
        a covered part D drug or a covered outpatient drug shall 
        include any rebate or discount under such program or such 
        title, respectively, including any negotiated price concession 
        described in section 1860D-2(d)(1)(B) of the Social Security 
        Act (42 U.S.C. 1395w-102(d)(1)(B)) or rebate under an agreement 
        under section 1927 of the Social Security Act (42 U.S.C. 1396r-
        8).
            (C) Authority to collect any necessary information.--
        Notwithstanding any other provision of law, the Inspector 
        General of the Department of Health and Human Services shall be 
        able to collect any information related to the prices of 
        covered part D drugs under such program and covered outpatient 
        drugs under such title XIX necessary to carry out the 
        comparison under subparagraph (A).
        (2) Report.--
            (A) In general.--Not later than October 1, 2011, subject to 
        subparagraph (B), the Inspector General 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 Inspector General 
        determines appropriate.
            (B) Limitation on information contained in report.--The 
        report submitted under subparagraph (A) shall not include any 
        information that the Inspector General determines is 
        proprietary or is likely to negatively impact the ability of a 
        PDP sponsor or a State plan under title XIX to negotiate prices 
        for covered part D drugs or covered outpatient drugs, 
        respectively.
        (3) Definitions.--In this section:
            (A) Covered part d drug.--The term ``covered part D drug'' 
        has the meaning given such term in section 1860D-2(e) of the 
        Social Security Act (42 U.S.C. 1395w-102(e)).
            (B) Covered outpatient drug.--The term ``covered outpatient 
        drug'' has the meaning given such term in section 1927(k) of 
        such Act (42 U.S.C. 1396r(k)).
            (C) MA-PD plan.--The term ``MA-PD plan'' has the meaning 
        given such term in section 1860D-41(a)(9) of such Act (42 
        U.S.C. 1395w-151(a)(9)).
            (D) Medicare advantage organization.--The term ``Medicare 
        Advantage organization'' has the meaning given such term in 
        section 1859(a)(1) of such Act (42 U.S.C. 1395w-28)(a)(1)).
            (E) PDP sponsor.--The term ``PDP sponsor'' has the meaning 
        given such term in section 1860D-41(a)(13) of such Act (42 
        U.S.C. 1395w-151(a)(13)).
            (F) Prescription drug plan.--The term ``prescription drug 
        plan'' has the meaning given such term in section 1860D-
        41(a)(14) of such Act (42 U.S.C. 1395w-151(a)(14)).

SEC. 3314. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE PROGRAMS 
              AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS 
              TOWARD THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
        (1) in clause (i), by striking ``and'' at the end;
        (2) in clause (ii)--
            (A) by striking ``such costs shall be treated as incurred 
        only if'' and inserting ``subject to clause (iii), such costs 
        shall be treated as incurred only if'';
            (B) by striking ``, under section 1860D-14, or under a 
        State Pharmaceutical Assistance Program''; and
            (C) by striking the period at the end and inserting ``; 
        and''; and
        (3) by inserting after clause (ii) the following new clause:
                ``(iii) such costs shall be treated as incurred and 
            shall not be considered to be reimbursed under clause (ii) 
            if such costs are borne or paid--

                    ``(I) under section 1860D-14;
                    ``(II) under a State Pharmaceutical Assistance 
                Program;
                    ``(III) by the Indian Health Service, an Indian 
                tribe or tribal organization, or an urban Indian 
                organization (as defined in section 4 of the Indian 
                Health Care Improvement Act); or
                    ``(IV) under an AIDS Drug Assistance Program under 
                part B of title XXVI of the Public Health Service 
                Act.''.

    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to costs incurred on or after January 1, 2011.

SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010.

    Section 1860D-2(b) of the Social Security Act (42 U.S.C. 1395w-
102(b)) is amended--
        (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
    inserting ``paragraphs (4) and (7)''; and
        (2) by adding at the end the following new paragraph:
        ``(7) Increase in initial coverage limit in 2010.--
            ``(A) In general.--For the plan year beginning on January 
        1, 2010, the initial coverage limit described in paragraph 
        (3)(B) otherwise applicable shall be increased by $500.
            ``(B) Application.--In applying subparagraph (A)--
                ``(i) except as otherwise provided in this 
            subparagraph, there shall be no change in the premiums, 
            bids, or any other parameters under this part or part C;
                ``(ii) costs that would be treated as incurred costs 
            for purposes of applying paragraph (4) but for the 
            application of subparagraph (A) shall continue to be 
            treated as incurred costs;
                ``(iii) the Secretary shall establish procedures, which 
            may include a reconciliation process, to fully reimburse 
            PDP sponsors with respect to prescription drug plans and MA 
            organizations with respect to MA-PD plans for the reduction 
            in beneficiary cost sharing associated with the application 
            of subparagraph (A);
                ``(iv) the Secretary shall develop an estimate of the 
            additional increased costs attributable to the application 
            of this paragraph for increased drug utilization and 
            financing and administrative costs and shall use such 
            estimate to adjust payments to PDP sponsors with respect to 
            prescription drug plans under this part and MA 
            organizations with respect to MA-PD plans under part C; and
                ``(v) the Secretary shall establish procedures for 
            retroactive reimbursement of part D eligible individuals 
            who are covered under such a plan for costs which are 
            incurred before the date of initial implementation of 
            subparagraph (A) and which would be reimbursed under such a 
            plan if such implementation occurred as of January 1, 2010.
            ``(C) No effect on subsequent years.--The increase under 
        subparagraph (A) shall only apply with respect to the plan year 
        beginning on January 1, 2010, and the initial coverage limit 
        for plan years beginning on or after January 1, 2011, shall be 
        determined as if subparagraph (A) had never applied.''.

              Subtitle E--Ensuring Medicare Sustainability

SEC. 3401. REVISION OF CERTAIN MARKET BASKET UPDATES AND INCORPORATION 
              OF PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES 
              THAT DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 
3001(a)(3), is further amended--
        (1) in clause (i)(XX), by striking ``clause (viii)'' and 
    inserting ``clauses (viii), (ix), (xi), and (xii)'';
        (2) in the first sentence of clause (viii), by inserting ``of 
    such applicable percentage increase (determined without regard to 
    clause (ix), (xi), or (xii))'' after ``one-quarter'';
        (3) in the first sentence of clause (ix)(I), by inserting 
    ``(determined without regard to clause (viii), (xi), or (xii))'' 
    after ``clause (i)'' the second time it appears; and
        (4) by adding at the end the following new clauses:
    ``(xi)(I) For 2012 and each subsequent fiscal year, after 
determining the applicable percentage increase described in clause (i) 
and after application of clauses (viii) and (ix), such percentage 
increase shall be reduced by the productivity adjustment described in 
subclause (II).
    ``(II) The productivity adjustment described in this subclause, 
with respect to a percentage, factor, or update for a fiscal year, 
year, cost reporting period, or other annual period, is a productivity 
adjustment equal to the 10-year moving average of changes in annual 
economy-wide private nonfarm business multi-factor productivity (as 
projected by the Secretary for the 10-year period ending with the 
applicable fiscal year, year, cost reporting period, or other annual 
period).
    ``(III) The application of subclause (I) may result in the 
applicable percentage increase described in clause (i) being less than 
0.0 for a fiscal year, and may result in payment rates under this 
section for a fiscal year being less than such payment rates for the 
preceding fiscal year.
    ``(xii) After determining the applicable percentage increase 
described in clause (i), and after application of clauses (viii), (ix), 
and (xi), the Secretary shall reduce such applicable percentage 
increase--
        ``(I) for each of fiscal years 2010 and 2011, by 0.25 
    percentage point; and
        ``(II) subject to clause (xiii), for each of fiscal years 2012 
    through 2019, by 0.2 percentage point.
The application of this clause may result in the applicable percentage 
increase described in clause (i) being less than 0.0 for a fiscal year, 
and may result in payment rates under this section for a fiscal year 
being less than such payment rates for the preceding fiscal year.
    ``(xiii) Clause (xii) shall be applied with respect to any of 
fiscal years 2014 through 2019 by substituting `0.0 percentage points' 
for `0.2 percentage point', if for such fiscal year--
        ``(I) the excess (if any) of--
            ``(aa) the total percentage of the non-elderly insured 
        population for the preceding fiscal year (based on the most 
        recent estimates available from the Director of the 
        Congressional Budget Office before a vote in either House on 
        the Patient Protection and Affordable Care Act that, if 
        determined in the affirmative, would clear such Act for 
        enrollment); over
            ``(bb) the total percentage of the non-elderly insured 
        population for such preceding fiscal year (as estimated by the 
        Secretary); exceeds
        ``(II) 5 percentage points.''.
    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of the 
Social Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended--
        (1) by striking ``percentage.--The term'' and inserting 
    ``percentage.--
                ``(i) In general.--Subject to clause (ii), the term''; 
            and
        (2) by adding at the end the following new clause:
                ``(ii) Adjustment.--For fiscal year 2012 and each 
            subsequent fiscal year, after determining the percentage 
            described in clause (i), the Secretary shall reduce such 
            percentage by the productivity adjustment described in 
            section 1886(b)(3)(B)(xi)(II). The application of the 
            preceding sentence may result in such percentage being less 
            than 0.0 for a fiscal year, and may result in payment rates 
            under this subsection for a fiscal year being less than 
            such payment rates for the preceding fiscal year.''.
    (c) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraphs:
        ``(3) Implementation for rate year 2010 and subsequent years.--
            ``(A) In general.--In implementing the system described in 
        paragraph (1) for rate year 2010 and each subsequent rate year, 
        any annual update to a standard Federal rate for discharges for 
        the hospital during the rate year, shall be reduced--
                ``(i) for rate year 2012 and each subsequent rate year, 
            by the productivity adjustment described in section 
            1886(b)(3)(B)(xi)(II); and
                ``(ii) for each of rate years 2010 through 2019, by the 
            other adjustment described in paragraph (4).
            ``(B) Special rule.--The application of this paragraph may 
        result in such annual update being less than 0.0 for a rate 
        year, and may result in payment rates under the system 
        described in paragraph (1) for a rate year being less than such 
        payment rates for the preceding rate year.
        ``(4) Other adjustment.--
            ``(A) In general.--For purposes of paragraph (3)(A)(ii), 
        the other adjustment described in this paragraph is--
                ``(i) for each of rate years 2010 and 2011, 0.25 
            percentage point; and
                ``(ii) subject to subparagraph (B), for each of rate 
            years 2012 through 2019, 0.2 percentage point.
            ``(B) Reduction of other adjustment.--Subparagraph (A)(ii) 
        shall be applied with respect to any of rate years 2014 through 
        2019 by substituting `0.0 percentage points' for `0.2 
        percentage point', if for such rate year--
                ``(i) the excess (if any) of--

                    ``(I) the total percentage of the non-elderly 
                insured population for the preceding rate year (based 
                on the most recent estimates available from the 
                Director of the Congressional Budget Office before a 
                vote in either House on the Patient Protection and 
                Affordable Care Act that, if determined in the 
                affirmative, would clear such Act for enrollment); over
                    ``(II) the total percentage of the non-elderly 
                insured population for such preceding rate year (as 
                estimated by the Secretary); exceeds

                ``(ii) 5 percentage points.''.
    (d) Inpatient Rehabilitation Facilities.--Section 1886(j)(3) of the 
Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended--
        (1) in subparagraph (C)--
            (A) by striking ``factor.--For purposes'' and inserting 
        ``factor.--
                ``(i) In general.--For purposes'';
            (B) by inserting ``subject to clause (ii)'' before the 
        period at the end of the first sentence of clause (i), as added 
        by paragraph (1); and
            (C) by adding at the end the following new clause:
                ``(ii) Productivity and other adjustment.--After 
            establishing the increase factor described in clause (i) 
            for a fiscal year, the Secretary shall reduce such increase 
            factor--

                    ``(I) for fiscal year 2012 and each subsequent 
                fiscal year, by the productivity adjustment described 
                in section 1886(b)(3)(B)(xi)(II); and
                    ``(II) for each of fiscal years 2010 through 2019, 
                by the other adjustment described in subparagraph (D).

            The application of this clause may result in the increase 
            factor under this subparagraph being less than 0.0 for a 
            fiscal year, and may result in payment rates under this 
            subsection for a fiscal year being less than such payment 
            rates for the preceding fiscal year.''; and
        (2) by adding at the end the following new subparagraph:
            ``(D) Other adjustment.--
                ``(i) In general.--For purposes of subparagraph 
            (C)(ii)(II), the other adjustment described in this 
            subparagraph is--

                    ``(I) for each of fiscal years 2010 and 2011, 0.25 
                percentage point; and
                    ``(II) subject to clause (ii), for each of fiscal 
                years 2012 through 2019, 0.2 percentage point.

                ``(ii) Reduction of other adjustment.--Clause (i)(II) 
            shall be applied with respect to any of fiscal years 2014 
            through 2019 by substituting `0.0 percentage points' for 
            `0.2 percentage point', if for such fiscal year--

                    ``(I) the excess (if any) of--

                        ``(aa) the total percentage of the non-elderly 
                    insured population for the preceding fiscal year 
                    (based on the most recent estimates available from 
                    the Director of the Congressional Budget Office 
                    before a vote in either House on the Patient 
                    Protection and Affordable Care Act that, if 
                    determined in the affirmative, would clear such Act 
                    for enrollment); over
                        ``(bb) the total percentage of the non-elderly 
                    insured population for such preceding fiscal year 
                    (as estimated by the Secretary); exceeds

                    ``(II) 5 percentage points.''.

    (e) Home Health Agencies.--Section 1895(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended--
        (1) in clause (ii)(V), by striking ``clause (v)'' and inserting 
    ``clauses (v) and (vi)''; and
        (2) by adding at the end the following new clause:
                ``(vi) Adjustments.--After determining the home health 
            market basket percentage increase under clause (iii), and 
            after application of clause (v), the Secretary shall reduce 
            such percentage--

                    ``(I) for 2015 and each subsequent year, by the 
                productivity adjustment described in section 
                1886(b)(3)(B)(xi)(II); and
                    ``(II) for each of 2011 and 2012, by 1 percentage 
                point.

            The application of this clause may result in the home 
            health market basket percentage increase under clause (iii) 
            being less than 0.0 for a year, and may result in payment 
            rates under the system under this subsection for a year 
            being less than such payment rates for the preceding 
            year.''.
    (f) Psychiatric Hospitals.--Section 1886 of the Social Security 
Act, as amended by sections 3001, 3008, 3025, and 3133, is amended by 
adding at the end the following new subsection:
    ``(s) Prospective Payment for Psychiatric Hospitals.--
        ``(1) Reference to establishment and implementation of 
    system.--For provisions related to the establishment and 
    implementation of a prospective payment system for payments under 
    this title for inpatient hospital services furnished by psychiatric 
    hospitals (as described in clause (i) of subsection (d)(1)(B)) and 
    psychiatric units (as described in the matter following clause (v) 
    of such subsection), see section 124 of the Medicare, Medicaid, and 
    SCHIP Balanced Budget Refinement Act of 1999.
        ``(2) Implementation for rate year beginning in 2010 and 
    subsequent rate years.--
            ``(A) In general.--In implementing the system described in 
        paragraph (1) for the rate year beginning in 2010 and any 
        subsequent rate year, any update to a base rate for days during 
        the rate year for a psychiatric hospital or unit, respectively, 
        shall be reduced--
                ``(i) for the rate year beginning in 2012 and each 
            subsequent rate year, by the productivity adjustment 
            described in section 1886(b)(3)(B)(xi)(II); and
                ``(ii) for each of the rate years beginning in 2010 
            through 2019, by the other adjustment described in 
            paragraph (3).
            ``(B) Special rule.--The application of this paragraph may 
        result in such update being less than 0.0 for a rate year, and 
        may result in payment rates under the system described in 
        paragraph (1) for a rate year being less than such payment 
        rates for the preceding rate year.
        ``(3) Other adjustment.--
            ``(A) In general.--For purposes of paragraph (2)(A)(ii), 
        the other adjustment described in this paragraph is--
                ``(i) for each of the rate years beginning in 2010 and 
            2011, 0.25 percentage point; and
                ``(ii) subject to subparagraph (B), for each of the 
            rate years beginning in 2012 through 2019, 0.2 percentage 
            point.
            ``(B) Reduction of other adjustment.--Subparagraph (A)(ii) 
        shall be applied with respect to any of rate years 2014 through 
        2019 by substituting `0.0 percentage points' for `0.2 
        percentage point', if for such rate year--
                ``(i) the excess (if any) of--

                    ``(I) the total percentage of the non-elderly 
                insured population for the preceding rate year (based 
                on the most recent estimates available from the 
                Director of the Congressional Budget Office before a 
                vote in either House on the Patient Protection and 
                Affordable Care Act that, if determined in the 
                affirmative, would clear such Act for enrollment); over
                    ``(II) the total percentage of the non-elderly 
                insured population for such preceding rate year (as 
                estimated by the Secretary); exceeds

                ``(ii) 5 percentage points.''.
    (g) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended by 
adding at the end the following new clauses:
    ``(iv) After determining the market basket percentage increase 
under clause (ii)(VII) or (iii), as applicable, with respect to fiscal 
year 2013 and each subsequent fiscal year, the Secretary shall reduce 
such percentage--
        ``(I) for 2013 and each subsequent fiscal year, by the 
    productivity adjustment described in section 1886(b)(3)(B)(xi)(II); 
    and
        ``(II) subject to clause (v), for each of fiscal years 2013 
    through 2019, by 0.5 percentage point.
The application of this clause may result in the market basket 
percentage increase under clause (ii)(VII) or (iii), as applicable, 
being less than 0.0 for a fiscal year, and may result in payment rates 
under this subsection for a fiscal year being less than such payment 
rates for the preceding fiscal year.
    ``(v) Clause (iv)(II) shall be applied with respect to any of 
fiscal years 2014 through 2019 by substituting `0.0 percentage points' 
for `0.5 percentage point', if for such fiscal year--
        ``(I) the excess (if any) of--
            ``(aa) the total percentage of the non-elderly insured 
        population for the preceding fiscal year (based on the most 
        recent estimates available from the Director of the 
        Congressional Budget Office before a vote in either House on 
        the Patient Protection and Affordable Care Act that, if 
        determined in the affirmative, would clear such Act for 
        enrollment); over
            ``(bb) the total percentage of the non-elderly insured 
        population for such preceding fiscal year (as estimated by the 
        Secretary); exceeds
        ``(II) 5 percentage points.''.
    (h) Dialysis.--Section 1881(b)(14)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(14)(F)) is amended--
        (1) in clause (i)--
            (A) by inserting ``(I)'' after ``(F)(i)''
            (B) in subclause (I), as inserted by subparagraph (A)--
                (i) by striking ``clause (ii)'' and inserting 
            ``subclause (II) and clause (ii)''; and
                (ii) by striking ``minus 1.0 percentage point''; and
            (C) by adding at the end the following new subclause:
    ``(II) For 2012 and each subsequent year, after determining the 
increase factor described in subclause (I), the Secretary shall reduce 
such increase factor by the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II). The application of the preceding 
sentence may result in such increase factor being less than 0.0 for a 
year, and may result in payment rates under the payment system under 
this paragraph for a year being less than such payment rates for the 
preceding year.''; and
        (2) in clause (ii)(II)--
            (A) by striking ``The'' and inserting ``Subject to clause 
        (i)(II), the''; and
            (B) by striking ``clause (i) minus 1.0 percentage point'' 
        and inserting ``clause (i)(I)''.
    (i) Outpatient Hospitals.--Section 1833(t)(3) of the Social 
Security Act (42 U.S.C. 1395l(t)(3)) is amended--
        (1) in subparagraph (C)(iv), by inserting ``and subparagraph 
    (F) of this paragraph'' after ``(17)''; and
        (2) by adding at the end the following new subparagraphs:
            ``(F) Productivity and other adjustment.--After determining 
        the OPD fee schedule increase factor under subparagraph 
        (C)(iv), the Secretary shall reduce such increase factor--
                ``(i) for 2012 and subsequent years, by the 
            productivity adjustment described in section 
            1886(b)(3)(B)(xi)(II); and
                ``(ii) for each of 2010 through 2019, by the adjustment 
            described in subparagraph (G).
        The application of this subparagraph may result in the increase 
        factor under subparagraph (C)(iv) being less than 0.0 for a 
        year, and may result in payment rates under the payment system 
        under this subsection for a year being less than such payment 
        rates for the preceding year.
            ``(G) Other adjustment.--
                ``(i) Adjustment.--For purposes of subparagraph 
            (F)(ii), the adjustment described in this subparagraph is--

                    ``(I) for each of 2010 and 2011, 0.25 percentage 
                point; and
                    ``(II) subject to clause (ii), for each of 2012 
                through 2019, 0.2 percentage point.

                ``(ii) Reduction of other adjustment.--Clause (i)(II) 
            shall be applied with respect to any of 2014 through 2019 
            by substituting `0.0 percentage points' for `0.2 percentage 
            point', if for such year--

                    ``(I) the excess (if any) of--

                        ``(aa) the total percentage of the non-elderly 
                    insured population for the preceding year (based on 
                    the most recent estimates available from the 
                    Director of the Congressional Budget Office before 
                    a vote in either House on the Patient Protection 
                    and Affordable Care Act that, if determined in the 
                    affirmative, would clear such Act for enrollment); 
                    over
                        ``(bb) the total percentage of the non-elderly 
                    insured population for such preceding year (as 
                    estimated by the Secretary); exceeds

                    ``(II) 5 percentage points.''.

    (j) Ambulance Services.--Section 1834(l)(3) of the Social Security 
Act (42 U.S.C. 1395m(l)(3)) is amended--
        (1) in subparagraph (A), by striking ``and'' at the end;
        (2) in subparagraph (B)--
            (A) by inserting ``, subject to subparagraph (C) and the 
        succeeding sentence of this paragraph,'' after ``increased''; 
        and
            (B) by striking the period at the end and inserting ``; 
        and'';
        (3) by adding at the end the following new subparagraph:
            ``(C) for 2011 and each subsequent year, after determining 
        the percentage increase under subparagraph (B) for the year, 
        reduce such percentage increase by the productivity adjustment 
        described in section 1886(b)(3)(B)(xi)(II).''; and
        (4) by adding at the end the following flush sentence:
    ``The application of subparagraph (C) may result in the percentage 
    increase under subparagraph (B) being less than 0.0 for a year, and 
    may result in payment rates under the fee schedule under this 
    subsection for a year being less than such payment rates for the 
    preceding year.''.
    (k) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
        (1) by redesignating clause (v) as clause (vi); and
        (2) by inserting after clause (iv) the following new clause:
                ``(v) In implementing the system described in clause 
            (i) for 2011 and each subsequent year, any annual update 
            under such system for the year, after application of clause 
            (iv), shall be reduced by the productivity adjustment 
            described in section 1886(b)(3)(B)(xi)(II). The application 
            of the preceding sentence may result in such update being 
            less than 0.0 for a year, and may result in payment rates 
            under the system described in clause (i) for a year being 
            less than such payment rates for the preceding year.''.
    (l) Laboratory Services.--Section 1833(h)(2)(A) of the Social 
Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
        (1) in clause (i)--
            (A) by inserting ``, subject to clause (iv),'' after 
        ``year) by''; and
            (B) by striking ``through 2013'' and inserting ``and 
        2010''; and
        (2) by adding at the end the following new clause:
                ``(iv) After determining the adjustment to the fee 
            schedules under clause (i), the Secretary shall reduce such 
            adjustment--

                    ``(I) for 2011 and each subsequent year, by the 
                productivity adjustment described in section 
                1886(b)(3)(B)(xi)(II); and
                    ``(II) for each of 2011 through 2015, by 1.75 
                percentage points.

            Subclause (I) shall not apply in a year where the 
            adjustment to the fee schedules determined under clause (i) 
            is 0.0 or a percentage decrease for a year. The application 
            of the productivity adjustment under subclause (I) shall 
            not result in an adjustment to the fee schedules under 
            clause (i) being less than 0.0 for a year. The application 
            of subclause (II) may result in an adjustment to the fee 
            schedules under clause (i) being less than 0.0 for a year, 
            and may result in payment rates for a year being less than 
            such payment rates for the preceding year.''.
    (m) Certain Durable Medical Equipment.--Section 1834(a)(14) of the 
Social Security Act (42 U.S.C. 1395m(a)(14)) is amended--
        (1) in subparagraph (K)--
            (A) by striking ``2011, 2012, and 2013,''; and
            (B) by inserting ``and'' after the semicolon at the end;
        (2) by striking subparagraphs (L) and (M) and inserting the 
    following new subparagraph:
            ``(L) for 2011 and each subsequent year--
                ``(i) the percentage increase in the consumer price 
            index for all urban consumers (United States city average) 
            for the 12-month period ending with June of the previous 
            year, reduced by--
                ``(ii) the productivity adjustment described in section 
            1886(b)(3)(B)(xi)(II).''; and
        (3) by adding at the end the following flush sentence:
    ``The application of subparagraph (L)(ii) may result in the covered 
    item update under this paragraph being less than 0.0 for a year, 
    and may result in payment rates under this subsection for a year 
    being less than such payment rates for the preceding year.''.
    (n) Prosthetic Devices, Orthotics, and Prosthetics.--Section 
1834(h)(4) of the Social Security Act (42 U.S.C. 1395m(h)(4)) is 
amended--
        (1) in subparagraph (A)--
            (A) in clause (ix), by striking ``and'' at the end;
            (B) in clause (x)--
                (i) by striking ``a subsequent year'' and inserting 
            ``for each of 2007 through 2010''; and
                (ii) by inserting ``and'' after the semicolon at the 
            end;
            (C) by adding at the end the following new clause:
                ``(xi) for 2011 and each subsequent year--

                    ``(I) the percentage increase in the consumer price 
                index for all urban consumers (United States city 
                average) for the 12-month period ending with June of 
                the previous year, reduced by--
                    ``(II) the productivity adjustment described in 
                section 1886(b)(3)(B)(xi)(II).''; and

            (D) by adding at the end the following flush sentence:
    ``The application of subparagraph (A)(xi)(II) may result in the 
    applicable percentage increase under subparagraph (A) being less 
    than 0.0 for a year, and may result in payment rates under this 
    subsection for a year being less than such payment rates for the 
    preceding year.''.
    (o) Other Items.--Section 1842(s)(1) of the Social Security Act (42 
U.S.C. 1395u(s)(1)) is amended--
        (1) in the first sentence, by striking ``Subject to'' and 
    inserting ``(A) Subject to'';
        (2) by striking the second sentence and inserting the following 
    new subparagraph:
            ``(B) Any fee schedule established under this paragraph for 
        such item or service shall be updated--
                ``(i) for years before 2011--

                    ``(I) subject to subclause (II), by the percentage 
                increase in the consumer price index for all urban 
                consumers (United States city average) for the 12-month 
                period ending with June of the preceding year; and
                    ``(II) for items and services described in 
                paragraph (2)(D) for 2009, section 1834(a)(14)(J) shall 
                apply under this paragraph instead of the percentage 
                increase otherwise applicable; and

                ``(ii) for 2011 and subsequent years--

                    ``(I) the percentage increase in the consumer price 
                index for all urban consumers (United States city 
                average) for the 12-month period ending with June of 
                the previous year, reduced by--
                    ``(II) the productivity adjustment described in 
                section 1886(b)(3)(B)(xi)(II).''; and

        (3) by adding at the end the following flush sentence:
    ``The application of subparagraph (B)(ii)(II) may result in the 
    update under this paragraph being less than 0.0 for a year, and may 
    result in payment rates under any fee schedule established under 
    this paragraph for a year being less than such payment rates for 
    the preceding year.''.
    (p) No Application Prior to April 1, 2010.--Notwithstanding the 
preceding provisions of this section, the amendments made by 
subsections (a), (c), and (d) shall not apply to discharges occurring 
before April 1, 2010.

SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULATION OF PART B PREMIUMS.

    Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is 
amended--
        (1) in paragraph (2), in the matter preceding subparagraph (A), 
    by inserting ``subject to paragraph (6),'' after ``subsection,'';
        (2) in paragraph (3)(A)(i), by striking ``The applicable'' and 
    inserting ``Subject to paragraph (6), the applicable'';
        (3) by redesignating paragraph (6) as paragraph (7); and
        (4) by inserting after paragraph (5) the following new 
    paragraph:
        ``(6) Temporary adjustment to income thresholds.--
    Notwithstanding any other provision of this subsection, during the 
    period beginning on January 1, 2011, and ending on December 31, 
    2019--
            ``(A) the threshold amount otherwise applicable under 
        paragraph (2) shall be equal to such amount for 2010; and
            ``(B) the dollar amounts otherwise applicable under 
        paragraph (3)(C)(i) shall be equal to such dollar amounts for 
        2010.''.

SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) Board.--
        (1) In general.--Title XVIII of the Social Security Act (42 
    U.S.C. 1395 et seq.), as amended by section 3022, is amended by 
    adding at the end the following new section:


                  ``independent medicare advisory board

    ``Sec. 1899A.  (a) Establishment.--There is established an 
independent board to be known as the `Independent Medicare Advisory 
Board'.
    ``(b) Purpose.--It is the purpose of this section to, in accordance 
with the following provisions of this section, reduce the per capita 
rate of growth in Medicare spending--
        ``(1) by requiring the Chief Actuary of the Centers for 
    Medicare & Medicaid Services to determine in each year to which 
    this section applies (in this section referred to as `a 
    determination year') the projected per capita growth rate under 
    Medicare for the second year following the determination year (in 
    this section referred to as `an implementation year');
        ``(2) if the projection for the implementation year exceeds the 
    target growth rate for that year, by requiring the Board to develop 
    and submit during the first year following the determination year 
    (in this section referred to as `a proposal year') a proposal 
    containing recommendations to reduce the Medicare per capita growth 
    rate to the extent required by this section; and
        ``(3) by requiring the Secretary to implement such proposals 
    unless Congress enacts legislation pursuant to this section.
    ``(c) Board Proposals.--
        ``(1) Development.--
            ``(A) In general.--The Board shall develop detailed and 
        specific proposals related to the Medicare program in 
        accordance with the succeeding provisions of this section.
            ``(B) Advisory reports.--Beginning January 15, 2014, the 
        Board may develop and submit to Congress advisory reports on 
        matters related to the Medicare program, regardless of whether 
        or not the Board submitted a proposal for such year. Such a 
        report may, for years prior to 2020, include recommendations 
        regarding improvements to payment systems for providers of 
        services and suppliers who are not otherwise subject to the 
        scope of the Board's recommendations in a proposal under this 
        section. Any advisory report submitted under this subparagraph 
        shall not be subject to the rules for congressional 
        consideration under subsection (d).
        ``(2) Proposals.--
            ``(A) Requirements.--Each proposal submitted under this 
        section in a proposal year shall meet each of the following 
        requirements:
                ``(i) If the Chief Actuary of the Centers for Medicare 
            & Medicaid Services has made a determination under 
            paragraph (7)(A) in the determination year, the proposal 
            shall include recommendations so that the proposal as a 
            whole (after taking into account recommendations under 
            clause (v)) will result in a net reduction in total 
            Medicare program spending in the implementation year that 
            is at least equal to the applicable savings target 
            established under paragraph (7)(B) for such implementation 
            year. In determining whether a proposal meets the 
            requirement of the preceding sentence, reductions in 
            Medicare program spending during the 3-month period 
            immediately preceding the implementation year shall be 
            counted to the extent that such reductions are a result of 
            the implementation of recommendations contained in the 
            proposal for a change in the payment rate for an item or 
            service that was effective during such period pursuant to 
            subsection (e)(2)(A).
                ``(ii) The proposal shall not include any 
            recommendation to ration health care, raise revenues or 
            Medicare beneficiary premiums under section 1818, 1818A, or 
            1839, increase Medicare beneficiary cost-sharing (including 
            deductibles, coinsurance, and copayments), or otherwise 
            restrict benefits or modify eligibility criteria.
                ``(iii) In the case of proposals submitted prior to 
            December 31, 2018, the proposal shall not include any 
            recommendation that would reduce payment rates for items 
            and services furnished, prior to December 31, 2019, by 
            providers of services (as defined in section 1861(u)) and 
            suppliers (as defined in section 1861(d)) scheduled, 
            pursuant to the amendments made by section 3401 of the 
            Patient Protection and Affordable Care Act, to receive a 
            reduction to the inflationary payment updates of such 
            providers of services and suppliers in excess of a 
            reduction due to productivity in a year in which such 
            recommendations would take effect.
                ``(iv) As appropriate, the proposal shall include 
            recommendations to reduce Medicare payments under parts C 
            and D, such as reductions in direct subsidy payments to 
            Medicare Advantage and prescription drug plans specified 
            under paragraph (1) and (2) of section 1860D-15(a) that are 
            related to administrative expenses (including profits) for 
            basic coverage, denying high bids or removing high bids for 
            prescription drug coverage from the calculation of the 
            national average monthly bid amount under section 1860D-
            13(a)(4), and reductions in payments to Medicare Advantage 
            plans under clauses (i) and (ii) of section 1853(a)(1)(B) 
            that are related to administrative expenses (including 
            profits) and performance bonuses for Medicare Advantage 
            plans under section 1853(n). Any such recommendation shall 
            not affect the base beneficiary premium percentage 
            specified under 1860D-13(a).
                ``(v) The proposal shall include recommendations with 
            respect to administrative funding for the Secretary to 
            carry out the recommendations contained in the proposal.
                ``(vi) The proposal shall only include recommendations 
            related to the Medicare program.
            ``(B) Additional considerations.--In developing and 
        submitting each proposal under this section in a proposal year, 
        the Board shall, to the extent feasible--
                ``(i) give priority to recommendations that extend 
            Medicare solvency;
                ``(ii) include recommendations that--

                    ``(I) improve the health care delivery system and 
                health outcomes, including by promoting integrated 
                care, care coordination, prevention and wellness, and 
                quality and efficiency improvement; and
                    ``(II) protect and improve Medicare beneficiaries' 
                access to necessary and evidence-based items and 
                services, including in rural and frontier areas;

                ``(iii) include recommendations that target reductions 
            in Medicare program spending to sources of excess cost 
            growth;
                ``(iv) consider the effects on Medicare beneficiaries 
            of changes in payments to providers of services (as defined 
            in section 1861(u)) and suppliers (as defined in section 
            1861(d));
                ``(v) consider the effects of the recommendations on 
            providers of services and suppliers with actual or 
            projected negative cost margins or payment updates; and
                ``(vi) consider the unique needs of Medicare 
            beneficiaries who are dually eligible for Medicare and the 
            Medicaid program under title XIX.
            ``(C) No increase in total medicare program spending.--Each 
        proposal submitted under this section shall be designed in such 
        a manner that implementation of the recommendations contained 
        in the proposal would not be expected to result, over the 10-
        year period starting with the implementation year, in any 
        increase in the total amount of net Medicare program spending 
        relative to the total amount of net Medicare program spending 
        that would have occurred absent such implementation.
            ``(D) Consultation with medpac.--The Board shall submit a 
        draft copy of each proposal to be submitted under this section 
        to the Medicare Payment Advisory Commission established under 
        section 1805 for its review. The Board shall submit such draft 
        copy by not later than September 1 of the determination year.
            ``(E) Review and comment by the secretary.--The Board shall 
        submit a draft copy of each proposal to be submitted to 
        Congress under this section to the Secretary for the 
        Secretary's review and comment. The Board shall submit such 
        draft copy by not later than September 1 of the determination 
        year. Not later than March 1 of the submission year, the 
        Secretary shall submit a report to Congress on the results of 
        such review, unless the Secretary submits a proposal under 
        paragraph (5)(A) in that year.
            ``(F) Consultations.--In carrying out its duties under this 
        section, the Board shall engage in regular consultations with 
        the Medicaid and CHIP Payment and Access Commission under 
        section 1900.
        ``(3) Transmission of board proposal to president.--
            ``(A) In general.--
                ``(i) In general.--Except as provided in clause (ii) 
            and subsection (f)(3)(B), the Board shall transmit a 
            proposal under this section to the President on January 15 
            of each year (beginning with 2014).
                ``(ii) Exception.--The Board shall not submit a 
            proposal under clause (i) in a proposal year if the year 
            is--

                    ``(I) a year for which the Chief Actuary of the 
                Centers for Medicare & Medicaid Services makes a 
                determination in the determination year under paragraph 
                (6)(A) that the growth rate described in clause (i) of 
                such paragraph does not exceed the growth rate 
                described in clause (ii) of such paragraph;
                    ``(II) a year in which the Chief Actuary of the 
                Centers for Medicare & Medicaid Services makes a 
                determination in the determination year that the 
                projected percentage increase (if any) for the medical 
                care expenditure category of the Consumer Price Index 
                for All Urban Consumers (United States city average) 
                for the implementation year is less than the projected 
                percentage increase (if any) in the Consumer Price 
                Index for All Urban Consumers (all items; United States 
                city average) for such implementation year; or
                    ``(III) for proposal year 2019 and subsequent 
                proposal years, a year in which the Chief Actuary of 
                the Centers for Medicare & Medicaid Services makes a 
                determination in the determination year that the growth 
                rate described in paragraph (8) exceeds the growth rate 
                described in paragraph (6)(A)(i).

                ``(iii) Start-up period.--The Board may not submit a 
            proposal under clause (i) prior to January 15, 2014.
            ``(B) Required information.--Each proposal submitted by the 
        Board under subparagraph (A)(i) shall include--
                ``(i) the recommendations described in paragraph 
            (2)(A)(i);
                ``(ii) an explanation of each recommendation contained 
            in the proposal and the reasons for including such 
            recommendation;
                ``(iii) an actuarial opinion by the Chief Actuary of 
            the Centers for Medicare & Medicaid Services certifying 
            that the proposal meets the requirements of subparagraphs 
            (A)(i) and (C) of paragraph (2);
                ``(iv) a legislative proposal that implements the 
            recommendations; and
                ``(v) other information determined appropriate by the 
            Board.
        ``(4) Presidential submission to congress.--Upon receiving a 
    proposal from the Board under paragraph (3)(A)(i) or the Secretary 
    under paragraph (5), the President shall immediately submit such 
    proposal to Congress.
        ``(5) Contingent secretarial development of proposal.--If, with 
    respect to a proposal year, the Board is required, to but fails, to 
    submit a proposal to the President by the deadline applicable under 
    paragraph (3)(A)(i), the Secretary shall develop a detailed and 
    specific proposal that satisfies the requirements of subparagraphs 
    (A) and (C) (and, to the extent feasible, subparagraph (B)) of 
    paragraph (2) and contains the information required paragraph 
    (3)(B)). By not later than January 25 of the year, the Secretary 
    shall transmit--
            ``(A) such proposal to the President; and
            ``(B) a copy of such proposal to the Medicare Payment 
        Advisory Commission for its review.
        ``(6) Per capita growth rate projections by chief actuary.--
            ``(A) In general.--Subject to subsection (f)(3)(A), not 
        later than April 30, 2013, and annually thereafter, the Chief 
        Actuary of the Centers for Medicare & Medicaid Services shall 
        determine in each such year whether--
                ``(i) the projected Medicare per capita growth rate for 
            the implementation year (as determined under subparagraph 
            (B)); exceeds
                ``(ii) the projected Medicare per capita target growth 
            rate for the implementation year (as determined under 
            subparagraph (C)).
            ``(B) Medicare per capita growth rate.--
                ``(i) In general.--For purposes of this section, the 
            Medicare per capita growth rate for an implementation year 
            shall be calculated as the projected 5-year average (ending 
            with such year) of the growth in Medicare program spending 
            per unduplicated enrollee.
                ``(ii) Requirement.--The projection under clause (i) 
            shall--

                    ``(I) to the extent that there is projected to be a 
                negative update to the single conversion factor 
                applicable to payments for physicians' services under 
                section 1848(d) furnished in the proposal year or the 
                implementation year, assume that such update for such 
                services is 0 percent rather than the negative percent 
                that would otherwise apply; and
                    ``(II) take into account any delivery system 
                reforms or other payment changes that have been enacted 
                or published in final rules but not yet implemented as 
                of the making of such calculation.

            ``(C) Medicare per capita target growth rate.--For purposes 
        of this section, the Medicare per capita target growth rate for 
        an implementation year shall be calculated as the projected 5-
        year average (ending with such year) percentage increase in--
                ``(i) with respect to a determination year that is 
            prior to 2018, the average of the projected percentage 
            increase (if any) in--

                    ``(I) the Consumer Price Index for All Urban 
                Consumers (all items; United States city average); and
                    ``(II) the medical care expenditure category of the 
                Consumer Price Index for All Urban Consumers (United 
                States city average); and

                ``(ii) with respect to a determination year that is 
            after 2017, the nominal gross domestic product per capita 
            plus 1.0 percentage point.
        ``(7) Savings requirement.--
            ``(A) In general.--If, with respect to a determination 
        year, the Chief Actuary of the Centers for Medicare & Medicaid 
        Services makes a determination under paragraph (6)(A) that the 
        growth rate described in clause (i) of such paragraph exceeds 
        the growth rate described in clause (ii) of such paragraph, the 
        Chief Actuary shall establish an applicable savings target for 
        the implementation year.
            ``(B) Applicable savings target.--For purposes of this 
        section, the applicable savings target for an implementation 
        year shall be an amount equal to the product of--
                ``(i) the total amount of projected Medicare program 
            spending for the proposal year; and
                ``(ii) the applicable percent for the implementation 
            year.
            ``(C) Applicable percent.--For purposes of subparagraph 
        (B), the applicable percent for an implementation year is the 
        lesser of--
                ``(i) in the case of--

                    ``(I) implementation year 2015, 0.5 percent;
                    ``(II) implementation year 2016, 1.0 percent;
                    ``(III) implementation year 2017, 1.25 percent; and
                    ``(IV) implementation year 2018 or any subsequent 
                implementation year, 1.5 percent; and

                ``(ii) the projected excess for the implementation year 
            (expressed as a percent) determined under subparagraph (A).
        ``(8) Per capita rate of growth in national health 
    expenditures.--In each determination year (beginning in 2018), the 
    Chief Actuary of the Centers for Medicare & Medicaid Services shall 
    project the per capita rate of growth in national health 
    expenditures for the implementation year. Such rate of growth for 
    an implementation year shall be calculated as the projected 5-year 
    average (ending with such year) percentage increase in national 
    health care expenditures.
    ``(d) Congressional Consideration.--
        ``(1) Introduction.--
            ``(A) In general.--On the day on which a proposal is 
        submitted by the President to the House of Representatives and 
        the Senate under subsection (c)(4), the legislative proposal 
        (described in subsection (c)(3)(B)(iv)) contained in the 
        proposal shall be introduced (by request) in the Senate by the 
        majority leader of the Senate or by Members of the Senate 
        designated by the majority leader of the Senate and shall be 
        introduced (by request) in the House by the majority leader of 
        the House or by Members of the House designated by the majority 
        leader of the House.
            ``(B) Not in session.--If either House is not in session on 
        the day on which such legislative proposal is submitted, the 
        legislative proposal shall be introduced in that House, as 
        provided in subparagraph (A), on the first day thereafter on 
        which that House is in session.
            ``(C) Any member.--If the legislative proposal is not 
        introduced in either House within 5 days on which that House is 
        in session after the day on which the legislative proposal is 
        submitted, then any Member of that House may introduce the 
        legislative proposal.
            ``(D) Referral.--The legislation introduced under this 
        paragraph shall be referred by the Presiding Officers of the 
        respective Houses to the Committee on Finance in the Senate and 
        to the Committee on Energy and Commerce and the Committee on 
        Ways and Means in the House of Representatives.
        ``(2) Committee consideration of proposal.--
            ``(A) Reporting bill.--Not later than April 1 of any 
        proposal year in which a proposal is submitted by the President 
        to Congress under this section, the Committee on Ways and Means 
        and the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate may 
        report the bill referred to the Committee under paragraph 
        (1)(D) with committee amendments related to the Medicare 
        program.
            ``(B) Calculations.--In determining whether a committee 
        amendment meets the requirement of subparagraph (A), the 
        reductions in Medicare program spending during the 3-month 
        period immediately preceding the implementation year shall be 
        counted to the extent that such reductions are a result of the 
        implementation provisions in the committee amendment for a 
        change in the payment rate for an item or service that was 
        effective during such period pursuant to such amendment.
            ``(C) Committee jurisdiction.--Notwithstanding rule XV of 
        the Standing Rules of the Senate, a committee amendment 
        described in subparagraph (A) may include matter not within the 
        jurisdiction of the Committee on Finance if that matter is 
        relevant to a proposal contained in the bill submitted under 
        subsection (c)(3).
            ``(D) Discharge.--If, with respect to the House involved, 
        the committee has not reported the bill by the date required by 
        subparagraph (A), the committee shall be discharged from 
        further consideration of the proposal.
        ``(3) Limitation on changes to the board recommendations.--
            ``(A) In general.--It shall not be in order in the Senate 
        or the House of Representatives to consider any bill, 
        resolution, or amendment, pursuant to this subsection or 
        conference report thereon, that fails to satisfy the 
        requirements of subparagraphs (A)(i) and (C) of subsection 
        (c)(2).
            ``(B) Limitation on changes to the board recommendations in 
        other legislation.--It shall not be in order in the Senate or 
        the House of Representatives to consider any bill, resolution, 
        amendment, or conference report (other than pursuant to this 
        section) that would repeal or otherwise change the 
        recommendations of the Board if that change would fail to 
        satisfy the requirements of subparagraphs (A)(i) and (C) of 
        subsection (c)(2).
            ``(C) Limitation on changes to this subsection.--It shall 
        not be in order in the Senate or the House of Representatives 
        to consider any bill, resolution, amendment, or conference 
        report that would repeal or otherwise change this subsection.
            ``(D) Waiver.--This paragraph may be waived or suspended in 
        the Senate only by the affirmative vote of three-fifths of the 
        Members, duly chosen and sworn.
            ``(E) Appeals.--An affirmative vote of three-fifths of the 
        Members of the Senate, duly chosen and sworn, shall be required 
        in the Senate to sustain an appeal of the ruling of the Chair 
        on a point of order raised under this paragraph.
        ``(4) Expedited procedure.--
            ``(A) Consideration.--A motion to proceed to the 
        consideration of the bill in the Senate is not debatable.
            ``(B) Amendment.--
                ``(i) Time limitation.--Debate in the Senate on any 
            amendment to a bill under this section shall be limited to 
            1 hour, to be equally divided between, and controlled by, 
            the mover and the manager of the bill, and debate on any 
            amendment to an amendment, debatable motion, or appeal 
            shall be limited to 30 minutes, to be equally divided 
            between, and controlled by, the mover and the manager of 
            the bill, except that in the event the manager of the bill 
            is in favor of any such amendment, motion, or appeal, the 
            time in opposition thereto shall be controlled by the 
            minority leader or such leader's designee.
                ``(ii) Germane.--No amendment that is not germane to 
            the provisions of such bill shall be received.
                ``(iii) Additional time.--The leaders, or either of 
            them, may, from the time under their control on the passage 
            of the bill, allot additional time to any Senator during 
            the consideration of any amendment, debatable motion, or 
            appeal.
                ``(iv) Amendment not in order.--It shall not be in 
            order to consider an amendment that would cause the bill to 
            result in a net reduction in total Medicare program 
            spending in the implementation year that is less than the 
            applicable savings target established under subsection 
            (c)(7)(B) for such implementation year.
                ``(v) Waiver and appeals.--This paragraph may be waived 
            or suspended in the Senate only by the affirmative vote of 
            three-fifths of the Members, duly chosen and sworn. An 
            affirmative vote of three-fifths of the Members of the 
            Senate, duly chosen and sworn, shall be required in the 
            Senate to sustain an appeal of the ruling of the Chair on a 
            point of order raised under this section.
            ``(C) Consideration by the other house.--
                ``(i) In general.--The expedited procedures provided in 
            this subsection for the consideration of a bill introduced 
            pursuant to paragraph (1) shall not apply to such a bill 
            that is received by one House from the other House if such 
            a bill was not introduced in the receiving House.
                ``(ii) Before passage.--If a bill that is introduced 
            pursuant to paragraph (1) is received by one House from the 
            other House, after introduction but before disposition of 
            such a bill in the receiving House, then the following 
            shall apply:

                    ``(I) The receiving House shall consider the bill 
                introduced in that House through all stages of 
                consideration up to, but not including, passage.
                    ``(II) The question on passage shall be put on the 
                bill of the other House as amended by the language of 
                the receiving House.

                ``(iii) After passage.--If a bill introduced pursuant 
            to paragraph (1) is received by one House from the other 
            House, after such a bill is passed by the receiving House, 
            then the vote on passage of the bill that originates in the 
            receiving House shall be considered to be the vote on 
            passage of the bill received from the other House as 
            amended by the language of the receiving House.
                ``(iv) Disposition.--Upon disposition of a bill 
            introduced pursuant to paragraph (1) that is received by 
            one House from the other House, it shall no longer be in 
            order to consider the bill that originates in the receiving 
            House.
                ``(v) Limitation.--Clauses (ii), (iii), and (iv) shall 
            apply only to a bill received by one House from the other 
            House if the bill--

                    ``(I) is related only to the program under this 
                title; and
                    ``(II) satisfies the requirements of subparagraphs 
                (A)(i) and (C) of subsection (c)(2).

            ``(D) Senate limits on debate.--
                ``(i) In general.--In the Senate, consideration of the 
            bill and on all debatable motions and appeals in connection 
            therewith shall not exceed a total of 30 hours, which shall 
            be divided equally between the majority and minority 
            leaders or their designees.
                ``(ii) Motion to further limit debate.--A motion to 
            further limit debate on the bill is in order and is not 
            debatable.
                ``(iii) Motion or appeal.--Any debatable motion or 
            appeal is debatable for not to exceed 1 hour, to be divided 
            equally between those favoring and those opposing the 
            motion or appeal.
                ``(iv) Final disposition.--After 30 hours of 
            consideration, the Senate shall proceed, without any 
            further debate on any question, to vote on the final 
            disposition thereof to the exclusion of all amendments not 
            then pending before the Senate at that time and to the 
            exclusion of all motions, except a motion to table, or to 
            reconsider and one quorum call on demand to establish the 
            presence of a quorum (and motions required to establish a 
            quorum) immediately before the final vote begins.
            ``(E) Consideration in conference.--
                ``(i) In general.--Consideration in the Senate and the 
            House of Representatives on the conference report or any 
            messages between Houses shall be limited to 10 hours, 
            equally divided and controlled by the majority and minority 
            leaders of the Senate or their designees and the Speaker of 
            the House of Representatives and the minority leader of the 
            House of Representatives or their designees.
                ``(ii) Time limitation.--Debate in the Senate on any 
            amendment under this subparagraph shall be limited to 1 
            hour, to be equally divided between, and controlled by, the 
            mover and the manager of the bill, and debate on any 
            amendment to an amendment, debatable motion, or appeal 
            shall be limited to 30 minutes, to be equally divided 
            between, and controlled by, the mover and the manager of 
            the bill, except that in the event the manager of the bill 
            is in favor of any such amendment, motion, or appeal, the 
            time in opposition thereto shall be controlled by the 
            minority leader or such leader's designee.
                ``(iii) Final disposition.--After 10 hours of 
            consideration, the Senate shall proceed, without any 
            further debate on any question, to vote on the final 
            disposition thereof to the exclusion of all motions not 
            then pending before the Senate at that time or necessary to 
            resolve the differences between the Houses and to the 
            exclusion of all other motions, except a motion to table, 
            or to reconsider and one quorum call on demand to establish 
            the presence of a quorum (and motions required to establish 
            a quorum) immediately before the final vote begins.
                ``(iv) Limitation.--Clauses (i) through (iii) shall 
            only apply to a conference report, message or the 
            amendments thereto if the conference report, message, or an 
            amendment thereto--

                    ``(I) is related only to the program under this 
                title; and
                    ``(II) satisfies the requirements of subparagraphs 
                (A)(i) and (C) of subsection (c)(2).

            ``(F) Veto.--If the President vetoes the bill debate on a 
        veto message in the Senate under this subsection shall be 1 
        hour equally divided between the majority and minority leaders 
        or their designees.
        ``(5) Rules of the senate and house of representatives.--This 
    subsection and subsection (f)(2) are enacted by Congress--
            ``(A) as an exercise of the rulemaking power of the Senate 
        and the House of Representatives, respectively, and is deemed 
        to be part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of bill under this section, and it 
        supersedes other rules only to the extent that it is 
        inconsistent with such rules; and
            ``(B) with full recognition of the constitutional right of 
        either House to change the rules (so far as they relate to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.
    ``(e) Implementation of Proposal.--
        ``(1) In general.--Notwithstanding any other provision of law, 
    the Secretary shall, except as provided in paragraph (3), implement 
    the recommendations contained in a proposal submitted by the 
    President to Congress pursuant to this section on August 15 of the 
    year in which the proposal is so submitted.
        ``(2) Application.--
            ``(A) In general.--A recommendation described in paragraph 
        (1) shall apply as follows:
                ``(i) In the case of a recommendation that is a change 
            in the payment rate for an item or service under Medicare 
            in which payment rates change on a fiscal year basis (or a 
            cost reporting period basis that relates to a fiscal year), 
            on a calendar year basis (or a cost reporting period basis 
            that relates to a calendar year), or on a rate year basis 
            (or a cost reporting period basis that relates to a rate 
            year), such recommendation shall apply to items and 
            services furnished on the first day of the first fiscal 
            year, calendar year, or rate year (as the case may be) that 
            begins after such August 15.
                ``(ii) In the case of a recommendation relating to 
            payments to plans under parts C and D, such recommendation 
            shall apply to plan years beginning on the first day of the 
            first calendar year that begins after such August 15.
                ``(iii) In the case of any other recommendation, such 
            recommendation shall be addressed in the regular regulatory 
            process timeframe and shall apply as soon as practicable.
            ``(B) Interim final rulemaking.--The Secretary may use 
        interim final rulemaking to implement any recommendation 
        described in paragraph (1).
        ``(3) Exception.--The Secretary shall not be required to 
    implement the recommendations contained in a proposal submitted in 
    a proposal year by the President to Congress pursuant to this 
    section if--
            ``(A) prior to August 15 of the proposal year, Federal 
        legislation is enacted that includes the following provision: 
        `This Act supercedes the recommendations of the Board contained 
        in the proposal submitted, in the year which includes the date 
        of enactment of this Act, to Congress under section 1899A of 
        the Social Security Act.'; and
            ``(B) in the case of implementation year 2020 and 
        subsequent implementation years, a joint resolution described 
        in subsection (f)(1) is enacted not later than August 15, 2017.
        ``(4) No affect on authority to implement certain provisions.--
    Nothing in paragraph (3) shall be construed to affect the authority 
    of the Secretary to implement any recommendation contained in a 
    proposal or advisory report under this section to the extent that 
    the Secretary otherwise has the authority to implement such 
    recommendation administratively.
        ``(5) Limitation on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of the implementation by the Secretary under this subsection of the 
    recommendations contained in a proposal.
    ``(f) Joint Resolution Required To Discontinue the Board.--
        ``(1) In general.--For purposes of subsection (e)(3)(B), a 
    joint resolution described in this paragraph means only a joint 
    resolution--
            ``(A) that is introduced in 2017 by not later than February 
        1 of such year;
            ``(B) which does not have a preamble;
            ``(C) the title of which is as follows: `Joint resolution 
        approving the discontinuation of the process for consideration 
        and automatic implementation of the annual proposal of the 
        Independent Medicare Advisory Board under section 1899A of the 
        Social Security Act'; and
            ``(D) the matter after the resolving clause of which is as 
        follows: `That Congress approves the discontinuation of the 
        process for consideration and automatic implementation of the 
        annual proposal of the Independent Medicare Advisory Board 
        under section 1899A of the Social Security Act.'.
        ``(2) Procedure.--
            ``(A) Referral.--A joint resolution described in paragraph 
        (1) shall be referred to the Committee on Ways and Means and 
        the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate.
            ``(B) Discharge.--In the Senate, if the committee to which 
        is referred a joint resolution described in paragraph (1) has 
        not reported such joint resolution (or an identical joint 
        resolution) at the end of 20 days after the joint resolution 
        described in paragraph (1) is introduced, such committee may be 
        discharged from further consideration of such joint resolution 
        upon a petition supported in writing by 30 Members of the 
        Senate, and such joint resolution shall be placed on the 
        calendar.
            ``(C) Consideration.--
                ``(i) In general.--In the Senate, when the committee to 
            which a joint resolution is referred has reported, or when 
            a committee is discharged (under subparagraph (C)) from 
            further consideration of a joint resolution described in 
            paragraph (1), it is at any time thereafter in order (even 
            though a previous motion to the same effect has been 
            disagreed to) for a motion to proceed to the consideration 
            of the joint resolution to be made, and all points of order 
            against the joint resolution (and against consideration of 
            the joint resolution) are waived, except for points of 
            order under the Congressional Budget act of 1974 or under 
            budget resolutions pursuant to that Act. The motion is not 
            debatable. A motion to reconsider the vote by which the 
            motion is agreed to or disagreed to shall not be in order. 
            If a motion to proceed to the consideration of the joint 
            resolution is agreed to, the joint resolution shall remain 
            the unfinished business of the Senate until disposed of.
                ``(ii) Debate limitation.--In the Senate, consideration 
            of the joint resolution, and on all debatable motions and 
            appeals in connection therewith, shall be limited to not 
            more than 10 hours, which shall be divided equally between 
            the majority leader and the minority leader, or their 
            designees. A motion further to limit debate is in order and 
            not debatable. An amendment to, or a motion to postpone, or 
            a motion to proceed to the consideration of other business, 
            or a motion to recommit the joint resolution is not in 
            order.
                ``(iii) Passage.--In the Senate, immediately following 
            the conclusion of the debate on a joint resolution 
            described in paragraph (1), and a single quorum call at the 
            conclusion of the debate if requested in accordance with 
            the rules of the Senate, the vote on passage of the joint 
            resolution shall occur.
                ``(iv) Appeals.--Appeals from the decisions of the 
            Chair relating to the application of the rules of the 
            Senate to the procedure relating to a joint resolution 
            described in paragraph (1) shall be decided without debate.
            ``(D) Other house acts first.--If, before the passage by 1 
        House of a joint resolution of that House described in 
        paragraph (1), that House receives from the other House a joint 
        resolution described in paragraph (1), then the following 
        procedures shall apply:
                ``(i) The joint resolution of the other House shall not 
            be referred to a committee.
                ``(ii) With respect to a joint resolution described in 
            paragraph (1) of the House receiving the joint resolution--

                    ``(I) the procedure in that House shall be the same 
                as if no joint resolution had been received from the 
                other House; but
                    ``(II) the vote on final passage shall be on the 
                joint resolution of the other House.

            ``(E) Excluded days.--For purposes of determining the 
        period specified in subparagraph (B), there shall be excluded 
        any days either House of Congress is adjourned for more than 3 
        days during a session of Congress.
            ``(F) Majority required for adoption.--A joint resolution 
        considered under this subsection shall require an affirmative 
        vote of three-fifths of the Members, duly chosen and sworn, for 
        adoption.
        ``(3) Termination.--If a joint resolution described in 
    paragraph (1) is enacted not later than August 15, 2017--
            ``(A) the Chief Actuary of the Medicare & Medicaid Services 
        shall not--
                ``(i) make any determinations under subsection (c)(6) 
            after May 1, 2017; or
                ``(ii) provide any opinion pursuant to subsection 
            (c)(3)(B)(iii) after January 16, 2018;
            ``(B) the Board shall not submit any proposals or advisory 
        reports to Congress under this section after January 16, 2018; 
        and
            ``(C) the Board and the consumer advisory council under 
        subsection (k) shall terminate on August 16, 2018.
    ``(g) Board Membership; Terms of Office; Chairperson; Removal.--
        ``(1) Membership.--
            ``(A) In general.--The Board shall be composed of--
                ``(i) 15 members appointed by the President, by and 
            with the advice and consent of the Senate; and
                ``(ii) the Secretary, the Administrator of the Center 
            for Medicare & Medicaid Services, and the Administrator of 
            the Health Resources and Services Administration, all of 
            whom shall serve ex officio as nonvoting members of the 
            Board.
            ``(B) Qualifications.--
                ``(i) In general.--The appointed membership of the 
            Board shall include individuals with national recognition 
            for their expertise in health finance and economics, 
            actuarial science, health facility management, health plans 
            and integrated delivery systems, reimbursement of health 
            facilities, allopathic and osteopathic physicians, and 
            other providers of health services, and other related 
            fields, who provide a mix of different professionals, broad 
            geographic representation, and a balance between urban and 
            rural representatives.
                ``(ii) Inclusion.--The appointed membership of the 
            Board shall include (but not be limited to) physicians and 
            other health professionals, experts in the area of 
            pharmaco-economics or prescription drug benefit programs, 
            employers, third-party payers, individuals skilled in the 
            conduct and interpretation of biomedical, health services, 
            and health economics research and expertise in outcomes and 
            effectiveness research and technology assessment. Such 
            membership shall also include representatives of consumers 
            and the elderly.
                ``(iii) Majority nonproviders.--Individuals who are 
            directly involved in the provision or management of the 
            delivery of items and services covered under this title 
            shall not constitute a majority of the appointed membership 
            of the Board.
            ``(C) Ethical disclosure.--The President shall establish a 
        system for public disclosure by appointed members of the Board 
        of financial and other potential conflicts of interest relating 
        to such members. Appointed members of the Board shall be 
        treated as officers in the executive branch for purposes of 
        applying title I of the Ethics in Government Act of 1978 
        (Public Law 95-521).
            ``(D) Conflicts of interest.--No individual may serve as an 
        appointed member if that individual engages in any other 
        business, vocation, or employment.
            ``(E) Consultation with congress.--In selecting individuals 
        for nominations for appointments to the Board, the President 
        shall consult with--
                ``(i) the majority leader of the Senate concerning the 
            appointment of 3 members;
                ``(ii) the Speaker of the House of Representatives 
            concerning the appointment of 3 members;
                ``(iii) the minority leader of the Senate concerning 
            the appointment of 3 members; and
                ``(iv) the minority leader of the House of 
            Representatives concerning the appointment of 3 members.
        ``(2) Term of office.--Each appointed member shall hold office 
    for a term of 6 years except that--
            ``(A) a member may not serve more than 2 full consecutive 
        terms (but may be reappointed to 2 full consecutive terms after 
        being appointed to fill a vacancy on the Board);
            ``(B) a member appointed to fill a vacancy occurring prior 
        to the expiration of the term for which that member's 
        predecessor was appointed shall be appointed for the remainder 
        of such term;
            ``(C) a member may continue to serve after the expiration 
        of the member's term until a successor has taken office; and
            ``(D) of the members first appointed under this section, 5 
        shall be appointed for a term of 1 year, 5 shall be appointed 
        for a term of 3 years, and 5 shall be appointed for a term of 6 
        years, the term of each to be designated by the President at 
        the time of nomination.
        ``(3) Chairperson.--
            ``(A) In general.--The Chairperson shall be appointed by 
        the President, by and with the advice and consent of the 
        Senate, from among the members of the Board.
            ``(B) Duties.--The Chairperson shall be the principal 
        executive officer of the Board, and shall exercise all of the 
        executive and administrative functions of the Board, including 
        functions of the Board with respect to--
                ``(i) the appointment and supervision of personnel 
            employed by the Board;
                ``(ii) the distribution of business among personnel 
            appointed and supervised by the Chairperson and among 
            administrative units of the Board; and
                ``(iii) the use and expenditure of funds.
            ``(C) Governance.--In carrying out any of the functions 
        under subparagraph (B), the Chairperson shall be governed by 
        the general policies established by the Board and by the 
        decisions, findings, and determinations the Board shall by law 
        be authorized to make.
            ``(D) Requests for appropriations.--Requests or estimates 
        for regular, supplemental, or deficiency appropriations on 
        behalf of the Board may not be submitted by the Chairperson 
        without the prior approval of a majority vote of the Board.
        ``(4) Removal.--Any appointed member may be removed by the 
    President for neglect of duty or malfeasance in office, but for no 
    other cause.
    ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on 
Reports.--
        ``(1) Vacancies.--No vacancy on the Board shall impair the 
    right of the remaining members to exercise all the powers of the 
    Board.
        ``(2) Quorum.--A majority of the appointed members of the Board 
    shall constitute a quorum for the transaction of business, but a 
    lesser number of members may hold hearings.
        ``(3) Seal.--The Board shall have an official seal, of which 
    judicial notice shall be taken.
        ``(4) Vice chairperson.--The Board shall annually elect a Vice 
    Chairperson to act in the absence or disability of the Chairperson 
    or in case of a vacancy in the office of the Chairperson.
        ``(5) Voting on proposals.--Any proposal of the Board must be 
    approved by the majority of appointed members present.
    ``(i) Powers of the Board.--
        ``(1) Hearings.--The Board may hold such hearings, sit and act 
    at such times and places, take such testimony, and receive such 
    evidence as the Board considers advisable to carry out this 
    section.
        ``(2) Authority to inform research priorities for data 
    collection.--The Board may advise the Secretary on priorities for 
    health services research, particularly as such priorities pertain 
    to necessary changes and issues regarding payment reforms under 
    Medicare.
        ``(3) Obtaining official data.--The Board may secure directly 
    from any department or agency of the United States information 
    necessary to enable it to carry out this section. Upon request of 
    the Chairperson, the head of that department or agency shall 
    furnish that information to the Board on an agreed upon schedule.
        ``(4) Postal services.--The Board may use the United States 
    mails in the same manner and under the same conditions as other 
    departments and agencies of the Federal Government.
        ``(5) Gifts.--The Board may accept, use, and dispose of gifts 
    or donations of services or property.
        ``(6) Offices.--The Board shall maintain a principal office and 
    such field offices as it determines necessary, and may meet and 
    exercise any of its powers at any other place.
    ``(j) Personnel Matters.--
        ``(1) Compensation of members and chairperson.--Each appointed 
    member, other than the Chairperson, shall be compensated at a rate 
    equal to the annual rate of basic pay prescribed for level III of 
    the Executive Schedule under section 5315 of title 5, United States 
    Code. The Chairperson shall be compensated at a rate equal to the 
    daily equivalent of the annual rate of basic pay prescribed for 
    level II of the Executive Schedule under section 5315 of title 5, 
    United States Code.
        ``(2) Travel expenses.--The appointed members shall be allowed 
    travel expenses, including per diem in lieu of subsistence, at 
    rates authorized for employees of agencies under subchapter I of 
    chapter 57 of title 5, United States Code, while away from their 
    homes or regular places of business in the performance of services 
    for the Board.
        ``(3) Staff.--
            ``(A) In general.--The Chairperson may, without regard to 
        the civil service laws and regulations, appoint and terminate 
        an executive director and such other additional personnel as 
        may be necessary to enable the Board to perform its duties. The 
        employment of an executive director shall be subject to 
        confirmation by the Board.
            ``(B) Compensation.--The Chairperson may fix the 
        compensation of the executive director and other personnel 
        without regard to chapter 51 and subchapter III of chapter 53 
        of title 5, United States Code, relating to classification of 
        positions and General Schedule pay rates, except that the rate 
        of pay for the executive director and other personnel may not 
        exceed the rate payable for level V of the Executive Schedule 
        under section 5316 of such title.
        ``(4) Detail of government employees.--Any Federal Government 
    employee may be detailed to the Board without reimbursement, and 
    such detail shall be without interruption or loss of civil service 
    status or privilege.
        ``(5) Procurement of temporary and intermittent services.--The 
    Chairperson may procure temporary and intermittent services under 
    section 3109(b) of title 5, United States Code, at rates for 
    individuals which do not exceed the daily equivalent of the annual 
    rate of basic pay prescribed for level V of the Executive Schedule 
    under section 5316 of such title.
    ``(k) Consumer Advisory Council.--
        ``(1) In general.--There is established a consumer advisory 
    council to advise the Board on the impact of payment policies under 
    this title on consumers.
        ``(2) Membership.--
            ``(A) Number and appointment.--The consumer advisory 
        council shall be composed of 10 consumer representatives 
        appointed by the Comptroller General of the United States, 1 
        from among each of the 10 regions established by the Secretary 
        as of the date of enactment of this section.
            ``(B) Qualifications.--The membership of the council shall 
        represent the interests of consumers and particular 
        communities.
        ``(3) Duties.--The consumer advisory council shall, subject to 
    the call of the Board, meet not less frequently than 2 times each 
    year in the District of Columbia.
        ``(4) Open meetings.--Meetings of the consumer advisory council 
    shall be open to the public.
        ``(5) Election of officers.--Members of the consumer advisory 
    council shall elect their own officers.
        ``(6) Application of faca.--The Federal Advisory Committee Act 
    (5 U.S.C. App.) shall apply to the consumer advisory council except 
    that section 14 of such Act shall not apply.
    ``(l) Definitions.--In this section:
        ``(1) Board; chairperson; member.--The terms `Board', 
    `Chairperson', and `Member' mean the Independent Medicare Advisory 
    Board established under subsection (a) and the Chairperson and any 
    Member thereof, respectively.
        ``(2) Medicare.--The term `Medicare' means the program 
    established under this title, including parts A, B, C, and D.
        ``(3) Medicare beneficiary.--The term `Medicare beneficiary' 
    means an individual who is entitled to, or enrolled for, benefits 
    under part A or enrolled for benefits under part B.
        ``(4) Medicare program spending.--The term `Medicare program 
    spending' means program spending under parts A, B, and D net of 
    premiums.
    ``(m) Funding.--
        ``(1) In general.--There are appropriated to the Board to carry 
    out its duties and functions--
            ``(A) for fiscal year 2012, $15,000,000; and
            ``(B) for each subsequent fiscal year, the amount 
        appropriated under this paragraph for the previous fiscal year 
        increased by the annual percentage increase in the Consumer 
        Price Index for All Urban Consumers (all items; United States 
        city average) as of June of the previous fiscal year.
        ``(2) From trust funds.--Sixty percent of amounts appropriated 
    under paragraph (1) shall be derived by transfer from the Federal 
    Hospital Insurance Trust Fund under section 1817 and 40 percent of 
    amounts appropriated under such paragraph shall be derived by 
    transfer from the Federal Supplementary Medical Insurance Trust 
    Fund under section 1841.''.
        (2) Lobbying cooling-off period for members of the independent 
    medicare advisory board.--Section 207(c) of title 18, United States 
    Code, is amended by inserting at the end the following:
        ``(3) Members of the independent medicare advisory board.--
            ``(A) In general.--Paragraph (1) shall apply to a member of 
        the Independent Medicare Advisory Board under section 1899A.
            ``(B) Agencies and congress.--For purposes of paragraph 
        (1), the agency in which the individual described in 
        subparagraph (A) served shall be considered to be the 
        Independent Medicare Advisory Board, the Department of Health 
        and Human Services, and the relevant committees of jurisdiction 
        of Congress, including the Committee on Ways and Means and the 
        Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate.''.
    (b) GAO Study and Report on Determination and Implementation of 
Payment and Coverage Policies Under the Medicare Program.--
        (1) Initial study and report.--
            (A) Study.--The Comptroller General of the United States 
        (in this section referred to as the ``Comptroller General'') 
        shall conduct a study on changes to payment policies, 
        methodologies, and rates and coverage policies and 
        methodologies under the Medicare program under title XVIII of 
        the Social Security Act as a result of the recommendations 
        contained in the proposals made by the Independent Medicare 
        Advisory Board under section 1899A of such Act (as added by 
        subsection (a)), including an analysis of the effect of such 
        recommendations on--
                (i) Medicare beneficiary access to providers and items 
            and services;
                (ii) the affordability of Medicare premiums and cost-
            sharing (including deductibles, coinsurance, and 
            copayments);
                (iii) the potential impact of changes on other 
            government or private-sector purchasers and payers of care; 
            and
                (iv) quality of patient care, including patient 
            experience, outcomes, and other measures of care.
            (B) Report.--Not later than July 1, 2015, the Comptroller 
        General shall submit to Congress a report containing the 
        results of the study conducted under subparagraph (A), together 
        with recommendations for such legislation and administrative 
        action as the Comptroller General determines appropriate.
        (2) Subsequent studies and reports.--The Comptroller General 
    shall periodically conduct such additional studies and submit 
    reports to Congress on changes to Medicare payments policies, 
    methodologies, and rates and coverage policies and methodologies as 
    the Comptroller General determines appropriate, in consultation 
    with the Committee on Ways and Means and the Committee on Energy 
    and Commerce of the House of Representatives and the Committee on 
    Finance of the Senate.
    (c) Conforming Amendments.--Section 1805(b) of the Social Security 
Act (42 U.S.C. 1395b-6(b)) is amended--
        (1) by redesignating paragraphs (4) through (8) as paragraphs 
    (5) through (9), respectively; and
        (2) by inserting after paragraph (3) the following:
        ``(4) Review and comment on the independent medicare advisory 
    board or secretarial proposal.--If the Independent Medicare 
    Advisory Board (as established under subsection (a) of section 
    1899A) or the Secretary submits a proposal to the Commission under 
    such section in a year, the Commission shall review the proposal 
    and, not later than March 1 of that year, submit to the Committee 
    on Ways and Means and the Committee on Energy and Commerce of the 
    House of Representatives and the Committee on Finance of the Senate 
    written comments on such proposal. Such comments may include such 
    recommendations as the Commission deems appropriate.''.

              Subtitle F--Health Care Quality Improvements

SEC. 3501. HEALTH CARE DELIVERY SYSTEM RESEARCH; QUALITY IMPROVEMENT 
              TECHNICAL ASSISTANCE.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3013, is further amended by adding at the end the following:

         ``Subpart II--Health Care Quality Improvement Programs

``SEC. 933. HEALTH CARE DELIVERY SYSTEM RESEARCH.

    ``(a) Purpose.--The purposes of this section are to--
        ``(1) enable the Director to identify, develop, evaluate, 
    disseminate, and provide training in innovative methodologies and 
    strategies for quality improvement practices in the delivery of 
    health care services that represent best practices (referred to as 
    `best practices') in health care quality, safety, and value; and
        ``(2) ensure that the Director is accountable for implementing 
    a model to pursue such research in a collaborative manner with 
    other related Federal agencies.
    ``(b) General Functions of the Center.--The Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research 
and Quality (referred to in this section as the `Center'), or any other 
relevant agency or department designated by the Director, shall--
        ``(1) carry out its functions using research from a variety of 
    disciplines, which may include epidemiology, health services, 
    sociology, psychology, human factors engineering, biostatistics, 
    health economics, clinical research, and health informatics;
        ``(2) conduct or support activities consistent with the 
    purposes described in subsection (a), and for--
            ``(A) best practices for quality improvement practices in 
        the delivery of health care services; and
            ``(B) that include changes in processes of care and the 
        redesign of systems used by providers that will reliably result 
        in intended health outcomes, improve patient safety, and reduce 
        medical errors (such as skill development for health care 
        providers in team-based health care delivery and rapid cycle 
        process improvement) and facilitate adoption of improved 
        workflow;
        ``(3) identify health care providers, including health care 
    systems, single institutions, and individual providers, that--
            ``(A) deliver consistently high-quality, efficient health 
        care services (as determined by the Secretary); and
            ``(B) employ best practices that are adaptable and scalable 
        to diverse health care settings or effective in improving care 
        across diverse settings;
        ``(4) assess research, evidence, and knowledge about what 
    strategies and methodologies are most effective in improving health 
    care delivery;
        ``(5) find ways to translate such information rapidly and 
    effectively into practice, and document the sustainability of those 
    improvements;
        ``(6) create strategies for quality improvement through the 
    development of tools, methodologies, and interventions that can 
    successfully reduce variations in the delivery of health care;
        ``(7) identify, measure, and improve organizational, human, or 
    other causative factors, including those related to the culture and 
    system design of a health care organization, that contribute to the 
    success and sustainability of specific quality improvement and 
    patient safety strategies;
        ``(8) provide for the development of best practices in the 
    delivery of health care services that--
            ``(A) have a high likelihood of success, based on 
        structured review of empirical evidence;
            ``(B) are specified with sufficient detail of the 
        individual processes, steps, training, skills, and knowledge 
        required for implementation and incorporation into workflow of 
        health care practitioners in a variety of settings;
            ``(C) are designed to be readily adapted by health care 
        providers in a variety of settings; and
            ``(D) where applicable, assist health care providers in 
        working with other health care providers across the continuum 
        of care and in engaging patients and their families in 
        improving the care and patient health outcomes;
        ``(9) provide for the funding of the activities of 
    organizations with recognized expertise and excellence in improving 
    the delivery of health care services, including children's health 
    care, by involving multiple disciplines, managers of health care 
    entities, broad development and training, patients, caregivers and 
    families, and frontline health care workers, including activities 
    for the examination of strategies to share best quality improvement 
    practices and to promote excellence in the delivery of health care 
    services; and
        ``(10) build capacity at the State and community level to lead 
    quality and safety efforts through education, training, and 
    mentoring programs to carry out the activities under paragraphs (1) 
    through (9).
    ``(c) Research Functions of Center.--
        ``(1) In general.--The Center shall support, such as through a 
    contract or other mechanism, research on health care delivery 
    system improvement and the development of tools to facilitate 
    adoption of best practices that improve the quality, safety, and 
    efficiency of health care delivery services. Such support may 
    include establishing a Quality Improvement Network Research Program 
    for the purpose of testing, scaling, and disseminating of 
    interventions to improve quality and efficiency in health care. 
    Recipients of funding under the Program may include national, 
    State, multi-State, or multi-site quality improvement networks.
        ``(2) Research requirements.--The research conducted pursuant 
    to paragraph (1) shall--
            ``(A) address the priorities identified by the Secretary in 
        the national strategic plan established under section 399HH;
            ``(B) identify areas in which evidence is insufficient to 
        identify strategies and methodologies, taking into 
        consideration areas of insufficient evidence identified by the 
        entity with a contract under section 1890(a) of the Social 
        Security Act in the report required under section 399JJ;
            ``(C) address concerns identified by health care 
        institutions and providers and communicated through the Center 
        pursuant to subsection (d);
            ``(D) reduce preventable morbidity, mortality, and 
        associated costs of morbidity and mortality by building 
        capacity for patient safety research;
            ``(E) support the discovery of processes for the reliable, 
        safe, efficient, and responsive delivery of health care, taking 
        into account discoveries from clinical research and comparative 
        effectiveness research;
            ``(F) allow communication of research findings and 
        translate evidence into practice recommendations that are 
        adaptable to a variety of settings, and which, as soon as 
        practicable after the establishment of the Center, shall 
        include--
                ``(i) the implementation of a national application of 
            Intensive Care Unit improvement projects relating to the 
            adult (including geriatric), pediatric, and neonatal 
            patient populations;
                ``(ii) practical methods for addressing health care 
            associated infections, including Methicillin-Resistant 
            Staphylococcus Aureus and Vancomycin-Resistant Entercoccus 
            infections and other emerging infections; and
                ``(iii) practical methods for reducing preventable 
            hospital admissions and readmissions;
            ``(G) expand demonstration projects for improving the 
        quality of children's health care and the use of health 
        information technology, such as through Pediatric Quality 
        Improvement Collaboratives and Learning Networks, consistent 
        with provisions of section 1139A of the Social Security Act for 
        assessing and improving quality, where applicable;
            ``(H) identify and mitigate hazards by--
                ``(i) analyzing events reported to patient safety 
            reporting systems and patient safety organizations; and
                ``(ii) using the results of such analyses to develop 
            scientific methods of response to such events;
            ``(I) include the conduct of systematic reviews of existing 
        practices that improve the quality, safety, and efficiency of 
        health care delivery, as well as new research on improving such 
        practices; and
            ``(J) include the examination of how to measure and 
        evaluate the progress of quality and patient safety activities.
    ``(d) Dissemination of Research Findings.--
        ``(1) Public availability.--The Director shall make the 
    research findings of the Center available to the public through 
    multiple media and appropriate formats to reflect the varying needs 
    of health care providers and consumers and diverse levels of health 
    literacy.
        ``(2) Linkage to health information technology.--The Secretary 
    shall ensure that research findings and results generated by the 
    Center are shared with the Office of the National Coordinator of 
    Health Information Technology and used to inform the activities of 
    the health information technology extension program under section 
    3012, as well as any relevant standards, certification criteria, or 
    implementation specifications.
    ``(e) Prioritization.--The Director shall identify and regularly 
update a list of processes or systems on which to focus research and 
dissemination activities of the Center, taking into account--
        ``(1) the cost to Federal health programs;
        ``(2) consumer assessment of health care experience;
        ``(3) provider assessment of such processes or systems and 
    opportunities to minimize distress and injury to the health care 
    workforce;
        ``(4) the potential impact of such processes or systems on 
    health status and function of patients, including vulnerable 
    populations including children;
        ``(5) the areas of insufficient evidence identified under 
    subsection (c)(2)(B); and
        ``(6) the evolution of meaningful use of health information 
    technology, as defined in section 3000.
    ``(f) Coordination.--The Center shall coordinate its activities 
with activities conducted by the Center for Medicare and Medicaid 
Innovation established under section 1115A of the Social Security Act.
    ``(g) Funding.--There is authorized to be appropriated to carry out 
this section $20,000,000 for fiscal years 2010 through 2014.

``SEC. 934. QUALITY IMPROVEMENT TECHNICAL ASSISTANCE AND 
              IMPLEMENTATION.

    ``(a) In General.--The Director, through the Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research 
and Quality (referred to in this section as the `Center'), shall 
award--
        ``(1) technical assistance grants or contracts to eligible 
    entities to provide technical support to institutions that deliver 
    health care and health care providers (including rural and urban 
    providers of services and suppliers with limited infrastructure and 
    financial resources to implement and support quality improvement 
    activities, providers of services and suppliers with poor 
    performance scores, and providers of services and suppliers for 
    which there are disparities in care among subgroups of patients) so 
    that such institutions and providers understand, adapt, and 
    implement the models and practices identified in the research 
    conducted by the Center, including the Quality Improvement Networks 
    Research Program; and
        ``(2) implementation grants or contracts to eligible entities 
    to implement the models and practices described under paragraph 
    (1).
    ``(b) Eligible Entities.--
        ``(1) Technical assistance award.--To be eligible to receive a 
    technical assistance grant or contract under subsection (a)(1), an 
    entity--
            ``(A) may be a health care provider, health care provider 
        association, professional society, health care worker 
        organization, Indian health organization, quality improvement 
        organization, patient safety organization, local quality 
        improvement collaborative, the Joint Commission, academic 
        health center, university, physician-based research network, 
        primary care extension program established under section 399W, 
        a Federal Indian Health Service program or a health program 
        operated by an Indian tribe (as defined in section 4 of the 
        Indian Health Care Improvement Act), or any other entity 
        identified by the Secretary; and
            ``(B) shall have demonstrated expertise in providing 
        information and technical support and assistance to health care 
        providers regarding quality improvement.
        ``(2) Implementation award.--To be eligible to receive an 
    implementation grant or contract under subsection (a)(2), an 
    entity--
            ``(A) may be a hospital or other health care provider or 
        consortium or providers, as determined by the Secretary; and
            ``(B) shall have demonstrated expertise in providing 
        information and technical support and assistance to health care 
        providers regarding quality improvement.
    ``(c) Application.--
        ``(1) Technical assistance award.--To receive a technical 
    assistance grant or contract under subsection (a)(1), an eligible 
    entity shall submit an application to the Secretary at such time, 
    in such manner, and containing--
            ``(A) a plan for a sustainable business model that may 
        include a system of--
                ``(i) charging fees to institutions and providers that 
            receive technical support from the entity; and
                ``(ii) reducing or eliminating such fees for such 
            institutions and providers that serve low-income 
            populations; and
            ``(B) such other information as the Director may require.
        ``(2) Implementation award.--To receive a grant or contract 
    under subsection (a)(2), an eligible entity shall submit an 
    application to the Secretary at such time, in such manner, and 
    containing--
            ``(A) a plan for implementation of a model or practice 
        identified in the research conducted by the Center including--
                ``(i) financial cost, staffing requirements, and 
            timeline for implementation; and
                ``(ii) pre- and projected post-implementation quality 
            measure performance data in targeted improvement areas 
            identified by the Secretary; and
            ``(B) such other information as the Director may require.
    ``(d) Matching Funds.--The Director may not award a grant or 
contract under this section to an entity unless the entity agrees that 
it will make available (directly or through contributions from other 
public or private entities) non-Federal contributions toward the 
activities to be carried out under the grant or contract in an amount 
equal to $1 for each $5 of Federal funds provided under the grant or 
contract. Such non-Federal matching funds may be provided directly or 
through donations from public or private entities and may be in cash or 
in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Evaluation.--
        ``(1) In general.--The Director shall evaluate the performance 
    of each entity that receives a grant or contract under this 
    section. The evaluation of an entity shall include a study of--
            ``(A) the success of such entity in achieving the 
        implementation, by the health care institutions and providers 
        assisted by such entity, of the models and practices identified 
        in the research conducted by the Center under section 933;
            ``(B) the perception of the health care institutions and 
        providers assisted by such entity regarding the value of the 
        entity; and
            ``(C) where practicable, better patient health outcomes and 
        lower cost resulting from the assistance provided by such 
        entity.
        ``(2) Effect of evaluation.--Based on the outcome of the 
    evaluation of the entity under paragraph (1), the Director shall 
    determine whether to renew a grant or contract with such entity 
    under this section.
    ``(f) Coordination.--The entities that receive a grant or contract 
under this section shall coordinate with health information technology 
regional extension centers under section 3012(c) and the primary care 
extension program established under section 399W regarding the 
dissemination of quality improvement, system delivery reform, and best 
practices information.''.

SEC. 3502. ESTABLISHING COMMUNITY HEALTH TEAMS TO SUPPORT THE PATIENT-
              CENTERED MEDICAL HOME.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish a 
program to provide grants to or enter into contracts with eligible 
entities to establish community-based interdisciplinary, 
interprofessional teams (referred to in this section as ``health 
teams'') to support primary care practices, including obstetrics and 
gynecology practices, within the hospital service areas served by the 
eligible entities. Grants or contracts shall be used to--
        (1) establish health teams to provide support services to 
    primary care providers; and
        (2) provide capitated payments to primary care providers as 
    determined by the Secretary.
    (b) Eligible Entities.--To be eligible to receive a grant or 
contract under subsection (a), an entity shall--
        (1)(A) be a State or State-designated entity; or
        (B) be an Indian tribe or tribal organization, as defined in 
    section 4 of the Indian Health Care Improvement Act;
        (2) submit a plan for achieving long-term financial 
    sustainability within 3 years;
        (3) submit a plan for incorporating prevention initiatives and 
    patient education and care management resources into the delivery 
    of health care that is integrated with community-based prevention 
    and treatment resources, where available;
        (4) ensure that the health team established by the entity 
    includes an interdisciplinary, interprofessional team of health 
    care providers, as determined by the Secretary; such team may 
    include medical specialists, nurses, pharmacists, nutritionists, 
    dieticians, social workers, behavioral and mental health providers 
    (including substance use disorder prevention and treatment 
    providers), doctors of chiropractic, licensed complementary and 
    alternative medicine practitioners, and physicians' assistants;
        (5) agree to provide services to eligible individuals with 
    chronic conditions, as described in section 1945 of the Social 
    Security Act (as added by section 2703), in accordance with the 
    payment methodology established under subsection (c) of such 
    section; and
        (6) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require.
    (c) Requirements for Health Teams.--A health team established 
pursuant to a grant or contract under subsection (a) shall--
        (1) establish contractual agreements with primary care 
    providers to provide support services;
        (2) support patient-centered medical homes, defined as a mode 
    of care that includes--
            (A) personal physicians;
            (B) whole person orientation;
            (C) coordinated and integrated care;
            (D) safe and high-quality care through evidence-informed 
        medicine, appropriate use of health information technology, and 
        continuous quality improvements;
            (E) expanded access to care; and
            (F) payment that recognizes added value from additional 
        components of patient-centered care;
        (3) collaborate with local primary care providers and existing 
    State and community based resources to coordinate disease 
    prevention, chronic disease management, transitioning between 
    health care providers and settings and case management for 
    patients, including children, with priority given to those amenable 
    to prevention and with chronic diseases or conditions identified by 
    the Secretary;
        (4) in collaboration with local health care providers, develop 
    and implement interdisciplinary, interprofessional care plans that 
    integrate clinical and community preventive and health promotion 
    services for patients, including children, with a priority given to 
    those amenable to prevention and with chronic diseases or 
    conditions identified by the Secretary;
        (5) incorporate health care providers, patients, caregivers, 
    and authorized representatives in program design and oversight;
        (6) provide support necessary for local primary care providers 
    to--
            (A) coordinate and provide access to high-quality health 
        care services;
            (B) coordinate and provide access to preventive and health 
        promotion services;
            (C) provide access to appropriate specialty care and 
        inpatient services;
            (D) provide quality-driven, cost-effective, culturally 
        appropriate, and patient- and family-centered health care;
            (E) provide access to pharmacist-delivered medication 
        management services, including medication reconciliation;
            (F) provide coordination of the appropriate use of 
        complementary and alternative (CAM) services to those who 
        request such services;
            (G) promote effective strategies for treatment planning, 
        monitoring health outcomes and resource use, sharing 
        information, treatment decision support, and organizing care to 
        avoid duplication of service and other medical management 
        approaches intended to improve quality and value of health care 
        services;
            (H) provide local access to the continuum of health care 
        services in the most appropriate setting, including access to 
        individuals that implement the care plans of patients and 
        coordinate care, such as integrative health care practitioners;
            (I) collect and report data that permits evaluation of the 
        success of the collaborative effort on patient outcomes, 
        including collection of data on patient experience of care, and 
        identification of areas for improvement; and
            (J) establish a coordinated system of early identification 
        and referral for children at risk for developmental or 
        behavioral problems such as through the use of infolines, 
        health information technology, or other means as determined by 
        the Secretary;
        (7) provide 24-hour care management and support during 
    transitions in care settings including--
            (A) a transitional care program that provides onsite visits 
        from the care coordinator, assists with the development of 
        discharge plans and medication reconciliation upon admission to 
        and discharge from the hospitals, nursing home, or other 
        institution setting;
            (B) discharge planning and counseling support to providers, 
        patients, caregivers, and authorized representatives;
            (C) assuring that post-discharge care plans include 
        medication management, as appropriate;
            (D) referrals for mental and behavioral health services, 
        which may include the use of infolines; and
            (E) transitional health care needs from adolescence to 
        adulthood;
        (8) serve as a liaison to community prevention and treatment 
    programs;
        (9) demonstrate a capacity to implement and maintain health 
    information technology that meets the requirements of certified EHR 
    technology (as defined in section 3000 of the Public Health Service 
    Act (42 U.S.C. 300jj)) to facilitate coordination among members of 
    the applicable care team and affiliated primary care practices; and
        (10) where applicable, report to the Secretary information on 
    quality measures used under section 399JJ of the Public Health 
    Service Act.
    (d) Requirement for Primary Care Providers.--A provider who 
contracts with a care team shall--
        (1) provide a care plan to the care team for each patient 
    participant;
        (2) provide access to participant health records; and
        (3) meet regularly with the care team to ensure integration of 
    care.
    (e) Reporting to Secretary.--An entity that receives a grant or 
contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out by the entity under subsection (c).
    (f) Definition of Primary Care.--In this section, the term 
``primary care'' means the provision of integrated, accessible health 
care services by clinicians who are accountable for addressing a large 
majority of personal health care needs, developing a sustained 
partnership with patients, and practicing in the context of family and 
community.

SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC 
              DISEASE.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.), 
as amended by section 3501, is further amended by inserting after 
section 934 the following:

``SEC. 935. GRANTS OR CONTRACTS TO IMPLEMENT MEDICATION MANAGEMENT 
              SERVICES IN TREATMENT OF CHRONIC DISEASES.

    ``(a) In General.--The Secretary, acting through the Patient Safety 
Research Center established in section 933 (referred to in this section 
as the `Center'), shall establish a program to provide grants or 
contracts to eligible entities to implement medication management 
(referred to in this section as `MTM') services provided by licensed 
pharmacists, as a collaborative, multidisciplinary, inter-professional 
approach to the treatment of chronic diseases for targeted individuals, 
to improve the quality of care and reduce overall cost in the treatment 
of such diseases. The Secretary shall commence the program under this 
section not later than May 1, 2010.
    ``(b) Eligible Entities.--To be eligible to receive a grant or 
contract under subsection (a), an entity shall--
        ``(1) provide a setting appropriate for MTM services, as 
    recommended by the experts described in subsection (e);
        ``(2) submit to the Secretary a plan for achieving long-term 
    financial sustainability;
        ``(3) where applicable, submit a plan for coordinating MTM 
    services through local community health teams established in 
    section 3502 of the Patient Protection and Affordable Care Act or 
    in collaboration with primary care extension programs established 
    in section 399W;
        ``(4) submit a plan for meeting the requirements under 
    subsection (c); and
        ``(5) submit to the Secretary such other information as the 
    Secretary may require.
    ``(c) MTM Services to Targeted Individuals.--The MTM services 
provided with the assistance of a grant or contract awarded under 
subsection (a) shall, as allowed by State law including applicable 
collaborative pharmacy practice agreements, include--
        ``(1) performing or obtaining necessary assessments of the 
    health and functional status of each patient receiving such MTM 
    services;
        ``(2) formulating a medication treatment plan according to 
    therapeutic goals agreed upon by the prescriber and the patient or 
    caregiver or authorized representative of the patient;
        ``(3) selecting, initiating, modifying, recommending changes 
    to, or administering medication therapy;
        ``(4) monitoring, which may include access to, ordering, or 
    performing laboratory assessments, and evaluating the response of 
    the patient to therapy, including safety and effectiveness;
        ``(5) performing an initial comprehensive medication review to 
    identify, resolve, and prevent medication-related problems, 
    including adverse drug events, quarterly targeted medication 
    reviews for ongoing monitoring, and additional followup 
    interventions on a schedule developed collaboratively with the 
    prescriber;
        ``(6) documenting the care delivered and communicating 
    essential information about such care, including a summary of the 
    medication review, and the recommendations of the pharmacist to 
    other appropriate health care providers of the patient in a timely 
    fashion;
        ``(7) providing education and training designed to enhance the 
    understanding and appropriate use of the medications by the 
    patient, caregiver, and other authorized representative;
        ``(8) providing information, support services, and resources 
    and strategies designed to enhance patient adherence with 
    therapeutic regimens;
        ``(9) coordinating and integrating MTM services within the 
    broader health care management services provided to the patient; 
    and
        ``(10) such other patient care services allowed under 
    pharmacist scopes of practice in use in other Federal programs that 
    have implemented MTM services.
    ``(d) Targeted Individuals.--MTM services provided by licensed 
pharmacists under a grant or contract awarded under subsection (a) 
shall be offered to targeted individuals who--
        ``(1) take 4 or more prescribed medications (including over-
    the-counter medications and dietary supplements);
        ``(2) take any `high risk' medications;
        ``(3) have 2 or more chronic diseases, as identified by the 
    Secretary; or
        ``(4) have undergone a transition of care, or other factors, as 
    determined by the Secretary, that are likely to create a high risk 
    of medication-related problems.
    ``(e) Consultation With Experts.--In designing and implementing MTM 
services provided under grants or contracts awarded under subsection 
(a), the Secretary shall consult with Federal, State, private, public-
private, and academic entities, pharmacy and pharmacist organizations, 
health care organizations, consumer advocates, chronic disease groups, 
and other stakeholders involved with the research, dissemination, and 
implementation of pharmacist-delivered MTM services, as the Secretary 
determines appropriate. The Secretary, in collaboration with this 
group, shall determine whether it is possible to incorporate rapid 
cycle process improvement concepts in use in other Federal programs 
that have implemented MTM services.
    ``(f) Reporting to the Secretary.--An entity that receives a grant 
or contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out under subsection (c), including quality measures 
endorsed by the entity with a contract under section 1890 of the Social 
Security Act, as determined by the Secretary.
    ``(g) Evaluation and Report.--The Secretary shall submit to the 
relevant committees of Congress a report which shall--
        ``(1) assess the clinical effectiveness of pharmacist-provided 
    services under the MTM services program, as compared to usual care, 
    including an evaluation of whether enrollees maintained better 
    health with fewer hospitalizations and emergency room visits than 
    similar patients not enrolled in the program;
        ``(2) assess changes in overall health care resource use by 
    targeted individuals;
        ``(3) assess patient and prescriber satisfaction with MTM 
    services;
        ``(4) assess the impact of patient-cost sharing requirements on 
    medication adherence and recommendations for modifications;
        ``(5) identify and evaluate other factors that may impact 
    clinical and economic outcomes, including demographic 
    characteristics, clinical characteristics, and health services use 
    of the patient, as well as characteristics of the regimen, pharmacy 
    benefit, and MTM services provided; and
        ``(6) evaluate the extent to which participating pharmacists 
    who maintain a dispensing role have a conflict of interest in the 
    provision of MTM services, and if such conflict is found, provide 
    recommendations on how such a conflict might be appropriately 
    addressed.
    ``(h) Grants or Contracts To Fund Development of Performance 
Measures.--The Secretary may, through the quality measure development 
program under section 931 of the Public Health Service Act, award 
grants or contracts to eligible entities for the purpose of funding the 
development of performance measures that assess the use and 
effectiveness of medication therapy management services.''.

SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYSTEMS FOR 
              EMERGENCY CARE.

    (a) In General.--Title XII of the Public Health Service Act (42 
U.S.C. 300d et seq.) is amended--
        (1) in section 1203--
            (A) in the section heading, by inserting ``for trauma 
        systems'' after ``grants''; and
            (B) in subsection (a), by striking ``Administrator of the 
        Health Resources and Services Administration'' and inserting 
        ``Assistant Secretary for Preparedness and Response'';
        (2) by inserting after section 1203 the following:

``SEC. 1204. COMPETITIVE GRANTS FOR REGIONALIZED SYSTEMS FOR EMERGENCY 
              CARE RESPONSE.

    ``(a) In General.--The Secretary, acting through the Assistant 
Secretary for Preparedness and Response, shall award not fewer than 4 
multiyear contracts or competitive grants to eligible entities to 
support pilot projects that design, implement, and evaluate innovative 
models of regionalized, comprehensive, and accountable emergency care 
and trauma systems.
    ``(b) Eligible Entity; Region.--In this section:
        ``(1) Eligible entity.--The term `eligible entity' means--
            ``(A) a State or a partnership of 1 or more States and 1 or 
        more local governments; or
            ``(B) an Indian tribe (as defined in section 4 of the 
        Indian Health Care Improvement Act) or a partnership of 1 or 
        more Indian tribes.
        ``(2) Region.--The term `region' means an area within a State, 
    an area that lies within multiple States, or a similar area (such 
    as a multicounty area), as determined by the Secretary.
        ``(3) Emergency services.--The term `emergency services' 
    includes acute, prehospital, and trauma care.
    ``(c) Pilot Projects.--The Secretary shall award a contract or 
grant under subsection (a) to an eligible entity that proposes a pilot 
project to design, implement, and evaluate an emergency medical and 
trauma system that--
        ``(1) coordinates with public health and safety services, 
    emergency medical services, medical facilities, trauma centers, and 
    other entities in a region to develop an approach to emergency 
    medical and trauma system access throughout the region, including 
    9-1-1 Public Safety Answering Points and emergency medical 
    dispatch;
        ``(2) includes a mechanism, such as a regional medical 
    direction or transport communications system, that operates 
    throughout the region to ensure that the patient is taken to the 
    medically appropriate facility (whether an initial facility or a 
    higher-level facility) in a timely fashion;
        ``(3) allows for the tracking of prehospital and hospital 
    resources, including inpatient bed capacity, emergency department 
    capacity, trauma center capacity, on-call specialist coverage, 
    ambulance diversion status, and the coordination of such tracking 
    with regional communications and hospital destination decisions; 
    and
        ``(4) includes a consistent region-wide prehospital, hospital, 
    and interfacility data management system that--
            ``(A) submits data to the National EMS Information System, 
        the National Trauma Data Bank, and others;
            ``(B) reports data to appropriate Federal and State 
        databanks and registries; and
            ``(C) contains information sufficient to evaluate key 
        elements of prehospital care, hospital destination decisions, 
        including initial hospital and interfacility decisions, and 
        relevant health outcomes of hospital care.
    ``(d) Application.--
        ``(1) In general.--An eligible entity that seeks a contract or 
    grant described in subsection (a) shall submit to the Secretary an 
    application at such time and in such manner as the Secretary may 
    require.
        ``(2) Application information.--Each application shall 
    include--
            ``(A) an assurance from the eligible entity that the 
        proposed system--
                ``(i) has been coordinated with the applicable State 
            Office of Emergency Medical Services (or equivalent State 
            office);
                ``(ii) includes consistent indirect and direct medical 
            oversight of prehospital, hospital, and interfacility 
            transport throughout the region;
                ``(iii) coordinates prehospital treatment and triage, 
            hospital destination, and interfacility transport 
            throughout the region;
                ``(iv) includes a categorization or designation system 
            for special medical facilities throughout the region that 
            is integrated with transport and destination protocols;
                ``(v) includes a regional medical direction, patient 
            tracking, and resource allocation system that supports day-
            to-day emergency care and surge capacity and is integrated 
            with other components of the national and State emergency 
            preparedness system; and
                ``(vi) addresses pediatric concerns related to 
            integration, planning, preparedness, and coordination of 
            emergency medical services for infants, children and 
            adolescents; and
            ``(B) such other information as the Secretary may require.
    ``(e) Requirement of Matching Funds.--
        ``(1) In general.--The Secretary may not make a grant under 
    this section unless the State (or consortia of States) involved 
    agrees, with respect to the costs to be incurred by the State (or 
    consortia) in carrying out the purpose for which such grant was 
    made, to make available non-Federal contributions (in cash or in 
    kind under paragraph (2)) toward such costs in an amount equal to 
    not less than $1 for each $3 of Federal funds provided in the 
    grant. Such contributions may be made directly or through donations 
    from public or private entities.
        ``(2) Non-federal contributions.--Non-Federal contributions 
    required in paragraph (1) may be in cash or in kind, fairly 
    evaluated, including equipment or services (and excluding indirect 
    or overhead costs). Amounts provided by the Federal Government, or 
    services assisted or subsidized to any significant extent by the 
    Federal Government, may not be included in determining the amount 
    of such non-Federal contributions.
    ``(f) Priority.--The Secretary shall give priority for the award of 
the contracts or grants described in subsection (a) to any eligible 
entity that serves a population in a medically underserved area (as 
defined in section 330(b)(3)).
    ``(g) Report.--Not later than 90 days after the completion of a 
pilot project under subsection (a), the recipient of such contract or 
grant described in shall submit to the Secretary a report containing 
the results of an evaluation of the program, including an 
identification of--
        ``(1) the impact of the regional, accountable emergency care 
    and trauma system on patient health outcomes for various critical 
    care categories, such as trauma, stroke, cardiac emergencies, 
    neurological emergencies, and pediatric emergencies;
        ``(2) the system characteristics that contribute to the 
    effectiveness and efficiency of the program (or lack thereof);
        ``(3) methods of assuring the long-term financial 
    sustainability of the emergency care and trauma system;
        ``(4) the State and local legislation necessary to implement 
    and to maintain the system;
        ``(5) the barriers to developing regionalized, accountable 
    emergency care and trauma systems, as well as the methods to 
    overcome such barriers; and
        ``(6) recommendations on the utilization of available funding 
    for future regionalization efforts.
    ``(h) Dissemination of Findings.--The Secretary shall, as 
appropriate, disseminate to the public and to the appropriate 
Committees of the Congress, the information contained in a report made 
under subsection (g).''; and
        (3) in section 1232--
            (A) in subsection (a), by striking ``appropriated'' and all 
        that follows through the period at the end and inserting 
        ``appropriated $24,000,000 for each of fiscal years 2010 
        through 2014.''; and
            (B) by inserting after subsection (c) the following:
    ``(d) Authority.--For the purpose of carrying out parts A through 
C, beginning on the date of enactment of the Patient Protection and 
Affordable Care Act, the Secretary shall transfer authority in 
administering grants and related authorities under such parts from the 
Administrator of the Health Resources and Services Administration to 
the Assistant Secretary for Preparedness and Response.''.
    (b) Support for Emergency Medicine Research.--Part H of title IV of 
the Public Health Service Act (42 U.S.C. 289 et seq.) is amended by 
inserting after the section 498C the following:

``SEC. 498D. SUPPORT FOR EMERGENCY MEDICINE RESEARCH.

    ``(a) Emergency Medical Research.--The Secretary shall support 
Federal programs administered by the National Institutes of Health, the 
Agency for Healthcare Research and Quality, the Health Resources and 
Services Administration, the Centers for Disease Control and 
Prevention, and other agencies involved in improving the emergency care 
system to expand and accelerate research in emergency medical care 
systems and emergency medicine, including--
        ``(1) the basic science of emergency medicine;
        ``(2) the model of service delivery and the components of such 
    models that contribute to enhanced patient health outcomes;
        ``(3) the translation of basic scientific research into 
    improved practice; and
        ``(4) the development of timely and efficient delivery of 
    health services.
    ``(b) Pediatric Emergency Medical Research.--The Secretary shall 
support Federal programs administered by the National Institutes of 
Health, the Agency for Healthcare Research and Quality, the Health 
Resources and Services Administration, the Centers for Disease Control 
and Prevention, and other agencies to coordinate and expand research in 
pediatric emergency medical care systems and pediatric emergency 
medicine, including--
        ``(1) an examination of the gaps and opportunities in pediatric 
    emergency care research and a strategy for the optimal organization 
    and funding of such research;
        ``(2) the role of pediatric emergency services as an integrated 
    component of the overall health system;
        ``(3) system-wide pediatric emergency care planning, 
    preparedness, coordination, and funding;
        ``(4) pediatric training in professional education; and
        ``(5) research in pediatric emergency care, specifically on the 
    efficacy, safety, and health outcomes of medications used for 
    infants, children, and adolescents in emergency care settings in 
    order to improve patient safety.
    ``(c) Impact Research.--The Secretary shall support research to 
determine the estimated economic impact of, and savings that result 
from, the implementation of coordinated emergency care systems.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2014.''.

SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY.

    (a) Trauma Care Centers.--
        (1) Grants for trauma care centers.--Section 1241 of the Public 
    Health Service Act (42 U.S.C. 300d-41) is amended by striking 
    subsections (a) and (b) and inserting the following:
    ``(a) In General.--The Secretary shall establish 3 programs to 
award grants to qualified public, nonprofit Indian Health Service, 
Indian tribal, and urban Indian trauma centers--
        ``(1) to assist in defraying substantial uncompensated care 
    costs;
        ``(2) to further the core missions of such trauma centers, 
    including by addressing costs associated with patient stabilization 
    and transfer, trauma education and outreach, coordination with 
    local and regional trauma systems, essential personnel and other 
    fixed costs, and expenses associated with employee and non-employee 
    physician services; and
        ``(3) to provide emergency relief to ensure the continued and 
    future availability of trauma services.
    ``(b) Minimum Qualifications of Trauma Centers.--
        ``(1) Participation in trauma care system operating under 
    certain professional guidelines.--Except as provided in paragraph 
    (2), the Secretary may not award a grant to a trauma center under 
    subsection (a) unless the trauma center is a participant in a 
    trauma system that substantially complies with section 1213.
        ``(2) Exemption.--Paragraph (1) shall not apply to trauma 
    centers that are located in States with no existing trauma care 
    system.
        ``(3) Qualification for substantial uncompensated care costs.--
    The Secretary shall award substantial uncompensated care grants 
    under subsection (a)(1) only to trauma centers meeting at least 1 
    of the criteria in 1 of the following 3 categories:
            ``(A) Category a.--The criteria for category A are as 
        follows:
                ``(i) At least 40 percent of the visits in the 
            emergency department of the hospital in which the trauma 
            center is located were charity or self-pay patients.
                ``(ii) At least 50 percent of the visits in such 
            emergency department were Medicaid (under title XIX of the 
            Social Security Act (42 U.S.C. 1396 et seq.)) and charity 
            and self-pay patients combined.
            ``(B) Category b.--The criteria for category B are as 
        follows:
                ``(i) At least 35 percent of the visits in the 
            emergency department were charity or self-pay patients.
                ``(ii) At least 50 percent of the visits in the 
            emergency department were Medicaid and charity and self-pay 
            patients combined.
            ``(C) Category c.--The criteria for category C are as 
        follows:
                ``(i) At least 20 percent of the visits in the 
            emergency department were charity or self-pay patients.
                ``(ii) At least 30 percent of the visits in the 
            emergency department were Medicaid and charity and self-pay 
            patients combined.
        ``(4) Trauma centers in 1115 waiver states.--Notwithstanding 
    paragraph (3), the Secretary may award a substantial uncompensated 
    care grant to a trauma center under subsection (a)(1) if the trauma 
    center qualifies for funds under a Low Income Pool or Safety Net 
    Care Pool established through a waiver approved under section 1115 
    of the Social Security Act (42 U.S.C. 1315).
        ``(5) Designation.--The Secretary may not award a grant to a 
    trauma center unless such trauma center is verified by the American 
    College of Surgeons or designated by an equivalent State or local 
    agency.
    ``(c) Additional Requirements.--The Secretary may not award a grant 
to a trauma center under subsection (a)(1) unless such trauma center--
        ``(1) submits to the Secretary a plan satisfactory to the 
    Secretary that demonstrates a continued commitment to serving 
    trauma patients regardless of their ability to pay; and
        ``(2) has policies in place to assist patients who cannot pay 
    for part or all of the care they receive, including a sliding fee 
    scale, and to ensure fair billing and collection practices.''.
        (2) Considerations in making grants.--Section 1242 of the 
    Public Health Service Act (42 U.S.C. 300d-42) is amended by 
    striking subsections (a) and (b) and inserting the following:
    ``(a) Substantial Uncompensated Care Awards.--
        ``(1) In general.--The Secretary shall establish an award basis 
    for each eligible trauma center for grants under section 1241(a)(1) 
    according to the percentage described in paragraph (2), subject to 
    the requirements of section 1241(b)(3).
        ``(2) Percentages.--The applicable percentages are as follows:
            ``(A) With respect to a category A trauma center, 100 
        percent of the uncompensated care costs.
            ``(B) With respect to a category B trauma center, not more 
        than 75 percent of the uncompensated care costs.
            ``(C) With respect to a category C trauma center, not more 
        than 50 percent of the uncompensated care costs.
    ``(b) Core Mission Awards.--
        ``(1) In general.--In awarding grants under section 1241(a)(2), 
    the Secretary shall--
            ``(A) reserve 25 percent of the amount allocated for core 
        mission awards for Level III and Level IV trauma centers; and
            ``(B) reserve 25 percent of the amount allocated for core 
        mission awards for large urban Level I and II trauma centers--
                ``(i) that have at least 1 graduate medical education 
            fellowship in trauma or trauma related specialties for 
            which demand is exceeding supply;
                ``(ii) for which--

                    ``(I) annual uncompensated care costs exceed 
                $10,000,000; or
                    ``(II) at least 20 percent of emergency department 
                visits are charity or self-pay or Medicaid patients; 
                and

                ``(iii) that are not eligible for substantial 
            uncompensated care awards under section 1241(a)(1).
    ``(c) Emergency Awards.--In awarding grants under section 
1241(a)(3), the Secretary shall--
        ``(1) give preference to any application submitted by a trauma 
    center that provides trauma care in a geographic area in which the 
    availability of trauma care has significantly decreased or will 
    significantly decrease if the center is forced to close or 
    downgrade service or growth in demand for trauma services exceeds 
    capacity; and
        ``(2) reallocate any emergency awards funds not obligated due 
    to insufficient, or a lack of qualified, applications to the 
    significant uncompensated care award program.''.
        (3) Certain agreements.--Section 1243 of the Public Health 
    Service Act (42 U.S.C. 300d-43) is amended by striking subsections 
    (a), (b), and (c) and inserting the following:
    ``(a) Maintenance of Financial Support.--The Secretary may require 
a trauma center receiving a grant under section 1241(a) to maintain 
access to trauma services at comparable levels to the prior year during 
the grant period.
    ``(b) Trauma Care Registry.--The Secretary may require the trauma 
center receiving a grant under section 1241(a) to provide data to a 
national and centralized registry of trauma cases, in accordance with 
guidelines developed by the American College of Surgeons, and as the 
Secretary may otherwise require.''.
        (4) General provisions.--Section 1244 of the Public Health 
    Service Act (42 U.S.C. 300d-44) is amended by striking subsections 
    (a), (b), and (c) and inserting the following:
    ``(a) Application.--The Secretary may not award a grant to a trauma 
center under section 1241(a) unless such center submits an application 
for the grant to the Secretary and the application is in such form, is 
made in such manner, and contains such agreements, assurances, and 
information as the Secretary determines to be necessary to carry out 
this part.
    ``(b) Limitation on Duration of Support.--The period during which a 
trauma center receives payments under a grant under section 1241(a)(3) 
shall be for 3 fiscal years, except that the Secretary may waive such 
requirement for a center and authorize such center to receive such 
payments for 1 additional fiscal year.
    ``(c) Limitation on Amount of Grant.--Notwithstanding section 
1242(a), a grant under section 1241 may not be made in an amount 
exceeding $2,000,000 for each fiscal year.
    ``(d) Eligibility.--Except as provided in section 
1242(b)(1)(B)(iii), acquisition of, or eligibility for, a grant under 
section 1241(a) shall not preclude a trauma center from being eligible 
for other grants described in such section.
    ``(e) Funding Distribution.--Of the total amount appropriated for a 
fiscal year under section 1245, 70 percent shall be used for 
substantial uncompensated care awards under section 1241(a)(1), 20 
percent shall be used for core mission awards under section 1241(a)(2), 
and 10 percent shall be used for emergency awards under section 
1241(a)(3).
    ``(f) Minimum Allowance.--Notwithstanding subsection (e), if the 
amount appropriated for a fiscal year under section 1245 is less than 
$25,000,000, all available funding for such fiscal year shall be used 
for substantial uncompensated care awards under section 1241(a)(1).
    ``(g) Substantial Uncompensated Care Award Distribution and 
Proportional Share.--Notwithstanding section 1242(a), of the amount 
appropriated for substantial uncompensated care grants for a fiscal 
year, the Secretary shall--
        ``(1) make available--
            ``(A) 50 percent of such funds for category A trauma center 
        grantees;
            ``(B) 35 percent of such funds for category B trauma center 
        grantees; and
            ``(C) 15 percent of such funds for category C trauma center 
        grantees; and
        ``(2) provide available funds within each category in a manner 
    proportional to the award basis specified in section 1242(a)(2) to 
    each eligible trauma center.
    ``(h) Report.--Beginning 2 years after the date of enactment of the 
Patient Protection and Affordable Care Act, and every 2 years 
thereafter, the Secretary shall biennially report to Congress regarding 
the status of the grants made under section 1241 and on the overall 
financial stability of trauma centers.''.
        (5) Authorization of appropriations.--Section 1245 of the 
    Public Health Service Act (42 U.S.C. 300d-45) is amended to read as 
    follows:

``SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $100,000,000 for fiscal year 2009, and such sums as 
may be necessary for each of fiscal years 2010 through 2015. Such 
authorization of appropriations is in addition to any other 
authorization of appropriations or amounts that are available for such 
purpose.''.
        (6) Definition.--Part D of title XII of the Public Health 
    Service Act (42 U.S.C. 300d-41 et seq.) is amended by adding at the 
    end the following:

``SEC. 1246. DEFINITION.

    ``In this part, the term `uncompensated care costs' means 
unreimbursed costs from serving self-pay, charity, or Medicaid 
patients, without regard to payment under section 1923 of the Social 
Security Act, all of which are attributable to emergency care and 
trauma care, including costs related to subsequent inpatient admissions 
to the hospital.''.
    (b) Trauma Service Availability.--Title XII of the Public Health 
Service Act (42 U.S.C. 300d et seq.) is amended by adding at the end 
the following:

                 ``PART H--TRAUMA SERVICE AVAILABILITY

``SEC. 1281. GRANTS TO STATES.

    ``(a) Establishment.--To promote universal access to trauma care 
services provided by trauma centers and trauma-related physician 
specialties, the Secretary shall provide funding to States to enable 
such States to award grants to eligible entities for the purposes 
described in this section.
    ``(b) Awarding of Grants by States.--Each State may award grants to 
eligible entities within the State for the purposes described in 
subparagraph (d).
    ``(c) Eligibility.--
        ``(1) In general.--To be eligible to receive a grant under 
    subsection (b) an entity shall--
            ``(A) be--
                ``(i) a public or nonprofit trauma center or consortium 
            thereof that meets that requirements of paragraphs (1), 
            (2), and (5) of section 1241(b);
                ``(ii) a safety net public or nonprofit trauma center 
            that meets the requirements of paragraphs (1) through (5) 
            of section 1241(b); or
                ``(iii) a hospital in an underserved area (as defined 
            by the State) that seeks to establish new trauma services; 
            and
            ``(B) submit to the State an application at such time, in 
        such manner, and containing such information as the State may 
        require.
        ``(2) Limitation.--A State shall use at least 40 percent of the 
    amount available to the State under this part for a fiscal year to 
    award grants to safety net trauma centers described in paragraph 
    (1)(A)(ii).
    ``(d) Use of Funds.--The recipient of a grant under subsection (b) 
shall carry out 1 or more of the following activities consistent with 
subsection (b):
        ``(1) Providing trauma centers with funding to support 
    physician compensation in trauma-related physician specialties 
    where shortages exist in the region involved, with priority 
    provided to safety net trauma centers described in subsection 
    (c)(1)(A)(ii).
        ``(2) Providing for individual safety net trauma center fiscal 
    stability and costs related to having service that is available 24 
    hours a day, 7 days a week, with priority provided to safety net 
    trauma centers described in subsection (c)(1)(A)(ii) located in 
    urban, border, and rural areas.
        ``(3) Reducing trauma center overcrowding at specific trauma 
    centers related to throughput of trauma patients.
        ``(4) Establishing new trauma services in underserved areas as 
    defined by the State.
        ``(5) Enhancing collaboration between trauma centers and other 
    hospitals and emergency medical services personnel related to 
    trauma service availability.
        ``(6) Making capital improvements to enhance access and 
    expedite trauma care, including providing helipads and associated 
    safety infrastructure.
        ``(7) Enhancing trauma surge capacity at specific trauma 
    centers.
        ``(8) Ensuring expedient receipt of trauma patients transported 
    by ground or air to the appropriate trauma center.
        ``(9) Enhancing interstate trauma center collaboration.
    ``(e) Limitation.--
        ``(1) In general.--A State may use not more than 20 percent of 
    the amount available to the State under this part for a fiscal year 
    for administrative costs associated with awarding grants and 
    related costs.
        ``(2) Maintenance of effort.--The Secretary may not provide 
    funding to a State under this part unless the State agrees that 
    such funds will be used to supplement and not supplant State 
    funding otherwise available for the activities and costs described 
    in this part.
    ``(f) Distribution of Funds.--The following shall apply with 
respect to grants provided in this part:
        ``(1) Less than $10,000,000.--If the amount of appropriations 
    for this part in a fiscal year is less than $10,000,000, the 
    Secretary shall divide such funding evenly among only those States 
    that have 1 or more trauma centers eligible for funding under 
    section 1241(b)(3)(A).
        ``(2) Less than $20,000,000.--If the amount of appropriations 
    in a fiscal year is less than $20,000,000, the Secretary shall 
    divide such funding evenly among only those States that have 1 or 
    more trauma centers eligible for funding under subparagraphs (A) 
    and (B) of section 1241(b)(3).
        ``(3) Less than $30,000,000.--If the amount of appropriations 
    for this part in a fiscal year is less than $30,000,000, the 
    Secretary shall divide such funding evenly among only those States 
    that have 1 or more trauma centers eligible for funding under 
    section 1241(b)(3).
        ``(4) $30,000,000 or more.--If the amount of appropriations for 
    this part in a fiscal year is $30,000,000 or more, the Secretary 
    shall divide such funding evenly among all States.

``SEC. 1282. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there is authorized to 
be appropriated $100,000,000 for each of fiscal years 2010 through 
2015.''.

SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3503, is further amended by adding at the end the following:

``SEC. 936. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    ``(a) Purpose.--The purpose of this section is to facilitate 
collaborative processes between patients, caregivers or authorized 
representatives, and clinicians that engages the patient, caregiver or 
authorized representative in decisionmaking, provides patients, 
caregivers or authorized representatives with information about trade-
offs among treatment options, and facilitates the incorporation of 
patient preferences and values into the medical plan.
    ``(b) Definitions.--In this section:
        ``(1) Patient decision aid.--The term `patient decision aid' 
    means an educational tool that helps patients, caregivers or 
    authorized representatives understand and communicate their beliefs 
    and preferences related to their treatment options, and to decide 
    with their health care provider what treatments are best for them 
    based on their treatment options, scientific evidence, 
    circumstances, beliefs, and preferences.
        ``(2) Preference sensitive care.--The term `preference 
    sensitive care' means medical care for which the clinical evidence 
    does not clearly support one treatment option such that the 
    appropriate course of treatment depends on the values of the 
    patient or the preferences of the patient, caregivers or authorized 
    representatives regarding the benefits, harms and scientific 
    evidence for each treatment option, the use of such care should 
    depend on the informed patient choice among clinically appropriate 
    treatment options.
    ``(c) Establishment of Independent Standards for Patient Decision 
Aids for Preference Sensitive Care.--
        ``(1) Contract with entity to establish standards and certify 
    patient decision aids.--
            ``(A) In general.--For purposes of supporting consensus-
        based standards for patient decision aids for preference 
        sensitive care and a certification process for patient decision 
        aids for use in the Federal health programs and by other 
        interested parties, the Secretary shall have in effect a 
        contract with the entity with a contract under section 1890 of 
        the Social Security Act. Such contract shall provide that the 
        entity perform the duties described in paragraph (2).
            ``(B) Timing for first contract.--As soon as practicable 
        after the date of the enactment of this section, the Secretary 
        shall enter into the first contract under subparagraph (A).
            ``(C) Period of contract.--A contract under subparagraph 
        (A) shall be for a period of 18 months (except such contract 
        may be renewed after a subsequent bidding process).
        ``(2) Duties.--The following duties are described in this 
    paragraph:
            ``(A) Develop and identify standards for patient decision 
        aids.--The entity shall synthesize evidence and convene a broad 
        range of experts and key stakeholders to develop and identify 
        consensus-based standards to evaluate patient decision aids for 
        preference sensitive care.
            ``(B) Endorse patient decision aids.--The entity shall 
        review patient decision aids and develop a certification 
        process whether patient decision aids meet the standards 
        developed and identified under subparagraph (A). The entity 
        shall give priority to the review and certification of patient 
        decision aids for preference sensitive care.
    ``(d) Program To Develop, Update and Patient Decision Aids To 
Assist Health Care Providers and Patients.--
        ``(1) In general.--The Secretary, acting through the Director, 
    and in coordination with heads of other relevant agencies, such as 
    the Director of the Centers for Disease Control and Prevention and 
    the Director of the National Institutes of Health, shall establish 
    a program to award grants or contracts--
            ``(A) to develop, update, and produce patient decision aids 
        for preference sensitive care to assist health care providers 
        in educating patients, caregivers, and authorized 
        representatives concerning the relative safety, relative 
        effectiveness (including possible health outcomes and impact on 
        functional status), and relative cost of treatment or, where 
        appropriate, palliative care options;
            ``(B) to test such materials to ensure such materials are 
        balanced and evidence based in aiding health care providers and 
        patients, caregivers, and authorized representatives to make 
        informed decisions about patient care and can be easily 
        incorporated into a broad array of practice settings; and
            ``(C) to educate providers on the use of such materials, 
        including through academic curricula.
        ``(2) Requirements for patient decision aids.--Patient decision 
    aids developed and produced pursuant to a grant or contract under 
    paragraph (1)--
            ``(A) shall be designed to engage patients, caregivers, and 
        authorized representatives in informed decisionmaking with 
        health care providers;
            ``(B) shall present up-to-date clinical evidence about the 
        risks and benefits of treatment options in a form and manner 
        that is age-appropriate and can be adapted for patients, 
        caregivers, and authorized representatives from a variety of 
        cultural and educational backgrounds to reflect the varying 
        needs of consumers and diverse levels of health literacy;
            ``(C) shall, where appropriate, explain why there is a lack 
        of evidence to support one treatment option over another; and
            ``(D) shall address health care decisions across the age 
        span, including those affecting vulnerable populations 
        including children.
        ``(3) Distribution.--The Director shall ensure that patient 
    decision aids produced with grants or contracts under this section 
    are available to the public.
        ``(4) Nonduplication of efforts.--The Director shall ensure 
    that the activities under this section of the Agency and other 
    agencies, including the Centers for Disease Control and Prevention 
    and the National Institutes of Health, are free of unnecessary 
    duplication of effort.
    ``(e) Grants To Support Shared Decisionmaking Implementation.--
        ``(1) In general.--The Secretary shall establish a program to 
    provide for the phased-in development, implementation, and 
    evaluation of shared decisionmaking using patient decision aids to 
    meet the objective of improving the understanding of patients of 
    their medical treatment options.
        ``(2) Shared decisionmaking resource centers.--
            ``(A) In general.--The Secretary shall provide grants for 
        the establishment and support of Shared Decisionmaking Resource 
        Centers (referred to in this subsection as `Centers') to 
        provide technical assistance to providers and to develop and 
        disseminate best practices and other information to support and 
        accelerate adoption, implementation, and effective use of 
        patient decision aids and shared decisionmaking by providers.
            ``(B) Objectives.--The objective of a Center is to enhance 
        and promote the adoption of patient decision aids and shared 
        decisionmaking through--
                ``(i) providing assistance to eligible providers with 
            the implementation and effective use of, and training on, 
            patient decision aids; and
                ``(ii) the dissemination of best practices and research 
            on the implementation and effective use of patient decision 
            aids.
        ``(3) Shared decisionmaking participation grants.--
            ``(A) In general.--The Secretary shall provide grants to 
        health care providers for the development and implementation of 
        shared decisionmaking techniques and to assess the use of such 
        techniques.
            ``(B) Preference.--In order to facilitate the use of best 
        practices, the Secretary shall provide a preference in making 
        grants under this subsection to health care providers who 
        participate in training by Shared Decisionmaking Resource 
        Centers or comparable training.
            ``(C) Limitation.--Funds under this paragraph shall not be 
        used to purchase or implement use of patient decision aids 
        other than those certified under the process identified in 
        subsection (c).
        ``(4) Guidance.--The Secretary may issue guidance to eligible 
    grantees under this subsection on the use of patient decision aids.
    ``(f) Funding.--For purposes of carrying out this section there are 
authorized to be appropriated such sums as may be necessary for fiscal 
year 2010 and each subsequent fiscal year.''.

SEC. 3507. PRESENTATION OF PRESCRIPTION DRUG BENEFIT AND RISK 
              INFORMATION.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Commissioner of Food and Drugs, shall determine whether the addition of 
quantitative summaries of the benefits and risks of prescription drugs 
in a standardized format (such as a table or drug facts box) to the 
promotional labeling or print advertising of such drugs would improve 
health care decisionmaking by clinicians and patients and consumers.
    (b) Review and Consultation.--In making the determination under 
subsection (a), the Secretary shall review all available scientific 
evidence and research on decisionmaking and social and cognitive 
psychology and consult with drug manufacturers, clinicians, patients 
and consumers, experts in health literacy, representatives of racial 
and ethnic minorities, and experts in women's and pediatric health.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that 
provides--
        (1) the determination by the Secretary under subsection (a); 
    and
        (2) the reasoning and analysis underlying that determination.
    (d) Authority.--If the Secretary determines under subsection (a) 
that the addition of quantitative summaries of the benefits and risks 
of prescription drugs in a standardized format (such as a table or drug 
facts box) to the promotional labeling or print advertising of such 
drugs would improve health care decisionmaking by clinicians and 
patients and consumers, then the Secretary, not later than 3 years 
after the date of submission of the report under subsection (c), shall 
promulgate proposed regulations as necessary to implement such format.
    (e) Clarification.--Nothing in this section shall be construed to 
restrict the existing authorities of the Secretary with respect to 
benefit and risk information.

SEC. 3508. DEMONSTRATION PROGRAM TO INTEGRATE QUALITY IMPROVEMENT AND 
              PATIENT SAFETY TRAINING INTO CLINICAL EDUCATION OF HEALTH 
              PROFESSIONALS.

    (a) In General.--The Secretary may award grants to eligible 
entities or consortia under this section to carry out demonstration 
projects to develop and implement academic curricula that integrates 
quality improvement and patient safety in the clinical education of 
health professionals. Such awards shall be made on a competitive basis 
and pursuant to peer review.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity or consortium shall--
        (1) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require;
        (2) be or include--
            (A) a health professions school;
            (B) a school of public health;
            (C) a school of social work;
            (D) a school of nursing;
            (E) a school of pharmacy;
            (F) an institution with a graduate medical education 
        program; or
            (G) a school of health care administration;
        (3) collaborate in the development of curricula described in 
    subsection (a) with an organization that accredits such school or 
    institution;
        (4) provide for the collection of data regarding the 
    effectiveness of the demonstration project; and
        (5) provide matching funds in accordance with subsection (c).
    (c) Matching Funds.--
        (1) In general.--The Secretary may award a grant to an entity 
    or consortium under this section only if the entity or consortium 
    agrees to make available non-Federal contributions toward the costs 
    of the program to be funded under the grant in an amount that is 
    not less than $1 for each $5 of Federal funds provided under the 
    grant.
        (2) Determination of amount contributed.--Non-Federal 
    contributions under paragraph (1) may be in cash or in-kind, fairly 
    evaluated, including equipment or services. Amounts provided by the 
    Federal Government, or services assisted or subsidized to any 
    significant extent by the Federal Government, may not be included 
    in determining the amount of such contributions.
    (d) Evaluation.--The Secretary shall take such action as may be 
necessary to evaluate the projects funded under this section and 
publish, make publicly available, and disseminate the results of such 
evaluations on as wide a basis as is practicable.
    (e) Reports.--Not later than 2 years after the date of enactment of 
this section, and annually thereafter, the Secretary shall submit to 
the Committee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate and the Committee on Energy and 
Commerce and the Committee on Ways and Means of the House of 
Representatives a report that--
        (1) describes the specific projects supported under this 
    section; and
        (2) contains recommendations for Congress based on the 
    evaluation conducted under subsection (d).

SEC. 3509. IMPROVING WOMEN'S HEALTH.

    (a) Health and Human Services Office on Women's Health.--
        (1) Establishment.--Part A of title II of the Public Health 
    Service Act (42 U.S.C. 202 et seq.) is amended by adding at the end 
    the following:

``SEC. 229. HEALTH AND HUMAN SERVICES OFFICE ON WOMEN'S HEALTH.

    ``(a) Establishment of Office.--There is established within the 
Office of the Secretary, an Office on Women's Health (referred to in 
this section as the `Office'). The Office shall be headed by a Deputy 
Assistant Secretary for Women's Health who may report to the Secretary.
    ``(b) Duties.--The Secretary, acting through the Office, with 
respect to the health concerns of women, shall--
        ``(1) establish short-range and long-range goals and objectives 
    within the Department of Health and Human Services and, as relevant 
    and appropriate, coordinate with other appropriate offices on 
    activities within the Department that relate to disease prevention, 
    health promotion, service delivery, research, and public and health 
    care professional education, for issues of particular concern to 
    women throughout their lifespan;
        ``(2) provide expert advice and consultation to the Secretary 
    concerning scientific, legal, ethical, and policy issues relating 
    to women's health;
        ``(3) monitor the Department of Health and Human Services' 
    offices, agencies, and regional activities regarding women's health 
    and identify needs regarding the coordination of activities, 
    including intramural and extramural multidisciplinary activities;
        ``(4) establish a Department of Health and Human Services 
    Coordinating Committee on Women's Health, which shall be chaired by 
    the Deputy Assistant Secretary for Women's Health and composed of 
    senior level representatives from each of the agencies and offices 
    of the Department of Health and Human Services;
        ``(5) establish a National Women's Health Information Center 
    to--
            ``(A) facilitate the exchange of information regarding 
        matters relating to health information, health promotion, 
        preventive health services, research advances, and education in 
        the appropriate use of health care;
            ``(B) facilitate access to such information;
            ``(C) assist in the analysis of issues and problems 
        relating to the matters described in this paragraph; and
            ``(D) provide technical assistance with respect to the 
        exchange of information (including facilitating the development 
        of materials for such technical assistance);
        ``(6) coordinate efforts to promote women's health programs and 
    policies with the private sector; and
        ``(7) through publications and any other means appropriate, 
    provide for the exchange of information between the Office and 
    recipients of grants, contracts, and agreements under subsection 
    (c), and between the Office and health professionals and the 
    general public.
    ``(c) Grants and Contracts Regarding Duties.--
        ``(1) Authority.--In carrying out subsection (b), the Secretary 
    may make grants to, and enter into cooperative agreements, 
    contracts, and interagency agreements with, public and private 
    entities, agencies, and organizations.
        ``(2) Evaluation and dissemination.--The Secretary shall 
    directly or through contracts with public and private entities, 
    agencies, and organizations, provide for evaluations of projects 
    carried out with financial assistance provided under paragraph (1) 
    and for the dissemination of information developed as a result of 
    such projects.
    ``(d) Reports.--Not later than 1 year after the date of enactment 
of this section, and every second year thereafter, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
describing the activities carried out under this section during the 
period for which the report is being prepared.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
        (2) Transfer of functions.--There are transferred to the Office 
    on Women's Health (established under section 229 of the Public 
    Health Service Act, as added by this section), all functions 
    exercised by the Office on Women's Health of the Public Health 
    Service prior to the date of enactment of this section, including 
    all personnel and compensation authority, all delegation and 
    assignment authority, and all remaining appropriations. All orders, 
    determinations, rules, regulations, permits, agreements, grants, 
    contracts, certificates, licenses, registrations, privileges, and 
    other administrative actions that--
            (A) have been issued, made, granted, or allowed to become 
        effective by the President, any Federal agency or official 
        thereof, or by a court of competent jurisdiction, in the 
        performance of functions transferred under this paragraph; and
            (B) are in effect at the time this section takes effect, or 
        were final before the date of enactment of this section and are 
        to become effective on or after such date,
    shall continue in effect according to their terms until modified, 
    terminated, superseded, set aside, or revoked in accordance with 
    law by the President, the Secretary, or other authorized official, 
    a court of competent jurisdiction, or by operation of law.
    (b) Centers for Disease Control and Prevention Office of Women's 
Health.--Part A of title III of the Public Health Service Act (42 
U.S.C. 241 et seq.) is amended by adding at the end the following:

``SEC. 310A. CENTERS FOR DISEASE CONTROL AND PREVENTION OFFICE OF 
              WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director of the Centers for Disease Control and Prevention, an office 
to be known as the Office of Women's Health (referred to in this 
section as the `Office'). The Office shall be headed by a director who 
shall be appointed by the Director of such Centers.
    ``(b) Purpose.--The Director of the Office shall--
        ``(1) report to the Director of the Centers for Disease Control 
    and Prevention on the current level of the Centers' activity 
    regarding women's health conditions across, where appropriate, age, 
    biological, and sociocultural contexts, in all aspects of the 
    Centers' work, including prevention programs, public and 
    professional education, services, and treatment;
        ``(2) establish short-range and long-range goals and objectives 
    within the Centers for women's health and, as relevant and 
    appropriate, coordinate with other appropriate offices on 
    activities within the Centers that relate to prevention, research, 
    education and training, service delivery, and policy development, 
    for issues of particular concern to women;
        ``(3) identify projects in women's health that should be 
    conducted or supported by the Centers;
        ``(4) consult with health professionals, nongovernmental 
    organizations, consumer organizations, women's health 
    professionals, and other individuals and groups, as appropriate, on 
    the policy of the Centers with regard to women; and
        ``(5) serve as a member of the Department of Health and Human 
    Services Coordinating Committee on Women's Health (established 
    under section 229(b)(4)).
    ``(c) Definition.--As used in this section, the term `women's 
health conditions', with respect to women of all age, ethnic, and 
racial groups, means diseases, disorders, and conditions--
        ``(1) unique to, significantly more serious for, or 
    significantly more prevalent in women; and
        ``(2) for which the factors of medical risk or type of medical 
    intervention are different for women, or for which there is 
    reasonable evidence that indicates that such factors or types may 
    be different for women.
    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (c) Office of Women's Health Research.--Section 486(a) of the 
Public Health Service Act (42 U.S.C. 287d(a)) is amended by inserting 
``and who shall report directly to the Director'' before the period at 
the end thereof.
    (d) Substance Abuse and Mental Health Services Administration.--
Section 501(f) of the Public Health Service Act (42 U.S.C. 290aa(f)) is 
amended--
        (1) in paragraph (1), by inserting ``who shall report directly 
    to the Administrator'' before the period;
        (2) by redesignating paragraph (4) as paragraph (5); and
        (3) by inserting after paragraph (3), the following:
        ``(4) Office.--Nothing in this subsection shall be construed to 
    preclude the Secretary from establishing within the Substance Abuse 
    and Mental Health Administration an Office of Women's Health.''.
    (e) Agency for Healthcare Research and Quality Activities Regarding 
Women's Health.--Part C of title IX of the Public Health Service Act 
(42 U.S.C. 299c et seq.) is amended--
        (1) by redesignating sections 925 and 926 as sections 926 and 
    927, respectively; and
        (2) by inserting after section 924 the following:

``SEC. 925. ACTIVITIES REGARDING WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director, an Office of Women's Health and Gender-Based Research 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Director of 
Healthcare and Research Quality.
    ``(b) Purpose.--The official designated under subsection (a) 
shall--
        ``(1) report to the Director on the current Agency level of 
    activity regarding women's health, across, where appropriate, age, 
    biological, and sociocultural contexts, in all aspects of Agency 
    work, including the development of evidence reports and clinical 
    practice protocols and the conduct of research into patient 
    outcomes, delivery of health care services, quality of care, and 
    access to health care;
        ``(2) establish short-range and long-range goals and objectives 
    within the Agency for research important to women's health and, as 
    relevant and appropriate, coordinate with other appropriate offices 
    on activities within the Agency that relate to health services and 
    medical effectiveness research, for issues of particular concern to 
    women;
        ``(3) identify projects in women's health that should be 
    conducted or supported by the Agency;
        ``(4) consult with health professionals, nongovernmental 
    organizations, consumer organizations, women's health 
    professionals, and other individuals and groups, as appropriate, on 
    Agency policy with regard to women; and
        ``(5) serve as a member of the Department of Health and Human 
    Services Coordinating Committee on Women's Health (established 
    under section 229(b)(4)).''.
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (f) Health Resources and Services Administration Office of Women's 
Health.--Title VII of the Social Security Act (42 U.S.C. 901 et seq.) 
is amended by adding at the end the following:

``SEC. 713. OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--The Secretary shall establish within the 
Office of the Administrator of the Health Resources and Services 
Administration, an office to be known as the Office of Women's Health. 
The Office shall be headed by a director who shall be appointed by the 
Administrator.
    ``(b) Purpose.--The Director of the Office shall--
        ``(1) report to the Administrator on the current Administration 
    level of activity regarding women's health across, where 
    appropriate, age, biological, and sociocultural contexts;
        ``(2) establish short-range and long-range goals and objectives 
    within the Health Resources and Services Administration for women's 
    health and, as relevant and appropriate, coordinate with other 
    appropriate offices on activities within the Administration that 
    relate to health care provider training, health service delivery, 
    research, and demonstration projects, for issues of particular 
    concern to women;
        ``(3) identify projects in women's health that should be 
    conducted or supported by the bureaus of the Administration;
        ``(4) consult with health professionals, nongovernmental 
    organizations, consumer organizations, women's health 
    professionals, and other individuals and groups, as appropriate, on 
    Administration policy with regard to women; and
        ``(5) serve as a member of the Department of Health and Human 
    Services Coordinating Committee on Women's Health (established 
    under section 229(b)(4) of the Public Health Service Act).
    ``(c) Continued Administration of Existing Programs.--The Director 
of the Office shall assume the authority for the development, 
implementation, administration, and evaluation of any projects carried 
out through the Health Resources and Services Administration relating 
to women's health on the date of enactment of this section.
    ``(d) Definitions.--For purposes of this section:
        ``(1) Administration.--The term `Administration' means the 
    Health Resources and Services Administration.
        ``(2) Administrator.--The term `Administrator' means the 
    Administrator of the Health Resources and Services Administration.
        ``(3) Office.--The term `Office' means the Office of Women's 
    Health established under this section in the Administration.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (g) Food and Drug Administration Office of Women's Health.--Chapter 
X of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 391 et seq.) 
is amended by adding at the end the following:

``SEC. 1011. OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Commissioner, an office to be known as the Office of Women's Health 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Commissioner of Food 
and Drugs.
    ``(b) Purpose.--The Director of the Office shall--
        ``(1) report to the Commissioner of Food and Drugs on current 
    Food and Drug Administration (referred to in this section as the 
    `Administration') levels of activity regarding women's 
    participation in clinical trials and the analysis of data by sex in 
    the testing of drugs, medical devices, and biological products 
    across, where appropriate, age, biological, and sociocultural 
    contexts;
        ``(2) establish short-range and long-range goals and objectives 
    within the Administration for issues of particular concern to 
    women's health within the jurisdiction of the Administration, 
    including, where relevant and appropriate, adequate inclusion of 
    women and analysis of data by sex in Administration protocols and 
    policies;
        ``(3) provide information to women and health care providers on 
    those areas in which differences between men and women exist;
        ``(4) consult with pharmaceutical, biologics, and device 
    manufacturers, health professionals with expertise in women's 
    issues, consumer organizations, and women's health professionals on 
    Administration policy with regard to women;
        ``(5) make annual estimates of funds needed to monitor clinical 
    trials and analysis of data by sex in accordance with needs that 
    are identified; and
        ``(6) serve as a member of the Department of Health and Human 
    Services Coordinating Committee on Women's Health (established 
    under section 229(b)(4) of the Public Health Service Act).
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (h) No New Regulatory Authority.--Nothing in this section and the 
amendments made by this section may be construed as establishing 
regulatory authority or modifying any existing regulatory authority.
    (i) Limitation on Termination.--Notwithstanding any other provision 
of law, a Federal office of women's health (including the Office of 
Research on Women's Health of the National Institutes of Health) or 
Federal appointive position with primary responsibility over women's 
health issues (including the Associate Administrator for Women's 
Services under the Substance Abuse and Mental Health Services 
Administration) that is in existence on the date of enactment of this 
section shall not be terminated, reorganized, or have any of it's 
powers or duties transferred unless such termination, reorganization, 
or transfer is approved by Congress through the adoption of a 
concurrent resolution of approval.
    (j) Rule of Construction.--Nothing in this section (or the 
amendments made by this section) shall be construed to limit the 
authority of the Secretary of Health and Human Services with respect to 
women's health, or with respect to activities carried out through the 
Department of Health and Human Services on the date of enactment of 
this section.

SEC. 3510. PATIENT NAVIGATOR PROGRAM.

    Section 340A of the Public Health Service Act (42 U.S.C. 256a) is 
amended--
        (1) by striking subsection (d)(3) and inserting the following:
        ``(3) Limitations on grant period.--In carrying out this 
    section, the Secretary shall ensure that the total period of a 
    grant does not exceed 4 years.'';
        (2) in subsection (e), by adding at the end the following:
        ``(3) Minimum core proficiencies.--The Secretary shall not 
    award a grant to an entity under this section unless such entity 
    provides assurances that patient navigators recruited, assigned, 
    trained, or employed using grant funds meet minimum core 
    proficiencies, as defined by the entity that submits the 
    application, that are tailored for the main focus or intervention 
    of the navigator involved.''; and
        (3) in subsection (m)--
            (A) in paragraph (1), by striking ``and $3,500,000 for 
        fiscal year 2010.'' and inserting ``$3,500,000 for fiscal year 
        2010, and such sums as may be necessary for each of fiscal 
        years 2011 through 2015.''; and
            (B) in paragraph (2), by striking ``2010'' and inserting 
        ``2015''.

SEC. 3511. AUTHORIZATION OF APPROPRIATIONS.

    Except where otherwise provided in this subtitle (or an amendment 
made by this subtitle), there is authorized to be appropriated such 
sums as may be necessary to carry out this subtitle (and such 
amendments made by this subtitle).

   Subtitle G--Protecting and Improving Guaranteed Medicare Benefits

SEC. 3601. PROTECTING AND IMPROVING GUARANTEED MEDICARE BENEFITS.

    (a) Protecting Guaranteed Medicare Benefits.--Nothing in the 
provisions of, or amendments made by, this Act shall result in a 
reduction of guaranteed benefits under title XVIII of the Social 
Security Act.
    (b) Ensuring That Medicare Savings Benefit the Medicare Program and 
Medicare Beneficiaries.--Savings generated for the Medicare program 
under title XVIII of the Social Security Act under the provisions of, 
and amendments made by, this Act shall extend the solvency of the 
Medicare trust funds, reduce Medicare premiums and other cost-sharing 
for beneficiaries, and improve or expand guaranteed Medicare benefits 
and protect access to Medicare providers.

SEC. 3602. NO CUTS IN GUARANTEED BENEFITS.

    Nothing in this Act shall result in the reduction or elimination of 
any benefits guaranteed by law to participants in Medicare Advantage 
plans.

  TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH
  Subtitle A--Modernizing Disease Prevention and Public Health Systems

SEC. 4001. NATIONAL PREVENTION, HEALTH PROMOTION AND PUBLIC HEALTH 
              COUNCIL.

    (a) Establishment.--The President shall establish, within the 
Department of Health and Human Services, a council to be known as the 
``National Prevention, Health Promotion and Public Health Council'' 
(referred to in this section as the ``Council'').
    (b) Chairperson.--The President shall appoint the Surgeon General 
to serve as the chairperson of the Council.
    (c) Composition.--The Council shall be composed of--
        (1) the Secretary of Health and Human Services;
        (2) the Secretary of Agriculture;
        (3) the Secretary of Education;
        (4) the Chairman of the Federal Trade Commission;
        (5) the Secretary of Transportation;
        (6) the Secretary of Labor;
        (7) the Secretary of Homeland Security;
        (8) the Administrator of the Environmental Protection Agency;
        (9) the Director of the Office of National Drug Control Policy;
        (10) the Director of the Domestic Policy Council;
        (11) the Assistant Secretary for Indian Affairs;
        (12) the Chairman of the Corporation for National and Community 
    Service; and
        (13) the head of any other Federal agency that the chairperson 
    determines is appropriate.
    (d) Purposes and Duties.--The Council shall--
        (1) provide coordination and leadership at the Federal level, 
    and among all Federal departments and agencies, with respect to 
    prevention, wellness and health promotion practices, the public 
    health system, and integrative health care in the United States;
        (2) after obtaining input from relevant stakeholders, develop a 
    national prevention, health promotion, public health, and 
    integrative health care strategy that incorporates the most 
    effective and achievable means of improving the health status of 
    Americans and reducing the incidence of preventable illness and 
    disability in the United States;
        (3) provide recommendations to the President and Congress 
    concerning the most pressing health issues confronting the United 
    States and changes in Federal policy to achieve national wellness, 
    health promotion, and public health goals, including the reduction 
    of tobacco use, sedentary behavior, and poor nutrition;
        (4) consider and propose evidence-based models, policies, and 
    innovative approaches for the promotion of transformative models of 
    prevention, integrative health, and public health on individual and 
    community levels across the United States;
        (5) establish processes for continual public input, including 
    input from State, regional, and local leadership communities and 
    other relevant stakeholders, including Indian tribes and tribal 
    organizations;
        (6) submit the reports required under subsection (g); and
        (7) carry out other activities determined appropriate by the 
    President.
    (e) Meetings.--The Council shall meet at the call of the 
Chairperson.
    (f) Advisory Group.--
        (1) In general.--The President shall establish an Advisory 
    Group to the Council to be known as the ``Advisory Group on 
    Prevention, Health Promotion, and Integrative and Public Health'' 
    (hereafter referred to in this section as the ``Advisory Group''). 
    The Advisory Group shall be within the Department of Health and 
    Human Services and report to the Surgeon General.
        (2) Composition.--
            (A) In general.--The Advisory Group shall be composed of 
        not more than 25 non-Federal members to be appointed by the 
        President.
            (B) Representation.--In appointing members under 
        subparagraph (A), the President shall ensure that the Advisory 
        Group includes a diverse group of licensed health 
        professionals, including integrative health practitioners who 
        have expertise in--
                (i) worksite health promotion;
                (ii) community services, including community health 
            centers;
                (iii) preventive medicine;
                (iv) health coaching;
                (v) public health education;
                (vi) geriatrics; and
                (vii) rehabilitation medicine.
        (3) Purposes and duties.--The Advisory Group shall develop 
    policy and program recommendations and advise the Council on 
    lifestyle-based chronic disease prevention and management, 
    integrative health care practices, and health promotion.
    (g) National Prevention and Health Promotion Strategy.--Not later 
than 1 year after the date of enactment of this Act, the Chairperson, 
in consultation with the Council, shall develop and make public a 
national prevention, health promotion and public health strategy, and 
shall review and revise such strategy periodically. Such strategy 
shall--
        (1) set specific goals and objectives for improving the health 
    of the United States through federally-supported prevention, health 
    promotion, and public health programs, consistent with ongoing goal 
    setting efforts conducted by specific agencies;
        (2) establish specific and measurable actions and timelines to 
    carry out the strategy, and determine accountability for meeting 
    those timelines, within and across Federal departments and 
    agencies; and
        (3) make recommendations to improve Federal efforts relating to 
    prevention, health promotion, public health, and integrative health 
    care practices to ensure Federal efforts are consistent with 
    available standards and evidence.
    (h) Report.--Not later than July 1, 2010, and annually thereafter 
through January 1, 2015, the Council shall submit to the President and 
the relevant committees of Congress, a report that--
        (1) describes the activities and efforts on prevention, health 
    promotion, and public health and activities to develop a national 
    strategy conducted by the Council during the period for which the 
    report is prepared;
        (2) describes the national progress in meeting specific 
    prevention, health promotion, and public health goals defined in 
    the strategy and further describes corrective actions recommended 
    by the Council and taken by relevant agencies and organizations to 
    meet these goals;
        (3) contains a list of national priorities on health promotion 
    and disease prevention to address lifestyle behavior modification 
    (smoking cessation, proper nutrition, appropriate exercise, mental 
    health, behavioral health, substance use disorder, and domestic 
    violence screenings) and the prevention measures for the 5 leading 
    disease killers in the United States;
        (4) contains specific science-based initiatives to achieve the 
    measurable goals of Healthy People 2010 regarding nutrition, 
    exercise, and smoking cessation, and targeting the 5 leading 
    disease killers in the United States;
        (5) contains specific plans for consolidating Federal health 
    programs and Centers that exist to promote healthy behavior and 
    reduce disease risk (including eliminating programs and offices 
    determined to be ineffective in meeting the priority goals of 
    Healthy People 2010);
        (6) contains specific plans to ensure that all Federal health 
    care programs are fully coordinated with science-based prevention 
    recommendations by the Director of the Centers for Disease Control 
    and Prevention; and
        (7) contains specific plans to ensure that all non-Department 
    of Health and Human Services prevention programs are based on the 
    science-based guidelines developed by the Centers for Disease 
    Control and Prevention under paragraph (4).
    (i) Periodic Reviews.--The Secretary and the Comptroller General of 
the United States shall jointly conduct periodic reviews, not less than 
every 5 years, and evaluations of every Federal disease prevention and 
health promotion initiative, program, and agency. Such reviews shall be 
evaluated based on effectiveness in meeting metrics-based goals with an 
analysis posted on such agencies' public Internet websites.

SEC. 4002. PREVENTION AND PUBLIC HEALTH FUND.

    (a) Purpose.--It is the purpose of this section to establish a 
Prevention and Public Health Fund (referred to in this section as the 
``Fund''), to be administered through the Department of Health and 
Human Services, Office of the Secretary, to provide for expanded and 
sustained national investment in prevention and public health programs 
to improve health and help restrain the rate of growth in private and 
public sector health care costs.
    (b) Funding.--There are hereby authorized to be appropriated, and 
appropriated, to the Fund, out of any monies in the Treasury not 
otherwise appropriated--
        (1) for fiscal year 2010, $500,000,000;
        (2) for fiscal year 2011, $750,000,000;
        (3) for fiscal year 2012, $1,000,000,000;
        (4) for fiscal year 2013, $1,250,000,000;
        (5) for fiscal year 2014, $1,500,000,000; and
        (6) for fiscal year 2015, and each fiscal year thereafter, 
    $2,000,000,000.
    (c) Use of Fund.--The Secretary shall transfer amounts in the Fund 
to accounts within the Department of Health and Human Services to 
increase funding, over the fiscal year 2008 level, for programs 
authorized by the Public Health Service Act, for prevention, wellness, 
and public health activities including prevention research and health 
screenings, such as the Community Transformation grant program, the 
Education and Outreach Campaign for Preventive Benefits, and 
immunization programs.
    (d) Transfer Authority.--The Committee on Appropriations of the 
Senate and the Committee on Appropriations of the House of 
Representatives may provide for the transfer of funds in the Fund to 
eligible activities under this section, subject to subsection (c).

SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES.

    (a) Preventive Services Task Force.--Section 915 of the Public 
Health Service Act (42 U.S.C. 299b-4) is amended by striking subsection 
(a) and inserting the following:
    ``(a) Preventive Services Task Force.--
        ``(1) Establishment and purpose.--The Director shall convene an 
    independent Preventive Services Task Force (referred to in this 
    subsection as the `Task Force') to be composed of individuals with 
    appropriate expertise. Such Task Force shall review the scientific 
    evidence related to the effectiveness, appropriateness, and cost-
    effectiveness of clinical preventive services for the purpose of 
    developing recommendations for the health care community, and 
    updating previous clinical preventive recommendations, to be 
    published in the Guide to Clinical Preventive Services (referred to 
    in this section as the `Guide'), for individuals and organizations 
    delivering clinical services, including primary care professionals, 
    health care systems, professional societies, employers, community 
    organizations, non-profit organizations, Congress and other policy-
    makers, governmental public health agencies, health care quality 
    organizations, and organizations developing national health 
    objectives. Such recommendations shall consider clinical preventive 
    best practice recommendations from the Agency for Healthcare 
    Research and Quality, the National Institutes of Health, the 
    Centers for Disease Control and Prevention, the Institute of 
    Medicine, specialty medical associations, patient groups, and 
    scientific societies.
        ``(2) Duties.--The duties of the Task Force shall include--
            ``(A) the development of additional topic areas for new 
        recommendations and interventions related to those topic areas, 
        including those related to specific sub-populations and age 
        groups;
            ``(B) at least once during every 5-year period, review 
        interventions and update recommendations related to existing 
        topic areas, including new or improved techniques to assess the 
        health effects of interventions;
            ``(C) improved integration with Federal Government health 
        objectives and related target setting for health improvement;
            ``(D) the enhanced dissemination of recommendations;
            ``(E) the provision of technical assistance to those health 
        care professionals, agencies and organizations that request 
        help in implementing the Guide recommendations; and
            ``(F) the submission of yearly reports to Congress and 
        related agencies identifying gaps in research, such as 
        preventive services that receive an insufficient evidence 
        statement, and recommending priority areas that deserve further 
        examination, including areas related to populations and age 
        groups not adequately addressed by current recommendations.
        ``(3) Role of agency.--The Agency shall provide ongoing 
    administrative, research, and technical support for the operations 
    of the Task Force, including coordinating and supporting the 
    dissemination of the recommendations of the Task Force, ensuring 
    adequate staff resources, and assistance to those organizations 
    requesting it for implementation of the Guide's recommendations.
        ``(4) Coordination with community preventive services task 
    force.--The Task Force shall take appropriate steps to coordinate 
    its work with the Community Preventive Services Task Force and the 
    Advisory Committee on Immunization Practices, including the 
    examination of how each task force's recommendations interact at 
    the nexus of clinic and community.
        ``(5) Operation.--Operation. In carrying out the duties under 
    paragraph (2), the Task Force is not subject to the provisions of 
    Appendix 2 of title 5, United States Code.
        ``(6) Independence.--All members of the Task Force convened 
    under this subsection, and any recommendations made by such 
    members, shall be independent and, to the extent practicable, not 
    subject to political pressure.
        ``(7) Authorization of appropriations.--There are authorized to 
    be appropriated such sums as may be necessary for each fiscal year 
    to carry out the activities of the Task Force.''.
    (b) Community Preventive Services Task Force.--
        (1) In general.--Part P of title III of the Public Health 
    Service Act, as amended by paragraph (2), is amended by adding at 
    the end the following:

``SEC. 399U. COMMUNITY PREVENTIVE SERVICES TASK FORCE.

    ``(a) Establishment and Purpose.--The Director of the Centers for 
Disease Control and Prevention shall convene an independent Community 
Preventive Services Task Force (referred to in this subsection as the 
`Task Force') to be composed of individuals with appropriate expertise. 
Such Task Force shall review the scientific evidence related to the 
effectiveness, appropriateness, and cost-effectiveness of community 
preventive interventions for the purpose of developing recommendations, 
to be published in the Guide to Community Preventive Services (referred 
to in this section as the `Guide'), for individuals and organizations 
delivering population-based services, including primary care 
professionals, health care systems, professional societies, employers, 
community organizations, non-profit organizations, schools, 
governmental public health agencies, Indian tribes, tribal 
organizations and urban Indian organizations, medical groups, Congress 
and other policy-makers. Community preventive services include any 
policies, programs, processes or activities designed to affect or 
otherwise affecting health at the population level.
    ``(b) Duties.--The duties of the Task Force shall include--
        ``(1) the development of additional topic areas for new 
    recommendations and interventions related to those topic areas, 
    including those related to specific populations and age groups, as 
    well as the social, economic and physical environments that can 
    have broad effects on the health and disease of populations and 
    health disparities among sub-populations and age groups;
        ``(2) at least once during every 5-year period, review 
    interventions and update recommendations related to existing topic 
    areas, including new or improved techniques to assess the health 
    effects of interventions, including health impact assessment and 
    population health modeling;
        ``(3) improved integration with Federal Government health 
    objectives and related target setting for health improvement;
        ``(4) the enhanced dissemination of recommendations;
        ``(5) the provision of technical assistance to those health 
    care professionals, agencies, and organizations that request help 
    in implementing the Guide recommendations; and
        ``(6) providing yearly reports to Congress and related agencies 
    identifying gaps in research and recommending priority areas that 
    deserve further examination, including areas related to populations 
    and age groups not adequately addressed by current recommendations.
    ``(c) Role of Agency.--The Director shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force, ensuring adequate staff 
resources, and assistance to those organizations requesting it for 
implementation of Guide recommendations.
    ``(d) Coordination With Preventive Services Task Force.--The Task 
Force shall take appropriate steps to coordinate its work with the U.S. 
Preventive Services Task Force and the Advisory Committee on 
Immunization Practices, including the examination of how each task 
force's recommendations interact at the nexus of clinic and community.
    ``(e) Operation.--In carrying out the duties under subsection (b), 
the Task Force shall not be subject to the provisions of Appendix 2 of 
title 5, United States Code.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each fiscal year to 
carry out the activities of the Task Force.''.
        (2) Technical amendments.--
            (A) Section 399R of the Public Health Service Act (as added 
        by section 2 of the ALS Registry Act (Public Law 110-373; 122 
        Stat. 4047)) is redesignated as section 399S.
            (B) Section 399R of such Act (as added by section 3 of the 
        Prenatally and Postnatally Diagnosed Conditions Awareness Act 
        (Public Law 110-374; 122 Stat. 4051)) is redesignated as 
        section 399T.

SEC. 4004. EDUCATION AND OUTREACH CAMPAIGN REGARDING PREVENTIVE 
              BENEFITS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall provide for 
the planning and implementation of a national public-private 
partnership for a prevention and health promotion outreach and 
education campaign to raise public awareness of health improvement 
across the life span. Such campaign shall include the dissemination of 
information that--
        (1) describes the importance of utilizing preventive services 
    to promote wellness, reduce health disparities, and mitigate 
    chronic disease;
        (2) promotes the use of preventive services recommended by the 
    United States Preventive Services Task Force and the Community 
    Preventive Services Task Force;
        (3) encourages healthy behaviors linked to the prevention of 
    chronic diseases;
        (4) explains the preventive services covered under health plans 
    offered through a Gateway;
        (5) describes additional preventive care supported by the 
    Centers for Disease Control and Prevention, the Health Resources 
    and Services Administration, the Substance Abuse and Mental Health 
    Services Administration, the Advisory Committee on Immunization 
    Practices, and other appropriate agencies; and
        (6) includes general health promotion information.
    (b) Consultation.--In coordinating the campaign under subsection 
(a), the Secretary shall consult with the Institute of Medicine to 
provide ongoing advice on evidence-based scientific information for 
policy, program development, and evaluation.
    (c) Media Campaign.--
        (1) In general.--Not later than 1 year after the date of 
    enactment of this Act, the Secretary, acting through the Director 
    of the Centers for Disease Control and Prevention, shall establish 
    and implement a national science-based media campaign on health 
    promotion and disease prevention.
        (2) Requirement of campaign.--The campaign implemented under 
    paragraph (1)--
            (A) shall be designed to address proper nutrition, regular 
        exercise, smoking cessation, obesity reduction, the 5 leading 
        disease killers in the United States, and secondary prevention 
        through disease screening promotion;
            (B) shall be carried out through competitively bid 
        contracts awarded to entities providing for the professional 
        production and design of such campaign;
            (C) may include the use of television, radio, Internet, and 
        other commercial marketing venues and may be targeted to 
        specific age groups based on peer-reviewed social research;
            (D) shall not be duplicative of any other Federal efforts 
        relating to health promotion and disease prevention; and
            (E) may include the use of humor and nationally recognized 
        positive role models.
        (3) Evaluation.--The Secretary shall ensure that the campaign 
    implemented under paragraph (1) is subject to an independent 
    evaluation every 2 years and shall report every 2 years to Congress 
    on the effectiveness of such campaigns towards meeting science-
    based metrics.
    (d) Website.--The Secretary, in consultation with private-sector 
experts, shall maintain or enter into a contract to maintain an 
Internet website to provide science-based information on guidelines for 
nutrition, regular exercise, obesity reduction, smoking cessation, and 
specific chronic disease prevention. Such website shall be designed to 
provide information to health care providers and consumers.
    (e) Dissemination of Information Through Providers.--The Secretary, 
acting through the Centers for Disease Control and Prevention, shall 
develop and implement a plan for the dissemination of health promotion 
and disease prevention information consistent with national priorities, 
to health care providers who participate in Federal programs, including 
programs administered by the Indian Health Service, the Department of 
Veterans Affairs, the Department of Defense, and the Health Resources 
and Services Administration, and Medicare and Medicaid.
    (f) Personalized Prevention Plans.--
        (1) Contract.--The Secretary, acting through the Director of 
    the Centers for Disease Control and Prevention, shall enter into a 
    contract with a qualified entity for the development and operation 
    of a Federal Internet website personalized prevention plan tool.
        (2) Use.--The website developed under paragraph (1) shall be 
    designed to be used as a source of the most up-to-date scientific 
    evidence relating to disease prevention for use by individuals. 
    Such website shall contain a component that enables an individual 
    to determine their disease risk (based on personal health and 
    family history, BMI, and other relevant information) relating to 
    the 5 leading diseases in the United States, and obtain 
    personalized suggestions for preventing such diseases.
    (g) Internet Portal.--The Secretary shall establish an Internet 
portal for accessing risk-assessment tools developed and maintained by 
private and academic entities.
    (h) Priority Funding.--Funding for the activities authorized under 
this section shall take priority over funding provided through the 
Centers for Disease Control and Prevention for grants to States and 
other entities for similar purposes and goals as provided for in this 
section. Not to exceed $500,000,000 shall be expended on the campaigns 
and activities required under this section.
    (i) Public Awareness of Preventive and Obesity-related Services.--
        (1) Information to states.--The Secretary of Health and Human 
    Services shall provide guidance and relevant information to States 
    and health care providers regarding preventive and obesity-related 
    services that are available to Medicaid enrollees, including 
    obesity screening and counseling for children and adults.
        (2) Information to enrollees.--Each State shall design a public 
    awareness campaign to educate Medicaid enrollees regarding 
    availability and coverage of such services, with the goal of 
    reducing incidences of obesity.
        (3) Report.--Not later than January 1, 2011, and every 3 years 
    thereafter through January 1, 2017, the Secretary of Health and 
    Human Services shall report to Congress on the status and 
    effectiveness of efforts under paragraphs (1) and (2), including 
    summaries of the States' efforts to increase awareness of coverage 
    of obesity-related services.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

     Subtitle B--Increasing Access to Clinical Preventive Services

SEC. 4101. SCHOOL-BASED HEALTH CENTERS.

    (a) Grants for the Establishment of School-based Health Centers.--
        (1) Program.--The Secretary of Health and Human Services (in 
    this subsection referred to as the ``Secretary'') shall establish a 
    program to award grants to eligible entities to support the 
    operation of school-based health centers.
        (2) Eligibility.--To be eligible for a grant under this 
    subsection, an entity shall--
            (A) be a school-based health center or a sponsoring 
        facility of a school-based health center; and
            (B) submit an application at such time, in such manner, and 
        containing such information as the Secretary may require, 
        including at a minimum an assurance that funds awarded under 
        the grant shall not be used to provide any service that is not 
        authorized or allowed by Federal, State, or local law.
        (3) Preference.--In awarding grants under this section, the 
    Secretary shall give preference to awarding grants for school-based 
    health centers that serve a large population of children eligible 
    for medical assistance under the State Medicaid plan under title 
    XIX of the Social Security Act or under a waiver of such plan or 
    children eligible for child health assistance under the State child 
    health plan under title XXI of that Act (42 U.S.C. 1397aa et seq.).
        (4) Limitation on use of funds.--An eligible entity shall use 
    funds provided under a grant awarded under this subsection only for 
    expenditures for facilities (including the acquisition or 
    improvement of land, or the acquisition, construction, expansion, 
    replacement, or other improvement of any building or other 
    facility), equipment, or similar expenditures, as specified by the 
    Secretary. No funds provided under a grant awarded under this 
    section shall be used for expenditures for personnel or to provide 
    health services.
        (5) Appropriations.--Out of any funds in the Treasury not 
    otherwise appropriated, there is appropriated for each of fiscal 
    years 2010 through 2013, $50,000,000 for the purpose of carrying 
    out this subsection. Funds appropriated under this paragraph shall 
    remain available until expended.
        (6) Definitions.--In this subsection, the terms ``school-based 
    health center'' and ``sponsoring facility'' have the meanings given 
    those terms in section 2110(c)(9) of the Social Security Act (42 
    U.S.C. 1397jj(c)(9)).
    (b) Grants for the Operation of School-based Health Centers.--Part 
Q of title III of the Public Health Service Act (42 U.S.C. 280h et 
seq.) is amended by adding at the end the following:

``SEC. 399Z-1. SCHOOL-BASED HEALTH CENTERS.

    ``(a) Definitions; Establishment of Criteria.--In this section:
        ``(1) Comprehensive primary health services.--The term 
    `comprehensive primary health services' means the core services 
    offered by school-based health centers, which shall include the 
    following:
            ``(A) Physical.--Comprehensive health assessments, 
        diagnosis, and treatment of minor, acute, and chronic medical 
        conditions, and referrals to, and follow-up for, specialty care 
        and oral health services.
            ``(B) Mental health.--Mental health and substance use 
        disorder assessments, crisis intervention, counseling, 
        treatment, and referral to a continuum of services including 
        emergency psychiatric care, community support programs, 
        inpatient care, and outpatient programs.
        ``(2) Medically underserved children and adolescents.--
            ``(A) In general.--The term `medically underserved children 
        and adolescents' means a population of children and adolescents 
        who are residents of an area designated as a medically 
        underserved area or a health professional shortage area by the 
        Secretary.
            ``(B) Criteria.--The Secretary shall prescribe criteria for 
        determining the specific shortages of personal health services 
        for medically underserved children and adolescents under 
        subparagraph (A) that shall--
                ``(i) take into account any comments received by the 
            Secretary from the chief executive officer of a State and 
            local officials in a State; and
                ``(ii) include factors indicative of the health status 
            of such children and adolescents of an area, including the 
            ability of the residents of such area to pay for health 
            services, the accessibility of such services, the 
            availability of health professionals to such children and 
            adolescents, and other factors as determined appropriate by 
            the Secretary.
        ``(3) School-based health center.--The term `school-based 
    health center' means a health clinic that--
            ``(A) meets the definition of a school-based health center 
        under section 2110(c)(9)(A) of the Social Security Act and is 
        administered by a sponsoring facility (as defined in section 
        2110(c)(9)(B) of the Social Security Act);
            ``(B) provides, at a minimum, comprehensive primary health 
        services during school hours to children and adolescents by 
        health professionals in accordance with established standards, 
        community practice, reporting laws, and other State laws, 
        including parental consent and notification laws that are not 
        inconsistent with Federal law; and
            ``(C) does not perform abortion services.
    ``(b) Authority To Award Grants.--The Secretary shall award grants 
for the costs of the operation of school-based health centers (referred 
to in this section as `SBHCs') that meet the requirements of this 
section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
        ``(1) be an SBHC (as defined in subsection (a)(3)); and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing--
            ``(A) evidence that the applicant meets all criteria 
        necessary to be designated an SBHC;
            ``(B) evidence of local need for the services to be 
        provided by the SBHC;
            ``(C) an assurance that--
                ``(i) SBHC services will be provided to those children 
            and adolescents for whom parental or guardian consent has 
            been obtained in cooperation with Federal, State, and local 
            laws governing health care service provision to children 
            and adolescents;
                ``(ii) the SBHC has made and will continue to make 
            every reasonable effort to establish and maintain 
            collaborative relationships with other health care 
            providers in the catchment area of the SBHC;
                ``(iii) the SBHC will provide on-site access during the 
            academic day when school is in session and 24-hour coverage 
            through an on-call system and through its backup health 
            providers to ensure access to services on a year-round 
            basis when the school or the SBHC is closed;
                ``(iv) the SBHC will be integrated into the school 
            environment and will coordinate health services with school 
            personnel, such as administrators, teachers, nurses, 
            counselors, and support personnel, as well as with other 
            community providers co-located at the school;
                ``(v) the SBHC sponsoring facility assumes all 
            responsibility for the SBHC administration, operations, and 
            oversight; and
                ``(vi) the SBHC will comply with Federal, State, and 
            local laws concerning patient privacy and student records, 
            including regulations promulgated under the Health 
            Insurance Portability and Accountability Act of 1996 and 
            section 444 of the General Education Provisions Act; and
            ``(D) such other information as the Secretary may require.
    ``(d) Preferences and Consideration.--In reviewing applications:
        ``(1) The Secretary may give preference to applicants who 
    demonstrate an ability to serve the following:
            ``(A) Communities that have evidenced barriers to primary 
        health care and mental health and substance use disorder 
        prevention services for children and adolescents.
            ``(B) Communities with high per capita numbers of children 
        and adolescents who are uninsured, underinsured, or enrolled in 
        public health insurance programs.
            ``(C) Populations of children and adolescents that have 
        historically demonstrated difficulty in accessing health and 
        mental health and substance use disorder prevention services.
        ``(2) The Secretary may give consideration to whether an 
    applicant has received a grant under subsection (a) of section 4101 
    of the Patient Protection and Affordable Care Act.
    ``(e) Waiver of Requirements.--The Secretary may--
        ``(1) under appropriate circumstances, waive the application of 
    all or part of the requirements of this subsection with respect to 
    an SBHC for not to exceed 2 years; and
        ``(2) upon a showing of good cause, waive the requirement that 
    the SBHC provide all required comprehensive primary health services 
    for a designated period of time to be determined by the Secretary.
    ``(f) Use of Funds.--
        ``(1) Funds.--Funds awarded under a grant under this section--
            ``(A) may be used for--
                ``(i) acquiring and leasing equipment (including the 
            costs of amortizing the principle of, and paying interest 
            on, loans for such equipment);
                ``(ii) providing training related to the provision of 
            required comprehensive primary health services and 
            additional health services;
                ``(iii) the management and operation of health center 
            programs;
                ``(iv) the payment of salaries for physicians, nurses, 
            and other personnel of the SBHC; and
            ``(B) may not be used to provide abortions.
        ``(2) Construction.--The Secretary may award grants which may 
    be used to pay the costs associated with expanding and modernizing 
    existing buildings for use as an SBHC, including the purchase of 
    trailers or manufactured buildings to install on the school 
    property.
        ``(3) Limitations.--
            ``(A) In general.--Any provider of services that is 
        determined by a State to be in violation of a State law 
        described in subsection (a)(3)(B) with respect to activities 
        carried out at a SBHC shall not be eligible to receive 
        additional funding under this section.
            ``(B) No overlapping grant period.--No entity that has 
        received funding under section 330 for a grant period shall be 
        eligible for a grant under this section for with respect to the 
        same grant period.
    ``(g) Matching Requirement.--
        ``(1) In general.--Each eligible entity that receives a grant 
    under this section shall provide, from non-Federal sources, an 
    amount equal to 20 percent of the amount of the grant (which may be 
    provided in cash or in-kind) to carry out the activities supported 
    by the grant.
        ``(2) Waiver.--The Secretary may waive all or part of the 
    matching requirement described in paragraph (1) for any fiscal year 
    for the SBHC if the Secretary determines that applying the matching 
    requirement to the SBHC would result in serious hardship or an 
    inability to carry out the purposes of this section.
    ``(h) Supplement, Not Supplant.--Grant funds provided under this 
section shall be used to supplement, not supplant, other Federal or 
State funds.
    ``(i) Evaluation.--The Secretary shall develop and implement a plan 
for evaluating SBHCs and monitoring quality performance under the 
awards made under this section.
    ``(j) Age Appropriate Services.--An eligible entity receiving funds 
under this section shall only provide age appropriate services through 
a SBHC funded under this section to an individual.
    ``(k) Parental Consent.--An eligible entity receiving funds under 
this section shall not provide services through a SBHC funded under 
this section to an individual without the consent of the parent or 
guardian of such individual if such individual is considered a minor 
under applicable State law.
    ``(l) Authorization of Appropriations.--For purposes of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.

SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

    (a) In General.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.), as amended by section 3025, is amended by adding 
at the end the following:

            ``PART T--ORAL HEALTHCARE PREVENTION ACTIVITIES

``SEC. 399LL. ORAL HEALTHCARE PREVENTION EDUCATION CAMPAIGN.

    ``(a) Establishment.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention and in consultation with 
professional oral health organizations, shall, subject to the 
availability of appropriations, establish a 5-year national, public 
education campaign (referred to in this section as the `campaign') that 
is focused on oral healthcare prevention and education, including 
prevention of oral disease such as early childhood and other caries, 
periodontal disease, and oral cancer.
    ``(b) Requirements.--In establishing the campaign, the Secretary 
shall--
        ``(1) ensure that activities are targeted towards specific 
    populations such as children, pregnant women, parents, the elderly, 
    individuals with disabilities, and ethnic and racial minority 
    populations, including Indians, Alaska Natives and Native Hawaiians 
    (as defined in section 4(c) of the Indian Health Care Improvement 
    Act) in a culturally and linguistically appropriate manner; and
        ``(2) utilize science-based strategies to convey oral health 
    prevention messages that include, but are not limited to, community 
    water fluoridation and dental sealants.
    ``(c) Planning and Implementation.--Not later than 2 years after 
the date of enactment of this section, the Secretary shall begin 
implementing the 5-year campaign. During the 2-year period referred to 
in the previous sentence, the Secretary shall conduct planning 
activities with respect to the campaign.

``SEC. 399LL-1. RESEARCH-BASED DENTAL CARIES DISEASE MANAGEMENT.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall award 
demonstration grants to eligible entities to demonstrate the 
effectiveness of research-based dental caries disease management 
activities.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
        ``(1) be a community-based provider of dental services (as 
    defined by the Secretary), including a Federally-qualified health 
    center, a clinic of a hospital owned or operated by a State (or by 
    an instrumentality or a unit of government within a State), a State 
    or local department of health, a dental program of the Indian 
    Health Service, an Indian tribe or tribal organization, or an urban 
    Indian organization (as such terms are defined in section 4 of the 
    Indian Health Care Improvement Act), a health system provider, a 
    private provider of dental services, medical, dental, public 
    health, nursing, nutrition educational institutions, or national 
    organizations involved in improving children's oral health; and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require.
    ``(c) Use of Funds.--A grantee shall use amounts received under a 
grant under this section to demonstrate the effectiveness of research-
based dental caries disease management activities.
    ``(d) Use of Information.--The Secretary shall utilize information 
generated from grantees under this section in planning and implementing 
the public education campaign under section 399LL.

``SEC. 399LL-2. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part, 
such sums as may be necessary.''.
    (b) School-based Sealant Programs.--Section 317M(c)(1) of the 
Public Health Service Act (42 U.S.C. 247b-14(c)(1)) is amended by 
striking ``may award grants to States and Indian tribes'' and inserting 
``shall award a grant to each of the 50 States and territories and to 
Indians, Indian tribes, tribal organizations and urban Indian 
organizations (as such terms are defined in section 4 of the Indian 
Health Care Improvement Act)''.
    (c) Oral Health Infrastructure.--Section 317M of the Public Health 
Service Act (42 U.S.C. 247b-14) is amended--
        (1) by redesignating subsections (d) and (e) as subsections (e) 
    and (f), respectively; and
        (2) by inserting after subsection (c), the following:
    ``(d) Oral Health Infrastructure.--
        ``(1) Cooperative agreements.--The Secretary, acting through 
    the Director of the Centers for Disease Control and Prevention, 
    shall enter into cooperative agreements with State, territorial, 
    and Indian tribes or tribal organizations (as those terms are 
    defined in section 4 of the Indian Health Care Improvement Act) to 
    establish oral health leadership and program guidance, oral health 
    data collection and interpretation, (including determinants of poor 
    oral health among vulnerable populations), a multi-dimensional 
    delivery system for oral health, and to implement science-based 
    programs (including dental sealants and community water 
    fluoridation) to improve oral health.
        ``(2) Authorization of appropriations.--There is authorized to 
    be appropriated such sums as necessary to carry out this subsection 
    for fiscal years 2010 through 2014.''.
    (d) Updating National Oral Healthcare Surveillance Activities.--
        (1) PRAMS.--
            (A) In general.--The Secretary of Health and Human Services 
        (referred to in this subsection as the ``Secretary'') shall 
        carry out activities to update and improve the Pregnancy Risk 
        Assessment Monitoring System (referred to in this section as 
        ``PRAMS'') as it relates to oral healthcare.
            (B) State reports and mandatory measurements.--
                (i) In general.--Not later than 5 years after the date 
            of enactment of this Act, and every 5 years thereafter, a 
            State shall submit to the Secretary a report concerning 
            activities conducted within the State under PRAMS.
                (ii) Measurements.--The oral healthcare measurements 
            developed by the Secretary for use under PRAMS shall be 
            mandatory with respect to States for purposes of the State 
            reports under clause (i).
            (C) Funding.--There is authorized to be appropriated to 
        carry out this paragraph, such sums as may be necessary.
        (2) National health and nutrition examination survey.--The 
    Secretary shall develop oral healthcare components that shall 
    include tooth-level surveillance for inclusion in the National 
    Health and Nutrition Examination Survey. Such components shall be 
    updated by the Secretary at least every 6 years. For purposes of 
    this paragraph, the term ``tooth-level surveillance'' means a 
    clinical examination where an examiner looks at each dental 
    surface, on each tooth in the mouth and as expanded by the Division 
    of Oral Health of the Centers for Disease Control and Prevention.
        (3) Medical expenditures panel survey.--The Secretary shall 
    ensure that the Medical Expenditures Panel Survey by the Agency for 
    Healthcare Research and Quality includes the verification of dental 
    utilization, expenditure, and coverage findings through conduct of 
    a look-back analysis.
        (4) National oral health surveillance system.--
            (A) Appropriations.--There is authorized to be 
        appropriated, such sums as may be necessary for each of fiscal 
        years 2010 through 2014 to increase the participation of States 
        in the National Oral Health Surveillance System from 16 States 
        to all 50 States, territories, and District of Columbia.
            (B) Requirements.--The Secretary shall ensure that the 
        National Oral Health Surveillance System include the 
        measurement of early childhood caries.

SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT PROVIDING A 
              PERSONALIZED PREVENTION PLAN.

    (a) Coverage of Personalized Prevention Plan Services.--
        (1) In general.--Section 1861(s)(2) of the Social Security Act 
    (42 U.S.C. 1395x(s)(2)) is amended--
            (A) in subparagraph (DD), by striking ``and'' at the end;
            (B) in subparagraph (EE), by adding ``and'' at the end; and
            (C) by adding at the end the following new subparagraph:
        ``(FF) personalized prevention plan services (as defined in 
    subsection (hhh));''.
        (2) Conforming amendments.--Clauses (i) and (ii) of section 
    1861(s)(2)(K) of the Social Security Act (42 U.S.C. 1395x(s)(2)(K)) 
    are each amended by striking ``subsection (ww)(1)'' and inserting 
    ``subsections (ww)(1) and (hhh)''.
    (b) Personalized Prevention Plan Services Defined.--Section 1861 of 
the Social Security Act (42 U.S.C. 1395x) is amended by adding at the 
end the following new subsection:

                        ``Annual Wellness Visit

    ``(hhh)(1) The term `personalized prevention plan services' means 
the creation of a plan for an individual--
        ``(A) that includes a health risk assessment (that meets the 
    guidelines established by the Secretary under paragraph (4)(A)) of 
    the individual that is completed prior to or as part of the same 
    visit with a health professional described in paragraph (3); and
        ``(B) that--
            ``(i) takes into account the results of the health risk 
        assessment; and
            ``(ii) may contain the elements described in paragraph (2).
    ``(2) Subject to paragraph (4)(H), the elements described in this 
paragraph are the following:
        ``(A) The establishment of, or an update to, the individual's 
    medical and family history.
        ``(B) A list of current providers and suppliers that are 
    regularly involved in providing medical care to the individual 
    (including a list of all prescribed medications).
        ``(C) A measurement of height, weight, body mass index (or 
    waist circumference, if appropriate), blood pressure, and other 
    routine measurements.
        ``(D) Detection of any cognitive impairment.
        ``(E) The establishment of, or an update to, the following:
            ``(i) A screening schedule for the next 5 to 10 years, as 
        appropriate, based on recommendations of the United States 
        Preventive Services Task Force and the Advisory Committee on 
        Immunization Practices, and the individual's health status, 
        screening history, and age-appropriate preventive services 
        covered under this title.
            ``(ii) A list of risk factors and conditions for which 
        primary, secondary, or tertiary prevention interventions are 
        recommended or are underway, including any mental health 
        conditions or any such risk factors or conditions that have 
        been identified through an initial preventive physical 
        examination (as described under subsection (ww)(1)), and a list 
        of treatment options and their associated risks and benefits.
        ``(F) The furnishing of personalized health advice and a 
    referral, as appropriate, to health education or preventive 
    counseling services or programs aimed at reducing identified risk 
    factors and improving self-management, or community-based lifestyle 
    interventions to reduce health risks and promote self-management 
    and wellness, including weight loss, physical activity, smoking 
    cessation, fall prevention, and nutrition.
        ``(G) Any other element determined appropriate by the 
    Secretary.
    ``(3) A health professional described in this paragraph is--
        ``(A) a physician;
        ``(B) a practitioner described in clause (i) of section 
    1842(b)(18)(C); or
        ``(C) a medical professional (including a health educator, 
    registered dietitian, or nutrition professional) or a team of 
    medical professionals, as determined appropriate by the Secretary, 
    under the supervision of a physician.
    ``(4)(A) For purposes of paragraph (1)(A), the Secretary, not later 
than 1 year after the date of enactment of this subsection, shall 
establish publicly available guidelines for health risk assessments. 
Such guidelines shall be developed in consultation with relevant groups 
and entities and shall provide that a health risk assessment--
        ``(i) identify chronic diseases, injury risks, modifiable risk 
    factors, and urgent health needs of the individual; and
        ``(ii) may be furnished--
            ``(I) through an interactive telephonic or web-based 
        program that meets the standards established under subparagraph 
        (B);
            ``(II) during an encounter with a health care professional;
            ``(III) through community-based prevention programs; or
            ``(IV) through any other means the Secretary determines 
        appropriate to maximize accessibility and ease of use by 
        beneficiaries, while ensuring the privacy of such 
        beneficiaries.
    ``(B) Not later than 1 year after the date of enactment of this 
subsection, the Secretary shall establish standards for interactive 
telephonic or web-based programs used to furnish health risk 
assessments under subparagraph (A)(ii)(I). The Secretary may utilize 
any health risk assessment developed under section 4004(f) of the 
Patient Protection and Affordable Care Act as part of the requirement 
to develop a personalized prevention plan to comply with this 
subparagraph.
    ``(C)(i) Not later than 18 months after the date of enactment of 
this subsection, the Secretary shall develop and make available to the 
public a health risk assessment model. Such model shall meet the 
guidelines under subparagraph (A) and may be used to meet the 
requirement under paragraph (1)(A).
    ``(ii) Any health risk assessment that meets the guidelines under 
subparagraph (A) and is approved by the Secretary may be used to meet 
the requirement under paragraph (1)(A).
    ``(D) The Secretary may coordinate with community-based entities 
(including State Health Insurance Programs, Area Agencies on Aging, 
Aging and Disability Resource Centers, and the Administration on Aging) 
to--
        ``(i) ensure that health risk assessments are accessible to 
    beneficiaries; and
        ``(ii) provide appropriate support for the completion of health 
    risk assessments by beneficiaries.
    ``(E) The Secretary shall establish procedures to make 
beneficiaries and providers aware of the requirement that a beneficiary 
complete a health risk assessment prior to or at the same time as 
receiving personalized prevention plan services.
    ``(F) To the extent practicable, the Secretary shall encourage the 
use of, integration with, and coordination of health information 
technology (including use of technology that is compatible with 
electronic medical records and personal health records) and may 
experiment with the use of personalized technology to aid in the 
development of self-management skills and management of and adherence 
to provider recommendations in order to improve the health status of 
beneficiaries.
    ``(G)(i) A beneficiary shall only be eligible to receive an initial 
preventive physical examination (as defined under subsection (ww)(1)) 
at any time during the 12-month period after the date that the 
beneficiary's coverage begins under part B and shall be eligible to 
receive personalized prevention plan services under this subsection 
provided that the beneficiary has not received such services within the 
preceding 12-month period.
    ``(ii) The Secretary shall establish procedures to make 
beneficiaries aware of the option to select an initial preventive 
physical examination or personalized prevention plan services during 
the period of 12 months after the date that a beneficiary's coverage 
begins under part B, which shall include information regarding any 
relevant differences between such services.
    ``(H) The Secretary shall issue guidance that--
        ``(i) identifies elements under paragraph (2) that are required 
    to be provided to a beneficiary as part of their first visit for 
    personalized prevention plan services; and
        ``(ii) establishes a yearly schedule for appropriate provision 
    of such elements thereafter.''.
    (c) Payment and Elimination of Cost-Sharing.--
        (1) Payment and elimination of coinsurance.--Section 1833(a)(1) 
    of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended--
            (A) in subparagraph (N), by inserting ``other than 
        personalized prevention plan services (as defined in section 
        1861(hhh)(1))'' after ``(as defined in section 1848(j)(3))'';
            (B) by striking ``and'' before ``(W)''; and
            (C) by inserting before the semicolon at the end the 
        following: ``, and (X) with respect to personalized prevention 
        plan services (as defined in section 1861(hhh)(1)), the amount 
        paid shall be 100 percent of the lesser of the actual charge 
        for the services or the amount determined under the payment 
        basis determined under section 1848''.
        (2) Payment under physician fee schedule.--Section 1848(j)(3) 
    of the Social Security Act (42 U.S.C. 1395w-4(j)(3)) is amended by 
    inserting ``(2)(FF) (including administration of the health risk 
    assessment) ,'' after ``(2)(EE),''.
        (3) Elimination of coinsurance in outpatient hospital 
    settings.--
            (A) Exclusion from opd fee schedule.--Section 
        1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
        1395l(t)(1)(B)(iv)) is amended by striking ``and diagnostic 
        mammography'' and inserting ``, diagnostic mammography, or 
        personalized prevention plan services (as defined in section 
        1861(hhh)(1))''.
            (B) Conforming amendments.--Section 1833(a)(2) of the 
        Social Security Act (42 U.S.C. 1395l(a)(2)) is amended--
                (i) in subparagraph (F), by striking ``and'' at the 
            end;
                (ii) in subparagraph (G)(ii), by striking the comma at 
            the end and inserting ``; and''; and
                (iii) by inserting after subparagraph (G)(ii) the 
            following new subparagraph:
            ``(H) with respect to personalized prevention plan services 
        (as defined in section 1861(hhh)(1)) furnished by an outpatient 
        department of a hospital, the amount determined under paragraph 
        (1)(X),''.
        (4) Waiver of application of deductible.--The first sentence of 
    section 1833(b) of the Social Security Act (42 U.S.C. 1395l(b)) is 
    amended--
            (A) by striking ``and'' before ``(9)''; and
            (B) by inserting before the period the following: ``, and 
        (10) such deductible shall not apply with respect to 
        personalized prevention plan services (as defined in section 
        1861(hhh)(1))''.
    (d) Frequency Limitation.--Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)) is amended--
        (1) in paragraph (1)--
            (A) in subparagraph (N), by striking ``and'' at the end;
            (B) in subparagraph (O), by striking the semicolon at the 
        end and inserting ``, and''; and
            (C) by adding at the end the following new subparagraph:
        ``(P) in the case of personalized prevention plan services (as 
    defined in section 1861(hhh)(1)), which are performed more 
    frequently than is covered under such section;''; and
        (2) in paragraph (7), by striking ``or (K)'' and inserting 
    ``(K), or (P)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2011.

SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN MEDICARE.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the 
Social Security Act (42 U.S.C. 1395x(ddd)) is amended--
        (1) in the heading, by inserting ``; Preventive Services'' 
    after ``Services'';
        (2) in paragraph (1), by striking ``not otherwise described in 
    this title'' and inserting ``not described in subparagraph (A) or 
    (C) of paragraph (3)''; and
        (3) by adding at the end the following new paragraph:
    ``(3) The term `preventive services' means the following:
        ``(A) The screening and preventive services described in 
    subsection (ww)(2) (other than the service described in 
    subparagraph (M) of such subsection).
        ``(B) An initial preventive physical examination (as defined in 
    subsection (ww)).
        ``(C) Personalized prevention plan services (as defined in 
    subsection (hhh)(1)).''.
    (b) Coinsurance.--
        (1) General application.--
            (A) In general.--Section 1833(a)(1) of the Social Security 
        Act (42 U.S.C. 1395l(a)(1)), as amended by section 4103(c)(1), 
        is amended--
                (i) in subparagraph (T), by inserting ``(or 100 percent 
            if such services are recommended with a grade of A or B by 
            the United States Preventive Services Task Force for any 
            indication or population and are appropriate for the 
            individual)'' after ``80 percent'';
                (ii) in subparagraph (W)--

                    (I) in clause (i), by inserting ``(if such 
                subparagraph were applied, by substituting `100 
                percent' for `80 percent')'' after ``subparagraph 
                (D)''; and
                    (II) in clause (ii), by striking ``80 percent'' and 
                inserting ``100 percent'';

                (iii) by striking ``and'' before ``(X)''; and
                (iv) by inserting before the semicolon at the end the 
            following: ``, and (Y) with respect to preventive services 
            described in subparagraphs (A) and (B) of section 
            1861(ddd)(3) that are appropriate for the individual and, 
            in the case of such services described in subparagraph (A), 
            are recommended with a grade of A or B by the United States 
            Preventive Services Task Force for any indication or 
            population, the amount paid shall be 100 percent of the 
            lesser of the actual charge for the services or the amount 
            determined under the fee schedule that applies to such 
            services under this part''.
        (2) Elimination of coinsurance in outpatient hospital 
    settings.--
            (A) Exclusion from opd fee schedule.--Section 
        1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
        1395l(t)(1)(B)(iv)), as amended by section 4103(c)(3)(A), is 
        amended--
                (i) by striking ``or'' before ``personalized prevention 
            plan services''; and
                (ii) by inserting before the period the following: ``, 
            or preventive services described in subparagraphs (A) and 
            (B) of section 1861(ddd)(3) that are appropriate for the 
            individual and, in the case of such services described in 
            subparagraph (A), are recommended with a grade of A or B by 
            the United States Preventive Services Task Force for any 
            indication or population''.
            (B) Conforming amendments.--Section 1833(a)(2) of the 
        Social Security Act (42 U.S.C. 1395l(a)(2)), as amended by 
        section 4103(c)(3)(B), is amended--
                (i) in subparagraph (G)(ii), by striking ``and'' after 
            the semicolon at the end;
                (ii) in subparagraph (H), by striking the comma at the 
            end and inserting ``; and''; and
                (iii) by inserting after subparagraph (H) the following 
            new subparagraph:
            ``(I) with respect to preventive services described in 
        subparagraphs (A) and (B) of section 1861(ddd)(3) that are 
        appropriate for the individual and are furnished by an 
        outpatient department of a hospital and, in the case of such 
        services described in subparagraph (A), are recommended with a 
        grade of A or B by the United States Preventive Services Task 
        Force for any indication or population, the amount determined 
        under paragraph (1)(W) or (1)(Y),''.
    (c) Waiver of Application of Deductible for Preventive Services and 
Colorectal Cancer Screening Tests.--Section 1833(b) of the Social 
Security Act (42 U.S.C. 1395l(b)), as amended by section 4103(c)(4), is 
amended--
        (1) in paragraph (1), by striking ``items and services 
    described in section 1861(s)(10)(A)'' and inserting ``preventive 
    services described in subparagraph (A) of section 1861(ddd)(3) that 
    are recommended with a grade of A or B by the United States 
    Preventive Services Task Force for any indication or population and 
    are appropriate for the individual.''; and
        (2) by adding at the end the following new sentence: 
    ``Paragraph (1) of the first sentence of this subsection shall 
    apply with respect to a colorectal cancer screening test regardless 
    of the code that is billed for the establishment of a diagnosis as 
    a result of the test, or for the removal of tissue or other matter 
    or other procedure that is furnished in connection with, as a 
    result of, and in the same clinical encounter as the screening 
    test.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES IN MEDICARE.

    (a) Authority To Modify or Eliminate Coverage of Certain Preventive 
Services.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is 
amended by adding at the end the following new subsection:
    ``(n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding any other provision of this 
title, effective beginning on January 1, 2010, if the Secretary 
determines appropriate, the Secretary may--
        ``(1) modify--
            ``(A) the coverage of any preventive service described in 
        subparagraph (A) of section 1861(ddd)(3) to the extent that 
        such modification is consistent with the recommendations of the 
        United States Preventive Services Task Force; and
            ``(B) the services included in the initial preventive 
        physical examination described in subparagraph (B) of such 
        section; and
        ``(2) provide that no payment shall be made under this title 
    for a preventive service described in subparagraph (A) of such 
    section that has not received a grade of A, B, C, or I by such Task 
    Force.''.
    (b) Construction.--Nothing in the amendment made by paragraph (1) 
shall be construed to affect the coverage of diagnostic or treatment 
services under title XVIII of the Social Security Act.

SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR ELIGIBLE ADULTS 
              IN MEDICAID.

    (a) Clarification of Inclusion of Services.--Section 1905(a)(13) of 
the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as 
follows:
        ``(13) other diagnostic, screening, preventive, and 
    rehabilitative services, including--
            ``(A) any clinical preventive services that are assigned a 
        grade of A or B by the United States Preventive Services Task 
        Force;
            ``(B) with respect to an adult individual, approved 
        vaccines recommended by the Advisory Committee on Immunization 
        Practices (an advisory committee established by the Secretary, 
        acting through the Director of the Centers for Disease Control 
        and Prevention) and their administration; and
            ``(C) any medical or remedial services (provided in a 
        facility, a home, or other setting) recommended by a physician 
        or other licensed practitioner of the healing arts within the 
        scope of their practice under State law, for the maximum 
        reduction of physical or mental disability and restoration of 
        an individual to the best possible functional level;''.
    (b) Increased Fmap.--Section 1905(b) of the Social Security Act (42 
U.S.C. 1396d(b)), as amended by sections 2001(a)(3)(A) and 2004(c)(1), 
is amended in the first sentence--
        (1) by striking ``, and (4)'' and inserting ``, (4)''; and
        (2) by inserting before the period the following: ``, and (5) 
    in the case of a State that provides medical assistance for 
    services and vaccines described in subparagraphs (A) and (B) of 
    subsection (a)(13), and prohibits cost-sharing for such services 
    and vaccines, the Federal medical assistance percentage, as 
    determined under this subsection and subsection (y) (without regard 
    to paragraph (1)(C) of such subsection), shall be increased by 1 
    percentage point with respect to medical assistance for such 
    services and vaccines and for items and services described in 
    subsection (a)(4)(D)''.
    (c) Effective Date.--The amendments made under this section shall 
take effect on January 1, 2013.

SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION SERVICES FOR 
              PREGNANT WOMEN IN MEDICAID.

    (a) Requiring Coverage of Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--Section 1905 of the Social 
Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3)(B) 
and 2303, is further amended--
        (1) in subsection (a)(4)--
            (A) by striking ``and'' before ``(C)''; and
            (B) by inserting before the semicolon at the end the 
        following new subparagraph: ``; and (D) counseling and 
        pharmacotherapy for cessation of tobacco use by pregnant women 
        (as defined in subsection (bb))''; and
        (2) by adding at the end the following:
    ``(bb)(1) For purposes of this title, the term `counseling and 
pharmacotherapy for cessation of tobacco use by pregnant women' means 
diagnostic, therapy, and counseling services and pharmacotherapy 
(including the coverage of prescription and nonprescription tobacco 
cessation agents approved by the Food and Drug Administration) for 
cessation of tobacco use by pregnant women who use tobacco products or 
who are being treated for tobacco use that is furnished--
        ``(A) by or under the supervision of a physician; or
        ``(B) by any other health care professional who--
            ``(i) is legally authorized to furnish such services under 
        State law (or the State regulatory mechanism provided by State 
        law) of the State in which the services are furnished; and
            ``(ii) is authorized to receive payment for other services 
        under this title or is designated by the Secretary for this 
        purpose.
    ``(2) Subject to paragraph (3), such term is limited to--
        ``(A) services recommended with respect to pregnant women in 
    `Treating Tobacco Use and Dependence: 2008 Update: A Clinical 
    Practice Guideline', published by the Public Health Service in May 
    2008, or any subsequent modification of such Guideline; and
        ``(B) such other services that the Secretary recognizes to be 
    effective for cessation of tobacco use by pregnant women.
    ``(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.''.
    (b) Exception From Optional Restriction Under Medicaid Prescription 
Drug Coverage.--Section 1927(d)(2)(F) of the Social Security Act (42 
U.S.C. 1396r-8(d)(2)(F)), as redesignated by section 2502(a), is 
amended by inserting before the period at the end the following: ``, 
except, in the case of pregnant women when recommended in accordance 
with the Guideline referred to in section 1905(bb)(2)(A), agents 
approved by the Food and Drug Administration under the over-the-counter 
monograph process for purposes of promoting, and when used to promote, 
tobacco cessation''.
    (c) Removal of Cost-Sharing for Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--
        (1) General cost-sharing limitations.--Section 1916 of the 
    Social Security Act (42 U.S.C. 1396o) is amended in each of 
    subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and counseling 
    and pharmacotherapy for cessation of tobacco use by pregnant women 
    (as defined in section 1905(bb)) and covered outpatient drugs (as 
    defined in subsection (k)(2) of section 1927 and including 
    nonprescription drugs described in subsection (d)(2) of such 
    section) that are prescribed for purposes of promoting, and when 
    used to promote, tobacco cessation by pregnant women in accordance 
    with the Guideline referred to in section 1905(bb)(2)(A)'' after 
    ``complicate the pregnancy''.
        (2) Application to alternative cost-sharing.--Section 
    1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-1(b)(3)(B)(iii)) 
    is amended by inserting ``, and counseling and pharmacotherapy for 
    cessation of tobacco use by pregnant women (as defined in section 
    1905(bb))'' after ``complicate the pregnancy''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2010.

SEC. 4108. INCENTIVES FOR PREVENTION OF CHRONIC DISEASES IN MEDICAID.

    (a) Initiatives.--
        (1) Establishment.--
            (A) In general.--The Secretary shall award grants to States 
        to carry out initiatives to provide incentives to Medicaid 
        beneficiaries who--
                (i) successfully participate in a program described in 
            paragraph (3); and
                (ii) upon completion of such participation, demonstrate 
            changes in health risk and outcomes, including the adoption 
            and maintenance of healthy behaviors by meeting specific 
            targets (as described in subsection (c)(2)).
            (B) Purpose.--The purpose of the initiatives under this 
        section is to test approaches that may encourage behavior 
        modification and determine scalable solutions.
        (2) Duration.--
            (A) Initiation of program; resources.--The Secretary shall 
        awards grants to States beginning on January 1, 2011, or 
        beginning on the date on which the Secretary develops program 
        criteria, whichever is earlier. The Secretary shall develop 
        program criteria for initiatives under this section using 
        relevant evidence-based research and resources, including the 
        Guide to Community Preventive Services, the Guide to Clinical 
        Preventive Services, and the National Registry of Evidence-
        Based Programs and Practices.
            (B) Duration of program.--A State awarded a grant to carry 
        out initiatives under this section shall carry out such 
        initiatives within the 5-year period beginning on January 1, 
        2011, or beginning on the date on which the Secretary develops 
        program criteria, whichever is earlier. Initiatives under this 
        section shall be carried out by a State for a period of not 
        less than 3 years.
        (3) Program described.--
            (A) In general.--A program described in this paragraph is a 
        comprehensive, evidence-based, widely available, and easily 
        accessible program, proposed by the State and approved by the 
        Secretary, that is designed and uniquely suited to address the 
        needs of Medicaid beneficiaries and has demonstrated success in 
        helping individuals achieve one or more of the following:
                (i) Ceasing use of tobacco products.
                (ii) Controlling or reducing their weight.
                (iii) Lowering their cholesterol.
                (iv) Lowering their blood pressure.
                (v) Avoiding the onset of diabetes or, in the case of a 
            diabetic, improving the management of that condition.
            (B) Co-morbidities.--A program under this section may also 
        address co-morbidities (including depression) that are related 
        to any of the conditions described in subparagraph (A).
            (C) Waiver authority.--The Secretary may waive the 
        requirements of section 1902(a)(1) (relating to statewideness) 
        of the Social Security Act for a State awarded a grant to 
        conduct an initiative under this section and shall ensure that 
        a State makes any program described in subparagraph (A) 
        available and accessible to Medicaid beneficiaries.
            (D) Flexibility in implementation.--A State may enter into 
        arrangements with providers participating in Medicaid, 
        community-based organizations, faith-based organizations, 
        public-private partnerships, Indian tribes, or similar entities 
        or organizations to carry out programs described in 
        subparagraph (A).
        (4) Application.--Following the development of program criteria 
    by the Secretary, a State may submit an application, in such manner 
    and containing such information as the Secretary may require, that 
    shall include a proposal for programs described in paragraph (3)(A) 
    and a plan to make Medicaid beneficiaries and providers 
    participating in Medicaid who reside in the State aware and 
    informed about such programs.
    (b) Education and Outreach Campaign.--
        (1) State awareness.--The Secretary shall conduct an outreach 
    and education campaign to make States aware of the grants under 
    this section.
        (2) Provider and beneficiary education.--A State awarded a 
    grant to conduct an initiative under this section shall conduct an 
    outreach and education campaign to make Medicaid beneficiaries and 
    providers participating in Medicaid who reside in the State aware 
    of the programs described in subsection (a)(3) that are to be 
    carried out by the State under the grant.
    (c) Impact.--A State awarded a grant to conduct an initiative under 
this section shall develop and implement a system to--
        (1) track Medicaid beneficiary participation in the program and 
    validate changes in health risk and outcomes with clinical data, 
    including the adoption and maintenance of health behaviors by such 
    beneficiaries;
        (2) to the extent practicable, establish standards and health 
    status targets for Medicaid beneficiaries participating in the 
    program and measure the degree to which such standards and targets 
    are met;
        (3) evaluate the effectiveness of the program and provide the 
    Secretary with such evaluations;
        (4) report to the Secretary on processes that have been 
    developed and lessons learned from the program; and
        (5) report on preventive services as part of reporting on 
    quality measures for Medicaid managed care programs.
    (d) Evaluations and Reports.--
        (1) Independent assessment.--The Secretary shall enter into a 
    contract with an independent entity or organization to conduct an 
    evaluation and assessment of the initiatives carried out by States 
    under this section, for the purpose of determining--
            (A) the effect of such initiatives on the use of health 
        care services by Medicaid beneficiaries participating in the 
        program;
            (B) the extent to which special populations (including 
        adults with disabilities, adults with chronic illnesses, and 
        children with special health care needs) are able to 
        participate in the program;
            (C) the level of satisfaction of Medicaid beneficiaries 
        with respect to the accessibility and quality of health care 
        services provided through the program; and
            (D) the administrative costs incurred by State agencies 
        that are responsible for administration of the program.
        (2) State reporting.--A State awarded a grant to carry out 
    initiatives under this section shall submit reports to the 
    Secretary, on a semi-annual basis, regarding the programs that are 
    supported by the grant funds. Such report shall include 
    information, as specified by the Secretary, regarding--
            (A) the specific uses of the grant funds;
            (B) an assessment of program implementation and lessons 
        learned from the programs;
            (C) an assessment of quality improvements and clinical 
        outcomes under such programs; and
            (D) estimates of cost savings resulting from such programs.
        (3) Initial report.--Not later than January 1, 2014, the 
    Secretary shall submit to Congress an initial report on such 
    initiatives based on information provided by States through reports 
    required under paragraph (2). The initial report shall include an 
    interim evaluation of the effectiveness of the initiatives carried 
    out with grants awarded under this section and a recommendation 
    regarding whether funding for expanding or extending the 
    initiatives should be extended beyond January 1, 2016.
        (4) Final report.--Not later than July 1, 2016, the Secretary 
    shall submit to Congress a final report on the program that 
    includes the results of the independent assessment required under 
    paragraph (1), together with recommendations for such legislation 
    and administrative action as the Secretary determines appropriate.
    (e) No Effect on Eligibility for, or Amount of, Medicaid or Other 
Benefits.--Any incentives provided to a Medicaid beneficiary 
participating in a program described in subsection (a)(3) shall not be 
taken into account for purposes of determining the beneficiary's 
eligibility for, or amount of, benefits under the Medicaid program or 
any program funded in whole or in part with Federal funds.
    (f) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the 5-year period beginning on 
January 1, 2011, $100,000,000 to the Secretary to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) Definitions.--In this section:
        (1) Medicaid beneficiary.--The term ``Medicaid beneficiary'' 
    means an individual who is eligible for medical assistance under a 
    State plan or waiver under title XIX of the Social Security Act (42 
    U.S.C. 1396 et seq.) and is enrolled in such plan or waiver.
        (2) State.--The term ``State'' has the meaning given that term 
    for purposes of title XIX of the Social Security Act (42 U.S.C. 
    1396 et seq.).

               Subtitle C--Creating Healthier Communities

SEC. 4201. COMMUNITY TRANSFORMATION GRANTS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention (referred to 
in this section as the ``Director''), shall award competitive grants to 
State and local governmental agencies and community-based organizations 
for the implementation, evaluation, and dissemination of evidence-based 
community preventive health activities in order to reduce chronic 
disease rates, prevent the development of secondary conditions, address 
health disparities, and develop a stronger evidence-base of effective 
prevention programming.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
        (1) be--
            (A) a State governmental agency;
            (B) a local governmental agency;
            (C) a national network of community-based organizations;
            (D) a State or local non-profit organization; or
            (E) an Indian tribe; and
        (2) submit to the Director an application at such time, in such 
    a manner, and containing such information as the Director may 
    require, including a description of the program to be carried out 
    under the grant; and
        (3) demonstrate a history or capacity, if funded, to develop 
    relationships necessary to engage key stakeholders from multiple 
    sectors within and beyond health care and across a community, such 
    as healthy futures corps and health care providers.
    (c) Use of Funds.--
        (1) In general.--An eligible entity shall use amounts received 
    under a grant under this section to carry out programs described in 
    this subsection.
        (2) Community transformation plan.--
            (A) In general.--An eligible entity that receives a grant 
        under this section shall submit to the Director (for approval) 
        a detailed plan that includes the policy, environmental, 
        programmatic, and as appropriate infrastructure changes needed 
        to promote healthy living and reduce disparities.
            (B) Activities.--Activities within the plan may focus on 
        (but not be limited to)--
                (i) creating healthier school environments, including 
            increasing healthy food options, physical activity 
            opportunities, promotion of healthy lifestyle, emotional 
            wellness, and prevention curricula, and activities to 
            prevent chronic diseases;
                (ii) creating the infrastructure to support active 
            living and access to nutritious foods in a safe 
            environment;
                (iii) developing and promoting programs targeting a 
            variety of age levels to increase access to nutrition, 
            physical activity and smoking cessation, improve social and 
            emotional wellness, enhance safety in a community, or 
            address any other chronic disease priority area identified 
            by the grantee;
                (iv) assessing and implementing worksite wellness 
            programming and incentives;
                (v) working to highlight healthy options at restaurants 
            and other food venues;
                (vi) prioritizing strategies to reduce racial and 
            ethnic disparities, including social, economic, and 
            geographic determinants of health; and
                (vii) addressing special populations needs, including 
            all age groups and individuals with disabilities, and 
            individuals in both urban and rural areas.
        (3) Community-based prevention health activities.--
            (A) In general.--An eligible entity shall use amounts 
        received under a grant under this section to implement a 
        variety of programs, policies, and infrastructure improvements 
        to promote healthier lifestyles.
            (B) Activities.--An eligible entity shall implement 
        activities detailed in the community transformation plan under 
        paragraph (2).
            (C) In-kind support.--An eligible entity may provide in-
        kind resources such as staff, equipment, or office space in 
        carrying out activities under this section.
        (4) Evaluation.--
            (A) In general.--An eligible entity shall use amounts 
        provided under a grant under this section to conduct activities 
        to measure changes in the prevalence of chronic disease risk 
        factors among community members participating in preventive 
        health activities
            (B) Types of measures.--In carrying out subparagraph (A), 
        the eligible entity shall, with respect to residents in the 
        community, measure--
                (i) changes in weight;
                (ii) changes in proper nutrition;
                (iii) changes in physical activity;
                (iv) changes in tobacco use prevalence;
                (v) changes in emotional well-being and overall mental 
            health;
                (vi) other factors using community-specific data from 
            the Behavioral Risk Factor Surveillance Survey; and
                (vii) other factors as determined by the Secretary.
            (C) Reporting.--An eligible entity shall annually submit to 
        the Director a report containing an evaluation of activities 
        carried out under the grant.
        (5) Dissemination.--A grantee under this section shall--
            (A) meet at least annually in regional or national meetings 
        to discuss challenges, best practices, and lessons learned with 
        respect to activities carried out under the grant; and
            (B) develop models for the replication of successful 
        programs and activities and the mentoring of other eligible 
        entities.
    (d) Training.--
        (1) In general.--The Director shall develop a program to 
    provide training for eligible entities on effective strategies for 
    the prevention and control of chronic disease and the link between 
    physical, emotional, and social well-being.
        (2) Community transformation plan.--The Director shall provide 
    appropriate feedback and technical assistance to grantees to 
    establish community transformation plans
        (3) Evaluation.--The Director shall provide a literature review 
    and framework for the evaluation of programs conducted as part of 
    the grant program under this section, in addition to working with 
    academic institutions or other entities with expertise in outcome 
    evaluation.
    (e) Prohibition.--A grantee shall not use funds provided under a 
grant under this section to create video games or to carry out any 
other activities that may lead to higher rates of obesity or 
inactivity.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each fiscal years 2010 through 2014.

SEC. 4202. HEALTHY AGING, LIVING WELL; EVALUATION OF COMMUNITY-BASED 
              PREVENTION AND WELLNESS PROGRAMS FOR MEDICARE 
              BENEFICIARIES.

    (a) Healthy Aging, Living Well.--
        (1) In general.--The Secretary of Health and Human Services 
    (referred to in this section as the ``Secretary''), acting through 
    the Director of the Centers for Disease Control and Prevention, 
    shall award grants to State or local health departments and Indian 
    tribes to carry out 5-year pilot programs to provide public health 
    community interventions, screenings, and where necessary, clinical 
    referrals for individuals who are between 55 and 64 years of age.
        (2) Eligibility.--To be eligible to receive a grant under 
    paragraph (1), an entity shall--
            (A) be--
                (i) a State health department;
                (ii) a local health department; or
                (iii) an Indian tribe;
            (B) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require including a description of the program to be 
        carried out under the grant;
            (C) design a strategy for improving the health of the 55-
        to-64 year-old population through community-based public health 
        interventions; and
            (D) demonstrate the capacity, if funded, to develop the 
        relationships necessary with relevant health agencies, health 
        care providers, community-based organizations, and insurers to 
        carry out the activities described in paragraph (3), such 
        relationships to include the identification of a community-
        based clinical partner, such as a community health center or 
        rural health clinic.
        (3) Use of funds.--
            (A) In general.--A State or local health department shall 
        use amounts received under a grant under this subsection to 
        carry out a program to provide the services described in this 
        paragraph to individuals who are between 55 and 64 years of 
        age.
            (B) Public health interventions.--
                (i) In general.--In developing and implementing such 
            activities, a grantee shall collaborate with the Centers 
            for Disease Control and Prevention and the Administration 
            on Aging, and relevant local agencies and organizations.
                (ii) Types of intervention activities.--Intervention 
            activities conducted under this subparagraph may include 
            efforts to improve nutrition, increase physical activity, 
            reduce tobacco use and substance abuse, improve mental 
            health, and promote healthy lifestyles among the target 
            population.
            (C) Community preventive screenings.--
                (i) In general.--In addition to community-wide public 
            health interventions, a State or local health department 
            shall use amounts received under a grant under this 
            subsection to conduct ongoing health screening to identify 
            risk factors for cardiovascular disease, cancer, stroke, 
            and diabetes among individuals in both urban and rural 
            areas who are between 55 and 64 years of age.
                (ii) Types of screening activities.--Screening 
            activities conducted under this subparagraph may include--

                    (I) mental health/behavioral health and substance 
                use disorders;
                    (II) physical activity, smoking, and nutrition; and
                    (III) any other measures deemed appropriate by the 
                Secretary.

                (iii) Monitoring.--Grantees under this section shall 
            maintain records of screening results under this 
            subparagraph to establish the baseline data for monitoring 
            the targeted population
            (D) Clinical referral/treatment for chronic diseases.--
                (i) In general.--A State or local health department 
            shall use amounts received under a grant under this 
            subsection to ensure that individuals between 55 and 64 
            years of age who are found to have chronic disease risk 
            factors through the screening activities described in 
            subparagraph (C)(ii), receive clinical referral/treatment 
            for follow-up services to reduce such risk.
                (ii) Mechanism.--

                    (I) Identification and determination of status.--
                With respect to each individual with risk factors for 
                or having heart disease, stroke, diabetes, or any other 
                condition for which such individual was screened under 
                subparagraph (C), a grantee under this section shall 
                determine whether or not such individual is covered 
                under any public or private health insurance program.
                    (II) Insured individuals.--An individual determined 
                to be covered under a health insurance program under 
                subclause (I) shall be referred by the grantee to the 
                existing providers under such program or, if such 
                individual does not have a current provider, to a 
                provider who is in-network with respect to the program 
                involved.
                    (III) Uninsured individuals.--With respect to an 
                individual determined to be uninsured under subclause 
                (I), the grantee's community-based clinical partner 
                described in paragraph (4)(D) shall assist the 
                individual in determining eligibility for available 
                public coverage options and identify other appropriate 
                community health care resources and assistance 
                programs.

                (iii) Public health intervention program.--A State or 
            local health department shall use amounts received under a 
            grant under this subsection to enter into contracts with 
            community health centers or rural health clinics and mental 
            health and substance use disorder service providers to 
            assist in the referral/treatment of at risk patients to 
            community resources for clinical follow-up and help 
            determine eligibility for other public programs.
            (E) Grantee evaluation.--An eligible entity shall use 
        amounts provided under a grant under this subsection to conduct 
        activities to measure changes in the prevalence of chronic 
        disease risk factors among participants.
        (4) Pilot program evaluation.--The Secretary shall conduct an 
    annual evaluation of the effectiveness of the pilot program under 
    this subsection. In determining such effectiveness, the Secretary 
    shall consider changes in the prevalence of uncontrolled chronic 
    disease risk factors among new Medicare enrollees (or individuals 
    nearing enrollment, including those who are 63 and 64 years of age) 
    who reside in States or localities receiving grants under this 
    section as compared with national and historical data for those 
    States and localities for the same population.
        (5) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, such sums as may be 
    necessary for each of fiscal years 2010 through 2014.
    (b) Evaluation and Plan for Community-based Prevention and Wellness 
Programs for Medicare Beneficiaries.--
        (1) In general.--The Secretary shall conduct an evaluation of 
    community-based prevention and wellness programs and develop a plan 
    for promoting healthy lifestyles and chronic disease self-
    management for Medicare beneficiaries.
        (2) Medicare evaluation of prevention and wellness programs.--
            (A) In general.--The Secretary shall evaluate community 
        prevention and wellness programs including those that are 
        sponsored by the Administration on Aging, are evidence-based, 
        and have demonstrated potential to help Medicare beneficiaries 
        (particularly beneficiaries that have attained 65 years of age) 
        reduce their risk of disease, disability, and injury by making 
        healthy lifestyle choices, including exercise, diet, and self-
        management of chronic diseases.
            (B) Evaluation.--The evaluation under subparagraph (A) 
        shall consist of the following:
                (i) Evidence review.--The Secretary shall review 
            available evidence, literature, best practices, and 
            resources that are relevant to programs that promote 
            healthy lifestyles and reduce risk factors for the Medicare 
            population. The Secretary may determine the scope of the 
            evidence review and such issues to be considered, which 
            shall include, at a minimum--

                    (I) physical activity, nutrition, and obesity;
                    (II) falls;
                    (III) chronic disease self-management; and
                    (IV) mental health.

                (ii) Independent evaluation of evidence-based community 
            prevention and wellness programs.--The Administrator of the 
            Centers for Medicare & Medicaid Services, in consultation 
            with the Assistant Secretary for Aging, shall, to the 
            extent feasible and practicable, conduct an evaluation of 
            existing community prevention and wellness programs that 
            are sponsored by the Administration on Aging to assess the 
            extent to which Medicare beneficiaries who participate in 
            such programs--

                    (I) reduce their health risks, improve their health 
                outcomes, and adopt and maintain healthy behaviors;
                    (II) improve their ability to manage their chronic 
                conditions; and
                    (III) reduce their utilization of health services 
                and associated costs under the Medicare program for 
                conditions that are amenable to improvement under such 
                programs.

        (3) Report.--Not later than September 30, 2013, the Secretary 
    shall submit to Congress a report that includes--
            (A) recommendations for such legislation and administrative 
        action as the Secretary determines appropriate to promote 
        healthy lifestyles and chronic disease self-management for 
        Medicare beneficiaries;
            (B) any relevant findings relating to the evidence review 
        under paragraph (2)(B)(i); and
            (C) the results of the evaluation under paragraph 
        (2)(B)(ii).
        (4) Funding.--For purposes of carrying out this subsection, the 
    Secretary shall provide for the transfer, from the Federal Hospital 
    Insurance Trust Fund under section 1817 of the Social Security Act 
    (42 U.S.C. 1395i) and the Federal Supplemental Medical Insurance 
    Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in 
    such proportion as the Secretary determines appropriate, of 
    $50,000,000 to the Centers for Medicare & Medicaid Services Program 
    Management Account. Amounts transferred under the preceding 
    sentence shall remain available until expended.
        (5) Administration.--Chapter 35 of title 44, United States Code 
    shall not apply to the this subsection.
        (6) Medicare beneficiary.--In this subsection, the term 
    ``Medicare beneficiary'' means an individual who is entitled to 
    benefits under part A of title XVIII of the Social Security Act and 
    enrolled under part B of such title.

SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO WELLNESS FOR 
              INDIVIDUALS WITH DISABILITIES.

    Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) 
is amended by adding at the end of the following:

``SEC. 510. ESTABLISHMENT OF STANDARDS FOR ACCESSIBLE MEDICAL 
              DIAGNOSTIC EQUIPMENT.

    ``(a) Standards.--Not later than 24 months after the date of 
enactment of the Affordable Health Choices Act, the Architectural and 
Transportation Barriers Compliance Board shall, in consultation with 
the Commissioner of the Food and Drug Administration, promulgate 
regulatory standards in accordance with the Administrative Procedure 
Act (2 U.S.C. 551 et seq.) setting forth the minimum technical criteria 
for medical diagnostic equipment used in (or in conjunction with) 
physician's offices, clinics, emergency rooms, hospitals, and other 
medical settings. The standards shall ensure that such equipment is 
accessible to, and usable by, individuals with accessibility needs, and 
shall allow independent entry to, use of, and exit from the equipment 
by such individuals to the maximum extent possible.
    ``(b) Medical Diagnostic Equipment Covered.--The standards issued 
under subsection (a) for medical diagnostic equipment shall apply to 
equipment that includes examination tables, examination chairs 
(including chairs used for eye examinations or procedures, and dental 
examinations or procedures), weight scales, mammography equipment, x-
ray machines, and other radiological equipment commonly used for 
diagnostic purposes by health professionals.
    ``(c) Review and Amendment.--The Architectural and Transportation 
Barriers Compliance Board, in consultation with the Commissioner of the 
Food and Drug Administration, shall periodically review and, as 
appropriate, amend the standards in accordance with the Administrative 
Procedure Act (2 U.S.C. 551 et seq.).''.

SEC. 4204. IMMUNIZATIONS.

    (a) State Authority To Purchase Recommended Vaccines for Adults.--
Section 317 of the Public Health Service Act (42 U.S.C. 247b) is 
amended by adding at the end the following:
    ``(l) Authority to Purchase Recommended Vaccines for Adults.--
        ``(1) In general.--The Secretary may negotiate and enter into 
    contracts with manufacturers of vaccines for the purchase and 
    delivery of vaccines for adults as provided for under subsection 
    (e).
        ``(2) State purchase.--A State may obtain additional quantities 
    of such adult vaccines (subject to amounts specified to the 
    Secretary by the State in advance of negotiations) through the 
    purchase of vaccines from manufacturers at the applicable price 
    negotiated by the Secretary under this subsection.''.
    (b) Demonstration Program to Improve Immunization Coverage.--
Section 317 of the Public Health Service Act (42 U.S.C. 247b), as 
amended by subsection (a), is further amended by adding at the end the 
following:
    ``(m) Demonstration Program To Improve Immunization Coverage.--
        ``(1) In general.--The Secretary, acting through the Director 
    of the Centers for Disease Control and Prevention, shall establish 
    a demonstration program to award grants to States to improve the 
    provision of recommended immunizations for children, adolescents, 
    and adults through the use of evidence-based, population-based 
    interventions for high-risk populations.
        ``(2) State plan.--To be eligible for a grant under paragraph 
    (1), a State shall submit to the Secretary an application at such 
    time, in such manner, and containing such information as the 
    Secretary may require, including a State plan that describes the 
    interventions to be implemented under the grant and how such 
    interventions match with local needs and capabilities, as 
    determined through consultation with local authorities.
        ``(3) Use of funds.--Funds received under a grant under this 
    subsection shall be used to implement interventions that are 
    recommended by the Task Force on Community Preventive Services (as 
    established by the Secretary, acting through the Director of the 
    Centers for Disease Control and Prevention) or other evidence-based 
    interventions, including--
            ``(A) providing immunization reminders or recalls for 
        target populations of clients, patients, and consumers;
            ``(B) educating targeted populations and health care 
        providers concerning immunizations in combination with one or 
        more other interventions;
            ``(C) reducing out-of-pocket costs for families for 
        vaccines and their administration;
            ``(D) carrying out immunization-promoting strategies for 
        participants or clients of public programs, including 
        assessments of immunization status, referrals to health care 
        providers, education, provision of on-site immunizations, or 
        incentives for immunization;
            ``(E) providing for home visits that promote immunization 
        through education, assessments of need, referrals, provision of 
        immunizations, or other services;
            ``(F) providing reminders or recalls for immunization 
        providers;
            ``(G) conducting assessments of, and providing feedback to, 
        immunization providers;
            ``(H) any combination of one or more interventions 
        described in this paragraph; or
            ``(I) immunization information systems to allow all States 
        to have electronic databases for immunization records.
        ``(4) Consideration.--In awarding grants under this subsection, 
    the Secretary shall consider any reviews or recommendations of the 
    Task Force on Community Preventive Services.
        ``(5) Evaluation.--Not later than 3 years after the date on 
    which a State receives a grant under this subsection, the State 
    shall submit to the Secretary an evaluation of progress made toward 
    improving immunization coverage rates among high-risk populations 
    within the State.
        ``(6) Report to congress.--Not later than 4 years after the 
    date of enactment of the Affordable Health Choices Act, the 
    Secretary shall submit to Congress a report concerning the 
    effectiveness of the demonstration program established under this 
    subsection together with recommendations on whether to continue and 
    expand such program.
        ``(7) Authorization of appropriations.--There is authorized to 
    be appropriated to carry out this subsection, such sums as may be 
    necessary for each of fiscal years 2010 through 2014.''.
    (c) Reauthorization of Immunization Program.--Section 317(j) of the 
Public Health Service Act (42 U.S.C. 247b(j)) is amended--
        (1) in paragraph (1), by striking ``for each of the fiscal 
    years 1998 through 2005''; and
        (2) in paragraph (2), by striking ``after October 1, 1997,''.
    (d) Rule of Construction Regarding Access to Immunizations.--
Nothing in this section (including the amendments made by this 
section), or any other provision of this Act (including any amendments 
made by this Act) shall be construed to decrease children's access to 
immunizations.
    (e) GAO Study and Report on Medicare Beneficiary Access to 
Vaccines.--
        (1) Study.--The Comptroller General of the United States (in 
    this section referred to as the ``Comptroller General'') shall 
    conduct a study on the ability of Medicare beneficiaries who were 
    65 years of age or older to access routinely recommended vaccines 
    covered under the prescription drug program under part D of title 
    XVIII of the Social Security Act over the period since the 
    establishment of such program. Such study shall include the 
    following:
            (A) An analysis and determination of--
                (i) the number of Medicare beneficiaries who were 65 
            years of age or older and were eligible for a routinely 
            recommended vaccination that was covered under part D;
                (ii) the number of such beneficiaries who actually 
            received a routinely recommended vaccination that was 
            covered under part D; and
                (iii) any barriers to access by such beneficiaries to 
            routinely recommended vaccinations that were covered under 
            part D.
            (B) A summary of the findings and recommendations by 
        government agencies, departments, and advisory bodies (as well 
        as relevant professional organizations) on the impact of 
        coverage under part D of routinely recommended adult 
        immunizations for access to such immunizations by Medicare 
        beneficiaries.
        (2) Report.--Not later than June 1, 2011, the Comptroller 
    General shall submit to the appropriate committees of jurisdiction 
    of the House of Representatives and the Senate 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.
        (3) Funding.--Out of any funds in the Treasury not otherwise 
    appropriated, there are appropriated $1,000,000 for fiscal year 
    2010 to carry out this subsection.

SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN 
              RESTAURANTS.

    (a) Technical Amendments.--Section 403(q)(5)(A) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) is amended--
        (1) in subitem (i), by inserting at the beginning ``except as 
    provided in clause (H)(ii)(III),''; and
        (2) in subitem (ii), by inserting at the beginning ``except as 
    provided in clause (H)(ii)(III),''.
    (b) Labeling Requirements.--Section 403(q)(5) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is amended by adding at 
the end the following:
    ``(H) Restaurants, Retail Food Establishments, and Vending 
Machines.--
        ``(i) General requirements for restaurants and similar retail 
    food establishments.--Except for food described in subclause (vii), 
    in the case of food that is a standard menu item that is offered 
    for sale in a restaurant or similar retail food establishment that 
    is part of a chain with 20 or more locations doing business under 
    the same name (regardless of the type of ownership of the 
    locations) and offering for sale substantially the same menu items, 
    the restaurant or similar retail food establishment shall disclose 
    the information described in subclauses (ii) and (iii).
        ``(ii) Information required to be disclosed by restaurants and 
    retail food establishments.--Except as provided in subclause (vii), 
    the restaurant or similar retail food establishment shall disclose 
    in a clear and conspicuous manner--
            ``(I)(aa) in a nutrient content disclosure statement 
        adjacent to the name of the standard menu item, so as to be 
        clearly associated with the standard menu item, on the menu 
        listing the item for sale, the number of calories contained in 
        the standard menu item, as usually prepared and offered for 
        sale; and
            ``(bb) a succinct statement concerning suggested daily 
        caloric intake, as specified by the Secretary by regulation and 
        posted prominently on the menu and designed to enable the 
        public to understand, in the context of a total daily diet, the 
        significance of the caloric information that is provided on the 
        menu;
            ``(II)(aa) in a nutrient content disclosure statement 
        adjacent to the name of the standard menu item, so as to be 
        clearly associated with the standard menu item, on the menu 
        board, including a drive-through menu board, the number of 
        calories contained in the standard menu item, as usually 
        prepared and offered for sale; and
            ``(bb) a succinct statement concerning suggested daily 
        caloric intake, as specified by the Secretary by regulation and 
        posted prominently on the menu board, designed to enable the 
        public to understand, in the context of a total daily diet, the 
        significance of the nutrition information that is provided on 
        the menu board;
        ``(III) in a written form, available on the premises of the 
    restaurant or similar retail establishment and to the consumer upon 
    request, the nutrition information required under clauses (C) and 
    (D) of subparagraph (1); and
        ``(IV) on the menu or menu board, a prominent, clear, and 
    conspicuous statement regarding the availability of the information 
    described in item (III).
        ``(iii) Self-service food and food on display.--Except as 
    provided in subclause (vii), in the case of food sold at a salad 
    bar, buffet line, cafeteria line, or similar self-service facility, 
    and for self-service beverages or food that is on display and that 
    is visible to customers, a restaurant or similar retail food 
    establishment shall place adjacent to each food offered a sign that 
    lists calories per displayed food item or per serving.
        ``(iv) Reasonable basis.--For the purposes of this clause, a 
    restaurant or similar retail food establishment shall have a 
    reasonable basis for its nutrient content disclosures, including 
    nutrient databases, cookbooks, laboratory analyses, and other 
    reasonable means, as described in section 101.10 of title 21, Code 
    of Federal Regulations (or any successor regulation) or in a 
    related guidance of the Food and Drug Administration.
        ``(v) Menu variability and combination meals.--The Secretary 
    shall establish by regulation standards for determining and 
    disclosing the nutrient content for standard menu items that come 
    in different flavors, varieties, or combinations, but which are 
    listed as a single menu item, such as soft drinks, ice cream, 
    pizza, doughnuts, or children's combination meals, through means 
    determined by the Secretary, including ranges, averages, or other 
    methods.
        ``(vi) Additional information.--If the Secretary determines 
    that a nutrient, other than a nutrient required under subclause 
    (ii)(III), should be disclosed for the purpose of providing 
    information to assist consumers in maintaining healthy dietary 
    practices, the Secretary may require, by regulation, disclosure of 
    such nutrient in the written form required under subclause 
    (ii)(III).
        ``(vii) Nonapplicability to certain food.--
            ``(I) In general.--Subclauses (i) through (vi) do not apply 
        to--
                ``(aa) items that are not listed on a menu or menu 
            board (such as condiments and other items placed on the 
            table or counter for general use);
                ``(bb) daily specials, temporary menu items appearing 
            on the menu for less than 60 days per calendar year, or 
            custom orders; or
                ``(cc) such other food that is part of a customary 
            market test appearing on the menu for less than 90 days, 
            under terms and conditions established by the Secretary.
            ``(II) Written forms.--Subparagraph (5)(C) shall apply to 
        any regulations promulgated under subclauses (ii)(III) and 
        (vi).
        ``(viii) Vending machines.--
            ``(I) In general.--In the case of an article of food sold 
        from a vending machine that--
                ``(aa) does not permit a prospective purchaser to 
            examine the Nutrition Facts Panel before purchasing the 
            article or does not otherwise provide visible nutrition 
            information at the point of purchase; and
                ``(bb) is operated by a person who is engaged in the 
            business of owning or operating 20 or more vending 
            machines,
        the vending machine operator shall provide a sign in close 
        proximity to each article of food or the selection button that 
        includes a clear and conspicuous statement disclosing the 
        number of calories contained in the article.
        ``(ix) Voluntary provision of nutrition information.--
            ``(I) In general.--An authorized official of any restaurant 
        or similar retail food establishment or vending machine 
        operator not subject to the requirements of this clause may 
        elect to be subject to the requirements of such clause, by 
        registering biannually the name and address of such restaurant 
        or similar retail food establishment or vending machine 
        operator with the Secretary, as specified by the Secretary by 
        regulation.
            ``(II) Registration.--Within 120 days of enactment of this 
        clause, the Secretary shall publish a notice in the Federal 
        Register specifying the terms and conditions for implementation 
        of item (I), pending promulgation of regulations.
            ``(III) Rule of construction.--Nothing in this subclause 
        shall be construed to authorize the Secretary to require an 
        application, review, or licensing process for any entity to 
        register with the Secretary, as described in such item.
        ``(x) Regulations.--
            ``(I) Proposed regulation.--Not later than 1 year after the 
        date of enactment of this clause, the Secretary shall 
        promulgate proposed regulations to carry out this clause.
            ``(II) Contents.--In promulgating regulations, the 
        Secretary shall--
                ``(aa) consider standardization of recipes and methods 
            of preparation, reasonable variation in serving size and 
            formulation of menu items, space on menus and menu boards, 
            inadvertent human error, training of food service workers, 
            variations in ingredients, and other factors, as the 
            Secretary determines; and
                ``(bb) specify the format and manner of the nutrient 
            content disclosure requirements under this subclause.
            ``(III) Reporting.--The Secretary shall submit to the 
        Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Energy and Commerce of the House of 
        Representatives a quarterly report that describes the 
        Secretary's progress toward promulgating final regulations 
        under this subparagraph.
        ``(xi) Definition.--In this clause, the term `menu' or `menu 
    board' means the primary writing of the restaurant or other similar 
    retail food establishment from which a consumer makes an order 
    selection.''
    (c) National Uniformity.--Section 403A(a)(4) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343-1(a)(4)) is amended by striking 
``except a requirement for nutrition labeling of food which is exempt 
under subclause (i) or (ii) of section 403(q)(5)(A)'' and inserting 
``except that this paragraph does not apply to food that is offered for 
sale in a restaurant or similar retail food establishment that is not 
part of a chain with 20 or more locations doing business under the same 
name (regardless of the type of ownership of the locations) and 
offering for sale substantially the same menu items unless such 
restaurant or similar retail food establishment complies with the 
voluntary provision of nutrition information requirements under section 
403(q)(5)(H)(ix)''.
    (d) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed--
        (1) to preempt any provision of State or local law, unless such 
    provision establishes or continues into effect nutrient content 
    disclosures of the type required under section 403(q)(5)(H) of the 
    Federal Food, Drug, and Cosmetic Act (as added by subsection (b)) 
    and is expressly preempted under subsection (a)(4) of such section;
        (2) to apply to any State or local requirement respecting a 
    statement in the labeling of food that provides for a warning 
    concerning the safety of the food or component of the food; or
        (3) except as provided in section 403(q)(5)(H)(ix) of the 
    Federal Food, Drug, and Cosmetic Act (as added by subsection (b)), 
    to apply to any restaurant or similar retail food establishment 
    other than a restaurant or similar retail food establishment 
    described in section 403(q)(5)(H)(i) of such Act.

SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED WELLNESS 
              PLAN.

    Section 330 of the Public Health Service Act (42 U.S.C. 245b) is 
amended by adding at the end the following:
    ``(s) Demonstration Program for Individualized Wellness Plans.--
        ``(1) In general.--The Secretary shall establish a pilot 
    program to test the impact of providing at-risk populations who 
    utilize community health centers funded under this section an 
    individualized wellness plan that is designed to reduce risk 
    factors for preventable conditions as identified by a comprehensive 
    risk-factor assessment.
        ``(2) Agreements.--The Secretary shall enter into agreements 
    with not more than 10 community health centers funded under this 
    section to conduct activities under the pilot program under 
    paragraph (1).
        ``(3) Wellness plans.--
            ``(A) In general.--An individualized wellness plan prepared 
        under the pilot program under this subsection may include one 
        or more of the following as appropriate to the individual's 
        identified risk factors:
                ``(i) Nutritional counseling.
                ``(ii) A physical activity plan.
                ``(iii) Alcohol and smoking cessation counseling and 
            services.
                ``(iv) Stress management.
                ``(v) Dietary supplements that have health claims 
            approved by the Secretary.
                ``(vi) Compliance assistance provided by a community 
            health center employee.
            ``(B) Risk factors.--Wellness plan risk factors shall 
        include--
                ``(i) weight;
                ``(ii) tobacco and alcohol use;
                ``(iii) exercise rates;
                ``(iv) nutritional status; and
                ``(v) blood pressure.
            ``(C) Comparisons.--Individualized wellness plans shall 
        make comparisons between the individual involved and a control 
        group of individuals with respect to the risk factors described 
        in subparagraph (B).
        ``(4) Authorization of appropriations.--There is authorized to 
    be appropriated to carry out this subsection, such sums as may be 
    necessary.''.

SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.

    Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) 
is amended by adding at the end the following:
    ``(r)(1) An employer shall provide--
        ``(A) a reasonable break time for an employee to express breast 
    milk for her nursing child for 1 year after the child's birth each 
    time such employee has need to express the milk; and
        ``(B) a place, other than a bathroom, that is shielded from 
    view and free from intrusion from coworkers and the public, which 
    may be used by an employee to express breast milk.
    ``(2) An employer shall not be required to compensate an employee 
receiving reasonable break time under paragraph (1) for any work time 
spent for such purpose.
    ``(3) An employer that employs less than 50 employees shall not be 
subject to the requirements of this subsection, if such requirements 
would impose an undue hardship by causing the employer significant 
difficulty or expense when considered in relation to the size, 
financial resources, nature, or structure of the employer's business.
    ``(4) Nothing in this subsection shall preempt a State law that 
provides greater protections to employees than the protections provided 
for under this subsection.''.

    Subtitle D--Support for Prevention and Public Health Innovation

SEC. 4301. RESEARCH ON OPTIMIZING THE DELIVERY OF PUBLIC HEALTH 
              SERVICES.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention, shall 
provide funding for research in the area of public health services and 
systems.
    (b) Requirements of Research.--Research supported under this 
section shall include--
        (1) examining evidence-based practices relating to prevention, 
    with a particular focus on high priority areas as identified by the 
    Secretary in the National Prevention Strategy or Healthy People 
    2020, and including comparing community-based public health 
    interventions in terms of effectiveness and cost;
        (2) analyzing the translation of interventions from academic 
    settings to real world settings; and
        (3) identifying effective strategies for organizing, financing, 
    or delivering public health services in real world community 
    settings, including comparing State and local health department 
    structures and systems in terms of effectiveness and cost.
    (c) Existing Partnerships.--Research supported under this section 
shall be coordinated with the Community Preventive Services Task Force 
and carried out by building on existing partnerships within the Federal 
Government while also considering initiatives at the State and local 
levels and in the private sector.
    (d) Annual Report.--The Secretary shall, on an annual basis, submit 
to Congress a report concerning the activities and findings with 
respect to research supported under this section.

SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION AND 
              ANALYSIS.

    (a) Uniform Categories and Collection Requirements.--The Public 
Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the 
end the following:

          ``TITLE XXXI--DATA COLLECTION, ANALYSIS, AND QUALITY

``SEC. 3101. DATA COLLECTION, ANALYSIS, AND QUALITY.

    ``(a) Data Collection.--
        ``(1) In general.--The Secretary shall ensure that, by not 
    later than 2 years after the date of enactment of this title, any 
    federally conducted or supported health care or public health 
    program, activity or survey (including Current Population Surveys 
    and American Community Surveys conducted by the Bureau of Labor 
    Statistics and the Bureau of the Census) collects and reports, to 
    the extent practicable--
            ``(A) data on race, ethnicity, sex, primary language, and 
        disability status for applicants, recipients, or participants;
            ``(B) data at the smallest geographic level such as State, 
        local, or institutional levels if such data can be aggregated;
            ``(C) sufficient data to generate statistically reliable 
        estimates by racial, ethnic, sex, primary language, and 
        disability status subgroups for applicants, recipients or 
        participants using, if needed, statistical oversamples of these 
        subpopulations; and
            ``(D) any other demographic data as deemed appropriate by 
        the Secretary regarding health disparities.
        ``(2) Collection standards.--In collecting data described in 
    paragraph (1), the Secretary or designee shall--
            ``(A) use Office of Management and Budget standards, at a 
        minimum, for race and ethnicity measures;
            ``(B) develop standards for the measurement of sex, primary 
        language, and disability status;
            ``(C) develop standards for the collection of data 
        described in paragraph (1) that, at a minimum--
                ``(i) collects self-reported data by the applicant, 
            recipient, or participant; and
                ``(ii) collects data from a parent or legal guardian if 
            the applicant, recipient, or participant is a minor or 
            legally incapacitated;
            ``(D) survey health care providers and establish other 
        procedures in order to assess access to care and treatment for 
        individuals with disabilities and to identify--
                ``(i) locations where individuals with disabilities 
            access primary, acute (including intensive), and long-term 
            care;
                ``(ii) the number of providers with accessible 
            facilities and equipment to meet the needs of the 
            individuals with disabilities, including medical diagnostic 
            equipment that meets the minimum technical criteria set 
            forth in section 510 of the Rehabilitation Act of 1973; and
                ``(iii) the number of employees of health care 
            providers trained in disability awareness and patient care 
            of individuals with disabilities; and
            ``(E) require that any reporting requirement imposed for 
        purposes of measuring quality under any ongoing or federally 
        conducted or supported health care or public health program, 
        activity, or survey includes requirements for the collection of 
        data on individuals receiving health care items or services 
        under such programs activities by race, ethnicity, sex, primary 
        language, and disability status.
        ``(3) Data management.--In collecting data described in 
    paragraph (1), the Secretary, acting through the National 
    Coordinator for Health Information Technology shall--
            ``(A) develop national standards for the management of data 
        collected; and
            ``(B) develop interoperability and security systems for 
        data management.
    ``(b) Data Analysis.--
        ``(1) In general.--For each federally conducted or supported 
    health care or public health program or activity, the Secretary 
    shall analyze data collected under paragraph (a) to detect and 
    monitor trends in health disparities (as defined for purposes of 
    section 485E) at the Federal and State levels.
    ``(c) Data Reporting and Dissemination.--
        ``(1) In general.--The Secretary shall make the analyses 
    described in (b) available to--
            ``(A) the Office of Minority Health;
            ``(B) the National Center on Minority Health and Health 
        Disparities;
            ``(C) the Agency for Healthcare Research and Quality;
            ``(D) the Centers for Disease Control and Prevention;
            ``(E) the Centers for Medicare & Medicaid Services;
            ``(F) the Indian Health Service and epidemiology centers 
        funded under the Indian Health Care Improvement Act;
            ``(G) the Office of Rural health;
            ``(H) other agencies within the Department of Health and 
        Human Services; and
            ``(I) other entities as determined appropriate by the 
        Secretary.
        ``(2) Reporting of data.--The Secretary shall report data and 
    analyses described in (a) and (b) through--
            ``(A) public postings on the Internet websites of the 
        Department of Health and Human Services; and
            ``(B) any other reporting or dissemination mechanisms 
        determined appropriate by the Secretary.
        ``(3) Availability of data.--The Secretary may make data 
    described in (a) and (b) available for additional research, 
    analyses, and dissemination to other Federal agencies, non-
    governmental entities, and the public, in accordance with any 
    Federal agency's data user agreements.
    ``(d) Limitations on Use of Data.--Nothing in this section shall be 
construed to permit the use of information collected under this section 
in a manner that would adversely affect any individual.
    ``(e) Protection and Sharing of Data.--
        ``(1) Privacy and other safeguards.--The Secretary shall ensure 
    (through the promulgation of regulations or otherwise) that--
            ``(A) all data collected pursuant to subsection (a) is 
        protected--
                ``(i) under privacy protections that are at least as 
            broad as those that the Secretary applies to other health 
            data under the regulations promulgated under section 264(c) 
            of the Health Insurance Portability and Accountability Act 
            of 1996 (Public Law 104-191; 110 Stat. 2033); and
                ``(ii) from all inappropriate internal use by any 
            entity that collects, stores, or receives the data, 
            including use of such data in determinations of eligibility 
            (or continued eligibility) in health plans, and from other 
            inappropriate uses, as defined by the Secretary; and
            ``(B) all appropriate information security safeguards are 
        used in the collection, analysis, and sharing of data collected 
        pursuant to subsection (a).
        ``(2) Data sharing.--The Secretary shall establish procedures 
    for sharing data collected pursuant to subsection (a), measures 
    relating to such data, and analyses of such data, with other 
    relevant Federal and State agencies including the agencies, 
    centers, and entities within the Department of Health and Human 
    Services specified in subsection (c)(1)..
    ``(f) Data on Rural Underserved Populations.--The Secretary shall 
ensure that any data collected in accordance with this section 
regarding racial and ethnic minority groups are also collected 
regarding underserved rural and frontier populations.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2010 through 2014.
    ``(h) Requirement for Implementation.--Notwithstanding any other 
provision of this section, data may not be collected under this section 
unless funds are directly appropriated for such purpose in an 
appropriations Act.
    ``(i) Consultation.--The Secretary shall consult with the Director 
of the Office of Personnel Management, the Secretary of Defense, the 
Secretary of Veterans Affairs, the Director of the Bureau of the 
Census, the Commissioner of Social Security, and the head of other 
appropriate Federal agencies in carrying out this section.''.
    (b) Addressing Health Care Disparities in Medicaid and CHIP.--
        (1) Standardized collection requirements included in state 
    plans.--
            (A) Medicaid.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 1396a(a)), as amended by section 2001(d), is 
        amended--
                (i) in paragraph 4), by striking ``and'' at the end;
                (ii) in paragraph (75), by striking the period at the 
            end and inserting ``; and''; and
                (iii) by inserting after paragraph (75) the following 
            new paragraph:
        ``(76) provide that any data collected under the State plan 
    meets the requirements of section 3101 of the Public Health Service 
    Act.''.
            (B) CHIP.--Section 2108(e) of the Social Security Act (42 
        U.S.C. 1397hh(e)) is amended by adding at the end the following 
        new paragraph:
        ``(7) Data collected and reported in accordance with section 
    3101 of the Public Health Service Act, with respect to individuals 
    enrolled in the State child health plan (and, in the case of 
    enrollees under 19 years of age, their parents or legal guardians), 
    including data regarding the primary language of such individuals, 
    parents, and legal guardians.''.
        (2) Extending medicare requirement to address health 
    disparities data collection to medicaid and chip.--Title XIX of the 
    Social Security Act (42 U.S.C. 1396 et seq.), as amended by section 
    2703 is amended by adding at the end the following new section:

``SEC. 1946. ADDRESSING HEALTH CARE DISPARITIES.

    ``(a) Evaluating Data Collection Approaches.--The Secretary shall 
evaluate approaches for the collection of data under this title and 
title XXI, to be performed in conjunction with existing quality 
reporting requirements and programs under this title and title XXI, 
that allow for the ongoing, accurate, and timely collection and 
evaluation of data on disparities in health care services and 
performance on the basis of race, ethnicity, sex, primary language, and 
disability status. In conducting such evaluation, the Secretary shall 
consider the following objectives:
        ``(1) Protecting patient privacy.
        ``(2) Minimizing the administrative burdens of data collection 
    and reporting on States, providers, and health plans participating 
    under this title or title XXI.
        ``(3) Improving program data under this title and title XXI on 
    race, ethnicity, sex, primary language, and disability status.
    ``(b) Reports to Congress.--
        ``(1) Report on evaluation.--Not later than 18 months after the 
    date of the enactment of this section, the Secretary shall submit 
    to Congress a report on the evaluation conducted under subsection 
    (a). Such report shall, taking into consideration the results of 
    such evaluation--
            ``(A) identify approaches (including defining 
        methodologies) for identifying and collecting and evaluating 
        data on health care disparities on the basis of race, 
        ethnicity, sex, primary language, and disability status for the 
        programs under this title and title XXI; and
            ``(B) include recommendations on the most effective 
        strategies and approaches to reporting HEDIS quality measures 
        as required under section 1852(e)(3) and other nationally 
        recognized quality performance measures, as appropriate, on 
        such bases.
        ``(2) Reports on data analyses.--Not later than 4 years after 
    the date of the enactment of this section, and 4 years thereafter, 
    the Secretary shall submit to Congress a report that includes 
    recommendations for improving the identification of health care 
    disparities for beneficiaries under this title and under title XXI 
    based on analyses of the data collected under subsection (c).
    ``(c) Implementing Effective Approaches.--Not later than 24 months 
after the date of the enactment of this section, the Secretary shall 
implement the approaches identified in the report submitted under 
subsection (b)(1) for the ongoing, accurate, and timely collection and 
evaluation of data on health care disparities on the basis of race, 
ethnicity, sex, primary language, and disability status.''.

SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), 
by section 4102, is further amended by adding at the end the following:

               ``PART U--EMPLOYER-BASED WELLNESS PROGRAM

``SEC. 399MM. TECHNICAL ASSISTANCE FOR EMPLOYER-BASED WELLNESS 
              PROGRAMS.

    ``In order to expand the utilization of evidence-based prevention 
and health promotion approaches in the workplace, the Director shall--
        ``(1) provide employers (including small, medium, and large 
    employers, as determined by the Director) with technical 
    assistance, consultation, tools, and other resources in evaluating 
    such employers' employer-based wellness programs, including--
            ``(A) measuring the participation and methods to increase 
        participation of employees in such programs;
            ``(B) developing standardized measures that assess policy, 
        environmental and systems changes necessary to have a positive 
        health impact on employees' health behaviors, health outcomes, 
        and health care expenditures; and
            ``(C) evaluating such programs as they relate to changes in 
        the health status of employees, the absenteeism of employees, 
        the productivity of employees, the rate of workplace injury, 
        and the medical costs incurred by employees; and
        ``(2) build evaluation capacity among workplace staff by 
    training employers on how to evaluate employer-based wellness 
    programs by ensuring evaluation resources, technical assistance, 
    and consultation are available to workplace staff as needed through 
    such mechanisms as web portals, call centers, or other means.

``SEC. 399MM-1. NATIONAL WORKSITE HEALTH POLICIES AND PROGRAMS STUDY.

    ``(a) In General.--In order to assess, analyze, and monitor over 
time data about workplace policies and programs, and to develop 
instruments to assess and evaluate comprehensive workplace chronic 
disease prevention and health promotion programs, policies and 
practices, not later than 2 years after the date of enactment of this 
part, and at regular intervals (to be determined by the Director) 
thereafter, the Director shall conduct a national worksite health 
policies and programs survey to assess employer-based health policies 
and programs.
    ``(b) Report.--Upon the completion of each study under subsection 
(a), the Director shall submit to Congress a report that includes the 
recommendations of the Director for the implementation of effective 
employer-based health policies and programs.

``SEC. 399MM-2. PRIORITIZATION OF EVALUATION BY SECRETARY.

    ``The Secretary shall evaluate, in accordance with this part, all 
programs funded through the Centers for Disease Control and Prevention 
before conducting such an evaluation of privately funded programs 
unless an entity with a privately funded wellness program requests such 
an evaluation.

``SEC. 399MM-3. PROHIBITION OF FEDERAL WORKPLACE WELLNESS REQUIREMENTS.

    ``Notwithstanding any other provision of this part, any 
recommendations, data, or assessments carried out under this part shall 
not be used to mandate requirements for workplace wellness programs.''.

SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

    Title XXVIII of the Public Health Service Act (42 U.S.C. 300hh et 
seq.) is amended by adding at the end the following:

     ``Subtitle C--Strengthening Public Health Surveillance Systems

``SEC. 2821. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

    ``(a) In General.--Subject to the availability of appropriations, 
the Secretary, acting through the Director of the Centers for Disease 
Control and Prevention, shall establish an Epidemiology and Laboratory 
Capacity Grant Program to award grants to State health departments as 
well as local health departments and tribal jurisdictions that meet 
such criteria as the Director determines appropriate. Academic centers 
that assist State and eligible local and tribal health departments may 
also be eligible for funding under this section as the Director 
determines appropriate. Grants shall be awarded under this section to 
assist public health agencies in improving surveillance for, and 
response to, infectious diseases and other conditions of public health 
importance by--
        ``(1) strengthening epidemiologic capacity to identify and 
    monitor the occurrence of infectious diseases and other conditions 
    of public health importance;
        ``(2) enhancing laboratory practice as well as systems to 
    report test orders and results electronically;
        ``(3) improving information systems including developing and 
    maintaining an information exchange using national guidelines and 
    complying with capacities and functions determined by an advisory 
    council established and appointed by the Director; and
        ``(4) developing and implementing prevention and control 
    strategies.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $190,000,000 for each of fiscal 
years 2010 through 2013, of which--
        ``(1) not less than $95,000,000 shall be made available each 
    such fiscal year for activities under paragraphs (1) and (4) of 
    subsection (a);
        ``(2) not less than $60,000,000 shall be made available each 
    such fiscal year for activities under subsection (a)(3); and
        ``(3) not less than $32,000,000 shall be made available each 
    such fiscal year for activities under subsection (a)(2).''.

SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE MANAGEMENT.

    (a) Institute of Medicine Conference on Pain.--
        (1) Convening.--Not later than 1 year after funds are 
    appropriated to carry out this subsection, the Secretary of Health 
    and Human Services shall seek to enter into an agreement with the 
    Institute of Medicine of the National Academies to convene a 
    Conference on Pain (in this subsection referred to as ``the 
    Conference'').
        (2) Purposes.--The purposes of the Conference shall be to--
            (A) increase the recognition of pain as a significant 
        public health problem in the United States;
            (B) evaluate the adequacy of assessment, diagnosis, 
        treatment, and management of acute and chronic pain in the 
        general population, and in identified racial, ethnic, gender, 
        age, and other demographic groups that may be 
        disproportionately affected by inadequacies in the assessment, 
        diagnosis, treatment, and management of pain;
            (C) identify barriers to appropriate pain care;
            (D) establish an agenda for action in both the public and 
        private sectors that will reduce such barriers and 
        significantly improve the state of pain care research, 
        education, and clinical care in the United States.
        (3) Other appropriate entity.--If the Institute of Medicine 
    declines to enter into an agreement under paragraph (1), the 
    Secretary of Health and Human Services may enter into such 
    agreement with another appropriate entity.
        (4) Report.--A report summarizing the Conference's findings and 
    recommendations shall be submitted to the Congress not later than 
    June 30, 2011.
        (5) Authorization of appropriations.--For the purpose of 
    carrying out this subsection, there is authorized to be 
    appropriated such sums as may be necessary for each of fiscal years 
    2010 and 2011.
    (b) Pain Research at National Institutes of Health.--Part B of 
title IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is 
amended by adding at the end the following:

``SEC. 409J. PAIN RESEARCH.

    ``(a) Research Initiatives.--
        ``(1) In general.--The Director of NIH is encouraged to 
    continue and expand, through the Pain Consortium, an aggressive 
    program of basic and clinical research on the causes of and 
    potential treatments for pain.
        ``(2) Annual recommendations.--Not less than annually, the Pain 
    Consortium, in consultation with the Division of Program 
    Coordination, Planning, and Strategic Initiatives, shall develop 
    and submit to the Director of NIH recommendations on appropriate 
    pain research initiatives that could be undertaken with funds 
    reserved under section 402A(c)(1) for the Common Fund or otherwise 
    available for such initiatives.
        ``(3) Definition.--In this subsection, the term `Pain 
    Consortium' means the Pain Consortium of the National Institutes of 
    Health or a similar trans-National Institutes of Health 
    coordinating entity designated by the Secretary for purposes of 
    this subsection.
    ``(b) Interagency Pain Research Coordinating Committee.--
        ``(1) Establishment.--The Secretary shall establish not later 
    than 1 year after the date of the enactment of this section and as 
    necessary maintain a committee, to be known as the Interagency Pain 
    Research Coordinating Committee (in this section referred to as the 
    `Committee'), to coordinate all efforts within the Department of 
    Health and Human Services and other Federal agencies that relate to 
    pain research.
        ``(2) Membership.--
            ``(A) In general.--The Committee shall be composed of the 
        following voting members:
                ``(i) Not more than 7 voting Federal representatives 
            appoint by the Secretary from agencies that conduct pain 
            care research and treatment.
                ``(ii) 12 additional voting members appointed under 
            subparagraph (B).
            ``(B) Additional members.--The Committee shall include 
        additional voting members appointed by the Secretary as 
        follows:
                ``(i) 6 non-Federal members shall be appointed from 
            among scientists, physicians, and other health 
            professionals.
                ``(ii) 6 members shall be appointed from members of the 
            general public, who are representatives of leading 
            research, advocacy, and service organizations for 
            individuals with pain-related conditions.
            ``(C) Nonvoting members.--The Committee shall include such 
        nonvoting members as the Secretary determines to be 
        appropriate.
        ``(3) Chairperson.--The voting members of the Committee shall 
    select a chairperson from among such members. The selection of a 
    chairperson shall be subject to the approval of the Director of 
    NIH.
        ``(4) Meetings.--The Committee shall meet at the call of the 
    chairperson of the Committee or upon the request of the Director of 
    NIH, but in no case less often than once each year.
        ``(5) Duties.--The Committee shall--
            ``(A) develop a summary of advances in pain care research 
        supported or conducted by the Federal agencies relevant to the 
        diagnosis, prevention, and treatment of pain and diseases and 
        disorders associated with pain;
            ``(B) identify critical gaps in basic and clinical research 
        on the symptoms and causes of pain;
            ``(C) make recommendations to ensure that the activities of 
        the National Institutes of Health and other Federal agencies 
        are free of unnecessary duplication of effort;
            ``(D) make recommendations on how best to disseminate 
        information on pain care; and
            ``(E) make recommendations on how to expand partnerships 
        between public entities and private entities to expand 
        collaborative, cross-cutting research.
        ``(6) Review.--The Secretary shall review the necessity of the 
    Committee at least once every 2 years.''.
    (c) Pain Care Education and Training.--Part D of title VII of the 
Public Health Service Act (42 U.S.C. 294 et seq.) is amended by adding 
at the end the following new section:

``SEC. 759. PROGRAM FOR EDUCATION AND TRAINING IN PAIN CARE.

    ``(a) In General.--The Secretary may make awards of grants, 
cooperative agreements, and contracts to health professions schools, 
hospices, and other public and private entities for the development and 
implementation of programs to provide education and training to health 
care professionals in pain care.
    ``(b) Certain Topics.--An award may be made under subsection (a) 
only if the applicant for the award agrees that the program carried out 
with the award will include information and education on--
        ``(1) recognized means for assessing, diagnosing, treating, and 
    managing pain and related signs and symptoms, including the 
    medically appropriate use of controlled substances;
        ``(2) applicable laws, regulations, rules, and policies on 
    controlled substances, including the degree to which misconceptions 
    and concerns regarding such laws, regulations, rules, and policies, 
    or the enforcement thereof, may create barriers to patient access 
    to appropriate and effective pain care;
        ``(3) interdisciplinary approaches to the delivery of pain 
    care, including delivery through specialized centers providing 
    comprehensive pain care treatment expertise;
        ``(4) cultural, linguistic, literacy, geographic, and other 
    barriers to care in underserved populations; and
        ``(5) recent findings, developments, and improvements in the 
    provision of pain care.
    ``(c) Evaluation of Programs.--The Secretary shall (directly or 
through grants or contracts) provide for the evaluation of programs 
implemented under subsection (a) in order to determine the effect of 
such programs on knowledge and practice of pain care.
    ``(d) Pain Care Defined.--For purposes of this section the term 
`pain care' means the assessment, diagnosis, treatment, or management 
of acute or chronic pain regardless of causation or body location.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of the fiscal years 2010 through 2012. Amounts appropriated 
under this subsection shall remain available until expended.''.

SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION PROJECT.

    Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 1320b-
9a(e)(8)) is amended to read as follows:
        ``(8) Appropriation.--Out of any funds in the Treasury not 
    otherwise appropriated, there is appropriated to carry out this 
    subsection, $25,000,000 for the period of fiscal years 2010 through 
    2014.''.

                  Subtitle E--Miscellaneous Provisions

SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING.

    (a) Finding.--The Senate finds that the costs of prevention 
programs are difficult to estimate due in part because prevention 
initiatives are hard to measure and results may occur outside the 5 and 
10 year budget windows.
    (b) Sense of Congress.--It is the sense of the Senate that Congress 
should work with the Congressional Budget Office to develop better 
methodologies for scoring progress to be made in prevention and 
wellness programs.

SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS INITIATIVES.

    To determine whether existing Federal health and wellness 
initiatives are effective in achieving their stated goals, the 
Secretary of Health and Human Services shall--
        (1) conduct an evaluation of such programs as they relate to 
    changes in health status of the American public and specifically on 
    the health status of the Federal workforce, including absenteeism 
    of employees, the productivity of employees, the rate of workplace 
    injury, and the medical costs incurred by employees, and health 
    conditions, including workplace fitness, healthy food and 
    beverages, and incentives in the Federal Employee Health Benefits 
    Program; and
        (2) submit to Congress a report concerning such evaluation, 
    which shall include conclusions concerning the reasons that such 
    existing programs have proven successful or not successful and what 
    factors contributed to such conclusions.

                     TITLE V--HEALTH CARE WORKFORCE
                  Subtitle A--Purpose and Definitions

SEC. 5001. PURPOSE.

    The purpose of this title is to improve access to and the delivery 
of health care services for all individuals, particularly low income, 
underserved, uninsured, minority, health disparity, and rural 
populations by--
        (1) gathering and assessing comprehensive data in order for the 
    health care workforce to meet the health care needs of individuals, 
    including research on the supply, demand, distribution, diversity, 
    and skills needs of the health care workforce;
        (2) increasing the supply of a qualified health care workforce 
    to improve access to and the delivery of health care services for 
    all individuals;
        (3) enhancing health care workforce education and training to 
    improve access to and the delivery of health care services for all 
    individuals; and
        (4) providing support to the existing health care workforce to 
    improve access to and the delivery of health care services for all 
    individuals.

SEC. 5002. DEFINITIONS.

    (a) This Title.--In this title:
        (1) Allied health professional.--The term ``allied health 
    professional'' means an allied health professional as defined in 
    section 799B(5) of the Public Heath Service Act (42 U.S.C. 295p(5)) 
    who--
            (A) has graduated and received an allied health professions 
        degree or certificate from an institution of higher education; 
        and
            (B) is employed with a Federal, State, local or tribal 
        public health agency, or in a setting where patients might 
        require health care services, including acute care facilities, 
        ambulatory care facilities, personal residences, and other 
        settings located in health professional shortage areas, 
        medically underserved areas, or medically underserved 
        populations, as recognized by the Secretary of Health and Human 
        Services.
        (2) Health care career pathway.--The term ``healthcare career 
    pathway'' means a rigorous, engaging, and high quality set of 
    courses and services that--
            (A) includes an articulated sequence of academic and career 
        courses, including 21st century skills;
            (B) is aligned with the needs of healthcare industries in a 
        region or State;
            (C) prepares students for entry into the full range of 
        postsecondary education options, including registered 
        apprenticeships, and careers;
            (D) provides academic and career counseling in student-to-
        counselor ratios that allow students to make informed decisions 
        about academic and career options;
            (E) meets State academic standards, State requirements for 
        secondary school graduation and is aligned with requirements 
        for entry into postsecondary education, and applicable industry 
        standards; and
            (F) leads to 2 or more credentials, including--
                (i) a secondary school diploma; and
                (ii) a postsecondary degree, an apprenticeship or other 
            occupational certification, a certificate, or a license.
        (3) Institution of higher education.--The term ``institution of 
    higher education'' has the meaning given the term in sections 101 
    and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 
    1002).
        (4) Low income individual, state workforce investment board, 
    and local workforce investment board.--
            (A) Low-income individual.--The term ``low-income 
        individual'' has the meaning given that term in section 101 of 
        the Workforce investment Act of 1998 (29 U.S.C. 2801).
            (B) State workforce investment board; local workforce 
        investment board.--The terms ``State workforce investment 
        board'' and ``local workforce investment board'', refer to a 
        State workforce investment board established under section 111 
        of the Workforce Investment Act of 1998 (29 U.S.C. 2821) and a 
        local workforce investment board established under section 117 
        of such Act (29 U.S.C. 2832), respectively.
        (5) Postsecondary education.--The term ``postsecondary 
    education'' means--
            (A) a 4-year program of instruction, or not less than a 1-
        year program of instruction that is acceptable for credit 
        toward an associate or a baccalaureate degree, offered by an 
        institution of higher education; or
            (B) a certificate or registered apprenticeship program at 
        the postsecondary level offered by an institution of higher 
        education or a non-profit educational institution.
        (6) Registered apprenticeship program.--The term ``registered 
    apprenticeship program'' means an industry skills training program 
    at the postsecondary level that combines technical and theoretical 
    training through structure on the job learning with related 
    instruction (in a classroom or through distance learning) while an 
    individual is employed, working under the direction of qualified 
    personnel or a mentor, and earning incremental wage increases 
    aligned to enhance job proficiency, resulting in the acquisition of 
    a nationally recognized and portable certificate, under a plan 
    approved by the Office of Apprenticeship or a State agency 
    recognized by the Department of Labor.
    (b) Title VII of the Public Health Service Act.--Section 799B of 
the Public Health Service Act (42 U.S.C. 295p) is amended--
        (1) by striking paragraph (3) and inserting the following:
        ``(3) Physician assistant education program.--The term 
    `physician assistant education program' means an educational 
    program in a public or private institution in a State that--
            ``(A) has as its objective the education of individuals 
        who, upon completion of their studies in the program, be 
        qualified to provide primary care medical services with the 
        supervision of a physician; and
            ``(B) is accredited by the Accreditation Review Commission 
        on Education for the Physician Assistant.''; and
        (2) by adding at the end the following:
        ``(12) Area health education center.--The term `area health 
    education center' means a public or nonprofit private organization 
    that has a cooperative agreement or contract in effect with an 
    entity that has received an award under subsection (a)(1) or (a)(2) 
    of section 751, satisfies the requirements in section 751(d)(1), 
    and has as one of its principal functions the operation of an area 
    health education center. Appropriate organizations may include 
    hospitals, health organizations with accredited primary care 
    training programs, accredited physician assistant educational 
    programs associated with a college or university, and universities 
    or colleges not operating a school of medicine or osteopathic 
    medicine.
        ``(13) Area health education center program.--The term `area 
    health education center program' means cooperative program 
    consisting of an entity that has received an award under subsection 
    (a)(1) or (a)(2) of section 751 for the purpose of planning, 
    developing, operating, and evaluating an area health education 
    center program and one or more area health education centers, which 
    carries out the required activities described in section 751(c), 
    satisfies the program requirements in such section, has as one of 
    its principal functions identifying and implementing strategies and 
    activities that address health care workforce needs in its service 
    area, in coordination with the local workforce investment boards.
        ``(14) Clinical social worker.--The term `clinical social 
    worker' has the meaning given the term in section 1861(hh)(1) of 
    the Social Security Act (42 U.S.C. 1395x(hh)(1)).
        ``(15) Cultural competency.--The term `cultural competency' 
    shall be defined by the Secretary in a manner consistent with 
    section 1707(d)(3).
        ``(16) Direct care worker.--The term `direct care worker' has 
    the meaning given that term in the 2010 Standard Occupational 
    Classifications of the Department of Labor for Home Health Aides 
    [31-1011], Psychiatric Aides [31-1013], Nursing Assistants [31-
    1014], and Personal Care Aides [39-9021].
        ``(17) Federally qualified health center.--The term `Federally 
    qualified health center' has the meaning given that term in section 
    1861(aa) of the Social Security Act (42 U.S.C. 1395x(aa)).
        ``(18) Frontier health professional shortage area.--The term 
    `frontier health professional shortage area' means an area--
            ``(A) with a population density less than 6 persons per 
        square mile within the service area; and
            ``(B) with respect to which the distance or time for the 
        population to access care is excessive.
        ``(19) Graduate psychology.--The term `graduate psychology' 
    means an accredited program in professional psychology.
        ``(20) Health disparity population.--The term `health disparity 
    population' has the meaning given such term in section 903(d)(1).
        ``(21) Health literacy.--The term `health literacy' means the 
    degree to which an individual has the capacity to obtain, 
    communicate, process, and understand health information and 
    services in order to make appropriate health decisions.
        ``(22) Mental health service professional.--The term `mental 
    health service professional' means an individual with a graduate or 
    postgraduate degree from an accredited institution of higher 
    education in psychiatry, psychology, school psychology, behavioral 
    pediatrics, psychiatric nursing, social work, school social work, 
    substance abuse disorder prevention and treatment, marriage and 
    family counseling, school counseling, or professional counseling.
        ``(23) One-stop delivery system center.--The term `one-stop 
    delivery system' means a one-stop delivery system described in 
    section 134(c) of the Workforce Investment Act of 1998 (29 U.S.C. 
    2864(c)).
        ``(24) Paraprofessional child and adolescent mental health 
    worker.--The term `paraprofessional child and adolescent mental 
    health worker' means an individual who is not a mental or 
    behavioral health service professional, but who works at the first 
    stage of contact with children and families who are seeking mental 
    or behavioral health services, including substance abuse prevention 
    and treatment services.
        ``(25) Racial and ethnic minority group; racial and ethnic 
    minority population.--The terms `racial and ethnic minority group' 
    and `racial and ethnic minority population' have the meaning given 
    the term `racial and ethnic minority group' in section 1707.
        ``(26) Rural health clinic.--The term `rural health clinic' has 
    the meaning given that term in section 1861(aa) of the Social 
    Security Act (42 U.S.C. 1395x(aa)).''.
    (c) Title VIII of the Public Health Service Act.--Section 801 of 
the Public Health Service Act (42 U.S.C. 296) is amended--
        (1) in paragraph (2)--
            (A) by striking ``means a'' and inserting ``means an 
        accredited (as defined in paragraph 6)''; and
            (B) by striking the period as inserting the following: 
        ``where graduates are--
            ``(A) authorized to sit for the National Council Licensure 
        EXamination-Registered Nurse (NCLEX-RN); or
            ``(B) licensed registered nurses who will receive a 
        graduate or equivalent degree or training to become an advanced 
        education nurse as defined by section 811(b).''; and
        (2) by adding at the end the following:
        ``(16) Accelerated nursing degree program.--The term 
    `accelerated nursing degree program' means a program of education 
    in professional nursing offered by an accredited school of nursing 
    in which an individual holding a bachelors degree in another 
    discipline receives a BSN or MSN degree in an accelerated time 
    frame as determined by the accredited school of nursing.
        ``(17) Bridge or degree completion program.--The term `bridge 
    or degree completion program' means a program of education in 
    professional nursing offered by an accredited school of nursing, as 
    defined in paragraph (2), that leads to a baccalaureate degree in 
    nursing. Such programs may include, Registered Nurse (RN) to 
    Bachelor's of Science of Nursing (BSN) programs, RN to MSN (Master 
    of Science of Nursing) programs, or BSN to Doctoral programs.''.

          Subtitle B--Innovations in the Health Care Workforce

SEC. 5101. NATIONAL HEALTH CARE WORKFORCE COMMISSION.

    (a) Purpose.--It is the purpose of this section to establish a 
National Health Care Workforce Commission that--
        (1) serves as a national resource for Congress, the President, 
    States, and localities;
        (2) communicates and coordinates with the Departments of Health 
    and Human Services, Labor, Veterans Affairs, Homeland Security, and 
    Education on related activities administered by one or more of such 
    Departments;
        (3) develops and commissions evaluations of education and 
    training activities to determine whether the demand for health care 
    workers is being met;
        (4) identifies barriers to improved coordination at the 
    Federal, State, and local levels and recommend ways to address such 
    barriers; and
        (5) encourages innovations to address population needs, 
    constant changes in technology, and other environmental factors.
    (b) Establishment.--There is hereby established the National Health 
Care Workforce Commission (in this section referred to as the 
``Commission'').
    (c) Membership.--
        (1) Number and appointment.--The Commission shall be composed 
    of 15 members to be appointed by the Comptroller General, without 
    regard to section 5 of the Federal Advisory Committee Act (5 U.S.C. 
    App.).
        (2) Qualifications.--
            (A) In general.--The membership of the Commission shall 
        include individuals--
                (i) with national recognition for their expertise in 
            health care labor market analysis, including health care 
            workforce analysis; health care finance and economics; 
            health care facility management; health care plans and 
            integrated delivery systems; health care workforce 
            education and training; health care philanthropy; providers 
            of health care services; and other related fields; and
                (ii) who will provide a combination of professional 
            perspectives, broad geographic representation, and a 
            balance between urban, suburban, rural, and frontier 
            representatives.
            (B) Inclusion.--
                (i) In general.--The membership of the Commission shall 
            include no less than one representative of--

                    (I) the health care workforce and health 
                professionals;
                    (II) employers;
                    (III) third-party payers;
                    (IV) individuals skilled in the conduct and 
                interpretation of health care services and health 
                economics research;
                    (V) representatives of consumers;
                    (VI) labor unions;
                    (VII) State or local workforce investment boards; 
                and
                    (VIII) educational institutions (which may include 
                elementary and secondary institutions, institutions of 
                higher education, including 2 and 4 year institutions, 
                or registered apprenticeship programs).

                (ii) Additional members.--The remaining membership may 
            include additional representatives from clause (i) and 
            other individuals as determined appropriate by the 
            Comptroller General of the United States.
            (C) Majority non-providers.--Individuals who are directly 
        involved in health professions education or practice shall not 
        constitute a majority of the membership of the Commission.
            (D) Ethical disclosure.--The Comptroller General shall 
        establish a system for public disclosure by members of the 
        Commission of financial and other potential conflicts of 
        interest relating to such members. Members of the Commission 
        shall be treated as employees of Congress for purposes of 
        applying title I of the Ethics in Government Act of 1978. 
        Members of the Commission shall not be treated as special 
        government employees under title 18, United States Code.
        (3) Terms.--
            (A) In general.--The terms of members of the Commission 
        shall be for 3 years except that the Comptroller General shall 
        designate staggered terms for the members first appointed.
            (B) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office. A vacancy in the Commission shall be filled in the 
        manner in which the original appointment was made.
            (C) Initial appointments.--The Comptroller General shall 
        make initial appointments of members to the Commission not 
        later than September 30, 2010.
        (4) Compensation.--While serving on the business of the 
    Commission (including travel time), a member of the Commission 
    shall be entitled to compensation at the per diem equivalent of the 
    rate provided for level IV of the Executive Schedule under section 
    5315 of tile 5, United States Code, and while so serving away from 
    home and the member's regular place of business, a member may be 
    allowed travel expenses, as authorized by the Chairman of the 
    Commission. Physicians serving as personnel of the Commission may 
    be provided a physician comparability allowance by the Commission 
    in the same manner as Government physicians may be provided such an 
    allowance by an agency under section 5948 of title 5, United States 
    Code, and for such purpose subsection (i) of such section shall 
    apply to the Commission in the same manner as it applies to the 
    Tennessee Valley Authority. For purposes of pay (other than pay of 
    members of the Commission) and employment benefits, rights, and 
    privileges, all personnel of the Commission shall be treated as if 
    they were employees of the United States Senate. Personnel of the 
    Commission shall not be treated as employees of the Government 
    Accountability Office for any purpose.
        (5) Chairman, vice chairman.--The Comptroller General shall 
    designate a member of the Commission, at the time of appointment of 
    the member, as Chairman and a member as Vice Chairman for that term 
    of appointment, except that in the case of vacancy of the 
    chairmanship or vice chairmanship, the Comptroller General may 
    designate another member for the remainder of that member's term.
        (6) Meetings.--The Commission shall meet at the call of the 
    chairman, but no less frequently than on a quarterly basis.
    (d) Duties.--
        (1) Recognition, dissemination, and communication.--The 
    Commission shall--
            (A) recognize efforts of Federal, State, and local 
        partnerships to develop and offer health care career pathways 
        of proven effectiveness;
            (B) disseminate information on promising retention 
        practices for health care professionals; and
            (C) communicate information on important policies and 
        practices that affect the recruitment, education and training, 
        and retention of the health care workforce.
        (2) Review of health care workforce and annual reports.--In 
    order to develop a fiscally sustainable integrated workforce that 
    supports a high-quality, readily accessible health care delivery 
    system that meets the needs of patients and populations, the 
    Commission, in consultation with relevant Federal, State, and local 
    agencies, shall--
            (A) review current and projected health care workforce 
        supply and demand, including the topics described in paragraph 
        (3);
            (B) make recommendations to Congress and the Administration 
        concerning national health care workforce priorities, goals, 
        and policies;
            (C) by not later than October 1 of each year (beginning 
        with 2011), submit a report to Congress and the Administration 
        containing the results of such reviews and recommendations 
        concerning related policies; and
            (D) by not later than April 1 of each year (beginning with 
        2011), submit a report to Congress and the Administration 
        containing a review of, and recommendations on, at a minimum 
        one high priority area as described in paragraph (4).
        (3) Specific topics to be reviewed.--The topics described in 
    this paragraph include--
            (A) current health care workforce supply and distribution, 
        including demographics, skill sets, and demands, with projected 
        demands during the subsequent 10 and 25 year periods;
            (B) health care workforce education and training capacity, 
        including the number of students who have completed education 
        and training, including registered apprenticeships; the number 
        of qualified faculty; the education and training 
        infrastructure; and the education and training demands, with 
        projected demands during the subsequent 10 and 25 year periods;
            (C) the education loan and grant programs in titles VII and 
        VIII of the Public Health Service Act (42 U.S.C. 292 et seq. 
        and 296 et seq.), with recommendations on whether such programs 
        should become part of the Higher Education Act of 1965 (20 
        U.S.C. 1001 et seq);
            (D) the implications of new and existing Federal policies 
        which affect the health care workforce, including Medicare and 
        Medicaid graduate medical education policies, titles VII and 
        VIII of the Public Health Service Act (42 U.S.C. 292 et seq. 
        and 296 et seq.), the National Health Service Corps (with 
        recommendations for aligning such programs with national health 
        workforce priorities and goals), and other health care 
        workforce programs, including those supported through the 
        Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.), the 
        Carl D. Perkins Career and Technical Education Act of 2006 (20 
        U.S.C. 2301 et seq.), the Higher Education Act of 1965 (20 
        U.S.C. 1001 et seq.), and any other Federal health care 
        workforce programs;
            (E) the health care workforce needs of special populations, 
        such as minorities, rural populations, medically underserved 
        populations, gender specific needs, individuals with 
        disabilities, and geriatric and pediatric populations with 
        recommendations for new and existing Federal policies to meet 
        the needs of these special populations; and
            (F) recommendations creating or revising national loan 
        repayment programs and scholarship programs to require low-
        income, minority medical students to serve in their home 
        communities, if designated as medical underserved community.
        (4) High priority areas.--
            (A) In general.--The initial high priority topics described 
        in this paragraph include each of the following:
                (i) Integrated health care workforce planning that 
            identifies health care professional skills needed and 
            maximizes the skill sets of health care professionals 
            across disciplines.
                (ii) An analysis of the nature, scopes of practice, and 
            demands for health care workers in the enhanced information 
            technology and management workplace.
                (iii) An analysis of how to align Medicare and Medicaid 
            graduate medical education policies with national workforce 
            goals.
                (iv) The education and training capacity, projected 
            demands, and integration with the health care delivery 
            system of each of the following:

                    (I) Nursing workforce capacity at all levels.
                    (II) Oral health care workforce capacity at all 
                levels.
                    (III) Mental and behavioral health care workforce 
                capacity at all levels.
                    (IV) Allied health and public health care workforce 
                capacity at all levels.
                    (V) Emergency medical service workforce capacity, 
                including the retention and recruitment of the 
                volunteer workforce, at all levels.
                    (VI) The geographic distribution of health care 
                providers as compared to the identified health care 
                workforce needs of States and regions.

            (B) Future determinations.--The Commission may require that 
        additional topics be included under subparagraph (A). The 
        appropriate committees of Congress may recommend to the 
        Commission the inclusion of other topics for health care 
        workforce development areas that require special attention.
        (5) Grant program.--The Commission shall--
            (A) review implementation progress reports on, and report 
        to Congress about, the State Health Care Workforce Development 
        Grant program established in section 5102;
            (B) in collaboration with the Department of Labor and in 
        coordination with the Department of Education and other 
        relevant Federal agencies, make recommendations to the fiscal 
        and administrative agent under section 5102(b) for grant 
        recipients under section 5102;
            (C) assess the implementation of the grants under such 
        section; and
            (D) collect performance and report information, including 
        identified models and best practices, on grants from the fiscal 
        and administrative agent under such section and distribute this 
        information to Congress, relevant Federal agencies, and to the 
        public.
        (6) Study.--The Commission shall study effective mechanisms for 
    financing education and training for careers in health care, 
    including public health and allied health.
        (7) Recommendations.--The Commission shall submit 
    recommendations to Congress, the Department of Labor, and the 
    Department of Health and Human Services about improving safety, 
    health, and worker protections in the workplace for the health care 
    workforce.
        (8) Assessment.--The Commission shall assess and receive 
    reports from the National Center for Health Care Workforce Analysis 
    established under section 761(b) of the Public Service Health Act 
    (as amended by section 5103).
    (e) Consultation With Federal, State, and Local Agencies, Congress, 
and Other Organizations.--
        (1) In general.--The Commission shall consult with Federal 
    agencies (including the Departments of Health and Human Services, 
    Labor, Education, Commerce, Agriculture, Defense, and Veterans 
    Affairs and the Environmental Protection Agency), Congress, the 
    Medicare Payment Advisory Commission, the Medicaid and CHIP Payment 
    and Access Commission, and, to the extent practicable, with State 
    and local agencies, Indian tribes, voluntary health care 
    organizations, professional societies, and other relevant public-
    private health care partnerships.
        (2) Obtaining official data.--The Commission, consistent with 
    established privacy rules, may secure directly from any department 
    or agency of the Executive Branch information necessary to enable 
    the Commission to carry out this section.
        (3) Detail of federal government employees.--An employee of the 
    Federal Government may be detailed to the Commission without 
    reimbursement. The detail of such an employee shall be without 
    interruption or loss of civil service status.
    (f) Director and Staff; Experts and Consultants.--Subject to such 
review as the Comptroller General of the United States determines to be 
necessary to ensure the efficient administration of the Commission, the 
Commission may--
        (1) employ and fix the compensation of an executive director 
    that shall not exceed the rate of basic pay payable for level V of 
    the Executive Schedule and such other personnel as may be necessary 
    to carry out its duties (without regard to the provisions of title 
    5, United States Code, governing appointments in the competitive 
    service);
        (2) seek such assistance and support as may be required in the 
    performance of its duties from appropriate Federal departments and 
    agencies;
        (3) enter into contracts or make other arrangements, as may be 
    necessary for the conduct of the work of the Commission (without 
    regard to section 3709 of the Revised Statutes (41 U.S.C. 5));
        (4) make advance, progress, and other payments which relate to 
    the work of the Commission;
        (5) provide transportation and subsistence for persons serving 
    without compensation; and
        (6) prescribe such rules and regulations as the Commission 
    determines to be necessary with respect to the internal 
    organization and operation of the Commission.
    (g) Powers.--
        (1) Data collection.--In order to carry out its functions under 
    this section, the Commission shall--
            (A) utilize existing information, both published and 
        unpublished, where possible, collected and assessed either by 
        its own staff or under other arrangements made in accordance 
        with this section, including coordination with the Bureau of 
        Labor Statistics;
            (B) carry out, or award grants or contracts for the 
        carrying out of, original research and development, where 
        existing information is inadequate, and
            (C) adopt procedures allowing interested parties to submit 
        information for the Commission's use in making reports and 
        recommendations.
        (2) Access of the government accountability office to 
    information.--The Comptroller General of the United States shall 
    have unrestricted access to all deliberations, records, and data of 
    the Commission, immediately upon request.
        (3) Periodic audit.--The Commission shall be subject to 
    periodic audit by an independent public accountant under contract 
    to the Commission.
    (h) Authorization of Appropriations.--
        (1) Request for appropriations.--The Commission shall submit 
    requests for appropriations in the same manner as the Comptroller 
    General of the United States submits requests for appropriations. 
    Amounts so appropriated for the Commission shall be separate from 
    amounts appropriated for the Comptroller General.
        (2) Authorization.--There are authorized to be appropriated 
    such sums as may be necessary to carry out this section.
        (3) Gifts and services.--The Commission may not accept gifts, 
    bequeaths, or donations of property, but may accept and use 
    donations of services for purposes of carrying out this section.
    (i) Definitions.--In this section:
        (1) Health care workforce.--The term ``health care workforce'' 
    includes all health care providers with direct patient care and 
    support responsibilities, such as physicians, nurses, nurse 
    practitioners, primary care providers, preventive medicine 
    physicians, optometrists, ophthalmologists, physician assistants, 
    pharmacists, dentists, dental hygienists, and other oral healthcare 
    professionals, allied health professionals, doctors of 
    chiropractic, community health workers, health care 
    paraprofessionals, direct care workers, psychologists and other 
    behavioral and mental health professionals (including substance 
    abuse prevention and treatment providers), social workers, physical 
    and occupational therapists, certified nurse midwives, podiatrists, 
    the EMS workforce (including professional and volunteer ambulance 
    personnel and firefighters who perform emergency medical services), 
    licensed complementary and alternative medicine providers, 
    integrative health practitioners, public health professionals, and 
    any other health professional that the Comptroller General of the 
    United States determines appropriate.
        (2) Health professionals.--The term ``health professionals'' 
    includes--
            (A) dentists, dental hygienists, primary care providers, 
        specialty physicians, nurses, nurse practitioners, physician 
        assistants, psychologists and other behavioral and mental 
        health professionals (including substance abuse prevention and 
        treatment providers), social workers, physical and occupational 
        therapists, public health professionals, clinical pharmacists, 
        allied health professionals, doctors of chiropractic, community 
        health workers, school nurses, certified nurse midwives, 
        podiatrists, licensed complementary and alternative medicine 
        providers, the EMS workforce (including professional and 
        volunteer ambulance personnel and firefighters who perform 
        emergency medical services), and integrative health 
        practitioners;
            (B) national representatives of health professionals;
            (C) representatives of schools of medicine, osteopathy, 
        nursing, dentistry, optometry, pharmacy, chiropractic, allied 
        health, educational programs for public health professionals, 
        behavioral and mental health professionals (as so defined), 
        social workers, pharmacists, physical and occupational 
        therapists, oral health care industry dentistry and dental 
        hygiene, and physician assistants;
            (D) representatives of public and private teaching 
        hospitals, and ambulatory health facilities, including Federal 
        medical facilities; and
            (E) any other health professional the Comptroller General 
        of the United States determines appropriate.

SEC. 5102. STATE HEALTH CARE WORKFORCE DEVELOPMENT GRANTS.

    (a) Establishment.--There is established a competitive health care 
workforce development grant program (referred to in this section as the 
``program'') for the purpose of enabling State partnerships to complete 
comprehensive planning and to carry out activities leading to coherent 
and comprehensive health care workforce development strategies at the 
State and local levels.
    (b) Fiscal and Administrative Agent.--The Health Resources and 
Services Administration of the Department of Health and Human Services 
(referred to in this section as the ``Administration'') shall be the 
fiscal and administrative agent for the grants awarded under this 
section. The Administration is authorized to carry out the program, in 
consultation with the National Health Care Workforce Commission 
(referred to in this section as the ``Commission''), which shall review 
reports on the development, implementation, and evaluation activities 
of the grant program, including--
        (1) administering the grants;
        (2) providing technical assistance to grantees; and
        (3) reporting performance information to the Commission.
    (c) Planning Grants.--
        (1) Amount and duration.--A planning grant shall be awarded 
    under this subsection for a period of not more than one year and 
    the maximum award may not be more than $150,000.
        (2) Eligibility.--To be eligible to receive a planning grant, 
    an entity shall be an eligible partnership. An eligible partnership 
    shall be a State workforce investment board, if it includes or 
    modifies the members to include at least one representative from 
    each of the following: health care employer, labor organization, a 
    public 2-year institution of higher education, a public 4-year 
    institution of higher education, the recognized State federation of 
    labor, the State public secondary education agency, the State P-16 
    or P-20 Council if such a council exists, and a philanthropic 
    organization that is actively engaged in providing learning, 
    mentoring, and work opportunities to recruit, educate, and train 
    individuals for, and retain individuals in, careers in health care 
    and related industries.
        (3) Fiscal and administrative agent.--The Governor of the State 
    receiving a planning grant has the authority to appoint a fiscal 
    and an administrative agency for the partnership.
        (4) Application.--Each State partnership desiring a planning 
    grant shall submit an application to the Administrator of the 
    Administration at such time and in such manner, and accompanied by 
    such information as the Administrator may reasonable require. Each 
    application submitted for a planning grant shall describe the 
    members of the State partnership, the activities for which 
    assistance is sought, the proposed performance benchmarks to be 
    used to measure progress under the planning grant, a budget for use 
    of the funds to complete the required activities described in 
    paragraph (5), and such additional assurance and information as the 
    Administrator determines to be essential to ensure compliance with 
    the grant program requirements.
        (5) Required activities.--A State partnership receiving a 
    planning grant shall carry out the following:
            (A) Analyze State labor market information in order to 
        create health care career pathways for students and adults, 
        including dislocated workers.
            (B) Identify current and projected high demand State or 
        regional health care sectors for purposes of planning career 
        pathways.
            (C) Identify existing Federal, State, and private resources 
        to recruit, educate or train, and retain a skilled health care 
        workforce and strengthen partnerships.
            (D) Describe the academic and health care industry skill 
        standards for high school graduation, for entry into 
        postsecondary education, and for various credentials and 
        licensure.
            (E) Describe State secondary and postsecondary education 
        and training policies, models, or practices for the health care 
        sector, including career information and guidance counseling.
            (F) Identify Federal or State policies or rules to 
        developing a coherent and comprehensive health care workforce 
        development strategy and barriers and a plan to resolve these 
        barriers.
            (G) Participate in the Administration's evaluation and 
        reporting activities.
        (6) Performance and evaluation.--Before the State partnership 
    receives a planning grant, such partnership and the Administrator 
    of the Administration shall jointly determine the performance 
    benchmarks that will be established for the purposes of the 
    planning grant.
        (7) Match.--Each State partnership receiving a planning grant 
    shall provide an amount, in cash or in kind, that is not less that 
    15 percent of the amount of the grant, to carry out the activities 
    supported by the grant. The matching requirement may be provided 
    from funds available under other Federal, State, local or private 
    sources to carry out the activities.
        (8) Report.--
            (A) Report to administration.--Not later than 1 year after 
        a State partnership receives a planning grant, the partnership 
        shall submit a report to the Administration on the State's 
        performance of the activities under the grant, including the 
        use of funds, including matching funds, to carry out required 
        activities, and a description of the progress of the State 
        workforce investment board in meeting the performance 
        benchmarks.
            (B) Report to congress.--The Administration shall submit a 
        report to Congress analyzing the planning activities, 
        performance, and fund utilization of each State grant 
        recipient, including an identification of promising practices 
        and a profile of the activities of each State grant recipient.
    (d) Implementation Grants.--
        (1) In general.--The Administration shall--
            (A) competitively award implementation grants to State 
        partnerships to enable such partnerships to implement 
        activities that will result in a coherent and comprehensive 
        plan for health workforce development that will address current 
        and projected workforce demands within the State; and
            (B) inform the Commission and Congress about the awards 
        made.
        (2) Duration.--An implementation grant shall be awarded for a 
    period of no more than 2 years, except in those cases where the 
    Administration determines that the grantee is high performing and 
    the activities supported by the grant warrant up to 1 additional 
    year of funding.
        (3) Eligibility.--To be eligible for an implementation grant, a 
    State partnership shall have--
            (A) received a planning grant under subsection (c) and 
        completed all requirements of such grant; or
            (B) completed a satisfactory application, including a plan 
        to coordinate with required partners and complete the required 
        activities during the 2 year period of the implementation 
        grant.
        (4) Fiscal and administrative agent.--A State partnership 
    receiving an implementation grant shall appoint a fiscal and an 
    administration agent for the implementation of such grant.
        (5) Application.--Each eligible State partnership desiring an 
    implementation grant shall submit an application to the 
    Administration at such time, in such manner, and accompanied by 
    such information as the Administration may reasonably require. Each 
    application submitted shall include--
            (A) a description of the members of the State partnership;
            (B) a description of how the State partnership completed 
        the required activities under the planning grant, if 
        applicable;
            (C) a description of the activities for which 
        implementation grant funds are sought, including grants to 
        regions by the State partnership to advance coherent and 
        comprehensive regional health care workforce planning 
        activities;
            (D) a description of how the State partnership will 
        coordinate with required partners and complete the required 
        partnership activities during the duration of an implementation 
        grant;
            (E) a budget proposal of the cost of the activities 
        supported by the implementation grant and a timeline for the 
        provision of matching funds required;
            (F) proposed performance benchmarks to be used to assess 
        and evaluate the progress of the partnership activities;
            (G) a description of how the State partnership will collect 
        data to report progress in grant activities; and
            (H) such additional assurances as the Administration 
        determines to be essential to ensure compliance with grant 
        requirements.
        (6) Required activities.--
            (A) In general.--A State partnership that receives an 
        implementation grant may reserve not less than 60 percent of 
        the grant funds to make grants to be competitively awarded by 
        the State partnership, consistent with State procurement rules, 
        to encourage regional partnerships to address health care 
        workforce development needs and to promote innovative health 
        care workforce career pathway activities, including career 
        counseling, learning, and employment.
            (B) Eligible partnership duties.--An eligible State 
        partnership receiving an implementation grant shall--
                (i) identify and convene regional leadership to discuss 
            opportunities to engage in statewide health care workforce 
            development planning, including the potential use of 
            competitive grants to improve the development, 
            distribution, and diversity of the regional health care 
            workforce; the alignment of curricula for health care 
            careers; and the access to quality career information and 
            guidance and education and training opportunities;
                (ii) in consultation with key stakeholders and regional 
            leaders, take appropriate steps to reduce Federal, State, 
            or local barriers to a comprehensive and coherent strategy, 
            including changes in State or local policies to foster 
            coherent and comprehensive health care workforce 
            development activities, including health care career 
            pathways at the regional and State levels, career planning 
            information, retraining for dislocated workers, and as 
            appropriate, requests for Federal program or administrative 
            waivers;
                (iii) develop, disseminate, and review with key 
            stakeholders a preliminary statewide strategy that 
            addresses short- and long-term health care workforce 
            development supply versus demand;
                (iv) convene State partnership members on a regular 
            basis, and at least on a semiannual basis;
                (v) assist leaders at the regional level to form 
            partnerships, including technical assistance and capacity 
            building activities;
                (vi) collect and assess data on and report on the 
            performance benchmarks selected by the State partnership 
            and the Administration for implementation activities 
            carried out by regional and State partnerships; and
                (vii) participate in the Administration's evaluation 
            and reporting activities.
        (7) Performance and evaluation.--Before the State partnership 
    receives an implementation grant, it and the Administrator shall 
    jointly determine the performance benchmarks that shall be 
    established for the purposes of the implementation grant.
        (8) Match.--Each State partnership receiving an implementation 
    grant shall provide an amount, in cash or in kind that is not less 
    than 25 percent of the amount of the grant, to carry out the 
    activities supported by the grant. The matching funds may be 
    provided from funds available from other Federal, State, local, or 
    private sources to carry out such activities.
        (9) Reports.--
            (A) Report to administration.--For each year of the 
        implementation grant, the State partnership receiving the 
        implementation grant shall submit a report to the 
        Administration on the performance of the State of the grant 
        activities, including a description of the use of the funds, 
        including matched funds, to complete activities, and a 
        description of the performance of the State partnership in 
        meeting the performance benchmarks.
            (B) Report to congress.--The Administration shall submit a 
        report to Congress analyzing implementation activities, 
        performance, and fund utilization of the State grantees, 
        including an identification of promising practices and a 
        profile of the activities of each State grantee.
    (e) Authorization for Appropriations.--
        (1) Planning grants.--There are authorized to be appropriated 
    to award planning grants under subsection (c) $8,000,000 for fiscal 
    year 2010, and such sums as may be necessary for each subsequent 
    fiscal year.
        (2) Implementation grants.--There are authorized to be 
    appropriated to award implementation grants under subsection (d), 
    $150,000,000 for fiscal year 2010, and such sums as may be 
    necessary for each subsequent fiscal year.

SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT.

    (a) In General.--Section 761 of the Public Health Service Act (42 
U.S.C. 294m) is amended--
        (1) by redesignating subsection (c) as subsection (e);
        (2) by striking subsection (b) and inserting the following:
    ``(b) National Center for Health Care Workforce Analysis.--
        ``(1) Establishment.--The Secretary shall establish the 
    National Center for Health Workforce Analysis (referred to in this 
    section as the `National Center').
        ``(2) Purposes.--The National Center, in coordination to the 
    extent practicable with the National Health Care Workforce 
    Commission (established in section 5101 of the Patient Protection 
    and Affordable Care Act), and relevant regional and State centers 
    and agencies, shall--
            ``(A) provide for the development of information describing 
        and analyzing the health care workforce and workforce related 
        issues;
            ``(B) carry out the activities under section 792(a);
            ``(C) annually evaluate programs under this title;
            ``(D) develop and publish performance measures and 
        benchmarks for programs under this title; and
            ``(E) establish, maintain, and publicize a national 
        Internet registry of each grant awarded under this title and a 
        database to collect data from longitudinal evaluations (as 
        described in subsection (d)(2)) on performance measures (as 
        developed under sections 749(d)(3), 757(d)(3), and 762(a)(3)).
        ``(3) Collaboration and data sharing.--
            ``(A) In general.--The National Center shall collaborate 
        with Federal agencies and relevant professional and educational 
        organizations or societies for the purpose of linking data 
        regarding grants awarded under this title.
            ``(B) Contracts for health workforce analysis.--For the 
        purpose of carrying out the activities described in 
        subparagraph (A), the National Center may enter into contracts 
        with relevant professional and educational organizations or 
        societies.
    ``(c) State and Regional Centers for Health Workforce Analysis.--
        ``(1) In general.--The Secretary shall award grants to, or 
    enter into contracts with, eligible entities for purposes of--
            ``(A) collecting, analyzing, and reporting data regarding 
        programs under this title to the National Center and to the 
        public; and
            ``(B) providing technical assistance to local and regional 
        entities on the collection, analysis, and reporting of data.
        ``(2) Eligible entities.--To be eligible for a grant or 
    contract under this subsection, an entity shall--
            ``(A) be a State, a State workforce investment board, a 
        public health or health professions school, an academic health 
        center, or an appropriate public or private nonprofit entity; 
        and
            ``(B) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require.
    ``(d) Increase in Grants for Longitudinal Evaluations.--
        ``(1) In general.--The Secretary shall increase the amount 
    awarded to an eligible entity under this title for a longitudinal 
    evaluation of individuals who have received education, training, or 
    financial assistance from programs under this title.
        ``(2) Capability.--A longitudinal evaluation shall be capable 
    of--
            ``(A) studying practice patterns; and
            ``(B) collecting and reporting data on performance measures 
        developed under sections 749(d)(3), 757(d)(3), and 762(a)(3).
        ``(3) Guidelines.--A longitudinal evaluation shall comply with 
    guidelines issued under sections 749(d)(4), 757(d)(4), and 
    762(a)(4).
        ``(4) Eligible entities.--To be eligible to obtain an increase 
    under this section, an entity shall be a recipient of a grant or 
    contract under this title.''; and
        (3) in subsection (e), as so redesignated--
            (A) by striking paragraph (1) and inserting the following:
        ``(1) In general.--
            ``(A) National center.--To carry out subsection (b), there 
        are authorized to be appropriated $7,500,000 for each of fiscal 
        years 2010 through 2014.
            ``(B) State and regional centers.--To carry out subsection 
        (c), there are authorized to be appropriated $4,500,000 for 
        each of fiscal years 2010 through 2014.
            ``(C) Grants for longitudinal evaluations.--To carry out 
        subsection (d), there are authorized to be appropriated such 
        sums as may be necessary for fiscal years 2010 through 2014.''; 
        and
        (4) in paragraph (2), by striking ``subsection (a)'' and 
    inserting ``paragraph (1)''.
    (b) Transfers.--Not later than 180 days after the date of enactment 
of this Act, the responsibilities and resources of the National Center 
for Health Workforce Analysis, as in effect on the date before the date 
of enactment of this Act, shall be transferred to the National Center 
for Health Care Workforce Analysis established under section 761 of the 
Public Health Service Act, as amended by subsection (a).
    (c) Use of Longitudinal Evaluations.--Section 791(a)(1) of the 
Public Health Service Act (42 U.S.C. 295j(a)(1)) is amended--
        (1) in subparagraph (A), by striking ``or'' at the end;
        (2) in subparagraph (B), by striking the period and inserting 
    ``; or''; and
        (3) by adding at the end the following:
            ``(C) utilizes a longitudinal evaluation (as described in 
        section 761(d)(2)) and reports data from such system to the 
        national workforce database (as established under section 
        761(b)(2)(E)).''.
    (d) Performance Measures; Guidelines for Longitudinal 
Evaluations.--
        (1) Advisory committee on training in primary care medicine and 
    dentistry.--Section 748(d) of the Public Health Service Act is 
    amended--
            (A) in paragraph (1), by striking ``and'' at the end;
            (B) in paragraph (2), by striking the period and inserting 
        a semicolon; and
            (C) by adding at the end the following:
        ``(3) develop, publish, and implement performance measures for 
    programs under this part;
        ``(4) develop and publish guidelines for longitudinal 
    evaluations (as described in section 761(d)(2)) for programs under 
    this part; and
        ``(5) recommend appropriation levels for programs under this 
    part.''.
        (2) Advisory committee on interdisciplinary, community-based 
    linkages.--Section 756(d) of the Public Health Service Act is 
    amended--
            (A) in paragraph (1), by striking ``and'' at the end;
            (B) in paragraph (2), by striking the period and inserting 
        a semicolon; and
            (C) by adding at the end the following:
        ``(3) develop, publish, and implement performance measures for 
    programs under this part;
        ``(4) develop and publish guidelines for longitudinal 
    evaluations (as described in section 761(d)(2)) for programs under 
    this part; and
        ``(5) recommend appropriation levels for programs under this 
    part.''.
        (3) Advisory council on graduate medical education.--Section 
    762(a) of the Public Health Service Act (42 U.S.C. 294o(a)) is 
    amended--
            (A) in paragraph (1), by striking ``and'' at the end;
            (B) in paragraph (2), by striking the period and inserting 
        a semicolon; and
            (C) by adding at the end the following:
        ``(3) develop, publish, and implement performance measures for 
    programs under this title, except for programs under part C or D;
        ``(4) develop and publish guidelines for longitudinal 
    evaluations (as described in section 761(d)(2)) for programs under 
    this title, except for programs under part C or D; and
        ``(5) recommend appropriation levels for programs under this 
    title, except for programs under part C or D.''.

     Subtitle C--Increasing the Supply of the Health Care Workforce

SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS.

    (a) Medical Schools and Primary Health Care.--Section 723 of the 
Public Health Service Act (42 U.S.C. 292s) is amended--
        (1) in subsection (a)--
            (A) in paragraph (1), by striking subparagraph (B) and 
        inserting the following:
            ``(B) to practice in such care for 10 years (including 
        residency training in primary health care) or through the date 
        on which the loan is repaid in full, whichever occurs first.''; 
        and
            (B) by striking paragraph (3) and inserting the following:
        ``(3) Noncompliance by student.--Each agreement entered into 
    with a student pursuant to paragraph (1) shall provide that, if the 
    student fails to comply with such agreement, the loan involved will 
    begin to accrue interest at a rate of 2 percent per year greater 
    than the rate at which the student would pay if compliant in such 
    year.''; and
        (2) by adding at the end the following:
    ``(d) Sense of Congress.--It is the sense of Congress that funds 
repaid under the loan program under this section should not be 
transferred to the Treasury of the United States or otherwise used for 
any other purpose other than to carry out this section.''.
    (b) Student Loan Guidelines.--The Secretary of Health and Human 
Services shall not require parental financial information for an 
independent student to determine financial need under section 723 of 
the Public Health Service Act (42 U.S.C. 292s) and the determination of 
need for such information shall be at the discretion of applicable 
school loan officer. The Secretary shall amend guidelines issued by the 
Health Resources and Services Administration in accordance with the 
preceding sentence.

SEC. 5202. NURSING STUDENT LOAN PROGRAM.

    (a) Loan Agreements.--Section 836(a) of the Public Health Service 
Act (42 U.S.C. 297b(a)) is amended--
        (1) by striking ``$2,500'' and inserting ``$3,300'';
        (2) by striking ``$4,000'' and inserting ``$5,200''; and
        (3) by striking ``$13,000'' and all that follows through the 
    period and inserting ``$17,000 in the case of any student during 
    fiscal years 2010 and 2011. After fiscal year 2011, such amounts 
    shall be adjusted to provide for a cost-of-attendance increase for 
    the yearly loan rate and the aggregate of the loans.''.
    (b) Loan Provisions.--Section 836(b) of the Public Health Service 
Act (42 U.S.C. 297b(b)) is amended--
        (1) in paragraph (1)(C), by striking ``1986'' and inserting 
    ``2000''; and
        (2) in paragraph (3), by striking ``the date of enactment of 
    the Nurse Training Amendments of 1979'' and inserting ``September 
    29, 1995''.

SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.) is amended by adding at the end the following:

            ``Subpart 3--Recruitment and Retention Programs

``SEC. 775. INVESTMENT IN TOMORROW'S PEDIATRIC HEALTH CARE WORKFORCE.

    ``(a) Establishment.--The Secretary shall establish and carry out a 
pediatric specialty loan repayment program under which the eligible 
individual agrees to be employed full-time for a specified period 
(which shall not be less than 2 years) in providing pediatric medical 
subspecialty, pediatric surgical specialty, or child and adolescent 
mental and behavioral health care, including substance abuse prevention 
and treatment services.
    ``(b) Program Administration.--Through the program established 
under this section, the Secretary shall enter into contracts with 
qualified health professionals under which--
        ``(1) such qualified health professionals will agree to provide 
    pediatric medical subspecialty, pediatric surgical specialty, or 
    child and adolescent mental and behavioral health care in an area 
    with a shortage of the specified pediatric subspecialty that has a 
    sufficient pediatric population to support such pediatric 
    subspecialty, as determined by the Secretary; and
        ``(2) the Secretary agrees to make payments on the principal 
    and interest of undergraduate, graduate, or graduate medical 
    education loans of professionals described in paragraph (1) of not 
    more than $35,000 a year for each year of agreed upon service under 
    such paragraph for a period of not more than 3 years during the 
    qualified health professional's--
            ``(A) participation in an accredited pediatric medical 
        subspecialty, pediatric surgical specialty, or child and 
        adolescent mental health subspecialty residency or fellowship; 
        or
            ``(B) employment as a pediatric medical subspecialist, 
        pediatric surgical specialist, or child and adolescent mental 
        health professional serving an area or population described in 
        such paragraph.
    ``(c) In General.--
        ``(1) Eligible individuals.--
            ``(A) Pediatric medical specialists and pediatric surgical 
        specialists.--For purposes of contracts with respect to 
        pediatric medical specialists and pediatric surgical 
        specialists, the term `qualified health professional' means a 
        licensed physician who--
                ``(i) is entering or receiving training in an 
            accredited pediatric medical subspecialty or pediatric 
            surgical specialty residency or fellowship; or
                ``(ii) has completed (but not prior to the end of the 
            calendar year in which this section is enacted) the 
            training described in subparagraph (B).
            ``(B) Child and adolescent mental and behavioral health.--
        For purposes of contracts with respect to child and adolescent 
        mental and behavioral health care, the term `qualified health 
        professional' means a health care professional who--
                ``(i) has received specialized training or clinical 
            experience in child and adolescent mental health in 
            psychiatry, psychology, school psychology, behavioral 
            pediatrics, psychiatric nursing, social work, school social 
            work, substance abuse disorder prevention and treatment, 
            marriage and family therapy, school counseling, or 
            professional counseling;
                ``(ii) has a license or certification in a State to 
            practice allopathic medicine, osteopathic medicine, 
            psychology, school psychology, psychiatric nursing, social 
            work, school social work, marriage and family therapy, 
            school counseling, or professional counseling; or
                ``(iii) is a mental health service professional who 
            completed (but not before the end of the calendar year in 
            which this section is enacted) specialized training or 
            clinical experience in child and adolescent mental health 
            described in clause (i).
        ``(2) Additional eligibility requirements.--The Secretary may 
    not enter into a contract under this subsection with an eligible 
    individual unless--
            ``(A) the individual agrees to work in, or for a provider 
        serving, a health professional shortage area or medically 
        underserved area, or to serve a medically underserved 
        population;
            ``(B) the individual is a United States citizen or a 
        permanent legal United States resident; and
            ``(C) if the individual is enrolled in a graduate program, 
        the program is accredited, and the individual has an acceptable 
        level of academic standing (as determined by the Secretary).
    ``(d) Priority.--In entering into contracts under this subsection, 
the Secretary shall give priority to applicants who--
        ``(1) are or will be working in a school or other pre-
    kindergarten, elementary, or secondary education setting;
        ``(2) have familiarity with evidence-based methods and cultural 
    and linguistic competence health care services; and
        ``(3) demonstrate financial need.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated $30,000,000 for each of fiscal years 2010 through 2014 to 
carry out subsection (c)(1)(A) and $20,000,000 for each of fiscal years 
2010 through 2013 to carry out subsection (c)(1)(B).''.

SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.), as amended by section 5203, is further amended by adding 
at the end the following:

``SEC. 776. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as 
the `Program') to assure an adequate supply of public health 
professionals to eliminate critical public health workforce shortages 
in Federal, State, local, and tribal public health agencies.
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
        ``(1)(A) be accepted for enrollment, or be enrolled, as a 
    student in an accredited academic educational institution in a 
    State or territory in the final year of a course of study or 
    program leading to a public health or health professions degree or 
    certificate; and have accepted employment with a Federal, State, 
    local, or tribal public health agency, or a related training 
    fellowship, as recognized by the Secretary, to commence upon 
    graduation;
        ``(B)(i) have graduated, during the preceding 10-year period, 
    from an accredited educational institution in a State or territory 
    and received a public health or health professions degree or 
    certificate; and
        ``(ii) be employed by, or have accepted employment with, a 
    Federal, State, local, or tribal public health agency or a related 
    training fellowship, as recognized by the Secretary;
        ``(2) be a United States citizen; and
        ``(3)(A) submit an application to the Secretary to participate 
    in the Program;
        ``(B) execute a written contract as required in subsection (c); 
    and
        ``(4) not have received, for the same service, a reduction of 
    loan obligations under section 455(m), 428J, 428K, 428L, or 460 of 
    the Higher Education Act of 1965.
    ``(c) Contract.--The written contract (referred to in this section 
as the `written contract') between the Secretary and an individual 
shall contain--
        ``(1) an agreement on the part of the Secretary that the 
    Secretary will repay on behalf of the individual loans incurred by 
    the individual in the pursuit of the relevant degree or certificate 
    in accordance with the terms of the contract;
        ``(2) an agreement on the part of the individual that the 
    individual will serve in the full-time employment of a Federal, 
    State, local, or tribal public health agency or a related 
    fellowship program in a position related to the course of study or 
    program for which the contract was awarded for a period of time 
    (referred to in this section as the `period of obligated service') 
    equal to the greater of--
            ``(A) 3 years; or
            ``(B) such longer period of time as determined appropriate 
        by the Secretary and the individual;
        ``(3) an agreement, as appropriate, on the part of the 
    individual to relocate to a priority service area (as determined by 
    the Secretary) in exchange for an additional loan repayment 
    incentive amount to be determined by the Secretary;
        ``(4) a provision that any financial obligation of the United 
    States arising out of a contract entered into under this section 
    and any obligation of the individual that is conditioned thereon, 
    is contingent on funds being appropriated for loan repayments under 
    this section;
        ``(5) a statement of the damages to which the United States is 
    entitled, under this section for the individual's breach of the 
    contract; and
        ``(6) such other statements of the rights and liabilities of 
    the Secretary and of the individual, not inconsistent with this 
    section.
    ``(d) Payments.--
        ``(1) In general.--A loan repayment provided for an individual 
    under a written contract under the Program shall consist of 
    payment, in accordance with paragraph (2), on behalf of the 
    individual of the principal, interest, and related expenses on 
    government and commercial loans received by the individual 
    regarding the undergraduate or graduate education of the individual 
    (or both), which loans were made for tuition expenses incurred by 
    the individual.
        ``(2) Payments for years served.--For each year of obligated 
    service that an individual contracts to serve under subsection (c) 
    the Secretary may pay up to $35,000 on behalf of the individual for 
    loans described in paragraph (1). With respect to participants 
    under the Program whose total eligible loans are less than 
    $105,000, the Secretary shall pay an amount that does not exceed 
    \1/3\ of the eligible loan balance for each year of obligated 
    service of the individual.
        ``(3) Tax liability.--For the purpose of providing 
    reimbursements for tax liability resulting from payments under 
    paragraph (2) on behalf of an individual, the Secretary shall, in 
    addition to such payments, make payments to the individual in an 
    amount not to exceed 39 percent of the total amount of loan 
    repayments made for the taxable year involved.
    ``(e) Postponing Obligated Service.--With respect to an individual 
receiving a degree or certificate from a health professions or other 
related school, the date of the initiation of the period of obligated 
service may be postponed as approved by the Secretary.
    ``(f) Breach of Contract.--An individual who fails to comply with 
the contract entered into under subsection (c) shall be subject to the 
same financial penalties as provided for under section 338E for 
breaches of loan repayment contracts under section 338B.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $195,000,000 for fiscal year 
2010, and such sums as may be necessary for each of fiscal years 2011 
through 2015.''.

SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    (a) Purpose.--The purpose of this section is to assure an adequate 
supply of allied health professionals to eliminate critical allied 
health workforce shortages in Federal, State, local, and tribal public 
health agencies or in settings where patients might require health care 
services, including acute care facilities, ambulatory care facilities, 
personal residences and other settings, as recognized by the Secretary 
of Health and Human Services by authorizing an Allied Health Loan 
Forgiveness Program.
    (b) Allied Health Workforce Recruitment and Retention Program.--
Section 428K of the Higher Education Act of 1965 (20 U.S.C. 1078-11) is 
amended--
        (1) in subsection (b), by adding at the end the following:
        ``(18) Allied health professionals.--The individual is employed 
    full-time as an allied health professional--
            ``(A) in a Federal, State, local, or tribal public health 
        agency; or
            ``(B) in a setting where patients might require health care 
        services, including acute care facilities, ambulatory care 
        facilities, personal residences and other settings located in 
        health professional shortage areas, medically underserved 
        areas, or medically underserved populations, as recognized by 
        the Secretary of Health and Human Services.''; and
        (2) in subsection (g)--
            (A) by redesignating paragraphs (1) through (9) as 
        paragraphs (2) through (10), respectively; and
            (B) by inserting before paragraph (2) (as redesignated by 
        subparagraph (A)) the following:
        ``(1) Allied health professional.--The term `allied health 
    professional' means an allied health professional as defined in 
    section 799B(5) of the Public Heath Service Act (42 U.S.C. 295p(5)) 
    who--
            ``(A) has graduated and received an allied health 
        professions degree or certificate from an institution of higher 
        education; and
            ``(B) is employed with a Federal, State, local or tribal 
        public health agency, or in a setting where patients might 
        require health care services, including acute care facilities, 
        ambulatory care facilities, personal residences and other 
        settings located in health professional shortage areas, 
        medically underserved areas, or medically underserved 
        populations, as recognized by the Secretary of Health and Human 
        Services.''.

SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS.

    (a) In General.--Section 765(d) of the Public Health Service Act 
(42 U.S.C. 295(d)) is amended--
        (1) in paragraph (7), by striking ``; or'' and inserting a 
    semicolon;
        (2) by redesignating paragraph (8) as paragraph (9); and
        (3) by inserting after paragraph (7) the following:
        ``(8) public health workforce loan repayment programs; or''.
    (b) Training for Mid-career Public Health Professionals.--Part E of 
title VII of the Public Health Service Act (42 U.S.C. 294n et seq.), as 
amended by section 5204, is further amended by adding at the end the 
following:

``SEC. 777. TRAINING FOR MID-CAREER PUBLIC AND ALLIED HEALTH 
              PROFESSIONALS.

    ``(a) In General.--The Secretary may make grants to, or enter into 
contracts with, any eligible entity to award scholarships to eligible 
individuals to enroll in degree or professional training programs for 
the purpose of enabling mid-career professionals in the public health 
and allied health workforce to receive additional training in the field 
of public health and allied health.
    ``(b) Eligibility.--
        ``(1) Eligible entity.--The term `eligible entity' indicates an 
    accredited educational institution that offers a course of study, 
    certificate program, or professional training program in public or 
    allied health or a related discipline, as determined by the 
    Secretary
        ``(2) Eligible individuals.--The term `eligible individuals' 
    includes those individuals employed in public and allied health 
    positions at the Federal, State, tribal, or local level who are 
    interested in retaining or upgrading their education.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $60,000,000 for fiscal year 
2010 and such sums as may be necessary for each of fiscal years 2011 
through 2015. Fifty percent of appropriated funds shall be allotted to 
public health mid-career professionals and 50 percent shall be allotted 
to allied health mid-career professionals.''.

SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

    Section 338H(a) of the Public Health Service Act (42 U.S.C. 
254q(a)) is amended to read as follows:
    ``(a) Authorization of Appropriations.--For the purpose of carrying 
out this section, there is authorized to be appropriated, out of any 
funds in the Treasury not otherwise appropriated, the following:
        ``(1) For fiscal year 2010, $320,461,632.
        ``(2) For fiscal year 2011, $414,095,394.
        ``(3) For fiscal year 2012, $535,087,442.
        ``(4) For fiscal year 2013, $691,431,432.
        ``(5) For fiscal year 2014, $893,456,433.
        ``(6) For fiscal year 2015, $1,154,510,336.
        ``(7) For fiscal year 2016, and each subsequent fiscal year, 
    the amount appropriated for the preceding fiscal year adjusted by 
    the product of--
            ``(A) one plus the average percentage increase in the costs 
        of health professions education during the prior fiscal year; 
        and
            ``(B) one plus the average percentage change in the number 
        of individuals residing in health professions shortage areas 
        designated under section 333 during the prior fiscal year, 
        relative to the number of individuals residing in such areas 
        during the previous fiscal year.''.

SEC. 5208. NURSE-MANAGED HEALTH CLINICS.

    (a) Purpose.--The purpose of this section is to fund the 
development and operation of nurse-managed health clinics.
    (b) Grants.--Subpart 1 of part D of title III of the Public Health 
Service Act (42 U.S.C. 254b et seq.) is amended by inserting after 
section 330A the following:

``SEC. 330A-1. GRANTS TO NURSE-MANAGED HEALTH CLINICS.

    ``(a) Definitions.--
        ``(1) Comprehensive primary health care services.--In this 
    section, the term `comprehensive primary health care services' 
    means the primary health services described in section 330(b)(1).
        ``(2) Nurse-managed health clinic.--The term `nurse-managed 
    health clinic' means a nurse-practice arrangement, managed by 
    advanced practice nurses, that provides primary care or wellness 
    services to underserved or vulnerable populations and that is 
    associated with a school, college, university or department of 
    nursing, federally qualified health center, or independent 
    nonprofit health or social services agency.
    ``(b) Authority to Award Grants.--The Secretary shall award grants 
for the cost of the operation of nurse-managed health clinics that meet 
the requirements of this section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
        ``(1) be an NMHC; and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing--
            ``(A) assurances that nurses are the major providers of 
        services at the NMHC and that at least 1 advanced practice 
        nurse holds an executive management position within the 
        organizational structure of the NMHC;
            ``(B) an assurance that the NMHC will continue providing 
        comprehensive primary health care services or wellness services 
        without regard to income or insurance status of the patient for 
        the duration of the grant period; and
            ``(C) an assurance that, not later than 90 days of 
        receiving a grant under this section, the NMHC will establish a 
        community advisory committee, for which a majority of the 
        members shall be individuals who are served by the NMHC.
    ``(d) Grant Amount.--The amount of any grant made under this 
section for any fiscal year shall be determined by the Secretary, 
taking into account--
        ``(1) the financial need of the NMHC, considering State, local, 
    and other operational funding provided to the NMHC; and
        ``(2) other factors, as the Secretary determines appropriate.
    ``(e) Authorization of Appropriations.--For the purposes of 
carrying out this section, there are authorized to be appropriated 
$50,000,000 for the fiscal year 2010 and such sums as may be necessary 
for each of the fiscal years 2011 through 2014.''.

SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS.

    Section 202 of the Department of Health and Human Services 
Appropriations Act, 1993 (Public Law 102-394) is amended by striking 
``not to exceed 2,800''.

SEC. 5210. ESTABLISHING A READY RESERVE CORPS.

    Section 203 of the Public Health Service Act (42 U.S.C. 204) is 
amended to read as follows:

``SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.

    ``(a) Establishment.--
        ``(1) In general.--There shall be in the Service a commissioned 
    Regular Corps and a Ready Reserve Corps for service in time of 
    national emergency.
        ``(2) Requirement.--All commissioned officers shall be citizens 
    of the United States and shall be appointed without regard to the 
    civil-service laws and compensated without regard to the 
    Classification Act of 1923, as amended.
        ``(3) Appointment.--Commissioned officers of the Ready Reserve 
    Corps shall be appointed by the President and commissioned officers 
    of the Regular Corps shall be appointed by the President with the 
    advice and consent of the Senate.
        ``(4) Active duty.--Commissioned officers of the Ready Reserve 
    Corps shall at all times be subject to call to active duty by the 
    Surgeon General, including active duty for the purpose of training.
        ``(5) Warrant officers.--Warrant officers may be appointed to 
    the Service for the purpose of providing support to the health and 
    delivery systems maintained by the Service and any warrant officer 
    appointed to the Service shall be considered for purposes of this 
    Act and title 37, United States Code, to be a commissioned officer 
    within the Commissioned Corps of the Service.
    ``(b) Assimilating Reserve Corp Officers Into the Regular Corps.--
Effective on the date of enactment of the Patient Protection and 
Affordable Care Act, all individuals classified as officers in the 
Reserve Corps under this section (as such section existed on the day 
before the date of enactment of such Act) and serving on active duty 
shall be deemed to be commissioned officers of the Regular Corps.
    ``(c) Purpose and Use of Ready Research.--
        ``(1) Purpose.--The purpose of the Ready Reserve Corps is to 
    fulfill the need to have additional Commissioned Corps personnel 
    available on short notice (similar to the uniformed service's 
    reserve program) to assist regular Commissioned Corps personnel to 
    meet both routine public health and emergency response missions.
        ``(2) Uses.--The Ready Reserve Corps shall--
            ``(A) participate in routine training to meet the general 
        and specific needs of the Commissioned Corps;
            ``(B) be available and ready for involuntary calls to 
        active duty during national emergencies and public health 
        crises, similar to the uniformed service reserve personnel;
            ``(C) be available for backfilling critical positions left 
        vacant during deployment of active duty Commissioned Corps 
        members, as well as for deployment to respond to public health 
        emergencies, both foreign and domestic; and
            ``(D) be available for service assignment in isolated, 
        hardship, and medically underserved communities (as defined in 
        section 799B) to improve access to health services.
    ``(d) Funding.--For the purpose of carrying out the duties and 
responsibilities of the Commissioned Corps under this section, there 
are authorized to be appropriated $5,000,000 for each of fiscal years 
2010 through 2014 for recruitment and training and $12,500,000 for each 
of fiscal years 2010 through 2014 for the Ready Reserve Corps.''.

   Subtitle D--Enhancing Health Care Workforce Education and Training

SEC. 5301. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, 
              GENERAL PEDIATRICS, AND PHYSICIAN ASSISTANTSHIP.

    Part C of title VII (42 U.S.C. 293k et seq.) is amended by striking 
section 747 and inserting the following:

``SEC. 747. PRIMARY CARE TRAINING AND ENHANCEMENT.

    ``(a) Support and Development of Primary Care Training Programs.--
        ``(1) In general.--The Secretary may make grants to, or enter 
    into contracts with, an accredited public or nonprofit private 
    hospital, school of medicine or osteopathic medicine, academically 
    affiliated physician assistant training program, or a public or 
    private nonprofit entity which the Secretary has determined is 
    capable of carrying out such grant or contract--
            ``(A) to plan, develop, operate, or participate in an 
        accredited professional training program, including an 
        accredited residency or internship program in the field of 
        family medicine, general internal medicine, or general 
        pediatrics for medical students, interns, residents, or 
        practicing physicians as defined by the Secretary;
            ``(B) to provide need-based financial assistance in the 
        form of traineeships and fellowships to medical students, 
        interns, residents, practicing physicians, or other medical 
        personnel, who are participants in any such program, and who 
        plan to specialize or work in the practice of the fields 
        defined in subparagraph (A);
            ``(C) to plan, develop, and operate a program for the 
        training of physicians who plan to teach in family medicine, 
        general internal medicine, or general pediatrics training 
        programs;
            ``(D) to plan, develop, and operate a program for the 
        training of physicians teaching in community-based settings;
            ``(E) to provide financial assistance in the form of 
        traineeships and fellowships to physicians who are participants 
        in any such programs and who plan to teach or conduct research 
        in a family medicine, general internal medicine, or general 
        pediatrics training program;
            ``(F) to plan, develop, and operate a physician assistant 
        education program, and for the training of individuals who will 
        teach in programs to provide such training;
            ``(G) to plan, develop, and operate a demonstration program 
        that provides training in new competencies, as recommended by 
        the Advisory Committee on Training in Primary Care Medicine and 
        Dentistry and the National Health Care Workforce Commission 
        established in section 5101 of the Patient Protection and 
        Affordable Care Act, which may include--
                ``(i) providing training to primary care physicians 
            relevant to providing care through patient-centered medical 
            homes (as defined by the Secretary for purposes of this 
            section);
                ``(ii) developing tools and curricula relevant to 
            patient-centered medical homes; and
                ``(iii) providing continuing education to primary care 
            physicians relevant to patient-centered medical homes; and
            ``(H) to plan, develop, and operate joint degree programs 
        to provide interdisciplinary and interprofessional graduate 
        training in public health and other health professions to 
        provide training in environmental health, infectious disease 
        control, disease prevention and health promotion, 
        epidemiological studies and injury control.
        ``(2) Duration of awards.--The period during which payments are 
    made to an entity from an award of a grant or contract under this 
    subsection shall be 5 years.
    ``(b) Capacity Building in Primary Care.--
        ``(1) In general.--The Secretary may make grants to or enter 
    into contracts with accredited schools of medicine or osteopathic 
    medicine to establish, maintain, or improve--
            ``(A) academic units or programs that improve clinical 
        teaching and research in fields defined in subsection 
        (a)(1)(A); or
            ``(B) programs that integrate academic administrative units 
        in fields defined in subsection (a)(1)(A) to enhance 
        interdisciplinary recruitment, training, and faculty 
        development.
        ``(2) Preference in making awards under this subsection.--In 
    making awards of grants and contracts under paragraph (1), the 
    Secretary shall give preference to any qualified applicant for such 
    an award that agrees to expend the award for the purpose of--
            ``(A) establishing academic units or programs in fields 
        defined in subsection (a)(1)(A); or
            ``(B) substantially expanding such units or programs.
        ``(3) Priorities in making awards.--In awarding grants or 
    contracts under paragraph (1), the Secretary shall give priority to 
    qualified applicants that--
            ``(A) proposes a collaborative project between academic 
        administrative units of primary care;
            ``(B) proposes innovative approaches to clinical teaching 
        using models of primary care, such as the patient centered 
        medical home, team management of chronic disease, and 
        interprofessional integrated models of health care that 
        incorporate transitions in health care settings and integration 
        physical and mental health provision;
            ``(C) have a record of training the greatest percentage of 
        providers, or that have demonstrated significant improvements 
        in the percentage of providers trained, who enter and remain in 
        primary care practice;
            ``(D) have a record of training individuals who are from 
        underrepresented minority groups or from a rural or 
        disadvantaged background;
            ``(E) provide training in the care of vulnerable 
        populations such as children, older adults, homeless 
        individuals, victims of abuse or trauma, individuals with 
        mental health or substance-related disorders, individuals with 
        HIV/AIDS, and individuals with disabilities;
            ``(F) establish formal relationships and submit joint 
        applications with federally qualified health centers, rural 
        health clinics, area health education centers, or clinics 
        located in underserved areas or that serve underserved 
        populations;
            ``(G) teach trainees the skills to provide 
        interprofessional, integrated care through collaboration among 
        health professionals;
            ``(H) provide training in enhanced communication with 
        patients, evidence-based practice, chronic disease management, 
        preventive care, health information technology, or other 
        competencies as recommended by the Advisory Committee on 
        Training in Primary Care Medicine and Dentistry and the 
        National Health Care Workforce Commission established in 
        section 5101 of the Patient Protection and Affordable Care Act; 
        or
            ``(I) provide training in cultural competency and health 
        literacy.
        ``(4) Duration of awards.--The period during which payments are 
    made to an entity from an award of a grant or contract under this 
    subsection shall be 5 years.
    ``(c) Authorization of Appropriations.--
        ``(1) In general.--For purposes of carrying out this section 
    (other than subsection (b)(1)(B)), there are authorized to be 
    appropriated $125,000,000 for fiscal year 2010, and such sums as 
    may be necessary for each of fiscal years 2011 through 2014.
        ``(2) Training programs.--Fifteen percent of the amount 
    appropriated pursuant to paragraph (1) in each such fiscal year 
    shall be allocated to the physician assistant training programs 
    described in subsection (a)(1)(F), which prepare students for 
    practice in primary care.
        ``(3) Integrating academic administrative units.--For purposes 
    of carrying out subsection (b)(1)(B), there are authorized to be 
    appropriated $750,000 for each of fiscal years 2010 through 
    2014.''.

SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by inserting after section 747, as amended by 
section 5301, the following:

``SEC. 747A. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    ``(a) In General.--The Secretary shall award grants to eligible 
entities to enable such entities to provide new training opportunities 
for direct care workers who are employed in long-term care settings 
such as nursing homes (as defined in section 1908(e)(1) of the Social 
Security Act (42 U.S.C. 1396g(e)(1)), assisted living facilities and 
skilled nursing facilities, intermediate care facilities for 
individuals with mental retardation, home and community based settings, 
and any other setting the Secretary determines to be appropriate.
    ``(b) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
        ``(1) be an institution of higher education (as defined in 
    section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) 
    that--
            ``(A) is accredited by a nationally recognized accrediting 
        agency or association listed under section 101(c) of the Higher 
        Education Act of 1965 (20 U.S.C. 1001(c)); and
            ``(B) has established a public-private educational 
        partnership with a nursing home or skilled nursing facility, 
        agency or entity providing home and community based services to 
        individuals with disabilities, or other long-term care 
        provider; and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require.
    ``(c) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant under this section to provide assistance to eligible 
individuals to offset the cost of tuition and required fees for 
enrollment in academic programs provided by such entity.
    ``(d) Eligible Individual.--
        ``(1) Eligibility.--To be eligible for assistance under this 
    section, an individual shall be enrolled in courses provided by a 
    grantee under this subsection and maintain satisfactory academic 
    progress in such courses.
        ``(2) Condition of assistance.--As a condition of receiving 
    assistance under this section, an individual shall agree that, 
    following completion of the assistance period, the individual will 
    work in the field of geriatrics, disability services, long term 
    services and supports, or chronic care management for a minimum of 
    2 years under guidelines set by the Secretary.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $10,000,000 for the period of 
fiscal years 2011 through 2013.''.

SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTRY.

    Part C of Title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by--
        (1) redesignating section 748, as amended by section 5103 of 
    this Act, as section 749; and
        (2) inserting after section 747A, as added by section 5302, the 
    following:

``SEC. 748. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
              DENTISTRY.

    ``(a) Support and Development of Dental Training Programs.--
        ``(1) In general.--The Secretary may make grants to, or enter 
    into contracts with, a school of dentistry, public or nonprofit 
    private hospital, or a public or private nonprofit entity which the 
    Secretary has determined is capable of carrying out such grant or 
    contract--
            ``(A) to plan, develop, and operate, or participate in, an 
        approved professional training program in the field of general 
        dentistry, pediatric dentistry, or public health dentistry for 
        dental students, residents, practicing dentists, dental 
        hygienists, or other approved primary care dental trainees, 
        that emphasizes training for general, pediatric, or public 
        health dentistry;
            ``(B) to provide financial assistance to dental students, 
        residents, practicing dentists, and dental hygiene students who 
        are in need thereof, who are participants in any such program, 
        and who plan to work in the practice of general, pediatric, 
        public heath dentistry, or dental hygiene;
            ``(C) to plan, develop, and operate a program for the 
        training of oral health care providers who plan to teach in 
        general, pediatric, public health dentistry, or dental hygiene;
            ``(D) to provide financial assistance in the form of 
        traineeships and fellowships to dentists who plan to teach or 
        are teaching in general, pediatric, or public health dentistry;
            ``(E) to meet the costs of projects to establish, maintain, 
        or improve dental faculty development programs in primary care 
        (which may be departments, divisions or other units);
            ``(F) to meet the costs of projects to establish, maintain, 
        or improve predoctoral and postdoctoral training in primary 
        care programs;
            ``(G) to create a loan repayment program for faculty in 
        dental programs; and
            ``(H) to provide technical assistance to pediatric training 
        programs in developing and implementing instruction regarding 
        the oral health status, dental care needs, and risk-based 
        clinical disease management of all pediatric populations with 
        an emphasis on underserved children.
        ``(2) Faculty loan repayment.--
            ``(A) In general.--A grant or contract under subsection 
        (a)(1)(G) may be awarded to a program of general, pediatric, or 
        public health dentistry described in such subsection to plan, 
        develop, and operate a loan repayment program under which--
                ``(i) individuals agree to serve full-time as faculty 
            members; and
                ``(ii) the program of general, pediatric or public 
            health dentistry agrees to pay the principal and interest 
            on the outstanding student loans of the individuals.
            ``(B) Manner of payments.--With respect to the payments 
        described in subparagraph (A)(ii), upon completion by an 
        individual of each of the first, second, third, fourth, and 
        fifth years of service, the program shall pay an amount equal 
        to 10, 15, 20, 25, and 30 percent, respectively, of the 
        individual's student loan balance as calculated based on 
        principal and interest owed at the initiation of the agreement.
    ``(b) Eligible Entity.--For purposes of this subsection, entities 
eligible for such grants or contracts in general, pediatric, or public 
health dentistry shall include entities that have programs in dental or 
dental hygiene schools, or approved residency or advanced education 
programs in the practice of general, pediatric, or public health 
dentistry. Eligible entities may partner with schools of public health 
to permit the education of dental students, residents, and dental 
hygiene students for a master's year in public health at a school of 
public health.
    ``(c) Priorities in Making Awards.--With respect to training 
provided for under this section, the Secretary shall give priority in 
awarding grants or contracts to the following:
        ``(1) Qualified applicants that propose collaborative projects 
    between departments of primary care medicine and departments of 
    general, pediatric, or public health dentistry.
        ``(2) Qualified applicants that have a record of training the 
    greatest percentage of providers, or that have demonstrated 
    significant improvements in the percentage of providers, who enter 
    and remain in general, pediatric, or public health dentistry.
        ``(3) Qualified applicants that have a record of training 
    individuals who are from a rural or disadvantaged background, or 
    from underrepresented minorities.
        ``(4) Qualified applicants that establish formal relationships 
    with Federally qualified health centers, rural health centers, or 
    accredited teaching facilities and that conduct training of 
    students, residents, fellows, or faculty at the center or facility.
        ``(5) Qualified applicants that conduct teaching programs 
    targeting vulnerable populations such as older adults, homeless 
    individuals, victims of abuse or trauma, individuals with mental 
    health or substance-related disorders, individuals with 
    disabilities, and individuals with HIV/AIDS, and in the risk-based 
    clinical disease management of all populations.
        ``(6) Qualified applicants that include educational activities 
    in cultural competency and health literacy.
        ``(7) Qualified applicants that have a high rate for placing 
    graduates in practice settings that serve underserved areas or 
    health disparity populations, or who achieve a significant increase 
    in the rate of placing graduates in such settings.
        ``(8) Qualified applicants that intend to establish a special 
    populations oral health care education center or training program 
    for the didactic and clinical education of dentists, dental health 
    professionals, and dental hygienists who plan to teach oral health 
    care for people with developmental disabilities, cognitive 
    impairment, complex medical problems, significant physical 
    limitations, and vulnerable elderly.
    ``(d) Application.--An eligible entity desiring a grant under this 
section shall submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require.
    ``(e) Duration of Award.--The period during which payments are made 
to an entity from an award of a grant or contract under subsection (a) 
shall be 5 years. The provision of such payments shall be subject to 
annual approval by the Secretary and subject to the availability of 
appropriations for the fiscal year involved to make the payments.
    ``(f) Authorizations of Appropriations.--For the purpose of 
carrying out subsections (a) and (b), there is authorized to be 
appropriated $30,000,000 for fiscal year 2010 and such sums as may be 
necessary for each of fiscal years 2011 through 2015.
    ``(g) Carryover Funds.--An entity that receives an award under this 
section may carry over funds from 1 fiscal year to another without 
obtaining approval from the Secretary. In no case may any funds be 
carried over pursuant to the preceding sentence for more than 3 
years.''.

SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS DEMONSTRATION 
              PROJECT.

    Subpart X of part D of title III of the Public Health Service Act 
(42 U.S.C. 256f et seq.) is amended by adding at the end the following:

``SEC. 340G-1. DEMONSTRATION PROGRAM.

    ``(a) In General.--
        ``(1) Authorization.--The Secretary is authorized to award 
    grants to 15 eligible entities to enable such entities to establish 
    a demonstration program to establish training programs to train, or 
    to employ, alternative dental health care providers in order to 
    increase access to dental health care services in rural and other 
    underserved communities.
        ``(2) Definition.--The term `alternative dental health care 
    providers' includes community dental health coordinators, advance 
    practice dental hygienists, independent dental hygienists, 
    supervised dental hygienists, primary care physicians, dental 
    therapists, dental health aides, and any other health professional 
    that the Secretary determines appropriate.
    ``(b) Timeframe.--The demonstration projects funded under this 
section shall begin not later than 2 years after the date of enactment 
of this section, and shall conclude not later than 7 years after such 
date of enactment.
    ``(c) Eligible Entities.--To be eligible to receive a grant under 
subsection (a), an entity shall--
        ``(1) be--
            ``(A) an institution of higher education, including a 
        community college;
            ``(B) a public-private partnership;
            ``(C) a federally qualified health center;
            ``(D) an Indian Health Service facility or a tribe or 
        tribal organization (as such terms are defined in section 4 of 
        the Indian Self-Determination and Education Assistance Act);
            ``(E) a State or county public health clinic, a health 
        facility operated by an Indian tribe or tribal organization, or 
        urban Indian organization providing dental services; or
            ``(F) a public hospital or health system;
        ``(2) be within a program accredited by the Commission on 
    Dental Accreditation or within a dental education program in an 
    accredited institution; and
        ``(3) shall submit an application to the Secretary at such 
    time, in such manner, and containing such information as the 
    Secretary may require.
    ``(d) Administrative Provisions.--
        ``(1) Amount of grant.--Each grant under this section shall be 
    in an amount that is not less than $4,000,000 for the 5-year period 
    during which the demonstration project being conducted.
        ``(2) Disbursement of funds.--
            ``(A) Preliminary disbursements.--Beginning 1 year after 
        the enactment of this section, the Secretary may disperse to 
        any entity receiving a grant under this section not more than 
        20 percent of the total funding awarded to such entity under 
        such grant, for the purpose of enabling the entity to plan the 
        demonstration project to be conducted under such grant.
            ``(B) Subsequent disbursements.--The remaining amount of 
        grant funds not dispersed under subparagraph (A) shall be 
        dispersed such that not less than 15 percent of such remaining 
        amount is dispersed each subsequent year.
    ``(e) Compliance With State Requirements.--Each entity receiving a 
grant under this section shall certify that it is in compliance with 
all applicable State licensing requirements.
    ``(f) Evaluation.--The Secretary shall contract with the Director 
of the Institute of Medicine to conduct a study of the demonstration 
programs conducted under this section that shall provide analysis, 
based upon quantitative and qualitative data, regarding access to 
dental health care in the United States.
    ``(g) Clarification Regarding Dental Health Aide Program.--Nothing 
in this section shall prohibit a dental health aide training program 
approved by the Indian Health Service from being eligible for a grant 
under this section.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.

SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS; 
              COMPREHENSIVE GERIATRIC EDUCATION.

    (a) Workforce Development; Career Awards.--Section 753 of the 
Public Health Service Act (42 U.S.C. 294c) is amended by adding at the 
end the following:
    ``(d) Geriatric Workforce Development.--
        ``(1) In general.--The Secretary shall award grants or 
    contracts under this subsection to entities that operate a 
    geriatric education center pursuant to subsection (a)(1).
        ``(2) Application.--To be eligible for an award under paragraph 
    (1), an entity described in such paragraph shall submit to the 
    Secretary an application at such time, in such manner, and 
    containing such information as the Secretary may require.
        ``(3) Use of funds.--Amounts awarded under a grant or contract 
    under paragraph (1) shall be used to--
            ``(A) carry out the fellowship program described in 
        paragraph (4); and
            ``(B) carry out 1 of the 2 activities described in 
        paragraph (5).
        ``(4) Fellowship program.--
            ``(A) In general.--Pursuant to paragraph (3), a geriatric 
        education center that receives an award under this subsection 
        shall use such funds to offer short-term intensive courses 
        (referred to in this subsection as a `fellowship') that focus 
        on geriatrics, chronic care management, and long-term care that 
        provide supplemental training for faculty members in medical 
        schools and other health professions schools with programs in 
        psychology, pharmacy, nursing, social work, dentistry, public 
        health, allied health, or other health disciplines, as approved 
        by the Secretary. Such a fellowship shall be open to current 
        faculty, and appropriately credentialed volunteer faculty and 
        practitioners, who do not have formal training in geriatrics, 
        to upgrade their knowledge and clinical skills for the care of 
        older adults and adults with functional limitations and to 
        enhance their interdisciplinary teaching skills.
            ``(B) Location.--A fellowship shall be offered either at 
        the geriatric education center that is sponsoring the course, 
        in collaboration with other geriatric education centers, or at 
        medical schools, schools of dentistry, schools of nursing, 
        schools of pharmacy, schools of social work, graduate programs 
        in psychology, or allied health and other health professions 
        schools approved by the Secretary with which the geriatric 
        education centers are affiliated.
            ``(C) CME credit.--Participation in a fellowship under this 
        paragraph shall be accepted with respect to complying with 
        continuing health profession education requirements. As a 
        condition of such acceptance, the recipient shall agree to 
        subsequently provide a minimum of 18 hours of voluntary 
        instructional support through a geriatric education center that 
        is providing clinical training to students or trainees in long-
        term care settings.
        ``(5) Additional required activities described.--Pursuant to 
    paragraph (3), a geriatric education center that receives an award 
    under this subsection shall use such funds to carry out 1 of the 
    following 2 activities.
            ``(A) Family caregiver and direct care provider training.--
        A geriatric education center that receives an award under this 
        subsection shall offer at least 2 courses each year, at no 
        charge or nominal cost, to family caregivers and direct care 
        providers that are designed to provide practical training for 
        supporting frail elders and individuals with disabilities. The 
        Secretary shall require such Centers to work with appropriate 
        community partners to develop training program content and to 
        publicize the availability of training courses in their service 
        areas. All family caregiver and direct care provider training 
        programs shall include instruction on the management of 
        psychological and behavioral aspects of dementia, communication 
        techniques for working with individuals who have dementia, and 
        the appropriate, safe, and effective use of medications for 
        older adults.
            ``(B) Incorporation of best practices.--A geriatric 
        education center that receives an award under this subsection 
        shall develop and include material on depression and other 
        mental disorders common among older adults, medication safety 
        issues for older adults, and management of the psychological 
        and behavioral aspects of dementia and communication techniques 
        with individuals who have dementia in all training courses, 
        where appropriate.
        ``(6) Targets.--A geriatric education center that receives an 
    award under this subsection shall meet targets approved by the 
    Secretary for providing geriatric training to a certain number of 
    faculty or practitioners during the term of the award, as well as 
    other parameters established by the Secretary.
        ``(7) Amount of award.--An award under this subsection shall be 
    in an amount of $150,000. Not more than 24 geriatric education 
    centers may receive an award under this subsection.
        ``(8) Maintenance of effort.--A geriatric education center that 
    receives an award under this subsection shall provide assurances to 
    the Secretary that funds provided to the geriatric education center 
    under this subsection will be used only to supplement, not to 
    supplant, the amount of Federal, State, and local funds otherwise 
    expended by the geriatric education center.
        ``(9) Authorization of appropriations.--In addition to any 
    other funding available to carry out this section, there is 
    authorized to be appropriated to carry out this subsection, 
    $10,800,000 for the period of fiscal year 2011 through 2014.
    ``(e) Geriatric Career Incentive Awards.--
        ``(1) In general.--The Secretary shall award grants or 
    contracts under this section to individuals described in paragraph 
    (2) to foster greater interest among a variety of health 
    professionals in entering the field of geriatrics, long-term care, 
    and chronic care management.
        ``(2) Eligible individuals.--To be eligible to received an 
    award under paragraph (1), an individual shall--
            ``(A) be an advanced practice nurse, a clinical social 
        worker, a pharmacist, or student of psychology who is pursuing 
        a doctorate or other advanced degree in geriatrics or related 
        fields in an accredited health professions school; and
            ``(B) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require.
        ``(3) Condition of award.--As a condition of receiving an award 
    under this subsection, an individual shall agree that, following 
    completion of the award period, the individual will teach or 
    practice in the field of geriatrics, long-term care, or chronic 
    care management for a minimum of 5 years under guidelines set by 
    the Secretary.
        ``(4) Authorization of appropriations.--There is authorized to 
    be appropriated to carry out this subsection, $10,000,000 for the 
    period of fiscal years 2011 through 2013.''.
    (b) Expansion of Eligibility for Geriatric Academic Career Awards; 
Payment to Institution.--Section 753(c) of the Public Health Service 
Act 294(c)) is amended--
        (1) by redesignating paragraphs (4) and (5) as paragraphs (5) 
    and (6), respectively;
        (2) by striking paragraph (2) through paragraph (3) and 
    inserting the following:
        ``(2) Eligible individuals.--To be eligible to receive an Award 
    under paragraph (1), an individual shall--
            ``(A) be board certified or board eligible in internal 
        medicine, family practice, psychiatry, or licensed dentistry, 
        or have completed any required training in a discipline and 
        employed in an accredited health professions school that is 
        approved by the Secretary;
            ``(B) have completed an approved fellowship program in 
        geriatrics or have completed specialty training in geriatrics 
        as required by the discipline and any addition geriatrics 
        training as required by the Secretary; and
            ``(C) have a junior (non-tenured) faculty appointment at an 
        accredited (as determined by the Secretary) school of medicine, 
        osteopathic medicine, nursing, social work, psychology, 
        dentistry, pharmacy, or other allied health disciplines in an 
        accredited health professions school that is approved by the 
        Secretary.
        ``(3) Limitations.--No Award under paragraph (1) may be made to 
    an eligible individual unless the individual--
            ``(A) has submitted to the Secretary an application, at 
        such time, in such manner, and containing such information as 
        the Secretary may require, and the Secretary has approved such 
        application;
            ``(B) provides, in such form and manner as the Secretary 
        may require, assurances that the individual will meet the 
        service requirement described in paragraph (6); and
            ``(C) provides, in such form and manner as the Secretary 
        may require, assurances that the individual has a full-time 
        faculty appointment in a health professions institution and 
        documented commitment from such institution to spend 75 percent 
        of the total time of such individual on teaching and developing 
        skills in interdisciplinary education in geriatrics.
        ``(4) Maintenance of effort.--An eligible individual that 
    receives an Award under paragraph (1) shall provide assurances to 
    the Secretary that funds provided to the eligible individual under 
    this subsection will be used only to supplement, not to supplant, 
    the amount of Federal, State, and local funds otherwise expended by 
    the eligible individual.''; and
        (3) in paragraph (5), as so designated--
            (A) in subparagraph (A)--
                (i) by inserting ``for individuals who are physicians'' 
            after ``this section''; and
                (ii) by inserting after the period at the end the 
            following: ``The Secretary shall determine the amount of an 
            Award under this section for individuals who are not 
            physicians.''; and
            (B) by adding at the end the following:
            ``(C) Payment to institution.--The Secretary shall make 
        payments to institutions which include schools of medicine, 
        osteopathic medicine, nursing, social work, psychology, 
        dentistry, and pharmacy, or other allied health discipline in 
        an accredited health professions school that is approved by the 
        Secretary.''.
    (c) Comprehensive Geriatric Education.--Section 855 of the Public 
Health Service Act (42 U.S.C. 298) is amended--
        (1) in subsection (b)--
            (A) in paragraph (3), by striking ``or'' at the end;
            (B) in paragraph (4), by striking the period and inserting 
        ``; or''; and
            (C) by adding at the end the following:
        ``(5) establish traineeships for individuals who are preparing 
    for advanced education nursing degrees in geriatric nursing, long-
    term care, gero-psychiatric nursing or other nursing areas that 
    specialize in the care of the elderly population.''; and
        (2) in subsection (e), by striking ``2003 through 2007'' and 
    inserting ``2010 through 2014''.

SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    (a) In General.--Part D of title VII (42 U.S.C. 294 et seq.) is 
amended by--
        (1) striking section 757;
        (2) redesignating section 756 (as amended by section 5103) as 
    section 757; and
        (3) inserting after section 755 the following:

``SEC. 756. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    ``(a) Grants Authorized.--The Secretary may award grants to 
eligible institutions of higher education to support the recruitment of 
students for, and education and clinical experience of the students 
in--
        ``(1) baccalaureate, master's, and doctoral degree programs of 
    social work, as well as the development of faculty in social work;
        ``(2) accredited master's, doctoral, internship, and post-
    doctoral residency programs of psychology for the development and 
    implementation of interdisciplinary training of psychology graduate 
    students for providing behavioral and mental health services, 
    including substance abuse prevention and treatment services;
        ``(3) accredited institutions of higher education or accredited 
    professional training programs that are establishing or expanding 
    internships or other field placement programs in child and 
    adolescent mental health in psychiatry, psychology, school 
    psychology, behavioral pediatrics, psychiatric nursing, social 
    work, school social work, substance abuse prevention and treatment, 
    marriage and family therapy, school counseling, or professional 
    counseling; and
        ``(4) State-licensed mental health nonprofit and for-profit 
    organizations to enable such organizations to pay for programs for 
    preservice or in-service training of paraprofessional child and 
    adolescent mental health workers.
    ``(b) Eligibility Requirements.--To be eligible for a grant under 
this section, an institution shall demonstrate--
        ``(1) participation in the institutions' programs of 
    individuals and groups from different racial, ethnic, cultural, 
    geographic, religious, linguistic, and class backgrounds, and 
    different genders and sexual orientations;
        ``(2) knowledge and understanding of the concerns of the 
    individuals and groups described in subsection (a);
        ``(3) any internship or other field placement program assisted 
    under the grant will prioritize cultural and linguistic competency;
        ``(4) the institution will provide to the Secretary such data, 
    assurances, and information as the Secretary may require; and
        ``(5) with respect to any violation of the agreement between 
    the Secretary and the institution, the institution will pay such 
    liquidated damages as prescribed by the Secretary by regulation.
    ``(c) Institutional Requirement.--For grants authorized under 
subsection (a)(1), at least 4 of the grant recipients shall be 
historically black colleges or universities or other minority-serving 
institutions.
    ``(d) Priority.--
        ``(1) In selecting the grant recipients in social work under 
    subsection (a)(1), the Secretary shall give priority to applicants 
    that--
            ``(A) are accredited by the Council on Social Work 
        Education;
            ``(B) have a graduation rate of not less than 80 percent 
        for social work students; and
            ``(C) exhibit an ability to recruit social workers from and 
        place social workers in areas with a high need and high demand 
        population.
        ``(2) In selecting the grant recipients in graduate psychology 
    under subsection (a)(2), the Secretary shall give priority to 
    institutions in which training focuses on the needs of vulnerable 
    groups such as older adults and children, individuals with mental 
    health or substance-related disorders, victims of abuse or trauma 
    and of combat stress disorders such as posttraumatic stress 
    disorder and traumatic brain injuries, homeless individuals, 
    chronically ill persons, and their families.
        ``(3) In selecting the grant recipients in training programs in 
    child and adolescent mental health under subsections (a)(3) and 
    (a)(4), the Secretary shall give priority to applicants that--
            ``(A) have demonstrated the ability to collect data on the 
        number of students trained in child and adolescent mental 
        health and the populations served by such students after 
        graduation or completion of preservice or in-service training;
            ``(B) have demonstrated familiarity with evidence-based 
        methods in child and adolescent mental health services, 
        including substance abuse prevention and treatment services;
            ``(C) have programs designed to increase the number of 
        professionals and paraprofessionals serving high-priority 
        populations and to applicants who come from high-priority 
        communities and plan to serve medically underserved 
        populations, in health professional shortage areas, or in 
        medically underserved areas;
            ``(D) offer curriculum taught collaboratively with a family 
        on the consumer and family lived experience or the importance 
        of family-professional or family-paraprofessional partnerships; 
        and
            ``(E) provide services through a community mental health 
        program described in section 1913(b)(1).
    ``(e) Authorization of Appropriation.--For the fiscal years 2010 
through 2013, there is authorized to be appropriated to carry out this 
section--
        ``(1) $8,000,000 for training in social work in subsection 
    (a)(1);
        ``(2) $12,000,000 for training in graduate psychology in 
    subsection (a)(2), of which not less than $10,000,000 shall be 
    allocated for doctoral, postdoctoral, and internship level 
    training;
        ``(3) $10,000,000 for training in professional child and 
    adolescent mental health in subsection (a)(3); and
        ``(4) $5,000,000 for training in paraprofessional child and 
    adolescent work in subsection (a)(4).''.
    (b) Conforming Amendments.--Section 757(b)(2) of the Public Health 
Service Act, as redesignated by subsection (a), is amended by striking 
``sections 751(a)(1)(A), 751(a)(1)(B), 753(b), 754(3)(A), and 755(b)'' 
and inserting ``sections 751(b)(1)(A), 753(b), and 755(b)''.

SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC HEALTH AND 
              INDIVIDUALS WITH DISABILITIES TRAINING.

    (a) Title VII.--Section 741 of the Public Health Service Act (42 
U.S.C. 293e) is amended--
        (1) in subsection (a)--
            (A) by striking the subsection heading and inserting 
        ``Cultural Competency, Prevention, and Public Health and 
        Individuals With Disability Grants''; and
            (B) in paragraph (1), by striking ``for the purpose of'' 
        and all that follows through the period at the end and 
        inserting ``for the development, evaluation, and dissemination 
        of research, demonstration projects, and model curricula for 
        cultural competency, prevention, public health proficiency, 
        reducing health disparities, and aptitude for working with 
        individuals with disabilities training for use in health 
        professions schools and continuing education programs, and for 
        other purposes determined as appropriate by the Secretary.''; 
        and
        (2) by striking subsection (b) and inserting the following:
    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with health professional societies, licensing and 
accreditation entities, health professions schools, and experts in 
minority health and cultural competency, prevention, and public health 
and disability groups, community-based organizations, and other 
organizations as determined appropriate by the Secretary. The Secretary 
shall coordinate with curricula and research and demonstration projects 
developed under section 807.
    ``(c) Dissemination.--
        ``(1) In general.--Model curricula developed under this section 
    shall be disseminated through the Internet Clearinghouse under 
    section 270 and such other means as determined appropriate by the 
    Secretary.
        ``(2) Evaluation.--The Secretary shall evaluate the adoption 
    and the implementation of cultural competency, prevention, and 
    public health, and working with individuals with a disability 
    training curricula, and the facilitate inclusion of these 
    competency measures in quality measurement systems as appropriate.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2015.''.
    (b) Title VIII.--Section 807 of the Public Health Service Act (42 
U.S.C. 296e-1) is amended--
        (1) in subsection (a)--
            (A) by striking the subsection heading and inserting 
        ``Cultural Competency, Prevention, and Public Health and 
        Individuals With Disability Grants''; and
            (B) by striking ``for the purpose of'' and all that follows 
        through ``health care.'' and inserting ``for the development, 
        evaluation, and dissemination of research, demonstration 
        projects, and model curricula for cultural competency, 
        prevention, public health proficiency, reducing health 
        disparities, and aptitude for working with individuals with 
        disabilities training for use in health professions schools and 
        continuing education programs, and for other purposes 
        determined as appropriate by the Secretary.''; and
        (2) by redesignating subsection (b) as subsection (d);
        (3) by inserting after subsection (a) the following:
    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with the entities described in section 741(b). The 
Secretary shall coordinate with curricula and research and 
demonstration projects developed under such section 741.
    ``(c) Dissemination.--Model curricula developed under this section 
shall be disseminated and evaluated in the same manner as model 
curricula developed under section 741, as described in subsection (c) 
of such section.''; and
        (4) in subsection (d), as so redesignated--
            (A) by striking ``subsection (a)'' and inserting ``this 
        section''; and
            (B) by striking ``2001 through 2004'' and inserting ``2010 
        through 2015''.

SEC. 5308. ADVANCED NURSING EDUCATION GRANTS.

    Section 811 of the Public Health Service Act (42 U.S.C. 296j) is 
amended--
        (1) in subsection (c)--
            (A) in the subsection heading, by striking ``and Nurse 
        Midwifery Programs''; and
            (B) by striking ``and nurse midwifery'';
        (2) in subsection (f)--
            (A) by striking paragraph (2); and
            (B) by redesignating paragraph (3) as paragraph (2); and
        (3) by redesignating subsections (d), (e), and (f) as 
    subsections (e), (f), and (g), respectively; and
        (4) by inserting after subsection (c), the following:
    ``(d) Authorized Nurse-midwifery Programs.--Midwifery programs that 
are eligible for support under this section are educational programs 
that--
        ``(1) have as their objective the education of midwives; and
        ``(2) are accredited by the American College of Nurse-Midwives 
    Accreditation Commission for Midwifery Education.''.

SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

    (a) In General.--Section 831 of the Public Health Service Act (42 
U.S.C. 296p) is amended--
        (1) in the section heading, by striking ``retention'' and 
    inserting ``quality'';
        (2) in subsection (a)--
            (A) in paragraph (1), by adding ``or'' after the semicolon;
            (B) by striking paragraph (2); and
            (C) by redesignating paragraph (3) as paragraph (2);
        (3) in subsection (b)(3), by striking ``managed care, quality 
    improvement'' and inserting ``coordinated care'';
        (4) in subsection (g), by inserting ``, as defined in section 
    801(2),'' after ``school of nursing''; and
        (5) in subsection (h), by striking ``2003 through 2007'' and 
    inserting ``2010 through 2014''.
    (b) Nurse Retention Grants.--Title VIII of the Public Health 
Service Act is amended by inserting after section 831 (42 U.S.C. 296b) 
the following:

``SEC. 831A. NURSE RETENTION GRANTS.

    ``(a) Retention Priority Areas.--The Secretary may award grants to, 
and enter into contracts with, eligible entities to enhance the nursing 
workforce by initiating and maintaining nurse retention programs 
pursuant to subsection (b) or (c).
    ``(b) Grants for Career Ladder Program.--The Secretary may award 
grants to, and enter into contracts with, eligible entities for 
programs--
        ``(1) to promote career advancement for individuals including 
    licensed practical nurses, licensed vocational nurses, certified 
    nurse assistants, home health aides, diploma degree or associate 
    degree nurses, to become baccalaureate prepared registered nurses 
    or advanced education nurses in order to meet the needs of the 
    registered nurse workforce;
        ``(2) developing and implementing internships and residency 
    programs in collaboration with an accredited school of nursing, as 
    defined by section 801(2), to encourage mentoring and the 
    development of specialties; or
        ``(3) to assist individuals in obtaining education and training 
    required to enter the nursing profession and advance within such 
    profession.
    ``(c) Enhancing Patient Care Delivery Systems.--
        ``(1) Grants.--The Secretary may award grants to eligible 
    entities to improve the retention of nurses and enhance patient 
    care that is directly related to nursing activities by enhancing 
    collaboration and communication among nurses and other health care 
    professionals, and by promoting nurse involvement in the 
    organizational and clinical decision-making processes of a health 
    care facility.
        ``(2) Priority.--In making awards of grants under this 
    subsection, the Secretary shall give preference to applicants that 
    have not previously received an award under this subsection (or 
    section 831(c) as such section existed on the day before the date 
    of enactment of this section).
        ``(3) Continuation of an award.--The Secretary shall make 
    continuation of any award under this subsection beyond the second 
    year of such award contingent on the recipient of such award having 
    demonstrated to the Secretary measurable and substantive 
    improvement in nurse retention or patient care.
    ``(d) Other Priority Areas.--The Secretary may award grants to, or 
enter into contracts with, eligible entities to address other areas 
that are of high priority to nurse retention, as determined by the 
Secretary.
    ``(e) Report.--The Secretary shall submit to the Congress before 
the end of each fiscal year a report on the grants awarded and the 
contracts entered into under this section. Each such report shall 
identify the overall number of such grants and contracts and provide an 
explanation of why each such grant or contract will meet the priority 
need of the nursing workforce.
    ``(f) Eligible Entity.--For purposes of this section, the term 
`eligible entity' includes an accredited school of nursing, as defined 
by section 801(2), a health care facility, or a partnership of such a 
school and facility.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2012.''.

SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM.

    (a) Loan Repayments and Scholarships.--Section 846(a)(3) of the 
Public Health Service Act (42 U.S.C. 297n(a)(3)) is amended by 
inserting before the semicolon the following: ``, or in a accredited 
school of nursing, as defined by section 801(2), as nurse faculty''.
    (b) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296 
et seq.) is amended--
        (1) by redesignating section 810 (relating to prohibition 
    against discrimination by schools on the basis of sex) as section 
    809 and moving such section so that it follows section 808;
        (2) in sections 835, 836, 838, 840, and 842, by striking the 
    term ``this subpart'' each place it appears and inserting ``this 
    part'';
        (3) in section 836(h), by striking the last sentence;
        (4) in section 836, by redesignating subsection (l) as 
    subsection (k);
        (5) in section 839, by striking ``839'' and all that follows 
    through ``(a)'' and inserting ``839. (a)'';
        (6) in section 835(b), by striking ``841'' each place it 
    appears and inserting ``871'';
        (7) by redesignating section 841 as section 871, moving part F 
    to the end of the title, and redesignating such part as part I;
        (8) in part G--
            (A) by redesignating section 845 as section 851; and
            (B) by redesignating part G as part F;
        (9) in part H--
            (A) by redesignating sections 851 and 852 as sections 861 
        and 862, respectively; and
            (B) by redesignating part H as part G; and
        (10) in part I--
            (A) by redesignating section 855, as amended by section 
        5305, as section 865; and
            (B) by redesignating part I as part H.

SEC. 5311. NURSE FACULTY LOAN PROGRAM.

    (a) In General.--Section 846A of the Public Health Service Act (42 
U.S.C. 297n-1) is amended--
        (1) in subsection (a)--
            (A) in the subsection heading, by striking 
        ``Establishment'' and inserting ``School of Nursing Student 
        Loan Fund''; and
            (B) by inserting ``accredited'' after ``agreement with 
        any'';
        (2) in subsection (c)--
            (A) in paragraph (2), by striking ``$30,000'' and all that 
        follows through the semicolon and inserting ``$35,500, during 
        fiscal years 2010 and 2011 fiscal years (after fiscal year 
        2011, such amounts shall be adjusted to provide for a cost-of-
        attendance increase for the yearly loan rate and the aggregate 
        loan;''; and
            (B) in paragraph (3)(A), by inserting ``an accredited'' 
        after ``faculty member in'';
        (3) in subsection (e), by striking ``a school'' and inserting 
    ``an accredited school''; and
        (4) in subsection (f), by striking ``2003 through 2007'' and 
    inserting ``2010 through 2014''.
    (b) Eligible Individual Student Loan Repayment.--Title VIII of the 
Public Health Service Act is amended by inserting after section 846A 
(42 U.S.C. 297n-1) the following:

``SEC. 847. ELIGIBLE INDIVIDUAL STUDENT LOAN REPAYMENT.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may enter into an 
agreement with eligible individuals for the repayment of education 
loans, in accordance with this section, to increase the number of 
qualified nursing faculty.
    ``(b) Agreements.--Each agreement entered into under this 
subsection shall require that the eligible individual shall serve as a 
full-time member of the faculty of an accredited school of nursing, for 
a total period, in the aggregate, of at least 4 years during the 6-year 
period beginning on the later of--
        ``(1) the date on which the individual receives a master's or 
    doctorate nursing degree from an accredited school of nursing; or
        ``(2) the date on which the individual enters into an agreement 
    under this subsection.
    ``(c) Agreement Provisions.--Agreements entered into pursuant to 
subsection (b) shall be entered into on such terms and conditions as 
the Secretary may determine, except that--
        ``(1) not more than 10 months after the date on which the 6-
    year period described under subsection (b) begins, but in no case 
    before the individual starts as a full-time member of the faculty 
    of an accredited school of nursing the Secretary shall begin making 
    payments, for and on behalf of that individual, on the outstanding 
    principal of, and interest on, any loan of that individual obtained 
    to pay for such degree;
        ``(2) for an individual who has completed a master's in nursing 
    or equivalent degree in nursing--
            ``(A) payments may not exceed $10,000 per calendar year; 
        and
            ``(B) total payments may not exceed $40,000 during the 2010 
        and 2011 fiscal years (after fiscal year 2011, such amounts 
        shall be adjusted to provide for a cost-of-attendance increase 
        for the yearly loan rate and the aggregate loan); and
        ``(3) for an individual who has completed a doctorate or 
    equivalent degree in nursing--
            ``(A) payments may not exceed $20,000 per calendar year; 
        and
            ``(B) total payments may not exceed $80,000 during the 2010 
        and 2011 fiscal years (adjusted for subsequent fiscal years as 
        provided for in the same manner as in paragraph (2)(B)).
    ``(d) Breach of Agreement.--
        ``(1) In general.--In the case of any agreement made under 
    subsection (b), the individual is liable to the Federal Government 
    for the total amount paid by the Secretary under such agreement, 
    and for interest on such amount at the maximum legal prevailing 
    rate, if the individual fails to meet the agreement terms required 
    under such subsection.
        ``(2) Waiver or suspension of liability.--In the case of an 
    individual making an agreement for purposes of paragraph (1), the 
    Secretary shall provide for the waiver or suspension of liability 
    under such paragraph if compliance by the individual with the 
    agreement involved is impossible or would involve extreme hardship 
    to the individual or if enforcement of the agreement with respect 
    to the individual would be unconscionable.
        ``(3) Date certain for recovery.--Subject to paragraph (2), any 
    amount that the Federal Government is entitled to recover under 
    paragraph (1) shall be paid to the United States not later than the 
    expiration of the 3-year period beginning on the date the United 
    States becomes so entitled.
        ``(4) Availability.--Amounts recovered under paragraph (1) 
    shall be available to the Secretary for making loan repayments 
    under this section and shall remain available for such purpose 
    until expended.
    ``(e) Eligible Individual Defined.--For purposes of this section, 
the term `eligible individual' means an individual who--
        ``(1) is a United States citizen, national, or lawful permanent 
    resident;
        ``(2) holds an unencumbered license as a registered nurse; and
        ``(3) has either already completed a master's or doctorate 
    nursing program at an accredited school of nursing or is currently 
    enrolled on a full-time or part-time basis in such a program.
    ``(f) Priority.--For the purposes of this section and section 846A, 
funding priority will be awarded to School of Nursing Student Loans 
that support doctoral nursing students or Individual Student Loan 
Repayment that support doctoral nursing students.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2014.''.

SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B THROUGH D OF 
              TITLE VIII.

    Section 871 of the Public Health Service Act, as redesignated and 
moved by section 5310, is amended to read as follows:

``SEC. 871. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out parts B, C, and D (subject to 
section 851(g)), there are authorized to be appropriated $338,000,000 
for fiscal year 2010, and such sums as may be necessary for each of the 
fiscal years 2011 through 2016.''.

SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH WORKFORCE.

    (a) In General.--Part P of title III of the Public Health Service 
Act (42 U.S.C. 280g et seq.) is amended by adding at the end the 
following:

``SEC. 399V. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND OUTCOMES.

    ``(a) Grants Authorized.--The Director of the Centers for Disease 
Control and Prevention, in collaboration with the Secretary, shall 
award grants to eligible entities to promote positive health behaviors 
and outcomes for populations in medically underserved communities 
through the use of community health workers.
    ``(b) Use of Funds.--Grants awarded under subsection (a) shall be 
used to support community health workers--
        ``(1) to educate, guide, and provide outreach in a community 
    setting regarding health problems prevalent in medically 
    underserved communities, particularly racial and ethnic minority 
    populations;
        ``(2) to educate and provide guidance regarding effective 
    strategies to promote positive health behaviors and discourage 
    risky health behaviors;
        ``(3) to educate and provide outreach regarding enrollment in 
    health insurance including the Children's Health Insurance Program 
    under title XXI of the Social Security Act, Medicare under title 
    XVIII of such Act and Medicaid under title XIX of such Act;
        ``(4) to identify, educate, refer, and enroll underserved 
    populations to appropriate healthcare agencies and community-based 
    programs and organizations in order to increase access to quality 
    healthcare services and to eliminate duplicative care; or
        ``(5) to educate, guide, and provide home visitation services 
    regarding maternal health and prenatal care.
    ``(c) Application.--Each eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the 
Secretary, at such time, in such manner, and accompanied by such 
information as the Secretary may require.
    ``(d) Priority.--In awarding grants under subsection (a), the 
Secretary shall give priority to applicants that--
        ``(1) propose to target geographic areas--
            ``(A) with a high percentage of residents who are eligible 
        for health insurance but are uninsured or underinsured;
            ``(B) with a high percentage of residents who suffer from 
        chronic diseases; or
            ``(C) with a high infant mortality rate;
        ``(2) have experience in providing health or health-related 
    social services to individuals who are underserved with respect to 
    such services; and
        ``(3) have documented community activity and experience with 
    community health workers.
    ``(e) Collaboration With Academic Institutions and the One-stop 
Delivery System.--The Secretary shall encourage community health worker 
programs receiving funds under this section to collaborate with 
academic institutions and one-stop delivery systems under section 
134(c) of the Workforce Investment Act of 1998. Nothing in this section 
shall be construed to require such collaboration.
    ``(f) Evidence-based Interventions.--The Secretary shall encourage 
community health worker programs receiving funding under this section 
to implement a process or an outcome-based payment system that rewards 
community health workers for connecting underserved populations with 
the most appropriate services at the most appropriate time. Nothing in 
this section shall be construed to require such a payment.
    ``(g) Quality Assurance and Cost Effectiveness.--The Secretary 
shall establish guidelines for assuring the quality of the training and 
supervision of community health workers under the programs funded under 
this section and for assuring the cost-effectiveness of such programs.
    ``(h) Monitoring.--The Secretary shall monitor community health 
worker programs identified in approved applications under this section 
and shall determine whether such programs are in compliance with the 
guidelines established under subsection (g).
    ``(i) Technical Assistance.--The Secretary may provide technical 
assistance to community health worker programs identified in approved 
applications under this section with respect to planning, developing, 
and operating programs under the grant.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated, such sums as may be necessary to carry out this section 
for each of fiscal years 2010 through 2014.
    ``(k) Definitions.--In this section:
        ``(1) Community health worker.--The term `community health 
    worker', as defined by the Department of Labor as Standard 
    Occupational Classification [21-1094] means an individual who 
    promotes health or nutrition within the community in which the 
    individual resides--
            ``(A) by serving as a liaison between communities and 
        healthcare agencies;
            ``(B) by providing guidance and social assistance to 
        community residents;
            ``(C) by enhancing community residents' ability to 
        effectively communicate with healthcare providers;
            ``(D) by providing culturally and linguistically 
        appropriate health or nutrition education;
            ``(E) by advocating for individual and community health;
            ``(F) by providing referral and follow-up services or 
        otherwise coordinating care; and
            ``(G) by proactively identifying and enrolling eligible 
        individuals in Federal, State, local, private or nonprofit 
        health and human services programs.
        ``(2) Community setting.--The term `community setting' means a 
    home or a community organization located in the neighborhood in 
    which a participant in the program under this section resides.
        ``(3) Eligible entity.--The term `eligible entity' means a 
    public or nonprofit private entity (including a State or public 
    subdivision of a State, a public health department, a free health 
    clinic, a hospital, or a Federally-qualified health center (as 
    defined in section 1861(aa) of the Social Security Act)), or a 
    consortium of any such entities.
        ``(4) Medically underserved community.--The term `medically 
    underserved community' means a community identified by a State--
            ``(A) that has a substantial number of individuals who are 
        members of a medically underserved population, as defined by 
        section 330(b)(3); and
            ``(B) a significant portion of which is a health 
        professional shortage area as designated under section 332.''.

SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.), as amended by section 5206, is further amended by adding 
at the end the following:

``SEC. 778. FELLOWSHIP TRAINING IN APPLIED PUBLIC HEALTH EPIDEMIOLOGY, 
              PUBLIC HEALTH LABORATORY SCIENCE, PUBLIC HEALTH 
              INFORMATICS, AND EXPANSION OF THE EPIDEMIC INTELLIGENCE 
              SERVICE.

    ``(a) In General.--The Secretary may carry out activities to 
address documented workforce shortages in State and local health 
departments in the critical areas of applied public health epidemiology 
and public health laboratory science and informatics and may expand the 
Epidemic Intelligence Service.
    ``(b) Specific Uses.--In carrying out subsection (a), the Secretary 
shall provide for the expansion of existing fellowship programs 
operated through the Centers for Disease Control and Prevention in a 
manner that is designed to alleviate shortages of the type described in 
subsection (a).
    ``(c) Other Programs.--The Secretary may provide for the expansion 
of other applied epidemiology training programs that meet objectives 
similar to the objectives of the programs described in subsection (b).
    ``(d) Work Obligation.--Participation in fellowship training 
programs under this section shall be deemed to be service for purposes 
of satisfying work obligations stipulated in contracts under section 
338I(j).
    ``(e) General Support.--Amounts may be used from grants awarded 
under this section to expand the Public Health Informatics Fellowship 
Program at the Centers for Disease Control and Prevention to better 
support all public health systems at all levels of government.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $39,500,000 for each of fiscal 
years 2010 through 2013, of which--
        ``(1) $5,000,000 shall be made available in each such fiscal 
    year for epidemiology fellowship training program activities under 
    subsections (b) and (c);
        ``(2) $5,000,000 shall be made available in each such fiscal 
    year for laboratory fellowship training programs under subsection 
    (b);
        ``(3) $5,000,000 shall be made available in each such fiscal 
    year for the Public Health Informatics Fellowship Program under 
    subsection (e); and
        ``(4) $24,500,000 shall be made available for expanding the 
    Epidemic Intelligence Service under subsection (a).''.

SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) 
is amended by adding at the end the following:

          ``PART D--UNITED STATES PUBLIC HEALTH SCIENCES TRACK

``SEC. 271. ESTABLISHMENT.

    ``(a) United States Public Health Services Track.--
        ``(1) In general.--There is hereby authorized to be established 
    a United States Public Health Sciences Track (referred to in this 
    part as the `Track'), at sites to be selected by the Secretary, 
    with authority to grant appropriate advanced degrees in a manner 
    that uniquely emphasizes team-based service, public health, 
    epidemiology, and emergency preparedness and response. It shall be 
    so organized as to graduate not less than--
            ``(A) 150 medical students annually, 10 of whom shall be 
        awarded studentships to the Uniformed Services University of 
        Health Sciences;
            ``(B) 100 dental students annually;
            ``(C) 250 nursing students annually;
            ``(D) 100 public health students annually;
            ``(E) 100 behavioral and mental health professional 
        students annually;
            ``(F) 100 physician assistant or nurse practitioner 
        students annually; and
            ``(G) 50 pharmacy students annually.
        ``(2) Locations.--The Track shall be located at existing and 
    accredited, affiliated health professions education training 
    programs at academic health centers located in regions of the 
    United States determined appropriate by the Surgeon General, in 
    consultation with the National Health Care Workforce Commission 
    established in section 5101 of the Patient Protection and 
    Affordable Care Act.
    ``(b) Number of Graduates.--Except as provided in subsection (a), 
the number of persons to be graduated from the Track shall be 
prescribed by the Secretary. In so prescribing the number of persons to 
be graduated from the Track, the Secretary shall institute actions 
necessary to ensure the maximum number of first-year enrollments in the 
Track consistent with the academic capacity of the affiliated sites and 
the needs of the United States for medical, dental, and nursing 
personnel.
    ``(c) Development.--The development of the Track may be by such 
phases as the Secretary may prescribe subject to the requirements of 
subsection (a).
    ``(d) Integrated Longitudinal Plan.--The Surgeon General shall 
develop an integrated longitudinal plan for health professions 
continuing education throughout the continuum of health-related 
education, training, and practice. Training under such plan shall 
emphasize patient-centered, interdisciplinary, and care coordination 
skills. Experience with deployment of emergency response teams shall be 
included during the clinical experiences.
    ``(e) Faculty Development.--The Surgeon General shall develop 
faculty development programs and curricula in decentralized venues of 
health care, to balance urban, tertiary, and inpatient venues.

``SEC. 272. ADMINISTRATION.

    ``(a) In General.--The business of the Track shall be conducted by 
the Surgeon General with funds appropriated for and provided by the 
Department of Health and Human Services. The National Health Care 
Workforce Commission shall assist the Surgeon General in an advisory 
capacity.
    ``(b) Faculty.--
        ``(1) In general.--The Surgeon General, after considering the 
    recommendations of the National Health Care Workforce Commission, 
    shall obtain the services of such professors, instructors, and 
    administrative and other employees as may be necessary to operate 
    the Track, but utilize when possible, existing affiliated health 
    professions training institutions. Members of the faculty and staff 
    shall be employed under salary schedules and granted retirement and 
    other related benefits prescribed by the Secretary so as to place 
    the employees of the Track faculty on a comparable basis with the 
    employees of fully accredited schools of the health professions 
    within the United States.
        ``(2) Titles.--The Surgeon General may confer academic titles, 
    as appropriate, upon the members of the faculty.
        ``(3) Nonapplication of provisions.--The limitations in section 
    5373 of title 5, United States Code, shall not apply to the 
    authority of the Surgeon General under paragraph (1) to prescribe 
    salary schedules and other related benefits.
    ``(c) Agreements.--The Surgeon General may negotiate agreements 
with agencies of the Federal Government to utilize on a reimbursable 
basis appropriate existing Federal medical resources located in the 
United States (or locations selected in accordance with section 
271(a)(2)). Under such agreements the facilities concerned will retain 
their identities and basic missions. The Surgeon General may negotiate 
affiliation agreements with accredited universities and health 
professions training institutions in the United States. Such agreements 
may include provisions for payments for educational services provided 
students participating in Department of Health and Human Services 
educational programs.
    ``(d) Programs.--The Surgeon General may establish the following 
educational programs for Track students:
        ``(1) Postdoctoral, postgraduate, and technological programs.
        ``(2) A cooperative program for medical, dental, physician 
    assistant, pharmacy, behavioral and mental health, public health, 
    and nursing students.
        ``(3) Other programs that the Surgeon General determines 
    necessary in order to operate the Track in a cost-effective manner.
    ``(e) Continuing Medical Education.--The Surgeon General shall 
establish programs in continuing medical education for members of the 
health professions to the end that high standards of health care may be 
maintained within the United States.
    ``(f) Authority of the Surgeon General.--
        ``(1) In general.--The Surgeon General is authorized--
            ``(A) to enter into contracts with, accept grants from, and 
        make grants to any nonprofit entity for the purpose of carrying 
        out cooperative enterprises in medical, dental, physician 
        assistant, pharmacy, behavioral and mental health, public 
        health, and nursing research, consultation, and education;
            ``(B) to enter into contracts with entities under which the 
        Surgeon General may furnish the services of such professional, 
        technical, or clerical personnel as may be necessary to fulfill 
        cooperative enterprises undertaken by the Track;
            ``(C) to accept, hold, administer, invest, and spend any 
        gift, devise, or bequest of personal property made to the 
        Track, including any gift, devise, or bequest for the support 
        of an academic chair, teaching, research, or demonstration 
        project;
            ``(D) to enter into agreements with entities that may be 
        utilized by the Track for the purpose of enhancing the 
        activities of the Track in education, research, and 
        technological applications of knowledge; and
            ``(E) to accept the voluntary services of guest scholars 
        and other persons.
        ``(2) Limitation.--The Surgeon General may not enter into any 
    contract with an entity if the contract would obligate the Track to 
    make outlays in advance of the enactment of budget authority for 
    such outlays.
        ``(3) Scientists.--Scientists or other medical, dental, or 
    nursing personnel utilized by the Track under an agreement 
    described in paragraph (1) may be appointed to any position within 
    the Track and may be permitted to perform such duties within the 
    Track as the Surgeon General may approve.
        ``(4) Volunteer services.--A person who provides voluntary 
    services under the authority of subparagraph (E) of paragraph (1) 
    shall be considered to be an employee of the Federal Government for 
    the purposes of chapter 81 of title 5, relating to compensation for 
    work-related injuries, and to be an employee of the Federal 
    Government for the purposes of chapter 171 of title 28, relating to 
    tort claims. Such a person who is not otherwise employed by the 
    Federal Government shall not be considered to be a Federal employee 
    for any other purpose by reason of the provision of such services.

``SEC. 273. STUDENTS; SELECTION; OBLIGATION.

    ``(a) Student Selection.--
        ``(1) In general.--Medical, dental, physician assistant, 
    pharmacy, behavioral and mental health, public health, and nursing 
    students at the Track shall be selected under procedures prescribed 
    by the Surgeon General. In so prescribing, the Surgeon General 
    shall consider the recommendations of the National Health Care 
    Workforce Commission.
        ``(2) Priority.--In developing admissions procedures under 
    paragraph (1), the Surgeon General shall ensure that such 
    procedures give priority to applicant medical, dental, physician 
    assistant, pharmacy, behavioral and mental health, public health, 
    and nursing students from rural communities and underrepresented 
    minorities.
    ``(b) Contract and Service Obligation.--
        ``(1) Contract.--Upon being admitted to the Track, a medical, 
    dental, physician assistant, pharmacy, behavioral and mental 
    health, public health, or nursing student shall enter into a 
    written contract with the Surgeon General that shall contain--
            ``(A) an agreement under which--
                ``(i) subject to subparagraph (B), the Surgeon General 
            agrees to provide the student with tuition (or tuition 
            remission) and a student stipend (described in paragraph 
            (2)) in each school year for a period of years (not to 
            exceed 4 school years) determined by the student, during 
            which period the student is enrolled in the Track at an 
            affiliated or other participating health professions 
            institution pursuant to an agreement between the Track and 
            such institution; and
                ``(ii) subject to subparagraph (B), the student 
            agrees--

                    ``(I) to accept the provision of such tuition and 
                student stipend to the student;
                    ``(II) to maintain enrollment at the Track until 
                the student completes the course of study involved;
                    ``(III) while enrolled in such course of study, to 
                maintain an acceptable level of academic standing (as 
                determined by the Surgeon General);
                    ``(IV) if pursuing a degree from a school of 
                medicine or osteopathic medicine, dental, public 
                health, or nursing school or a physician assistant, 
                pharmacy, or behavioral and mental health professional 
                program, to complete a residency or internship in a 
                specialty that the Surgeon General determines is 
                appropriate; and
                    ``(V) to serve for a period of time (referred to in 
                this part as the `period of obligated service') within 
                the Commissioned Corps of the Public Health Service 
                equal to 2 years for each school year during which such 
                individual was enrolled at the College, reduced as 
                provided for in paragraph (3);

            ``(B) a provision that any financial obligation of the 
        United States arising out of a contract entered into under this 
        part and any obligation of the student which is conditioned 
        thereon, is contingent upon funds being appropriated to carry 
        out this part;
            ``(C) a statement of the damages to which the United States 
        is entitled for the student's breach of the contract; and
            ``(D) such other statements of the rights and liabilities 
        of the Secretary and of the individual, not inconsistent with 
        the provisions of this part.
        ``(2) Tuition and student stipend.--
            ``(A) Tuition remission rates.--The Surgeon General, based 
        on the recommendations of the National Health Care Workforce 
        Commission, shall establish Federal tuition remission rates to 
        be used by the Track to provide reimbursement to affiliated and 
        other participating health professions institutions for the 
        cost of educational services provided by such institutions to 
        Track students. The agreement entered into by such 
        participating institutions under paragraph (1)(A)(i) shall 
        contain an agreement to accept as payment in full the 
        established remission rate under this subparagraph.
            ``(B) Stipend.--The Surgeon General, based on the 
        recommendations of the National Health Care Workforce 
        Commission, shall establish and update Federal stipend rates 
        for payment to students under this part.
        ``(3) Reductions in the period of obligated service.--The 
    period of obligated service under paragraph (1)(A)(ii)(V) shall be 
    reduced--
            ``(A) in the case of a student who elects to participate in 
        a high-needs speciality residency (as determined by the 
        National Health Care Workforce Commission), by 3 months for 
        each year of such participation (not to exceed a total of 12 
        months); and
            ``(B) in the case of a student who, upon completion of 
        their residency, elects to practice in a Federal medical 
        facility (as defined in section 781(e)) that is located in a 
        health professional shortage area (as defined in section 332), 
        by 3 months for year of full-time practice in such a facility 
        (not to exceed a total of 12 months).
    ``(c) Second 2 Years of Service.--During the third and fourth years 
in which a medical, dental, physician assistant, pharmacy, behavioral 
and mental health, public health, or nursing student is enrolled in the 
Track, training should be designed to prioritize clinical rotations in 
Federal medical facilities in health professional shortage areas, and 
emphasize a balance of hospital and community-based experiences, and 
training within interdisciplinary teams.
    ``(d) Dentist, Physician Assistant, Pharmacist, Behavioral and 
Mental Health Professional, Public Health Professional, and Nurse 
Training.--The Surgeon General shall establish provisions applicable 
with respect to dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students that are comparable 
to those for medical students under this section, including service 
obligations, tuition support, and stipend support. The Surgeon General 
shall give priority to health professions training institutions that 
train medical, dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students for some significant 
period of time together, but at a minimum have a discrete and shared 
core curriculum.
    ``(e) Elite Federal Disaster Teams.--The Surgeon General, in 
consultation with the Secretary, the Director of the Centers for 
Disease Control and Prevention, and other appropriate military and 
Federal government agencies, shall develop criteria for the appointment 
of highly qualified Track faculty, medical, dental, physician 
assistant, pharmacy, behavioral and mental health, public health, and 
nursing students, and graduates to elite Federal disaster preparedness 
teams to train and to respond to public health emergencies, natural 
disasters, bioterrorism events, and other emergencies.
    ``(f) Student Dropped From Track in Affiliate School.--A medical, 
dental, physician assistant, pharmacy, behavioral and mental health, 
public health, or nursing student who, under regulations prescribed by 
the Surgeon General, is dropped from the Track in an affiliated school 
for deficiency in conduct or studies, or for other reasons, shall be 
liable to the United States for all tuition and stipend support 
provided to the student.

``SEC. 274. FUNDING.

    ``Beginning with fiscal year 2010, the Secretary shall transfer 
from the Public Health and Social Services Emergency Fund such sums as 
may be necessary to carry out this part.''.

       Subtitle E--Supporting the Existing Health Care Workforce

SEC. 5401. CENTERS OF EXCELLENCE.

    Section 736 of the Public Health Service Act (42 U.S.C. 293) is 
amended by striking subsection (h) and inserting the following:
    ``(h) Formula for Allocations.--
        ``(1) Allocations.--Based on the amount appropriated under 
    subsection (i) for a fiscal year, the following subparagraphs shall 
    apply as appropriate:
            ``(A) In general.--If the amounts appropriated under 
        subsection (i) for a fiscal year are $24,000,000 or less--
                ``(i) the Secretary shall make available $12,000,000 
            for grants under subsection (a) to health professions 
            schools that meet the conditions described in subsection 
            (c)(2)(A); and
                ``(ii) and available after grants are made with funds 
            under clause (i), the Secretary shall make available--

                    ``(I) 60 percent of such amount for grants under 
                subsection (a) to health professions schools that meet 
                the conditions described in paragraph (3) or (4) of 
                subsection (c) (including meeting the conditions under 
                subsection (e)); and
                    ``(II) 40 percent of such amount for grants under 
                subsection (a) to health professions schools that meet 
                the conditions described in subsection (c)(5).

            ``(B) Funding in excess of $24,000,000.--If amounts 
        appropriated under subsection (i) for a fiscal year exceed 
        $24,000,000 but are less than $30,000,000--
                ``(i) 80 percent of such excess amounts shall be made 
            available for grants under subsection (a) to health 
            professions schools that meet the requirements described in 
            paragraph (3) or (4) of subsection (c) (including meeting 
            conditions pursuant to subsection (e)); and
                ``(ii) 20 percent of such excess amount shall be made 
            available for grants under subsection (a) to health 
            professions schools that meet the conditions described in 
            subsection (c)(5).
            ``(C) Funding in excess of $30,000,000.--If amounts 
        appropriated under subsection (i) for a fiscal year exceed 
        $30,000,000 but are less than $40,000,000, the Secretary shall 
        make available--
                ``(i) not less than $12,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in subsection (c)(2)(A);
                ``(ii) not less than $12,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in paragraph (3) or (4) of subsection 
            (c) (including meeting conditions pursuant to subsection 
            (e));
                ``(iii) not less than $6,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in subsection (c)(5); and
                ``(iv) after grants are made with funds under clauses 
            (i) through (iii), any remaining excess amount for grants 
            under subsection (a) to health professions schools that 
            meet the conditions described in paragraph (2)(A), (3), 
            (4), or (5) of subsection (c).
            ``(D) Funding in excess of $40,000,000.--If amounts 
        appropriated under subsection (i) for a fiscal year are 
        $40,000,000 or more, the Secretary shall make available--
                ``(i) not less than $16,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in subsection (c)(2)(A);
                ``(ii) not less than $16,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in paragraph (3) or (4) of subsection 
            (c) (including meeting conditions pursuant to subsection 
            (e));
                ``(iii) not less than $8,000,000 for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in subsection (c)(5); and
                ``(iv) after grants are made with funds under clauses 
            (i) through (iii), any remaining funds for grants under 
            subsection (a) to health professions schools that meet the 
            conditions described in paragraph (2)(A), (3), (4), or (5) 
            of subsection (c).
        ``(2) No limitation.--Nothing in this subsection shall be 
    construed as limiting the centers of excellence referred to in this 
    section to the designated amount, or to preclude such entities from 
    competing for grants under this section.
        ``(3) Maintenance of effort.--
            ``(A) In general.--With respect to activities for which a 
        grant made under this part are authorized to be expended, the 
        Secretary may not make such a grant to a center of excellence 
        for any fiscal year unless the center agrees to maintain 
        expenditures of non-Federal amounts for such activities at a 
        level that is not less than the level of such expenditures 
        maintained by the center for the fiscal year preceding the 
        fiscal year for which the school receives such a grant.
            ``(B) Use of federal funds.--With respect to any Federal 
        amounts received by a center of excellence and available for 
        carrying out activities for which a grant under this part is 
        authorized to be expended, the center shall, before expending 
        the grant, expend the Federal amounts obtained from sources 
        other than the grant, unless given prior approval from the 
        Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
        ``(1) $50,000,000 for each of the fiscal years 2010 through 
    2015; and
        ``(2) and such sums as are necessary for each subsequent fiscal 
    year.''.

SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY.

    (a) Loan Repayments and Fellowships Regarding Faculty Positions.--
Section 738(a)(1) of the Public Health Service Act (42 U.S.C. 
293b(a)(1)) is amended by striking ``$20,000 of the principal and 
interest of the educational loans of such individuals.'' and inserting 
``$30,000 of the principal and interest of the educational loans of 
such individuals.''.
    (b) Scholarships for Disadvantaged Students.--Section 740(a) of 
such Act (42 U.S.C. 293d(a)) is amended by striking ``$37,000,000'' and 
all that follows through ``2002'' and inserting ``$51,000,000 for 
fiscal year 2010, and such sums as may be necessary for each of the 
fiscal years 2011 through 2014''.
    (c) Reauthorization for Loan Repayments and Fellowships Regarding 
Faculty Positions.--Section 740(b) of such Act (42 U.S.C. 293d(b)) is 
amended by striking ``appropriated'' and all that follows through the 
period at the end and inserting ``appropriated, $5,000,000 for each of 
the fiscal years 2010 through 2014.''.
    (d) Reauthorization for Educational Assistance in the Health 
Professions Regarding Individuals From a Disadvantaged Background.--
Section 740(c) of such Act (42 U.S.C. 293d(c)) is amended by striking 
the first sentence and inserting the following: ``For the purpose of 
grants and contracts under section 739(a)(1), there is authorized to be 
appropriated $60,000,000 for fiscal year 2010 and such sums as may be 
necessary for each of the fiscal years 2011 through 2014.''

SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES.

    (a) Area Health Education Centers.--Section 751 of the Public 
Health Service Act (42 U.S.C. 294a) is amended to read as follows:

``SEC. 751. AREA HEALTH EDUCATION CENTERS.

    ``(a) Establishment of Awards.--The Secretary shall make the 
following 2 types of awards in accordance with this section:
        ``(1) Infrastructure development award.--The Secretary shall 
    make awards to eligible entities to enable such entities to 
    initiate health care workforce educational programs or to continue 
    to carry out comparable programs that are operating at the time the 
    award is made by planning, developing, operating, and evaluating an 
    area health education center program.
        ``(2) Point of service maintenance and enhancement award.--The 
    Secretary shall make awards to eligible entities to maintain and 
    improve the effectiveness and capabilities of an existing area 
    health education center program, and make other modifications to 
    the program that are appropriate due to changes in demographics, 
    needs of the populations served, or other similar issues affecting 
    the area health education center program. For the purposes of this 
    section, the term `Program' refers to the area health education 
    center program.
    ``(b) Eligible Entities; Application.--
        ``(1) Eligible entities.--
            ``(A) Infrastructure development.--For purposes of 
        subsection (a)(1), the term `eligible entity' means a school of 
        medicine or osteopathic medicine, an incorporated consortium of 
        such schools, or the parent institutions of such a school. With 
        respect to a State in which no area health education center 
        program is in operation, the Secretary may award a grant or 
        contract under subsection (a)(1) to a school of nursing.
            ``(B) Point of service maintenance and enhancement.--For 
        purposes of subsection (a)(2), the term `eligible entity' means 
        an entity that has received funds under this section, is 
        operating an area health education center program, including an 
        area health education center or centers, and has a center or 
        centers that are no longer eligible to receive financial 
        assistance under subsection (a)(1).
        ``(2) Application.--An eligible entity desiring to receive an 
    award under this section shall submit to the Secretary an 
    application at such time, in such manner, and containing such 
    information as the Secretary may require.
    ``(c) Use of Funds.--
        ``(1) Required activities.--An eligible entity shall use 
    amounts awarded under a grant under subsection (a)(1) or (a)(2) to 
    carry out the following activities:
            ``(A) Develop and implement strategies, in coordination 
        with the applicable one-stop delivery system under section 
        134(c) of the Workforce Investment Act of 1998, to recruit 
        individuals from underrepresented minority populations or from 
        disadvantaged or rural backgrounds into health professions, and 
        support such individuals in attaining such careers.
            ``(B) Develop and implement strategies to foster and 
        provide community-based training and education to individuals 
        seeking careers in health professions within underserved areas 
        for the purpose of developing and maintaining a diverse health 
        care workforce that is prepared to deliver high-quality care, 
        with an emphasis on primary care, in underserved areas or for 
        health disparity populations, in collaboration with other 
        Federal and State health care workforce development programs, 
        the State workforce agency, and local workforce investment 
        boards, and in health care safety net sites.
            ``(C) Prepare individuals to more effectively provide 
        health services to underserved areas and health disparity 
        populations through field placements or preceptorships in 
        conjunction with community-based organizations, accredited 
        primary care residency training programs, Federally qualified 
        health centers, rural health clinics, public health 
        departments, or other appropriate facilities.
            ``(D) Conduct and participate in interdisciplinary training 
        that involves physicians, physician assistants, nurse 
        practitioners, nurse midwives, dentists, psychologists, 
        pharmacists, optometrists, community health workers, public and 
        allied health professionals, or other health professionals, as 
        practicable.
            ``(E) Deliver or facilitate continuing education and 
        information dissemination programs for health care 
        professionals, with an emphasis on individuals providing care 
        in underserved areas and for health disparity populations.
            ``(F) Propose and implement effective program and outcomes 
        measurement and evaluation strategies.
            ``(G) Establish a youth public health program to expose and 
        recruit high school students into health careers, with a focus 
        on careers in public health.
        ``(2) Innovative opportunities.--An eligible entity may use 
    amounts awarded under a grant under subsection (a)(1) or subsection 
    (a)(2) to carry out any of the following activities:
            ``(A) Develop and implement innovative curricula in 
        collaboration with community-based accredited primary care 
        residency training programs, Federally qualified health 
        centers, rural health clinics, behavioral and mental health 
        facilities, public health departments, or other appropriate 
        facilities, with the goal of increasing the number of primary 
        care physicians and other primary care providers prepared to 
        serve in underserved areas and health disparity populations.
            ``(B) Coordinate community-based participatory research 
        with academic health centers, and facilitate rapid flow and 
        dissemination of evidence-based health care information, 
        research results, and best practices to improve quality, 
        efficiency, and effectiveness of health care and health care 
        systems within community settings.
            ``(C) Develop and implement other strategies to address 
        identified workforce needs and increase and enhance the health 
        care workforce in the area served by the area health education 
        center program.
    ``(d) Requirements.--
        ``(1) Area health education center program.--In carrying out 
    this section, the Secretary shall ensure the following:
            ``(A) An entity that receives an award under this section 
        shall conduct at least 10 percent of clinical education 
        required for medical students in community settings that are 
        removed from the primary teaching facility of the contracting 
        institution for grantees that operate a school of medicine or 
        osteopathic medicine. In States in which an entity that 
        receives an award under this section is a nursing school or its 
        parent institution, the Secretary shall alternatively ensure 
        that--
                ``(i) the nursing school conducts at least 10 percent 
            of clinical education required for nursing students in 
            community settings that are remote from the primary 
            teaching facility of the school; and
                ``(ii) the entity receiving the award maintains a 
            written agreement with a school of medicine or osteopathic 
            medicine to place students from that school in training 
            sites in the area health education center program area.
            ``(B) An entity receiving funds under subsection (a)(2) 
        does not distribute such funding to a center that is eligible 
        to receive funding under subsection (a)(1).
        ``(2) Area health education center.--The Secretary shall ensure 
    that each area health education center program includes at least 1 
    area health education center, and that each such center--
            ``(A) is a public or private organization whose structure, 
        governance, and operation is independent from the awardee and 
        the parent institution of the awardee;
            ``(B) is not a school of medicine or osteopathic medicine, 
        the parent institution of such a school, or a branch campus or 
        other subunit of a school of medicine or osteopathic medicine 
        or its parent institution, or a consortium of such entities;
            ``(C) designates an underserved area or population to be 
        served by the center which is in a location removed from the 
        main location of the teaching facilities of the schools 
        participating in the program with such center and does not 
        duplicate, in whole or in part, the geographic area or 
        population served by any other center;
            ``(D) fosters networking and collaboration among 
        communities and between academic health centers and community-
        based centers;
            ``(E) serves communities with a demonstrated need of health 
        professionals in partnership with academic medical centers;
            ``(F) addresses the health care workforce needs of the 
        communities served in coordination with the public workforce 
        investment system; and
            ``(G) has a community-based governing or advisory board 
        that reflects the diversity of the communities involved.
    ``(e) Matching Funds.--With respect to the costs of operating a 
program through a grant under this section, to be eligible for 
financial assistance under this section, an entity shall make available 
(directly or through contributions from State, county or municipal 
governments, or the private sector) recurring non-Federal contributions 
in cash or in kind, toward such costs in an amount that is equal to not 
less than 50 percent of such costs. At least 25 percent of the total 
required non-Federal contributions shall be in cash. An entity may 
apply to the Secretary for a waiver of not more than 75 percent of the 
matching fund amount required by the entity for each of the first 3 
years the entity is funded through a grant under subsection (a)(1).
    ``(f) Limitation.--Not less than 75 percent of the total amount 
provided to an area health education center program under subsection 
(a)(1) or (a)(2) shall be allocated to the area health education 
centers participating in the program under this section. To provide 
needed flexibility to newly funded area health education center 
programs, the Secretary may waive the requirement in the sentence for 
the first 2 years of a new area health education center program funded 
under subsection (a)(1).
    ``(g) Award.--An award to an entity under this section shall be not 
less than $250,000 annually per area health education center included 
in the program involved. If amounts appropriated to carry out this 
section are not sufficient to comply with the preceding sentence, the 
Secretary may reduce the per center amount provided for in such 
sentence as necessary, provided the distribution established in 
subsection (j)(2) is maintained.
    ``(h) Project Terms.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    period during which payments may be made under an award under 
    subsection (a)(1) may not exceed--
            ``(A) in the case of a program, 12 years; or
            ``(B) in the case of a center within a program, 6 years.
        ``(2) Exception.--The periods described in paragraph (1) shall 
    not apply to programs receiving point of service maintenance and 
    enhancement awards under subsection (a)(2) to maintain existing 
    centers and activities.
    ``(i) Inapplicability of Provision.--Notwithstanding any other 
provision of this title, section 791(a) shall not apply to an area 
health education center funded under this section.
    ``(j) Authorization of Appropriations.--
        ``(1) In general.--There is authorized to be appropriated to 
    carry out this section $125,000,000 for each of the fiscal years 
    2010 through 2014.
        ``(2) Requirements.--Of the amounts appropriated for a fiscal 
    year under paragraph (1)--
            ``(A) not more than 35 percent shall be used for awards 
        under subsection (a)(1);
            ``(B) not less than 60 percent shall be used for awards 
        under subsection (a)(2);
            ``(C) not more than 1 percent shall be used for grants and 
        contracts to implement outcomes evaluation for the area health 
        education centers; and
            ``(D) not more than 4 percent shall be used for grants and 
        contracts to provide technical assistance to entities receiving 
        awards under this section.
        ``(3) Carryover funds.--An entity that receives an award under 
    this section may carry over funds from 1 fiscal year to another 
    without obtaining approval from the Secretary. In no case may any 
    funds be carried over pursuant to the preceding sentence for more 
    than 3 years.
    ``(k) Sense of Congress.--It is the sense of the Congress that 
every State have an area health education center program in effect 
under this section.''.
    (b) Continuing Educational Support for Health Professionals Serving 
in Underserved Communities.--Part D of title VII of the Public Health 
Service Act (42 U.S.C. 294 et seq.) is amended by striking section 752 
and inserting the following:

``SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH PROFESSIONALS 
              SERVING IN UNDERSERVED COMMUNITIES.

    ``(a) In General.--The Secretary shall make grants to, and enter 
into contracts with, eligible entities to improve health care, increase 
retention, increase representation of minority faculty members, enhance 
the practice environment, and provide information dissemination and 
educational support to reduce professional isolation through the timely 
dissemination of research findings using relevant resources.
    ``(b) Eligible Entities.--For purposes of this section, the term 
`eligible entity' means an entity described in section 799(b).
    ``(c) Application.--An eligible entity desiring to receive an award 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require.
    ``(d) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant or contract under this section to provide innovative 
supportive activities to enhance education through distance learning, 
continuing educational activities, collaborative conferences, and 
electronic and telelearning activities, with priority for primary care.
    ``(e) Authorization.--There is authorized to be appropriated to 
carry out this section $5,000,000 for each of the fiscal years 2010 
through 2014, and such sums as may be necessary for each subsequent 
fiscal year.''.

SEC. 5404. WORKFORCE DIVERSITY GRANTS.

    Section 821 of the Public Health Service Act (42 U.S.C. 296m) is 
amended--
        (1) in subsection (a)--
            (A) by striking ``The Secretary may'' and inserting the 
        following:
        ``(1) Authority.--The Secretary may'';
            (B) by striking ``pre-entry preparation, and retention 
        activities'' and inserting the following: ``stipends for 
        diploma or associate degree nurses to enter a bridge or degree 
        completion program, student scholarships or stipends for 
        accelerated nursing degree programs, pre-entry preparation, 
        advanced education preparation, and retention activities''; and
        (2) in subsection (b)--
            (A) by striking ``First'' and all that follows through 
        ``including the'' and inserting ``National Advisory Council on 
        Nurse Education and Practice and consult with nursing 
        associations including the National Coalition of Ethnic 
        Minority Nurse Associations,''; and
            (B) by inserting before the period the following: ``, and 
        other organizations determined appropriate by the Secretary''.

SEC. 5405. PRIMARY CARE EXTENSION PROGRAM.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.), as amended by section 5313, is further amended by adding 
at the end the following:

``SEC. 399W. PRIMARY CARE EXTENSION PROGRAM.

    ``(a) Establishment, Purpose and Definition.--
        ``(1) In general.--The Secretary, acting through the Director 
    of the Agency for Healthcare Research and Quality, shall establish 
    a Primary Care Extension Program.
        ``(2) Purpose.--The Primary Care Extension Program shall 
    provide support and assistance to primary care providers to educate 
    providers about preventive medicine, health promotion, chronic 
    disease management, mental and behavioral health services 
    (including substance abuse prevention and treatment services), and 
    evidence-based and evidence-informed therapies and techniques, in 
    order to enable providers to incorporate such matters into their 
    practice and to improve community health by working with community-
    based health connectors (referred to in this section as `Health 
    Extension Agents').
        ``(3) Definitions.--In this section:
            ``(A) Health extension agent.--The term `Health Extension 
        Agent' means any local, community-based health worker who 
        facilitates and provides assistance to primary care practices 
        by implementing quality improvement or system redesign, 
        incorporating the principles of the patient-centered medical 
        home to provide high-quality, effective, efficient, and safe 
        primary care and to provide guidance to patients in culturally 
        and linguistically appropriate ways, and linking practices to 
        diverse health system resources.
            ``(B) Primary care provider.--The term `primary care 
        provider' means a clinician who provides integrated, accessible 
        health care services and who is accountable for addressing a 
        large majority of personal health care needs, including 
        providing preventive and health promotion services for men, 
        women, and children of all ages, developing a sustained 
        partnership with patients, and practicing in the context of 
        family and community, as recognized by a State licensing or 
        regulatory authority, unless otherwise specified in this 
        section.
    ``(b) Grants To Establish State Hubs and Local Primary Care 
Extension Agencies.--
        ``(1) Grants.--The Secretary shall award competitive grants to 
    States for the establishment of State- or multistate-level primary 
    care Primary Care Extension Program State Hubs (referred to in this 
    section as `Hubs').
        ``(2) Composition of hubs.--A Hub established by a State 
    pursuant to paragraph (1)--
            ``(A) shall consist of, at a minimum, the State health 
        department, the entity responsible for administering the State 
        Medicaid program (if other than the State health department), 
        the State-level entity administering the Medicare program, and 
        the departments of 1 or more health professions schools in the 
        State that train providers in primary care; and
            ``(B) may include entities such as hospital associations, 
        primary care practice-based research networks, health 
        professional societies, State primary care associations, State 
        licensing boards, organizations with a contract with the 
        Secretary under section 1153 of the Social Security Act, 
        consumer groups, and other appropriate entities.
    ``(c) State and Local Activities.--
        ``(1) Hub activities.--Hubs established under a grant under 
    subsection (b) shall--
            ``(A) submit to the Secretary a plan to coordinate 
        functions with quality improvement organizations and area 
        health education centers if such entities are members of the 
        Hub not described in subsection (b)(2)(A);
            ``(B) contract with a county- or local-level entity that 
        shall serve as the Primary Care Extension Agency to administer 
        the services described in paragraph (2);
            ``(C) organize and administer grant funds to county- or 
        local-level Primary Care Extension Agencies that serve a 
        catchment area, as determined by the State; and
            ``(D) organize State-wide or multistate networks of local-
        level Primary Care Extension Agencies to share and disseminate 
        information and practices.
        ``(2) Local primary care extension agency activities.--
            ``(A) Required activities.--Primary Care Extension Agencies 
        established by a Hub under paragraph (1) shall--
                ``(i) assist primary care providers to implement a 
            patient-centered medical home to improve the accessibility, 
            quality, and efficiency of primary care services, including 
            health homes;
                ``(ii) develop and support primary care learning 
            communities to enhance the dissemination of research 
            findings for evidence-based practice, assess implementation 
            of practice improvement, share best practices, and involve 
            community clinicians in the generation of new knowledge and 
            identification of important questions for research;
                ``(iii) participate in a national network of Primary 
            Care Extension Hubs and propose how the Primary Care 
            Extension Agency will share and disseminate lessons learned 
            and best practices; and
                ``(iv) develop a plan for financial sustainability 
            involving State, local, and private contributions, to 
            provide for the reduction in Federal funds that is expected 
            after an initial 6-year period of program establishment, 
            infrastructure development, and planning.
            ``(B) Discretionary activities.--Primary Care Extension 
        Agencies established by a Hub under paragraph (1) may--
                ``(i) provide technical assistance, training, and 
            organizational support for community health teams 
            established under section 3602 of the Patient Protection 
            and Affordable Care Act;
                ``(ii) collect data and provision of primary care 
            provider feedback from standardized measurements of 
            processes and outcomes to aid in continuous performance 
            improvement;
                ``(iii) collaborate with local health departments, 
            community health centers, tribes and tribal entities, and 
            other community agencies to identify community health 
            priorities and local health workforce needs, and 
            participate in community-based efforts to address the 
            social and primary determinants of health, strengthen the 
            local primary care workforce, and eliminate health 
            disparities;
                ``(iv) develop measures to monitor the impact of the 
            proposed program on the health of practice enrollees and of 
            the wider community served; and
                ``(v) participate in other activities, as determined 
            appropriate by the Secretary.
    ``(d) Federal Program Administration.--
        ``(1) Grants; types.--Grants awarded under subsection (b) shall 
    be--
            ``(A) program grants, that are awarded to State or 
        multistate entities that submit fully-developed plans for the 
        implementation of a Hub, for a period of 6 years; or
            ``(B) planning grants, that are awarded to State or 
        multistate entities with the goal of developing a plan for a 
        Hub, for a period of 2 years.
        ``(2) Applications.--To be eligible for a grant under 
    subsection (b), a State or multistate entity shall submit to the 
    Secretary an application, at such time, in such manner, and 
    containing such information as the Secretary may require.
        ``(3) Evaluation.--A State that receives a grant under 
    subsection (b) shall be evaluated at the end of the grant period by 
    an evaluation panel appointed by the Secretary.
        ``(4) Continuing support.--After the sixth year in which 
    assistance is provided to a State under a grant awarded under 
    subsection (b), the State may receive additional support under this 
    section if the State program has received satisfactory evaluations 
    with respect to program performance and the merits of the State 
    sustainability plan, as determined by the Secretary.
        ``(5) Limitation.--A State shall not use in excess of 10 
    percent of the amount received under a grant to carry out 
    administrative activities under this section. Funds awarded 
    pursuant to this section shall not be used for funding direct 
    patient care.
    ``(e) Requirements on the Secretary.--In carrying out this section, 
the Secretary shall consult with the heads of other Federal agencies 
with demonstrated experience and expertise in health care and 
preventive medicine, such as the Centers for Disease Control and 
Prevention, the Substance Abuse and Mental Health Administration, the 
Health Resources and Services Administration, the National Institutes 
of Health, the Office of the National Coordinator for Health 
Information Technology, the Indian Health Service, the Agricultural 
Cooperative Extension Service of the Department of Agriculture, and 
other entities, as the Secretary determines appropriate.
    ``(f) Authorization of Appropriations.--To awards grants as 
provided in subsection (d), there are authorized to be appropriated 
$120,000,000 for each of fiscal years 2011 and 2012, and such sums as 
may be necessary to carry out this section for each of fiscal years 
2013 through 2014.''.

Subtitle F--Strengthening Primary Care and Other Workforce Improvements

SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GENERAL 
              SURGERY SERVICES.

    (a) Incentive Payment Program for Primary Care Services.--
        (1) In general.--Section 1833 of the Social Security Act (42 
    U.S.C. 1395l) is amended by adding at the end the following new 
    subsection:
    ``(x) Incentive Payments for Primary Care Services.--
        ``(1) In general.--In the case of primary care services 
    furnished on or after January 1, 2011, and before January 1, 2016, 
    by a primary care practitioner, in addition to the amount of 
    payment that would otherwise be made for such services under this 
    part, there also shall be paid (on a monthly or quarterly basis) an 
    amount equal to 10 percent of the payment amount for the service 
    under this part.
        ``(2) Definitions.--In this subsection:
            ``(A) Primary care practitioner.--The term `primary care 
        practitioner' means an individual--
                ``(i) who--

                    ``(I) is a physician (as described in section 
                1861(r)(1)) who has a primary specialty designation of 
                family medicine, internal medicine, geriatric medicine, 
                or pediatric medicine; or
                    ``(II) is a nurse practitioner, clinical nurse 
                specialist, or physician assistant (as those terms are 
                defined in section 1861(aa)(5)); and

                ``(ii) for whom primary care services accounted for at 
            least 60 percent of the allowed charges under this part for 
            such physician or practitioner in a prior period as 
            determined appropriate by the Secretary.
            ``(B) Primary care services.--The term `primary care 
        services' means services identified, as of January 1, 2009, by 
        the following HCPCS codes (and as subsequently modified by the 
        Secretary):
                ``(i) 99201 through 99215.
                ``(ii) 99304 through 99340.
                ``(iii) 99341 through 99350.
        ``(3) Coordination with other payments.--The amount of the 
    additional payment for a service under this subsection and 
    subsection (m) shall be determined without regard to any additional 
    payment for the service under subsection (m) and this subsection, 
    respectively.
        ``(4) Limitation on review.--There shall be no administrative 
    or judicial review under section 1869, 1878, or otherwise, 
    respecting the identification of primary care practitioners under 
    this subsection.''.
        (2) Conforming amendment.--Section 1834(g)(2)(B) of the Social 
    Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by adding at the 
    end the following sentence: ``Section 1833(x) shall not be taken 
    into account in determining the amounts that would otherwise be 
    paid pursuant to the preceding sentence.''.
    (b) Incentive Payment Program for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
        (1) In general.--Section 1833 of the Social Security Act (42 
    U.S.C. 1395l), as amended by subsection (a)(1), is amended by 
    adding at the end the following new subsection:
    ``(y) Incentive Payments for Major Surgical Procedures Furnished in 
Health Professional Shortage Areas.--
        ``(1) In general.--In the case of major surgical procedures 
    furnished on or after January 1, 2011, and before January 1, 2016, 
    by a general surgeon in an area that is designated (under section 
    332(a)(1)(A) of the Public Health Service Act) as a health 
    professional shortage area as identified by the Secretary prior to 
    the beginning of the year involved, in addition to the amount of 
    payment that would otherwise be made for such services under this 
    part, there also shall be paid (on a monthly or quarterly basis) an 
    amount equal to 10 percent of the payment amount for the service 
    under this part.
        ``(2) Definitions.--In this subsection:
            ``(A) General surgeon.--In this subsection, the term 
        `general surgeon' means a physician (as described in section 
        1861(r)(1)) who has designated CMS specialty code 02-General 
        Surgery as their primary specialty code in the physician's 
        enrollment under section 1866(j).
            ``(B) Major surgical procedures.--The term `major surgical 
        procedures' means physicians' services which are surgical 
        procedures for which a 10-day or 90-day global period is used 
        for payment under the fee schedule under section 1848(b).
        ``(3) Coordination with other payments.--The amount of the 
    additional payment for a service under this subsection and 
    subsection (m) shall be determined without regard to any additional 
    payment for the service under subsection (m) and this subsection, 
    respectively.
        ``(4) Application.--The provisions of paragraph (2) and (4) of 
    subsection (m) shall apply to the determination of additional 
    payments under this subsection in the same manner as such 
    provisions apply to the determination of additional payments under 
    subsection (m).''.
        (2) Conforming amendment.--Section 1834(g)(2)(B) of the Social 
    Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by subsection 
    (a)(2), is amended by striking ``Section 1833(x)'' and inserting 
    ``Subsections (x) and (y) of section 1833'' in the last sentence.
    (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of the 
Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended by adding 
at the end the following new clause:
                ``(vii) Adjustment for certain physician incentive 
            payments.--Fifty percent of the additional expenditures 
            under this part attributable to subsections (x) and (y) of 
            section 1833 for a year (as estimated by the Secretary) 
            shall be taken into account in applying clause (ii)(II) for 
            2011 and subsequent years. In lieu of applying the budget-
            neutrality adjustments required under clause (ii)(II) to 
            relative value units to account for such costs for the 
            year, the Secretary shall apply such budget-neutrality 
            adjustments to the conversion factor otherwise determined 
            for the year. For 2011 and subsequent years, the Secretary 
            shall increase the incentive payment otherwise applicable 
            under section 1833(m) by a percent estimated to be equal to 
            the additional expenditures estimated under the first 
            sentence of this clause for such year that is applicable to 
            physicians who primarily furnish services in areas 
            designated (under section 332(a)(1)(A) of the Public Health 
            Service Act) as health professional shortage areas.''.

SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER IMPROVEMENTS.

    (a)  Expansion of Medicare-Covered Preventive Services at Federally 
Qualified Health Centers.--
        (1) In general.--Section 1861(aa)(3)(A) of the Social Security 
    Act (42 U.S.C. 1395w (aa)(3)(A)) is amended to read as follows:
            ``(A) services of the type described subparagraphs (A) 
        through (C) of paragraph (1) and preventive services (as 
        defined in section 1861(ddd)(3)); and''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply to services furnished on or after January 1, 2011.
    (b) Prospective Payment System for Federally Qualified Health 
Centers.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is 
amended by adding at the end the following new subsection:
    ``(n) Development and Implementation of Prospective Payment 
System.--
        ``(1) Development.--
            ``(A) In general.--The Secretary shall develop a 
        prospective payment system for payment for Federally qualified 
        health services furnished by Federally qualified health centers 
        under this title. Such system shall include a process for 
        appropriately describing the services furnished by Federally 
        qualified health centers.
            ``(B) Collection of data and evaluation.--The Secretary 
        shall require Federally qualified health centers to submit to 
        the Secretary such information as the Secretary may require in 
        order to develop and implement the prospective payment system 
        under this paragraph and paragraph (2), respectively, including 
        the reporting of services using HCPCS codes.
        ``(2) Implementation.--
            ``(A) In general.--Notwithstanding section 1833(a)(3)(B), 
        the Secretary shall provide, for cost reporting periods 
        beginning on or after October 1, 2014, for payments for 
        Federally qualified health services furnished by Federally 
        qualified health centers under this title in accordance with 
        the prospective payment system developed by the Secretary under 
        paragraph (1).
            ``(B) Payments.--
                ``(i) Initial payments.--The Secretary shall implement 
            such prospective payment system so that the estimated 
            amount of expenditures under this title for Federally 
            qualified health services in the first year that the 
            prospective payment system is implemented is equal to 103 
            percent of the estimated amount of expenditures under this 
            title that would have occurred for such services in such 
            year if the system had not been implemented.
                ``(ii) Payments in subsequent years.--In the year after 
            the first year of implementation of such system, and in 
            each subsequent year, the payment rate for Federally 
            qualified health services furnished in the year shall be 
            equal to the payment rate established for such services 
            furnished in the preceding year under this subparagraph 
            increased by the percentage increase in the MEI (as defined 
            in 1842(i)(3)) for the year involved.''.

SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
        (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' and 
    inserting ``paragraphs (7) and (8)'';
        (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' and 
    inserting ``paragraphs (7) and (8)'';
        (3) in paragraph (7)(E), by inserting ``or paragraph (8)'' 
    before the period at the end; and
        (4) by adding at the end the following new paragraph:
        ``(8) Distribution of additional residency positions.--
            ``(A) Reductions in limit based on unused positions.--
                ``(i) In general.--Except as provided in clause (ii), 
            if a hospital's reference resident level (as defined in 
            subparagraph (H)(i)) is less than the otherwise applicable 
            resident limit (as defined in subparagraph (H)(iii)), 
            effective for portions of cost reporting periods occurring 
            on or after July 1, 2011, the otherwise applicable resident 
            limit shall be reduced by 65 percent of the difference 
            between such otherwise applicable resident limit and such 
            reference resident level.
                ``(ii) Exceptions.--This subparagraph shall not apply 
            to--

                    ``(I) a hospital located in a rural area (as 
                defined in subsection (d)(2)(D)(ii)) with fewer than 
                250 acute care inpatient beds;
                    ``(II) a hospital that was part of a qualifying 
                entity which had a voluntary residency reduction plan 
                approved under paragraph (6)(B) or under the authority 
                of section 402 of Public Law 90-248, if the hospital 
                demonstrates to the Secretary that it has a specified 
                plan in place for filling the unused positions by not 
                later than 2 years after the date of enactment of this 
                paragraph; or
                    ``(III) a hospital described in paragraph 
                (4)(H)(v).

            ``(B) Distribution.--
                ``(i) In general.--The Secretary shall increase the 
            otherwise applicable resident limit for each qualifying 
            hospital that submits an application under this 
            subparagraph by such number as the Secretary may approve 
            for portions of cost reporting periods occurring on or 
            after July 1, 2011. The aggregate number of increases in 
            the otherwise applicable resident limit under this 
            subparagraph shall be equal to the aggregate reduction in 
            such limits attributable to subparagraph (A) (as estimated 
            by the Secretary).
                ``(ii) Requirements.--Subject to clause (iii), a 
            hospital that receives an increase in the otherwise 
            applicable resident limit under this subparagraph shall 
            ensure, during the 5-year period beginning on the date of 
            such increase, that--

                    ``(I) the number of full-time equivalent primary 
                care residents, as defined in paragraph (5)(H) (as 
                determined by the Secretary), excluding any additional 
                positions under subclause (II), is not less than the 
                average number of full-time equivalent primary care 
                residents (as so determined) during the 3 most recent 
                cost reporting periods ending prior to the date of 
                enactment of this paragraph; and
                    ``(II) not less than 75 percent of the positions 
                attributable to such increase are in a primary care or 
                general surgery residency (as determined by the 
                Secretary).

            The Secretary may determine whether a hospital has met the 
            requirements under this clause during such 5-year period in 
            such manner and at such time as the Secretary determines 
            appropriate, including at the end of such 5-year period.
                ``(iii) Redistribution of positions if hospital no 
            longer meets certain requirements.--In the case where the 
            Secretary determines that a hospital described in clause 
            (ii) does not meet either of the requirements under 
            subclause (I) or (II) of such clause, the Secretary shall--

                    ``(I) reduce the otherwise applicable resident 
                limit of the hospital by the amount by which such limit 
                was increased under this paragraph; and
                    ``(II) provide for the distribution of positions 
                attributable to such reduction in accordance with the 
                requirements of this paragraph.

            ``(C) Considerations in redistribution.--In determining for 
        which hospitals the increase in the otherwise applicable 
        resident limit is provided under subparagraph (B), the 
        Secretary shall take into account--
                ``(i) the demonstration likelihood of the hospital 
            filling the positions made available under this paragraph 
            within the first 3 cost reporting periods beginning on or 
            after July 1, 2011, as determined by the Secretary; and
                ``(ii) whether the hospital has an accredited rural 
            training track (as described in paragraph (4)(H)(iv)).
            ``(D) Priority for certain areas.--In determining for which 
        hospitals the increase in the otherwise applicable resident 
        limit is provided under subparagraph (B), subject to 
        subparagraph (E), the Secretary shall distribute the increase 
        to hospitals based on the following factors:
                ``(i) Whether the hospital is located in a State with a 
            resident-to-population ratio in the lowest quartile (as 
            determined by the Secretary).
                ``(ii) Whether the hospital is located in a State, a 
            territory of the United States, or the District of Columbia 
            that is among the top 10 States, territories, or Districts 
            in terms of the ratio of--

                    ``(I) the total population of the State, territory, 
                or District living in an area designated (under such 
                section 332(a)(1)(A)) as a health professional shortage 
                area (as of the date of enactment of this paragraph); 
                to
                    ``(II) the total population of the State, 
                territory, or District (as determined by the Secretary 
                based on the most recent available population data 
                published by the Bureau of the Census).

                ``(iii) Whether the hospital is located in a rural area 
            (as defined in subsection (d)(2)(D)(ii)).
            ``(E) Reservation of positions for certain hospitals.--
                ``(i) In general.--Subject to clause (ii), the 
            Secretary shall reserve the positions available for 
            distribution under this paragraph as follows:

                    ``(I) 70 percent of such positions for distribution 
                to hospitals described in clause (i) of subparagraph 
                (D).
                    ``(II) 30 percent of such positions for 
                distribution to hospitals described in clause (ii) and 
                (iii) of such subparagraph.

                ``(ii) Exception if positions not redistributed by july 
            1, 2011.--In the case where the Secretary does not 
            distribute positions to hospitals in accordance with clause 
            (i) by July 1, 2011, the Secretary shall distribute such 
            positions to other hospitals in accordance with the 
            considerations described in subparagraph (C) and the 
            priority described in subparagraph (D).
            ``(F) Limitation.--A hospital may not receive more than 75 
        full-time equivalent additional residency positions under this 
        paragraph.
            ``(G) Application of per resident amounts for primary care 
        and nonprimary care.--With respect to additional residency 
        positions in a hospital attributable to the increase provided 
        under this paragraph, the approved FTE per resident amounts are 
        deemed to be equal to the hospital per resident amounts for 
        primary care and nonprimary care computed under paragraph 
        (2)(D) for that hospital.
            ``(H) Definitions.--In this paragraph:
                ``(i) Reference resident level.--The term `reference 
            resident level' means, with respect to a hospital, the 
            highest resident level for any of the 3 most recent cost 
            reporting periods (ending before the date of the enactment 
            of this paragraph) of the hospital for which a cost report 
            has been settled (or, if not, submitted (subject to 
            audit)), as determined by the Secretary.
                ``(ii) Resident level.--The term `resident level' has 
            the meaning given such term in paragraph (7)(C)(i).
                ``(iii) Otherwise applicable resident limit.--The term 
            `otherwise applicable resident limit' means, with respect 
            to a hospital, the limit otherwise applicable under 
            subparagraphs (F)(i) and (H) of paragraph (4) on the 
            resident level for the hospital determined without regard 
            to this paragraph but taking into account paragraph 
            (7)(A).''.
    (b) IME.--
        (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
    Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
    sentence, is amended--
            (A) by striking ``subsection (h)(7)'' and inserting 
        ``subsections (h)(7) and (h)(8)''; and
            (B) by striking ``it applies'' and inserting ``they 
        apply''.
        (2) Conforming amendment.--Section 1886(d)(5)(B) of the Social 
    Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at 
    the end the following clause:
        ``(x) For discharges occurring on or after July 1, 2011, 
    insofar as an additional payment amount under this subparagraph is 
    attributable to resident positions distributed to a hospital under 
    subsection (h)(8)(B), the indirect teaching adjustment factor shall 
    be computed in the same manner as provided under clause (ii) with 
    respect to such resident positions.''.
    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that 
follows and inserting ``paragraphs (7) and (8) of subsection (h) of 
section 1886 of the Social Security Act''.

SEC. 5504. COUNTING RESIDENT TIME IN NONPROVIDER SETTINGS.

    (a) GME.--Section 1886(h)(4)(E) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(E)) is amended--
        (1) by striking ``shall be counted and that all the time'' and 
    inserting ``shall be counted and that--
                ``(i) effective for cost reporting periods beginning 
            before July 1, 2010, all the time;'';
        (2) in clause (i), as inserted by paragraph (1), by striking 
    the period at the end and inserting ``; and'';
        (3) by inserting after clause (i), as so inserted, the 
    following new clause:
                ``(ii) effective for cost reporting periods beginning 
            on or after July 1, 2010, all the time so spent by a 
            resident shall be counted towards the determination of 
            full-time equivalency, without regard to the setting in 
            which the activities are performed, if a hospital incurs 
            the costs of the stipends and fringe benefits of the 
            resident during the time the resident spends in that 
            setting. If more than one hospital incurs these costs, 
            either directly or through a third party, such hospitals 
            shall count a proportional share of the time, as determined 
            by written agreement between the hospitals, that a resident 
            spends training in that setting.''; and
        (4) by adding at the end the following flush sentence:
        ``Any hospital claiming under this subparagraph for time spent 
        in a nonprovider setting shall maintain and make available to 
        the Secretary records regarding the amount of such time and 
        such amount in comparison with amounts of such time in such 
        base year as the Secretary shall specify.''.
    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)) is amended--
        (1) by striking ``(iv) Effective for discharges occurring on or 
    after October 1, 1997'' and inserting ``(iv)(I) Effective for 
    discharges occurring on or after October 1, 1997, and before July 
    1, 2010''; and
        (2) by inserting after clause (I), as inserted by paragraph 
    (1), the following new subparagraph:
        ``(II) Effective for discharges occurring on or after July 1, 
    2010, all the time spent by an intern or resident in patient care 
    activities in a nonprovider setting shall be counted towards the 
    determination of full-time equivalency if a hospital incurs the 
    costs of the stipends and fringe benefits of the intern or resident 
    during the time the intern or resident spends in that setting. If 
    more than one hospital incurs these costs, either directly or 
    through a third party, such hospitals shall count a proportional 
    share of the time, as determined by written agreement between the 
    hospitals, that a resident spends training in that setting.''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. 1395ww(h)).

SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 5504, is amended--
        (1) in paragraph (4)--
            (A) in subparagraph (E), by striking ``Such rules'' and 
        inserting ``Subject to subparagraphs (J) and (K), such rules''; 
        and
            (B) by adding at the end the following new subparagraphs:
            ``(J) Treatment of certain nonprovider and didactic 
        activities.--Such rules shall provide that all time spent by an 
        intern or resident in an approved medical residency training 
        program in a nonprovider setting that is primarily engaged in 
        furnishing patient care (as defined in paragraph (5)(K)) in 
        non-patient care activities, such as didactic conferences and 
        seminars, but not including research not associated with the 
        treatment or diagnosis of a particular patient, as such time 
        and activities are defined by the Secretary, shall be counted 
        toward the determination of full-time equivalency.
            ``(K) Treatment of certain other activities.--In 
        determining the hospital's number of full-time equivalent 
        residents for purposes of this subsection, all the time that is 
        spent by an intern or resident in an approved medical residency 
        training program on vacation, sick leave, or other approved 
        leave, as such time is defined by the Secretary, and that does 
        not prolong the total time the resident is participating in the 
        approved program beyond the normal duration of the program 
        shall be counted toward the determination of full-time 
        equivalency.''; and
        (2) in paragraph (5), by adding at the end the following new 
    subparagraph:
            ``(K) Nonprovider setting that is primarily engaged in 
        furnishing patient care.--The term `nonprovider setting that is 
        primarily engaged in furnishing patient care' means a 
        nonprovider setting in which the primary activity is the care 
        and treatment of patients, as defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following 
new clause:
                ``(x)(I) The provisions of subparagraph (K) of 
            subsection (h)(4) shall apply under this subparagraph in 
            the same manner as they apply under such subsection.
                ``(II) In determining the hospital's number of full-
            time equivalent residents for purposes of this 
            subparagraph, all the time spent by an intern or resident 
            in an approved medical residency training program in non-
            patient care activities, such as didactic conferences and 
            seminars, as such time and activities are defined by the 
            Secretary, that occurs in the hospital shall be counted 
            toward the determination of full-time equivalency if the 
            hospital--

                    ``(aa) is recognized as a subsection (d) hospital;
                    ``(bb) is recognized as a subsection (d) Puerto 
                Rico hospital;
                    ``(cc) is reimbursed under a reimbursement system 
                authorized under section 1814(b)(3); or
                    ``(dd) is a provider-based hospital outpatient 
                department.

                ``(III) In determining the hospital's number of full-
            time equivalent residents for purposes of this 
            subparagraph, all the time spent by an intern or resident 
            in an approved medical residency training program in 
            research activities that are not associated with the 
            treatment or diagnosis of a particular patient, as such 
            time and activities are defined by the Secretary, shall not 
            be counted toward the determination of full-time 
            equivalency.''.
    (c) Effective Dates.--
        (1) In general.--Except as otherwise provided, the Secretary of 
    Health and Human Services shall implement the amendments made by 
    this section in a manner so as to apply to cost reporting periods 
    beginning on or after January 1, 1983.
        (2) GME.--Section 1886(h)(4)(J) of the Social Security Act, as 
    added by subsection (a)(1)(B), shall apply to cost reporting 
    periods beginning on or after July 1, 2009.
        (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social Security 
    Act, as added by subsection (b), shall apply to cost reporting 
    periods beginning on or after October 1, 2001. Such section, as so 
    added, shall not give rise to any inference as to how the law in 
    effect prior to such date should be interpreted.

SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
              HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clause:
                ``(vi) Redistribution of residency slots after a 
            hospital closes.--

                    ``(I) In general.--Subject to the succeeding 
                provisions of this clause, the Secretary shall, by 
                regulation, establish a process under which, in the 
                case where a hospital (other than a hospital described 
                in clause (v)) with an approved medical residency 
                program closes on or after a date that is 2 years 
                before the date of enactment of this clause, the 
                Secretary shall increase the otherwise applicable 
                resident limit under this paragraph for other hospitals 
                in accordance with this clause.
                    ``(II) Priority for hospitals in certain areas.--
                Subject to the succeeding provisions of this clause, in 
                determining for which hospitals the increase in the 
                otherwise applicable resident limit is provided under 
                such process, the Secretary shall distribute the 
                increase to hospitals in the following priority order 
                (with preference given within each category to 
                hospitals that are members of the same affiliated group 
                (as defined by the Secretary under clause (ii)) as the 
                closed hospital):

                        ``(aa) First, to hospitals located in the same 
                    core-based statistical area as, or a core-based 
                    statistical area contiguous to, the hospital that 
                    closed.
                        ``(bb) Second, to hospitals located in the same 
                    State as the hospital that closed.
                        ``(cc) Third, to hospitals located in the same 
                    region of the country as the hospital that closed.
                        ``(dd) Fourth, only if the Secretary is not 
                    able to distribute the increase to hospitals 
                    described in item (cc), to qualifying hospitals in 
                    accordance with the provisions of paragraph (8).

                    ``(III) Requirement hospital likely to fill 
                position within certain time period.--The Secretary may 
                only increase the otherwise applicable resident limit 
                of a hospital under such process if the Secretary 
                determines the hospital has demonstrated a likelihood 
                of filling the positions made available under this 
                clause within 3 years.
                    ``(IV) Limitation.--The aggregate number of 
                increases in the otherwise applicable resident limits 
                for hospitals under this clause shall be equal to the 
                number of resident positions in the approved medical 
                residency programs that closed on or after the date 
                described in subclause (I).
                    ``(V) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to the 
                implementation of this clause.''.

    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by 
section 5503, is amended by striking ``subsections (h)(7) and (h)(8)'' 
and inserting ``subsections (h)(4)(H)(vi), (h)(7), and (h)(8)''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. Section 1395ww(h)).
    (d) Effect on Temporary FTE Cap Adjustments.--The Secretary of 
Health and Human Services shall give consideration to the effect of the 
amendments made by this section on any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act) in 
order to ensure that there is no duplication of FTE slots. Such 
amendments shall not affect the application of section 1886(h)(4)(H)(v) 
of the Social Security Act (42 U.S.C. 1395ww(h)(4)(H)(v)).
    (e) Conforming Amendment.--Section 1886(h)(7)(E) of the Social 
Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended by section 
5503(a), is amended by striking ``paragraph or paragraph (8)'' and 
inserting ``this paragraph, paragraph (8), or paragraph (4)(H)(vi)''.

SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS; EXTENSION OF FAMILY-TO-FAMILY HEALTH 
              INFORMATION CENTERS.

    (a) Authority To Conduct Demonstration Projects.--Title XX of the 
Social Security Act (42 U.S.C. 1397 et seq.) is amended by adding at 
the end the following:

``SEC. 2008. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS.

    ``(a) Demonstration Projects To Provide Low-Income Individuals With 
Opportunities for Education, Training, and Career Advancement To 
Address Health Professions Workforce Needs.--
        ``(1) Authority to award grants.--The Secretary, in 
    consultation with the Secretary of Labor, shall award grants to 
    eligible entities to conduct demonstration projects that are 
    designed to provide eligible individuals with the opportunity to 
    obtain education and training for occupations in the health care 
    field that pay well and are expected to either experience labor 
    shortages or be in high demand.
        ``(2) Requirements.--
            ``(A) Aid and supportive services.--
                ``(i) In general.--A demonstration project conducted by 
            an eligible entity awarded a grant under this section 
            shall, if appropriate, provide eligible individuals 
            participating in the project with financial aid, child 
            care, case management, and other supportive services.
                ``(ii) Treatment.--Any aid, services, or incentives 
            provided to an eligible beneficiary participating in a 
            demonstration project under this section shall not be 
            considered income, and shall not be taken into account for 
            purposes of determining the individual's eligibility for, 
            or amount of, benefits under any means-tested program.
            ``(B) Consultation and coordination.--An eligible entity 
        applying for a grant to carry out a demonstration project under 
        this section shall demonstrate in the application that the 
        entity has consulted with the State agency responsible for 
        administering the State TANF program, the local workforce 
        investment board in the area in which the project is to be 
        conducted (unless the applicant is such board), the State 
        workforce investment board established under section 111 of the 
        Workforce Investment Act of 1998, and the State Apprenticeship 
        Agency recognized under the Act of August 16, 1937 (commonly 
        known as the `National Apprenticeship Act') (or if no agency 
        has been recognized in the State, the Office of Apprenticeship 
        of the Department of Labor) and that the project will be 
        carried out in coordination with such entities.
            ``(C) Assurance of opportunities for indian populations.--
        The Secretary shall award at least 3 grants under this 
        subsection to an eligible entity that is an Indian tribe, 
        tribal organization, or Tribal College or University.
        ``(3) Reports and evaluation.--
            ``(A) Eligible entities.--An eligible entity awarded a 
        grant to conduct a demonstration project under this subsection 
        shall submit interim reports to the Secretary on the activities 
        carried out under the project and a final report on such 
        activities upon the conclusion of the entities' participation 
        in the project. Such reports shall include assessments of the 
        effectiveness of such activities with respect to improving 
        outcomes for the eligible individuals participating in the 
        project and with respect to addressing health professions 
        workforce needs in the areas in which the project is conducted.
            ``(B) Evaluation.--The Secretary shall, by grant, contract, 
        or interagency agreement, evaluate the demonstration projects 
        conducted under this subsection. Such evaluation shall include 
        identification of successful activities for creating 
        opportunities for developing and sustaining, particularly with 
        respect to low-income individuals and other entry-level 
        workers, a health professions workforce that has accessible 
        entry points, that meets high standards for education, 
        training, certification, and professional development, and that 
        provides increased wages and affordable benefits, including 
        health care coverage, that are responsive to the workforce's 
        needs.
            ``(C) Report to congress.--The Secretary shall submit 
        interim reports and, based on the evaluation conducted under 
        subparagraph (B), a final report to Congress on the 
        demonstration projects conducted under this subsection.
        ``(4) Definitions.--In this subsection:
            ``(A) Eligible entity.--The term `eligible entity' means a 
        State, an Indian tribe or tribal organization, an institution 
        of higher education, a local workforce investment board 
        established under section 117 of the Workforce Investment Act 
        of 1998, a sponsor of an apprenticeship program registered 
        under the National Apprenticeship Act or a community-based 
        organization.
            ``(B) Eligible individual.--
                ``(i) In general.--The term `eligible individual' means 
            a individual receiving assistance under the State TANF 
            program.
                ``(ii) Other low-income individuals.--Such term may 
            include other low-income individuals described by the 
            eligible entity in its application for a grant under this 
            section.
            ``(C) Indian tribe; tribal organization.--The terms `Indian 
        tribe' and `tribal organization' have the meaning given such 
        terms in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b).
            ``(D) Institution of higher education.--The term 
        `institution of higher education' has the meaning given that 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            ``(E) State.--The term `State' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, and American Samoa.
            ``(F) State tanf program.--The term `State TANF program' 
        means the temporary assistance for needy families program 
        funded under part A of title IV.
            ``(G) Tribal college or university.--The term `Tribal 
        College or University' has the meaning given that term in 
        section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1059c(b)).
    ``(b) Demonstration Project To Develop Training and Certification 
Programs for Personal or Home Care Aides.--
        ``(1) Authority to award grants.--Not later than 18 months 
    after the date of enactment of this section, the Secretary shall 
    award grants to eligible entities that are States to conduct 
    demonstration projects for purposes of developing core training 
    competencies and certification programs for personal or home care 
    aides. The Secretary shall--
            ``(A) evaluate the efficacy of the core training 
        competencies described in paragraph (3)(A) for newly hired 
        personal or home care aides and the methods used by States to 
        implement such core training competencies in accordance with 
        the issues specified in paragraph (3)(B); and
            ``(B) ensure that the number of hours of training provided 
        by States under the demonstration project with respect to such 
        core training competencies are not less than the number of 
        hours of training required under any applicable State or 
        Federal law or regulation.
        ``(2) Duration.--A demonstration project shall be conducted 
    under this subsection for not less than 3 years.
        ``(3) Core training competencies for personal or home care 
    aides.--
            ``(A) In general.--The core training competencies for 
        personal or home care aides described in this subparagraph 
        include competencies with respect to the following areas:
                ``(i) The role of the personal or home care aide 
            (including differences between a personal or home care aide 
            employed by an agency and a personal or home care aide 
            employed directly by the health care consumer or an 
            independent provider).
                ``(ii) Consumer rights, ethics, and confidentiality 
            (including the role of proxy decision-makers in the case 
            where a health care consumer has impaired decision-making 
            capacity).
                ``(iii) Communication, cultural and linguistic 
            competence and sensitivity, problem solving, behavior 
            management, and relationship skills.
                ``(iv) Personal care skills.
                ``(v) Health care support.
                ``(vi) Nutritional support.
                ``(vii) Infection control.
                ``(viii) Safety and emergency training.
                ``(ix) Training specific to an individual consumer's 
            needs (including older individuals, younger individuals 
            with disabilities, individuals with developmental 
            disabilities, individuals with dementia, and individuals 
            with mental and behavioral health needs).
                ``(x) Self-Care.
            ``(B) Implementation.--The implementation issues specified 
        in this subparagraph include the following:
                ``(i) The length of the training.
                ``(ii) The appropriate trainer to student ratio.
                ``(iii) The amount of instruction time spent in the 
            classroom as compared to on-site in the home or a facility.
                ``(iv) Trainer qualifications.
                ``(v) Content for a `hands-on' and written 
            certification exam.
                ``(vi) Continuing education requirements.
        ``(4) Application and selection criteria.--
            ``(A) In general.--
                ``(i) Number of states.--The Secretary shall enter into 
            agreements with not more than 6 States to conduct 
            demonstration projects under this subsection.
                ``(ii) Requirements for states.--An agreement entered 
            into under clause (i) shall require that a participating 
            State--

                    ``(I) implement the core training competencies 
                described in paragraph (3)(A); and
                    ``(II) develop written materials and protocols for 
                such core training competencies, including the 
                development of a certification test for personal or 
                home care aides who have completed such training 
                competencies.

                ``(iii) Consultation and collaboration with community 
            and vocational colleges.--The Secretary shall encourage 
            participating States to consult with community and 
            vocational colleges regarding the development of curricula 
            to implement the project with respect to activities, as 
            applicable, which may include consideration of such 
            colleges as partners in such implementation.
            ``(B) Application and eligibility.--A State seeking to 
        participate in the project shall--
                ``(i) submit an application to the Secretary containing 
            such information and at such time as the Secretary may 
            specify;
                ``(ii) meet the selection criteria established under 
            subparagraph (C); and
                ``(iii) meet such additional criteria as the Secretary 
            may specify.
            ``(C) Selection criteria.--In selecting States to 
        participate in the program, the Secretary shall establish 
        criteria to ensure (if applicable with respect to the 
        activities involved)--
                ``(i) geographic and demographic diversity;
                ``(ii) that participating States offer medical 
            assistance for personal care services under the State 
            Medicaid plan;
                ``(iii) that the existing training standards for 
            personal or home care aides in each participating State--

                    ``(I) are different from such standards in the 
                other participating States; and
                    ``(II) are different from the core training 
                competencies described in paragraph (3)(A);

                ``(iv) that participating States do not reduce the 
            number of hours of training required under applicable State 
            law or regulation after being selected to participate in 
            the project; and
                ``(v) that participating States recruit a minimum 
            number of eligible health and long-term care providers to 
            participate in the project.
            ``(D) Technical assistance.--The Secretary shall provide 
        technical assistance to States in developing written materials 
        and protocols for such core training competencies.
        ``(5) Evaluation and report.--
            ``(A) Evaluation.--The Secretary shall develop an 
        experimental or control group testing protocol in consultation 
        with an independent evaluation contractor selected by the 
        Secretary. Such contractor shall evaluate--
                ``(i) the impact of core training competencies 
            described in paragraph (3)(A), including curricula 
            developed to implement such core training competencies, for 
            personal or home care aides within each participating State 
            on job satisfaction, mastery of job skills, beneficiary and 
            family caregiver satisfaction with services, and additional 
            measures determined by the Secretary in consultation with 
            the expert panel;
                ``(ii) the impact of providing such core training 
            competencies on the existing training infrastructure and 
            resources of States; and
                ``(iii) whether a minimum number of hours of initial 
            training should be required for personal or home care aides 
            and, if so, what minimum number of hours should be 
            required.
            ``(B) Reports.--
                ``(i) Report on initial implementation.--Not later than 
            2 years after the date of enactment of this section, the 
            Secretary shall submit to Congress a report on the initial 
            implementation of activities conducted under the 
            demonstration project, including any available results of 
            the evaluation conducted under subparagraph (A) with 
            respect to such activities, together with such 
            recommendations for legislation or administrative action as 
            the Secretary determines appropriate.
                ``(ii) Final report.--Not later than 1 year after the 
            completion of the demonstration project, the Secretary 
            shall submit to Congress a report containing the results of 
            the evaluation conducted under subparagraph (A), together 
            with such recommendations for legislation or administrative 
            action as the Secretary determines appropriate.
        ``(6) Definitions.--In this subsection:
            ``(A) Eligible health and long-term care provider.--The 
        term `eligible health and long-term care provider' means a 
        personal or home care agency (including personal or home care 
        public authorities), a nursing home, a home health agency (as 
        defined in section 1861(o)), or any other health care provider 
        the Secretary determines appropriate which--
                ``(i) is licensed or authorized to provide services in 
            a participating State; and
                ``(ii) receives payment for services under title XIX.
            ``(B) Personal care services.--The term `personal care 
        services' has the meaning given such term for purposes of title 
        XIX.
            ``(C) Personal or home care aide.--The term `personal or 
        home care aide' means an individual who helps individuals who 
        are elderly, disabled, ill, or mentally disabled (including an 
        individual with Alzheimer's disease or other dementia) to live 
        in their own home or a residential care facility (such as a 
        nursing home, assisted living facility, or any other facility 
        the Secretary determines appropriate) by providing routine 
        personal care services and other appropriate services to the 
        individual.
            ``(D) State.--The term `State' has the meaning given that 
        term for purposes of title XIX.
    ``(c) Funding.--
        ``(1) In general.--Subject to paragraph (2), out of any funds 
    in the Treasury not otherwise appropriated, there are appropriated 
    to the Secretary to carry out subsections (a) and (b), $85,000,000 
    for each of fiscal years 2010 through 2014.
        ``(2) Training and certification programs for personal and home 
    care aides.--With respect to the demonstration projects under 
    subsection (b), the Secretary shall use $5,000,000 of the amount 
    appropriated under paragraph (1) for each of fiscal years 2010 
    through 2012 to carry out such projects. No funds appropriated 
    under paragraph (1) shall be used to carry out demonstration 
    projects under subsection (b) after fiscal year 2012.
    ``(d) Nonapplication.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    preceding sections of this title shall not apply to grant awarded 
    under this section.
        ``(2) Limitations on use of grants.--Section 2005(a) (other 
    than paragraph (6)) shall apply to a grant awarded under this 
    section to the same extent and in the same manner as such section 
    applies to payments to States under this title.''.
    (b) Extension of Family-To-Family Health Information Centers.--
Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C. 
701(c)(1)(A)(iii)) is amended by striking ``fiscal year 2009'' and 
inserting ``each of fiscal years 2009 through 2012''.

SEC. 5508. INCREASING TEACHING CAPACITY.

    (a) Teaching Health Centers Training and Enhancement.--Part C of 
title VII of the Public Health Service Act (42 U.S.C. 293k et. seq.), 
as amended by section 5303, is further amended by inserting after 
section 749 the following:

``SEC. 749A. TEACHING HEALTH CENTERS DEVELOPMENT GRANTS.

    ``(a) Program Authorized.--The Secretary may award grants under 
this section to teaching health centers for the purpose of establishing 
new accredited or expanded primary care residency programs.
    ``(b) Amount and Duration.--Grants awarded under this section shall 
be for a term of not more than 3 years and the maximum award may not be 
more than $500,000.
    ``(c) Use of Funds.--Amounts provided under a grant under this 
section shall be used to cover the costs of--
        ``(1) establishing or expanding a primary care residency 
    training program described in subsection (a), including costs 
    associated with--
            ``(A) curriculum development;
            ``(B) recruitment, training and retention of residents and 
        faculty:
            ``(C) accreditation by the Accreditation Council for 
        Graduate Medical Education (ACGME), the American Dental 
        Association (ADA), or the American Osteopathic Association 
        (AOA); and
            ``(D) faculty salaries during the development phase; and
        ``(2) technical assistance provided by an eligible entity.
    ``(d) Application.--A teaching health center seeking a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    ``(e) Preference for Certain Applications.--In selecting recipients 
for grants under this section, the Secretary shall give preference to 
any such application that documents an existing affiliation agreement 
with an area health education center program as defined in sections 751 
and 799B.
    ``(f) Definitions.--In this section:
        ``(1) Eligible entity.--The term `eligible entity' means an 
    organization capable of providing technical assistance including an 
    area health education center program as defined in sections 751 and 
    799B.
        ``(2) Primary care residency program.--The term `primary care 
    residency program' means an approved graduate medical residency 
    training program (as defined in section 340H) in family medicine, 
    internal medicine, pediatrics, internal medicine-pediatrics, 
    obstetrics and gynecology, psychiatry, general dentistry, pediatric 
    dentistry, and geriatrics.
        ``(3) Teaching health center.--
            ``(A) In general.--The term `teaching health center' means 
        an entity that--
                ``(i) is a community based, ambulatory patient care 
            center; and
                ``(ii) operates a primary care residency program.
            ``(B) Inclusion of certain entities.--Such term includes 
        the following:
                ``(i) A Federally qualified health center (as defined 
            in section 1905(l)(2)(B), of the Social Security Act).
                ``(ii) A community mental health center (as defined in 
            section 1861(ff)(3)(B) of the Social Security Act).
                ``(iii) A rural health clinic, as defined in section 
            1861(aa) of the Social Security Act.
                ``(iv) A health center operated by the Indian Health 
            Service, an Indian tribe or tribal organization, or an 
            urban Indian organization (as defined in section 4 of the 
            Indian Health Care Improvement Act).
                ``(v) An entity receiving funds under title X of the 
            Public Health Service Act.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal 
year 2011, $50,000,000 for fiscal year 2012, and such sums as may be 
necessary for each fiscal year thereafter to carry out this section. 
Not to exceed $5,000,000 annually may be used for technical assistance 
program grants.''.
    (b) National Health Service Corps Teaching Capacity.--Section 
338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended 
to read as follows:
    ``(a) Service in Full-time Clinical Practice.--Except as provided 
in section 338D, each individual who has entered into a written 
contract with the Secretary under section 338A or 338B shall provide 
service in the full-time clinical practice of such individual's 
profession as a member of the Corps for the period of obligated service 
provided in such contract. For the purpose of calculating time spent in 
full-time clinical practice under this subsection, up to 50 percent of 
time spent teaching by a member of the Corps may be counted toward his 
or her service obligation.''.
    (c) Payments to Qualified Teaching Health Centers.--Part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) is 
amended by adding at the end the following:

   ``Subpart XI--Support of Graduate Medical Education in Qualified 
                        Teaching Health Centers

``SEC. 340H. PROGRAM OF PAYMENTS TO TEACHING HEALTH CENTERS THAT 
              OPERATE GRADUATE MEDICAL EDUCATION PROGRAMS.

    ``(a) Payments.--Subject to subsection (h)(2), the Secretary shall 
make payments under this section for direct expenses and for indirect 
expenses to qualified teaching health centers that are listed as 
sponsoring institutions by the relevant accrediting body for expansion 
of existing or establishment of new approved graduate medical residency 
training programs.
    ``(b) Amount of Payments.--
        ``(1) In general.--Subject to paragraph (2), the amounts 
    payable under this section to qualified teaching health centers for 
    an approved graduate medical residency training program for a 
    fiscal year are each of the following amounts:
            ``(A) Direct expense amount.--The amount determined under 
        subsection (c) for direct expenses associated with sponsoring 
        approved graduate medical residency training programs.
            ``(B) Indirect expense amount.--The amount determined under 
        subsection (d) for indirect expenses associated with the 
        additional costs relating to teaching residents in such 
        programs.
        ``(2) Capped amount.--
            ``(A) In general.--The total of the payments made to 
        qualified teaching health centers under paragraph (1)(A) or 
        paragraph (1)(B) in a fiscal year shall not exceed the amount 
        of funds appropriated under subsection (g) for such payments 
        for that fiscal year.
            ``(B) Limitation.--The Secretary shall limit the funding of 
        full-time equivalent residents in order to ensure the direct 
        and indirect payments as determined under subsection (c) and 
        (d) do not exceed the total amount of funds appropriated in a 
        fiscal year under subsection (g).
    ``(c) Amount of Payment for Direct Graduate Medical Education.--
        ``(1) In general.--The amount determined under this subsection 
    for payments to qualified teaching health centers for direct 
    graduate expenses relating to approved graduate medical residency 
    training programs for a fiscal year is equal to the product of--
            ``(A) the updated national per resident amount for direct 
        graduate medical education, as determined under paragraph (2); 
        and
            ``(B) the average number of full-time equivalent residents 
        in the teaching health center's graduate approved medical 
        residency training programs as determined under section 
        1886(h)(4) of the Social Security Act (without regard to the 
        limitation under subparagraph (F) of such section) during the 
        fiscal year.
        ``(2) Updated national per resident amount for direct graduate 
    medical education.--The updated per resident amount for direct 
    graduate medical education for a qualified teaching health center 
    for a fiscal year is an amount determined as follows:
            ``(A) Determination of qualified teaching health center per 
        resident amount.--The Secretary shall compute for each 
        individual qualified teaching health center a per resident 
        amount--
                ``(i) by dividing the national average per resident 
            amount computed under section 340E(c)(2)(D) into a wage-
            related portion and a non-wage related portion by applying 
            the proportion determined under subparagraph (B);
                ``(ii) by multiplying the wage-related portion by the 
            factor applied under section 1886(d)(3)(E) of the Social 
            Security Act (but without application of section 4410 of 
            the Balanced Budget Act of 1997 (42 U.S.C. 1395ww note)) 
            during the preceding fiscal year for the teaching health 
            center's area; and
                ``(iii) by adding the non-wage-related portion to the 
            amount computed under clause (ii).
            ``(B) Updating rate.--The Secretary shall update such per 
        resident amount for each such qualified teaching health center 
        as determined appropriate by the Secretary.
    ``(d) Amount of Payment for Indirect Medical Education.--
        ``(1) In general.--The amount determined under this subsection 
    for payments to qualified teaching health centers for indirect 
    expenses associated with the additional costs of teaching residents 
    for a fiscal year is equal to an amount determined appropriate by 
    the Secretary.
        ``(2) Factors.--In determining the amount under paragraph (1), 
    the Secretary shall--
            ``(A) evaluate indirect training costs relative to 
        supporting a primary care residency program in qualified 
        teaching health centers; and
            ``(B) based on this evaluation, assure that the aggregate 
        of the payments for indirect expenses under this section and 
        the payments for direct graduate medical education as 
        determined under subsection (c) in a fiscal year do not exceed 
        the amount appropriated for such expenses as determined in 
        subsection (g).
        ``(3) Interim payment.--Before the Secretary makes a payment 
    under this subsection pursuant to a determination of indirect 
    expenses under paragraph (1), the Secretary may provide to 
    qualified teaching health centers a payment, in addition to any 
    payment made under subsection (c), for expected indirect expenses 
    associated with the additional costs of teaching residents for a 
    fiscal year, based on an estimate by the Secretary.
    ``(e) Clarification Regarding Relationship to Other Payments for 
Graduate Medical Education.--Payments under this section--
        ``(1) shall be in addition to any payments--
            ``(A) for the indirect costs of medical education under 
        section 1886(d)(5)(B) of the Social Security Act;
            ``(B) for direct graduate medical education costs under 
        section 1886(h) of such Act; and
            ``(C) for direct costs of medical education under section 
        1886(k) of such Act;
        ``(2) shall not be taken into account in applying the 
    limitation on the number of total full-time equivalent residents 
    under subparagraphs (F) and (G) of section 1886(h)(4) of such Act 
    and clauses (v), (vi)(I), and (vi)(II) of section 1886(d)(5)(B) of 
    such Act for the portion of time that a resident rotates to a 
    hospital; and
        ``(3) shall not include the time in which a resident is counted 
    toward full-time equivalency by a hospital under paragraph (2) or 
    under section 1886(d)(5)(B)(iv) of the Social Security Act, section 
    1886(h)(4)(E) of such Act, or section 340E of this Act.
    ``(f) Reconciliation.--The Secretary shall determine any changes to 
the number of residents reported by a hospital in the application of 
the hospital for the current fiscal year to determine the final amount 
payable to the hospital for the current fiscal year for both direct 
expense and indirect expense amounts. Based on such determination, the 
Secretary shall recoup any overpayments made to pay any balance due to 
the extent possible. The final amount so determined shall be considered 
a final intermediary determination for the purposes of section 1878 of 
the Social Security Act and shall be subject to administrative and 
judicial review under that section in the same manner as the amount of 
payment under section 1186(d) of such Act is subject to review under 
such section.
    ``(g) Funding.--To carry out this section, there are appropriated 
such sums as may be necessary, not to exceed $230,000,000, for the 
period of fiscal years 2011 through 2015.
    ``(h) Annual Reporting Required.--
        ``(1) Annual report.--The report required under this paragraph 
    for a qualified teaching health center for a fiscal year is a 
    report that includes (in a form and manner specified by the 
    Secretary) the following information for the residency academic 
    year completed immediately prior to such fiscal year:
            ``(A) The types of primary care resident approved training 
        programs that the qualified teaching health center provided for 
        residents.
            ``(B) The number of approved training positions for 
        residents described in paragraph (4).
            ``(C) The number of residents described in paragraph (4) 
        who completed their residency training at the end of such 
        residency academic year and care for vulnerable populations 
        living in underserved areas.
            ``(D) Other information as deemed appropriate by the 
        Secretary.
        ``(2) Audit authority; limitation on payment.--
            ``(A) Audit authority.--The Secretary may audit a qualified 
        teaching health center to ensure the accuracy and completeness 
        of the information submitted in a report under paragraph (1).
            ``(B) Limitation on payment.--A teaching health center may 
        only receive payment in a cost reporting period for a number of 
        such resident positions that is greater than the base level of 
        primary care resident positions, as determined by the 
        Secretary. For purposes of this subparagraph, the `base level 
        of primary care residents' for a teaching health center is the 
        level of such residents as of a base period.
        ``(3) Reduction in payment for failure to report.--
            ``(A) In general.--The amount payable under this section to 
        a qualified teaching health center for a fiscal year shall be 
        reduced by at least 25 percent if the Secretary determines 
        that--
                ``(i) the qualified teaching health center has failed 
            to provide the Secretary, as an addendum to the qualified 
            teaching health center's application under this section for 
            such fiscal year, the report required under paragraph (1) 
            for the previous fiscal year; or
                ``(ii) such report fails to provide complete and 
            accurate information required under any subparagraph of 
            such paragraph.
            ``(B) Notice and opportunity to provide accurate and 
        missing information.--Before imposing a reduction under 
        subparagraph (A) on the basis of a qualified teaching health 
        center's failure to provide complete and accurate information 
        described in subparagraph (A)(ii), the Secretary shall provide 
        notice to the teaching health center of such failure and the 
        Secretary's intention to impose such reduction and shall 
        provide the teaching health center with the opportunity to 
        provide the required information within the period of 30 days 
        beginning on the date of such notice. If the teaching health 
        center provides such information within such period, no 
        reduction shall be made under subparagraph (A) on the basis of 
        the previous failure to provide such information.
        ``(4) Residents.--The residents described in this paragraph are 
    those who are in part-time or full-time equivalent resident 
    training positions at a qualified teaching health center in any 
    approved graduate medical residency training program.
    ``(i) Regulations.--The Secretary shall promulgate regulations to 
carry out this section.
    ``(j) Definitions.--In this section:
        ``(1) Approved graduate medical residency training program.--
    The term `approved graduate medical residency training program' 
    means a residency or other postgraduate medical training program--
            ``(A) participation in which may be counted toward 
        certification in a specialty or subspecialty and includes 
        formal postgraduate training programs in geriatric medicine 
        approved by the Secretary; and
            ``(B) that meets criteria for accreditation (as established 
        by the Accreditation Council for Graduate Medical Education, 
        the American Osteopathic Association, or the American Dental 
        Association).
        ``(2) Primary care residency program.--The term `primary care 
    residency program' has the meaning given that term in section 749A.
        ``(3) Qualified teaching health center.--The term `qualified 
    teaching health center' has the meaning given the term `teaching 
    health center' in section 749A.''.

SEC. 5509. GRADUATE NURSE EDUCATION DEMONSTRATION.

    (a) In General.--
        (1) Establishment.--
            (A) In general.--The Secretary shall establish a graduate 
        nurse education demonstration under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.) under which an eligible 
        hospital may receive payment for the hospital's reasonable 
        costs (described in paragraph (2)) for the provision of 
        qualified clinical training to advance practice nurses.
            (B) Number.--The demonstration shall include up to 5 
        eligible hospitals.
            (C) Written agreements.--Eligible hospitals selected to 
        participate in the demonstration shall enter into written 
        agreements pursuant to subsection (b) in order to reimburse the 
        eligible partners of the hospital the share of the costs 
        attributable to each partner.
        (2) Costs described.--
            (A) In general.--Subject to subparagraph (B) and subsection 
        (d), the costs described in this paragraph are the reasonable 
        costs (as described in section 1861(v) of the Social Security 
        Act (42 U.S.C. 1395x(v))) of each eligible hospital for the 
        clinical training costs (as determined by the Secretary) that 
        are attributable to providing advanced practice registered 
        nurses with qualified training.
            (B) Limitation.--With respect to a year, the amount 
        reimbursed under subparagraph (A) may not exceed the amount of 
        costs described in subparagraph (A) that are attributable to an 
        increase in the number of advanced practice registered nurses 
        enrolled in a program that provides qualified training during 
        the year and for which the hospital is being reimbursed under 
        the demonstration, as compared to the average number of 
        advanced practice registered nurses who graduated in each year 
        during the period beginning on January 1, 2006, and ending on 
        December 31, 2010 (as determined by the Secretary) from the 
        graduate nursing education program operated by the applicable 
        school of nursing that is an eligible partner of the hospital 
        for purposes of the demonstration.
        (3) Waiver authority.--The Secretary may waive such 
    requirements of titles XI and XVIII of the Social Security Act as 
    may be necessary to carry out the demonstration.
        (4) Administration.--Chapter 35 of title 44, United States 
    Code, shall not apply to the implementation of this section.
    (b) Written Agreements With Eligible Partners.--No payment shall be 
made under this section to an eligible hospital unless such hospital 
has in effect a written agreement with the eligible partners of the 
hospital. Such written agreement shall describe, at a minimum--
        (1) the obligations of the eligible partners with respect to 
    the provision of qualified training; and
        (2) the obligation of the eligible hospital to reimburse such 
    eligible partners applicable (in a timely manner) for the costs of 
    such qualified training attributable to partner.
    (c) Evaluation.--Not later than October 17, 2017, the Secretary 
shall submit to Congress a report on the demonstration. Such report 
shall include an analysis of the following:
        (1) The growth in the number of advanced practice registered 
    nurses with respect to a specific base year as a result of the 
    demonstration.
        (2) The growth for each of the specialties described in 
    subparagraphs (A) through (D) of subsection (e)(1).
        (3) The costs to the Medicare program under title XVIII of the 
    Social Security Act as a result of the demonstration.
        (4) Other items the Secretary determines appropriate and 
    relevant.
    (d) Funding.--
        (1) In general.--There is hereby appropriated to the Secretary, 
    out of any funds in the Treasury not otherwise appropriated, 
    $50,000,000 for each of fiscal years 2012 through 2015 to carry out 
    this section, including the design, implementation, monitoring, and 
    evaluation of the demonstration.
        (2) Proration.--If the aggregate payments to eligible hospitals 
    under the demonstration exceed $50,000,000 for a fiscal year 
    described in paragraph (1), the Secretary shall prorate the payment 
    amounts to each eligible hospital in order to ensure that the 
    aggregate payments do not exceed such amount.
        (3) Without fiscal year limitation.--Amounts appropriated under 
    this subsection shall remain available without fiscal year 
    limitation.
    (e) Definitions.--In this section:
        (1) Advanced practice registered nurse.--The term ``advanced 
    practice registered nurse'' includes the following:
            (A) A clinical nurse specialist (as defined in subsection 
        (aa)(5) of section 1861 of the Social Security Act (42 U.S.C. 
        1395x)).
            (B) A nurse practitioner (as defined in such subsection).
            (C) A certified registered nurse anesthetist (as defined in 
        subsection (bb)(2) of such section).
            (D) A certified nurse-midwife (as defined in subsection 
        (gg)(2) of such section).
        (2) Applicable non-hospital community-based care setting.--The 
    term ``applicable non-hospital community-based care setting'' means 
    a non-hospital community-based care setting which has entered into 
    a written agreement (as described in subsection (b)) with the 
    eligible hospital participating in the demonstration. Such settings 
    include Federally qualified health centers, rural health clinics, 
    and other non-hospital settings as determined appropriate by the 
    Secretary.
        (3) Applicable school of nursing.--The term ``applicable school 
    of nursing'' means an accredited school of nursing (as defined in 
    section 801 of the Public Health Service Act) which has entered 
    into a written agreement (as described in subsection (b)) with the 
    eligible hospital participating in the demonstration.
        (4) Demonstration.--The term ``demonstration'' means the 
    graduate nurse education demonstration established under subsection 
    (a).
        (5) Eligible hospital.--The term ``eligible hospital'' means a 
    hospital (as defined in subsection (e) of section 1861 of the 
    Social Security Act (42 U.S.C. 1395x)) or a critical access 
    hospital (as defined in subsection (mm)(1) of such section) that 
    has a written agreement in place with--
            (A) 1 or more applicable schools of nursing; and
            (B) 2 or more applicable non-hospital community-based care 
        settings.
        (6) Eligible partners.--The term ``eligible partners'' includes 
    the following:
            (A) An applicable non-hospital community-based care 
        setting.
            (B) An applicable school of nursing.
        (7) Qualified training.--
            (A) In general.--The term ``qualified training'' means 
        training--
                (i) that provides an advanced practice registered nurse 
            with the clinical skills necessary to provide primary care, 
            preventive care, transitional care, chronic care 
            management, and other services appropriate for individuals 
            entitled to, or enrolled for, benefits under part A of 
            title XVIII of the Social Security Act, or enrolled under 
            part B of such title; and
                (ii) subject to subparagraph (B), at least half of 
            which is provided in a non-hospital community-based care 
            setting.
            (B) Waiver of requirement half of training be provided in 
        non-hospital community-based care setting in certain areas.--
        The Secretary may waive the requirement under subparagraph 
        (A)(ii) with respect to eligible hospitals located in rural or 
        medically underserved areas.
        (8) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.

          Subtitle G--Improving Access to Health Care Services

SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS).

    (a) In General.--Section 330(r) of the Public Health Service Act 
(42 U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting 
the following:
        ``(1) General amounts for grants.--For the purpose of carrying 
    out this section, in addition to the amounts authorized to be 
    appropriated under subsection (d), there is authorized to be 
    appropriated the following:
            ``(A) For fiscal year 2010, $2,988,821,592.
            ``(B) For fiscal year 2011, $3,862,107,440.
            ``(C) For fiscal year 2012, $4,990,553,440.
            ``(D) For fiscal year 2013, $6,448,713,307.
            ``(E) For fiscal year 2014, $7,332,924,155.
            ``(F) For fiscal year 2015, $8,332,924,155.
            ``(G) For fiscal year 2016, and each subsequent fiscal 
        year, the amount appropriated for the preceding fiscal year 
        adjusted by the product of--
                ``(i) one plus the average percentage increase in costs 
            incurred per patient served; and
                ``(ii) one plus the average percentage increase in the 
            total number of patients served.''.
    (b) Rule of Construction.--Section 330(r) of the Public Health 
Service Act (42 U.S.C. 254b(r)) is amended by adding at the end the 
following:
        ``(4) Rule of construction with respect to rural health 
    clinics.--
            ``(A) In general.--Nothing in this section shall be 
        construed to prevent a community health center from contracting 
        with a Federally certified rural health clinic (as defined in 
        section 1861(aa)(2) of the Social Security Act), a low-volume 
        hospital (as defined for purposes of section 1886 of such Act), 
        a critical access hospital, a sole community hospital (as 
        defined for purposes of section 1886(d)(5)(D)(iii) of such 
        Act), or a medicare-dependent share hospital (as defined for 
        purposes of section 1886(d)(5)(G)(iv) of such Act) for the 
        delivery of primary health care services that are available at 
        the clinic or hospital to individuals who would otherwise be 
        eligible for free or reduced cost care if that individual were 
        able to obtain that care at the community health center. Such 
        services may be limited in scope to those primary health care 
        services available in that clinic or hospitals.
            ``(B) Assurances.--In order for a clinic or hospital to 
        receive funds under this section through a contract with a 
        community health center under subparagraph (A), such clinic or 
        hospital shall establish policies to ensure--
                ``(i) nondiscrimination based on the ability of a 
            patient to pay; and
                ``(ii) the establishment of a sliding fee scale for 
            low-income patients.''.

SEC. 5602. NEGOTIATED RULEMAKING FOR DEVELOPMENT OF METHODOLOGY AND 
              CRITERIA FOR DESIGNATING MEDICALLY UNDERSERVED 
              POPULATIONS AND HEALTH PROFESSIONS SHORTAGE AREAS.

    (a) Establishment.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall establish, 
    through a negotiated rulemaking process under subchapter 3 of 
    chapter 5 of title 5, United States Code, a comprehensive 
    methodology and criteria for designation of--
            (A) medically underserved populations in accordance with 
        section 330(b)(3) of the Public Health Service Act (42 U.S.C. 
        254b(b)(3));
            (B) health professions shortage areas under section 332 of 
        the Public Health Service Act (42 U.S.C. 254e).
        (2) Factors to consider.--In establishing the methodology and 
    criteria under paragraph (1), the Secretary--
            (A) shall consult with relevant stakeholders who will be 
        significantly affected by a rule (such as national, State and 
        regional organizations representing affected entities), State 
        health offices, community organizations, health centers and 
        other affected entities, and other interested parties; and
            (B) shall take into account--
                (i) the timely availability and appropriateness of data 
            used to determine a designation to potential applicants for 
            such designations;
                (ii) the impact of the methodology and criteria on 
            communities of various types and on health centers and 
            other safety net providers;
                (iii) the degree of ease or difficulty that will face 
            potential applicants for such designations in securing the 
            necessary data; and
                (iv) the extent to which the methodology accurately 
            measures various barriers that confront individuals and 
            population groups in seeking health care services.
    (b) Publication of Notice.--In carrying out the rulemaking process 
under this subsection, the Secretary shall publish the notice provided 
for under section 564(a) of title 5, United States Code, by not later 
than 45 days after the date of the enactment of this Act.
    (c) Target Date for Publication of Rule.--As part of the notice 
under subsection (b), and for purposes of this subsection, the ``target 
date for publication'', as referred to in section 564(a)(5) of title 5, 
United Sates Code, shall be July 1, 2010.
    (d) Appointment of Negotiated Rulemaking Committee and 
Facilitator.--The Secretary shall provide for--
        (1) the appointment of a negotiated rulemaking committee under 
    section 565(a) of title 5, United States Code, by not later than 30 
    days after the end of the comment period provided for under section 
    564(c) of such title; and
        (2) the nomination of a facilitator under section 566(c) of 
    such title 5 by not later than 10 days after the date of 
    appointment of the committee.
    (e) Preliminary Committee Report.--The negotiated rulemaking 
committee appointed under subsection (d) shall report to the Secretary, 
by not later than April 1, 2010, regarding the committee's progress on 
achieving a consensus with regard to the rulemaking proceeding and 
whether such consensus is likely to occur before one month before the 
target date for publication of the rule. If the committee reports that 
the committee has failed to make significant progress toward such 
consensus or is unlikely to reach such consensus by the target date, 
the Secretary may terminate such process and provide for the 
publication of a rule under this section through such other methods as 
the Secretary may provide.
    (f) Final Committee Report.--If the committee is not terminated 
under subsection (e), the rulemaking committee shall submit a report 
containing a proposed rule by not later than one month before the 
target publication date.
    (g) Interim Final Effect.--The Secretary shall publish a rule under 
this section in the Federal Register by not later than the target 
publication date. Such rule shall be effective and final immediately on 
an interim basis, but is subject to change and revision after public 
notice and opportunity for a period (of not less than 90 days) for 
public comment. In connection with such rule, the Secretary shall 
specify the process for the timely review and approval of applications 
for such designations pursuant to such rules and consistent with this 
section.
    (h) Publication of Rule After Public Comment.--The Secretary shall 
provide for consideration of such comments and republication of such 
rule by not later than 1 year after the target publication date.

SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MEDICAL SERVICES 
              FOR CHILDREN PROGRAM.

    Section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) is 
amended--
        (1) in subsection (a), by striking ``3-year period (with an 
    optional 4th year'' and inserting ``4-year period (with an optional 
    5th year''; and
        (2) in subsection (d)--
            (A) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (B) by inserting before the period the following: ``, 
        $25,000,000 for fiscal year 2010, $26,250,000 for fiscal year 
        2011, $27,562,500 for fiscal year 2012, $28,940,625 for fiscal 
        year 2013, and $30,387,656 for fiscal year 2014''.

SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN COMMUNITY-BASED 
              MENTAL HEALTH SETTINGS.

    Subpart 3 of part B of title V of the Public Health Service Act (42 
U.S.C. 290bb-31 et seq.) is amended by adding at the end the following:

``SEC. 520K. AWARDS FOR CO-LOCATING PRIMARY AND SPECIALTY CARE IN 
              COMMUNITY-BASED MENTAL HEALTH SETTINGS.

    ``(a) Definitions.--In this section:
        ``(1) Eligible entity.--The term `eligible entity' means a 
    qualified community mental health program defined under section 
    1913(b)(1).
        ``(2) Special populations.--The term `special populations' 
    means adults with mental illnesses who have co-occurring primary 
    care conditions and chronic diseases.
    ``(b) Program Authorized.--The Secretary, acting through the 
Administrator shall award grants and cooperative agreements to eligible 
entities to establish demonstration projects for the provision of 
coordinated and integrated services to special populations through the 
co-location of primary and specialty care services in community-based 
mental and behavioral health settings.
    ``(c) Application.--To be eligible to receive a grant or 
cooperative agreement under this section, an eligible entity shall 
submit an application to the Administrator at such time, in such 
manner, and accompanied by such information as the Administrator may 
require, including a description of partnerships, or other arrangements 
with local primary care providers, including community health centers, 
to provide services to special populations.
    ``(d) Use of Funds.--
        ``(1) In general.--For the benefit of special populations, an 
    eligible entity shall use funds awarded under this section for--
            ``(A) the provision, by qualified primary care 
        professionals, of on site primary care services;
            ``(B) reasonable costs associated with medically necessary 
        referrals to qualified specialty care professionals, other 
        coordinators of care or, if permitted by the terms of the grant 
        or cooperative agreement, by qualified specialty care 
        professionals on a reasonable cost basis on site at the 
        eligible entity;
            ``(C) information technology required to accommodate the 
        clinical needs of primary and specialty care professionals; or
            ``(D) facility modifications needed to bring primary and 
        specialty care professionals on site at the eligible entity.
        ``(2) Limitation.--Not to exceed 15 percent of grant or 
    cooperative agreement funds may be used for activities described in 
    subparagraphs (C) and (D) of paragraph (1).
    ``(e) Evaluation.--Not later than 90 days after a grant or 
cooperative agreement awarded under this section expires, an eligible 
entity shall submit to the Secretary the results of an evaluation to be 
conducted by the entity concerning the effectiveness of the activities 
carried out under the grant or agreement.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 
2010 and such sums as may be necessary for each of fiscal years 2011 
through 2014.''.

SEC. 5605. KEY NATIONAL INDICATORS.

    (a) Definitions.--In this section:
        (1) Academy.--The term ``Academy'' means the National Academy 
    of Sciences.
        (2) Commission.--The term ``Commission'' means the Commission 
    on Key National Indicators established under subsection (b).
        (3) Institute.--The term ``Institute'' means a Key National 
    Indicators Institute as designated under subsection (c)(3).
    (b) Commission on Key National Indicators.--
        (1) Establishment.--There is established a ``Commission on Key 
    National Indicators''.
        (2) Membership.--
            (A) Number and appointment.--The Commission shall be 
        composed of 8 members, to be appointed equally by the majority 
        and minority leaders of the Senate and the Speaker and minority 
        leader of the House of Representatives.
            (B) Prohibited appointments.--Members of the Commission 
        shall not include Members of Congress or other elected Federal, 
        State, or local government officials.
            (C) Qualifications.--In making appointments under 
        subparagraph (A), the majority and minority leaders of the 
        Senate and the Speaker and minority leader of the House of 
        Representatives shall appoint individuals who have shown a 
        dedication to improving civic dialogue and decision-making 
        through the wide use of scientific evidence and factual 
        information.
            (D) Period of appointment.--Each member of the Commission 
        shall be appointed for a 2-year term, except that 1 initial 
        appointment shall be for 3 years. Any vacancies shall not 
        affect the power and duties of the Commission but shall be 
        filled in the same manner as the original appointment and shall 
        last only for the remainder of that term.
            (E) Date.--Members of the Commission shall be appointed by 
        not later than 30 days after the date of enactment of this Act.
            (F) Initial organizing period.---Not later than 60 days 
        after the date of enactment of this Act, the Commission shall 
        develop and implement a schedule for completion of the review 
        and reports required under subsection (d).
            (G) Co-chairpersons.--The Commission shall select 2 Co-
        Chairpersons from among its members.
    (c) Duties of the Commission.--
        (1) In general.--The Commission shall--
            (A) conduct comprehensive oversight of a newly established 
        key national indicators system consistent with the purpose 
        described in this subsection;
            (B) make recommendations on how to improve the key national 
        indicators system;
            (C) coordinate with Federal Government users and 
        information providers to assure access to relevant and quality 
        data; and
            (D) enter into contracts with the Academy.
        (2) Reports.--
            (A) Annual report to congress.--Not later than 1 year after 
        the selection of the 2 Co-Chairpersons of the Commission, and 
        each subsequent year thereafter, the Commission shall prepare 
        and submit to the appropriate Committees of Congress and the 
        President a report that contains a detailed statement of the 
        recommendations, findings, and conclusions of the Commission on 
        the activities of the Academy and a designated Institute 
        related to the establishment of a Key National Indicator 
        System.
            (B) Annual report to the academy.--
                (i) In general.--Not later than 6 months after the 
            selection of the 2 Co-Chairpersons of the Commission, and 
            each subsequent year thereafter, the Commission shall 
            prepare and submit to the Academy and a designated 
            Institute a report making recommendations concerning 
            potential issue areas and key indicators to be included in 
            the Key National Indicators.
                (ii) Limitation.--The Commission shall not have the 
            authority to direct the Academy or, if established, the 
            Institute, to adopt, modify, or delete any key indicators.
        (3) Contract with the national academy of sciences.--
            (A) In general.---As soon as practicable after the 
        selection of the 2 Co-Chairpersons of the Commission, the Co-
        Chairpersons shall enter into an arrangement with the National 
        Academy of Sciences under which the Academy shall--
                (i) review available public and private sector research 
            on the selection of a set of key national indicators;
                (ii) determine how best to establish a key national 
            indicator system for the United States, by either creating 
            its own institutional capability or designating an 
            independent private nonprofit organization as an Institute 
            to implement a key national indicator system;
                (iii) if the Academy designates an independent 
            Institute under clause (ii), provide scientific and 
            technical advice to the Institute and create an appropriate 
            governance mechanism that balances Academy involvement and 
            the independence of the Institute; and
                (iv) provide an annual report to the Commission 
            addressing scientific and technical issues related to the 
            key national indicator system and, if established, the 
            Institute, and governance of the Institute's budget and 
            operations.
            (B) Participation.--In executing the arrangement under 
        subparagraph (A), the National Academy of Sciences shall 
        convene a multi-sector, multi-disciplinary process to define 
        major scientific and technical issues associated with 
        developing, maintaining, and evolving a Key National Indicator 
        System and, if an Institute is established, to provide it with 
        scientific and technical advice.
            (C) Establishment of a key national indicator system.--
                (i) In general.--In executing the arrangement under 
            subparagraph (A), the National Academy of Sciences shall 
            enable the establishment of a key national indicator system 
            by--

                    (I) creating its own institutional capability; or
                    (II) partnering with an independent private 
                nonprofit organization as an Institute to implement a 
                key national indicator system.

                (ii) Institute.--If the Academy designates an Institute 
            under clause (i)(II), such Institute shall be a non-profit 
            entity (as defined for purposes of section 501(c)(3) of the 
            Internal Revenue Code of 1986) with an educational mission, 
            a governance structure that emphasizes independence, and 
            characteristics that make such entity appropriate for 
            establishing a key national indicator system.
                (iii) Responsibilities.--Either the Academy or the 
            Institute designated under clause (i)(II) shall be 
            responsible for the following:

                    (I) Identifying and selecting issue areas to be 
                represented by the key national indicators.
                    (II) Identifying and selecting the measures used 
                for key national indicators within the issue areas 
                under subclause (I).
                    (III) Identifying and selecting data to populate 
                the key national indicators described under subclause 
                (II).
                    (IV) Designing, publishing, and maintaining a 
                public website that contains a freely accessible 
                database allowing public access to the key national 
                indicators.
                    (V) Developing a quality assurance framework to 
                ensure rigorous and independent processes and the 
                selection of quality data.
                    (VI) Developing a budget for the construction and 
                management of a sustainable, adaptable, and evolving 
                key national indicator system that reflects all 
                Commission funding of Academy and, if an Institute is 
                established, Institute activities.
                    (VII) Reporting annually to the Commission 
                regarding its selection of issue areas, key indicators, 
                data, and progress toward establishing a web-accessible 
                database.
                    (VIII) Responding directly to the Commission in 
                response to any Commission recommendations and to the 
                Academy regarding any inquiries by the Academy.

                (iv) Governance.--Upon the establishment of a key 
            national indicator system, the Academy shall create an 
            appropriate governance mechanism that incorporates advisory 
            and control functions. If an Institute is designated under 
            clause (i)(II), the governance mechanism shall balance 
            appropriate Academy involvement and the independence of the 
            Institute.
                (v) Modification and changes.--The Academy shall retain 
            the sole discretion, at any time, to alter its approach to 
            the establishment of a key national indicator system or, if 
            an Institute is designated under clause (i)(II), to alter 
            any aspect of its relationship with the Institute or to 
            designate a different non-profit entity to serve as the 
            Institute.
                (vi) Construction.--Nothing in this section shall be 
            construed to limit the ability of the Academy or the 
            Institute designated under clause (i)(II) to receive 
            private funding for activities related to the establishment 
            of a key national indicator system.
            (D) Annual report.--As part of the arrangement under 
        subparagraph (A), the National Academy of Sciences shall, not 
        later than 270 days after the date of enactment of this Act, 
        and annually thereafter, submit to the Co-Chairpersons of the 
        Commission a report that contains the findings and 
        recommendations of the Academy.
    (d) Government Accountability Office Study and Report.--
        (1) GAO study.--The Comptroller General of the United States 
    shall conduct a study of previous work conducted by all public 
    agencies, private organizations, or foreign countries with respect 
    to best practices for a key national indicator system. The study 
    shall be submitted to the appropriate authorizing committees of 
    Congress.
        (2) GAO financial audit.--If an Institute is established under 
    this section, the Comptroller General shall conduct an annual audit 
    of the financial statements of the Institute, in accordance with 
    generally accepted government auditing standards and submit a 
    report on such audit to the Commission and the appropriate 
    authorizing committees of Congress.
        (3) GAO programmatic review.--The Comptroller General of the 
    United States shall conduct programmatic assessments of the 
    Institute established under this section as determined necessary by 
    the Comptroller General and report the findings to the Commission 
    and to the appropriate authorizing committees of Congress.
    (e) Authorization of Appropriations.--
        (1) In general.---There are authorized to be appropriated to 
    carry out the purposes of this section, $10,000,000 for fiscal year 
    2010, and $7,500,000 for each of fiscal year 2011 through 2018.
        (2) Availability.---Amounts appropriated under paragraph (1) 
    shall remain available until expended.

                     Subtitle H--General Provisions

SEC. 5701. REPORTS.

    (a) Reports by Secretary of Health and Human Services.--On an 
annual basis, the Secretary of Health and Human Services shall submit 
to the appropriate Committees of Congress a report on the activities 
carried out under the amendments made by this title, and the 
effectiveness of such activities.
    (b) Reports by Recipients of Funds.--The Secretary of Health and 
Human Services may require, as a condition of receiving funds under the 
amendments made by this title, that the entity receiving such award 
submit to such Secretary such reports as the such Secretary may require 
on activities carried out with such award, and the effectiveness of 
such activities.

              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY
         Subtitle A--Physician Ownership and Other Transparency

SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON 
              CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
        (1) in subsection (d)(2)--
            (A) in subparagraph (A), by striking ``and'' at the end;
            (B) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
            (C) by adding at the end the following new subparagraph:
            ``(C) in the case where the entity is a hospital, the 
        hospital meets the requirements of paragraph (3)(D).'';
        (2) in subsection (d)(3)--
            (A) in subparagraph (B), by striking ``and'' at the end;
            (B) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
            (C) by adding at the end the following new subparagraph:
            ``(D) the hospital meets the requirements described in 
        subsection (i)(1) not later than 18 months after the date of 
        the enactment of this subparagraph.''; and
        (3) by adding at the end the following new subsection:
    ``(i) Requirements for Hospitals To Qualify for Rural Provider and 
Hospital Exception to Ownership or Investment Prohibition.--
        ``(1) Requirements described.--For purposes of subsection 
    (d)(3)(D), the requirements described in this paragraph for a 
    hospital are as follows:
            ``(A) Provider agreement.--The hospital had--
                ``(i) physician ownership or investment on February 1, 
            2010; and
                ``(ii) a provider agreement under section 1866 in 
            effect on such date.
            ``(B) Limitation on expansion of facility capacity.--Except 
        as provided in paragraph (3), the number of operating rooms, 
        procedure rooms, and beds for which the hospital is licensed at 
        any time on or after the date of the enactment of this 
        subsection is no greater than the number of operating rooms, 
        procedure rooms, and beds for which the hospital is licensed as 
        of such date.
            ``(C) Preventing conflicts of interest.--
                ``(i) The hospital submits to the Secretary an annual 
            report containing a detailed description of--

                    ``(I) the identity of each physician owner or 
                investor and any other owners or investors of the 
                hospital; and
                    ``(II) the nature and extent of all ownership and 
                investment interests in the hospital.

                ``(ii) The hospital has procedures in place to require 
            that any referring physician owner or investor discloses to 
            the patient being referred, by a time that permits the 
            patient to make a meaningful decision regarding the receipt 
            of care, as determined by the Secretary--

                    ``(I) the ownership or investment interest, as 
                applicable, of such referring physician in the 
                hospital; and
                    ``(II) if applicable, any such ownership or 
                investment interest of the treating physician.

                ``(iii) The hospital does not condition any physician 
            ownership or investment interests either directly or 
            indirectly on the physician owner or investor making or 
            influencing referrals to the hospital or otherwise 
            generating business for the hospital.
                ``(iv) The hospital discloses the fact that the 
            hospital is partially owned or invested in by physicians--

                    ``(I) on any public website for the hospital; and
                    ``(II) in any public advertising for the hospital.

            ``(D) Ensuring bona fide investment.--
                ``(i) The percentage of the total value of the 
            ownership or investment interests held in the hospital, or 
            in an entity whose assets include the hospital, by 
            physician owners or investors in the aggregate does not 
            exceed such percentage as of the date of enactment of this 
            subsection.
                ``(ii) Any ownership or investment interests that the 
            hospital offers to a physician owner or investor are not 
            offered on more favorable terms than the terms offered to a 
            person who is not a physician owner or investor.
                ``(iii) The hospital (or any owner or investor in the 
            hospital) does not directly or indirectly provide loans or 
            financing for any investment in the hospital by a physician 
            owner or investor.
                ``(iv) The hospital (or any owner or investor in the 
            hospital) does not directly or indirectly guarantee a loan, 
            make a payment toward a loan, or otherwise subsidize a 
            loan, for any individual physician owner or investor or 
            group of physician owners or investors that is related to 
            acquiring any ownership or investment interest in the 
            hospital.
                ``(v) Ownership or investment returns are distributed 
            to each owner or investor in the hospital in an amount that 
            is directly proportional to the ownership or investment 
            interest of such owner or investor in the hospital.
                ``(vi) Physician owners and investors do not receive, 
            directly or indirectly, any guaranteed receipt of or right 
            to purchase other business interests related to the 
            hospital, including the purchase or lease of any property 
            under the control of other owners or investors in the 
            hospital or located near the premises of the hospital.
                ``(vii) The hospital does not offer a physician owner 
            or investor the opportunity to purchase or lease any 
            property under the control of the hospital or any other 
            owner or investor in the hospital on more favorable terms 
            than the terms offered to an individual who is not a 
            physician owner or investor.
            ``(E) Patient safety.--
                ``(i) Insofar as the hospital admits a patient and does 
            not have any physician available on the premises to provide 
            services during all hours in which the hospital is 
            providing services to such patient, before admitting the 
            patient--

                    ``(I) the hospital discloses such fact to a 
                patient; and
                    ``(II) following such disclosure, the hospital 
                receives from the patient a signed acknowledgment that 
                the patient understands such fact.

                ``(ii) The hospital has the capacity to--

                    ``(I) provide assessment and initial treatment for 
                patients; and
                    ``(II) refer and transfer patients to hospitals 
                with the capability to treat the needs of the patient 
                involved.

            ``(F) Limitation on application to certain converted 
        facilities.--The hospital was not converted from an ambulatory 
        surgical center to a hospital on or after the date of enactment 
        of this subsection.
        ``(2) Publication of information reported.--The Secretary shall 
    publish, and update on an annual basis, the information submitted 
    by hospitals under paragraph (1)(C)(i) on the public Internet 
    website of the Centers for Medicare & Medicaid Services.
        ``(3) Exception to prohibition on expansion of facility 
    capacity.--
            ``(A) Process.--
                ``(i) Establishment.--The Secretary shall establish and 
            implement a process under which an applicable hospital (as 
            defined in subparagraph (E)) may apply for an exception 
            from the requirement under paragraph (1)(B).
                ``(ii) Opportunity for community input.--The process 
            under clause (i) shall provide individuals and entities in 
            the community in which the applicable hospital applying for 
            an exception is located with the opportunity to provide 
            input with respect to the application.
                ``(iii) Timing for implementation.--The Secretary shall 
            implement the process under clause (i) on August 1, 2011.
                ``(iv) Regulations.--Not later than July 1, 2011, the 
            Secretary shall promulgate regulations to carry out the 
            process under clause (i).
            ``(B) Frequency.--The process described in subparagraph (A) 
        shall permit an applicable hospital to apply for an exception 
        up to once every 2 years.
            ``(C) Permitted increase.--
                ``(i) In general.--Subject to clause (ii) and 
            subparagraph (D), an applicable hospital granted an 
            exception under the process described in subparagraph (A) 
            may increase the number of operating rooms, procedure 
            rooms, and beds for which the applicable hospital is 
            licensed above the baseline number of operating rooms, 
            procedure rooms, and beds of the applicable hospital (or, 
            if the applicable hospital has been granted a previous 
            exception under this paragraph, above the number of 
            operating rooms, procedure rooms, and beds for which the 
            hospital is licensed after the application of the most 
            recent increase under such an exception).
                ``(ii) 100 percent increase limitation.--The Secretary 
            shall not permit an increase in the number of operating 
            rooms, procedure rooms, and beds for which an applicable 
            hospital is licensed under clause (i) to the extent such 
            increase would result in the number of operating rooms, 
            procedure rooms, and beds for which the applicable hospital 
            is licensed exceeding 200 percent of the baseline number of 
            operating rooms, procedure rooms, and beds of the 
            applicable hospital.
                ``(iii) Baseline number of operating rooms, procedure 
            rooms, and beds.--In this paragraph, the term `baseline 
            number of operating rooms, procedure rooms, and beds' means 
            the number of operating rooms, procedure rooms, and beds 
            for which the applicable hospital is licensed as of the 
            date of enactment of this subsection.
            ``(D) Increase limited to facilities on the main campus of 
        the hospital.--Any increase in the number of operating rooms, 
        procedure rooms, and beds for which an applicable hospital is 
        licensed pursuant to this paragraph may only occur in 
        facilities on the main campus of the applicable hospital.
            ``(E) Applicable hospital.--In this paragraph, the term 
        `applicable hospital' means a hospital--
                ``(i) that is located in a county in which the 
            percentage increase in the population during the most 
            recent 5-year period (as of the date of the application 
            under subparagraph (A)) is at least 150 percent of the 
            percentage increase in the population growth of the State 
            in which the hospital is located during that period, as 
            estimated by Bureau of the Census;
                ``(ii) whose annual percent of total inpatient 
            admissions that represent inpatient admissions under the 
            program under title XIX is equal to or greater than the 
            average percent with respect to such admissions for all 
            hospitals located in the county in which the hospital is 
            located;
                ``(iii) that does not discriminate against 
            beneficiaries of Federal health care programs and does not 
            permit physicians practicing at the hospital to 
            discriminate against such beneficiaries;
                ``(iv) that is located in a State in which the average 
            bed capacity in the State is less than the national average 
            bed capacity; and
                ``(v) that has an average bed occupancy rate that is 
            greater than the average bed occupancy rate in the State in 
            which the hospital is located.
            ``(F) Procedure rooms.--In this subsection, the term 
        `procedure rooms' includes rooms in which catheterizations, 
        angiographies, angiograms, and endoscopies are performed, 
        except such term shall not include emergency rooms or 
        departments (exclusive of rooms in which catheterizations, 
        angiographies, angiograms, and endoscopies are performed).
            ``(G) Publication of final decisions.--Not later than 60 
        days after receiving a complete application under this 
        paragraph, the Secretary shall publish in the Federal Register 
        the final decision with respect to such application.
            ``(H) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the process under this paragraph 
        (including the establishment of such process).
        ``(4) Collection of ownership and investment information.--For 
    purposes of subparagraphs (A)(i) and (D)(i) of paragraph (1), the 
    Secretary shall collect physician ownership and investment 
    information for each hospital.
        ``(5) Physician owner or investor defined.--For purposes of 
    this subsection, the term `physician owner or investor' means a 
    physician (or an immediate family member of such physician) with a 
    direct or an indirect ownership or investment interest in the 
    hospital.
        ``(6) Clarification.--Nothing in this subsection shall be 
    construed as preventing the Secretary from revoking a hospital's 
    provider agreement if not in compliance with regulations 
    implementing section 1866.''.
    (b) Enforcement.--
        (1) Ensuring compliance.--The Secretary of Health and Human 
    Services shall establish policies and procedures to ensure 
    compliance with the requirements described in subsection (i)(1) of 
    section 1877 of the Social Security Act, as added by subsection 
    (a)(3), beginning on the date such requirements first apply. Such 
    policies and procedures may include unannounced site reviews of 
    hospitals.
        (2) Audits.--Beginning not later than November 1, 2011, the 
    Secretary of Health and Human Services shall conduct audits to 
    determine if hospitals violate the requirements referred to in 
    paragraph (1).

SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR 
              INVESTMENT INTERESTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1128F the following new 
section:

``SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP 
              OR INVESTMENT INTERESTS.

    ``(a) Transparency Reports.--
        ``(1) Payments or other transfers of value.--
            ``(A) In general.--On March 31, 2013, and on the 90th day 
        of each calendar year beginning thereafter, any applicable 
        manufacturer that provides a payment or other transfer of value 
        to a covered recipient (or to an entity or individual at the 
        request of or designated on behalf of a covered recipient), 
        shall submit to the Secretary, in such electronic form as the 
        Secretary shall require, the following information with respect 
        to the preceding calendar year:
                ``(i) The name of the covered recipient.
                ``(ii) The business address of the covered recipient 
            and, in the case of a covered recipient who is a physician, 
            the specialty and National Provider Identifier of the 
            covered recipient.
                ``(iii) The amount of the payment or other transfer of 
            value.
                ``(iv) The dates on which the payment or other transfer 
            of value was provided to the covered recipient.
                ``(v) A description of the form of the payment or other 
            transfer of value, indicated (as appropriate for all that 
            apply) as--

                    ``(I) cash or a cash equivalent;
                    ``(II) in-kind items or services;
                    ``(III) stock, a stock option, or any other 
                ownership interest, dividend, profit, or other return 
                on investment; or
                    ``(IV) any other form of payment or other transfer 
                of value (as defined by the Secretary).

                ``(vi) A description of the nature of the payment or 
            other transfer of value, indicated (as appropriate for all 
            that apply) as--

                    ``(I) consulting fees;
                    ``(II) compensation for services other than 
                consulting;
                    ``(III) honoraria;
                    ``(IV) gift;
                    ``(V) entertainment;
                    ``(VI) food;
                    ``(VII) travel (including the specified 
                destinations);
                    ``(VIII) education;
                    ``(IX) research;
                    ``(X) charitable contribution;
                    ``(XI) royalty or license;
                    ``(XII) current or prospective ownership or 
                investment interest;
                    ``(XIII) direct compensation for serving as faculty 
                or as a speaker for a medical education program;
                    ``(XIV) grant; or
                    ``(XV) any other nature of the payment or other 
                transfer of value (as defined by the Secretary).

                ``(vii) If the payment or other transfer of value is 
            related to marketing, education, or research specific to a 
            covered drug, device, biological, or medical supply, the 
            name of that covered drug, device, biological, or medical 
            supply.
                ``(viii) Any other categories of information regarding 
            the payment or other transfer of value the Secretary 
            determines appropriate.
            ``(B) Special rule for certain payments or other transfers 
        of value.--In the case where an applicable manufacturer 
        provides a payment or other transfer of value to an entity or 
        individual at the request of or designated on behalf of a 
        covered recipient, the applicable manufacturer shall disclose 
        that payment or other transfer of value under the name of the 
        covered recipient.
        ``(2) Physician ownership.--In addition to the requirement 
    under paragraph (1)(A), on March 31, 2013, and on the 90th day of 
    each calendar year beginning thereafter, any applicable 
    manufacturer or applicable group purchasing organization shall 
    submit to the Secretary, in such electronic form as the Secretary 
    shall require, the following information regarding any ownership or 
    investment interest (other than an ownership or investment interest 
    in a publicly traded security and mutual fund, as described in 
    section 1877(c)) held by a physician (or an immediate family member 
    of such physician (as defined for purposes of section 1877(a))) in 
    the applicable manufacturer or applicable group purchasing 
    organization during the preceding year:
            ``(A) The dollar amount invested by each physician holding 
        such an ownership or investment interest.
            ``(B) The value and terms of each such ownership or 
        investment interest.
            ``(C) Any payment or other transfer of value provided to a 
        physician holding such an ownership or investment interest (or 
        to an entity or individual at the request of or designated on 
        behalf of a physician holding such an ownership or investment 
        interest), including the information described in clauses (i) 
        through (viii) of paragraph (1)(A), except that in applying 
        such clauses, `physician' shall be substituted for `covered 
        recipient' each place it appears.
            ``(D) Any other information regarding the ownership or 
        investment interest the Secretary determines appropriate.
    ``(b) Penalties for Noncompliance.--
        ``(1) Failure to report.--
            ``(A) In general.--Subject to subparagraph (B) except as 
        provided in paragraph (2), any applicable manufacturer or 
        applicable group purchasing organization that fails to submit 
        information required under subsection (a) in a timely manner in 
        accordance with rules or regulations promulgated to carry out 
        such subsection, shall be subject to a civil money penalty of 
        not less than $1,000, but not more than $10,000, for each 
        payment or other transfer of value or ownership or investment 
        interest not reported as required under such subsection. Such 
        penalty shall be imposed and collected in the same manner as 
        civil money penalties under subsection (a) of section 1128A are 
        imposed and collected under that section.
            ``(B) Limitation.--The total amount of civil money 
        penalties imposed under subparagraph (A) with respect to each 
        annual submission of information under subsection (a) by an 
        applicable manufacturer or applicable group purchasing 
        organization shall not exceed $150,000.
        ``(2) Knowing failure to report.--
            ``(A) In general.--Subject to subparagraph (B), any 
        applicable manufacturer or applicable group purchasing 
        organization that knowingly fails to submit information 
        required under subsection (a) in a timely manner in accordance 
        with rules or regulations promulgated to carry out such 
        subsection, shall be subject to a civil money penalty of not 
        less than $10,000, but not more than $100,000, for each payment 
        or other transfer of value or ownership or investment interest 
        not reported as required under such subsection. Such penalty 
        shall be imposed and collected in the same manner as civil 
        money penalties under subsection (a) of section 1128A are 
        imposed and collected under that section.
            ``(B) Limitation.--The total amount of civil money 
        penalties imposed under subparagraph (A) with respect to each 
        annual submission of information under subsection (a) by an 
        applicable manufacturer or applicable group purchasing 
        organization shall not exceed $1,000,000.
        ``(3) Use of funds.--Funds collected by the Secretary as a 
    result of the imposition of a civil money penalty under this 
    subsection shall be used to carry out this section.
    ``(c) Procedures for Submission of Information and Public 
Availability.--
        ``(1) In general.--
            ``(A) Establishment.--Not later than October 1, 2011, the 
        Secretary shall establish procedures--
                ``(i) for applicable manufacturers and applicable group 
            purchasing organizations to submit information to the 
            Secretary under subsection (a); and
                ``(ii) for the Secretary to make such information 
            submitted available to the public.
            ``(B) Definition of terms.--The procedures established 
        under subparagraph (A) shall provide for the definition of 
        terms (other than those terms defined in subsection (e)), as 
        appropriate, for purposes of this section.
            ``(C) Public availability.--Except as provided in 
        subparagraph (E), the procedures established under subparagraph 
        (A)(ii) shall ensure that, not later than September 30, 2013, 
        and on June 30 of each calendar year beginning thereafter, the 
        information submitted under subsection (a) with respect to the 
        preceding calendar year is made available through an Internet 
        website that--
                ``(i) is searchable and is in a format that is clear 
            and understandable;
                ``(ii) contains information that is presented by the 
            name of the applicable manufacturer or applicable group 
            purchasing organization, the name of the covered recipient, 
            the business address of the covered recipient, the 
            specialty of the covered recipient, the value of the 
            payment or other transfer of value, the date on which the 
            payment or other transfer of value was provided to the 
            covered recipient, the form of the payment or other 
            transfer of value, indicated (as appropriate) under 
            subsection (a)(1)(A)(v), the nature of the payment or other 
            transfer of value, indicated (as appropriate) under 
            subsection (a)(1)(A)(vi), and the name of the covered drug, 
            device, biological, or medical supply, as applicable;
                ``(iii) contains information that is able to be easily 
            aggregated and downloaded;
                ``(iv) contains a description of any enforcement 
            actions taken to carry out this section, including any 
            penalties imposed under subsection (b), during the 
            preceding year;
                ``(v) contains background information on industry-
            physician relationships;
                ``(vi) in the case of information submitted with 
            respect to a payment or other transfer of value described 
            in subparagraph (E)(i), lists such information separately 
            from the other information submitted under subsection (a) 
            and designates such separately listed information as 
            funding for clinical research;
                ``(vii) contains any other information the Secretary 
            determines would be helpful to the average consumer;
                ``(viii) does not contain the National Provider 
            Identifier of the covered recipient, and
                ``(ix) subject to subparagraph (D), provides the 
            applicable manufacturer, applicable group purchasing 
            organization, or covered recipient an opportunity to review 
            and submit corrections to the information submitted with 
            respect to the applicable manufacturer, applicable group 
            purchasing organization, or covered recipient, 
            respectively, for a period of not less than 45 days prior 
            to such information being made available to the public.
            ``(D) Clarification of time period for review and 
        corrections.--In no case may the 45-day period for review and 
        submission of corrections to information under subparagraph 
        (C)(ix) prevent such information from being made available to 
        the public in accordance with the dates described in the matter 
        preceding clause (i) in subparagraph (C).
            ``(E) Delayed publication for payments made pursuant to 
        product research or development agreements and clinical 
        investigations.--
                ``(i) In general.--In the case of information submitted 
            under subsection (a) with respect to a payment or other 
            transfer of value made to a covered recipient by an 
            applicable manufacturer pursuant to a product research or 
            development agreement for services furnished in connection 
            with research on a potential new medical technology or a 
            new application of an existing medical technology or the 
            development of a new drug, device, biological, or medical 
            supply, or by an applicable manufacturer in connection with 
            a clinical investigation regarding a new drug, device, 
            biological, or medical supply, the procedures established 
            under subparagraph (A)(ii) shall provide that such 
            information is made available to the public on the first 
            date described in the matter preceding clause (i) in 
            subparagraph (C) after the earlier of the following:

                    ``(I) The date of the approval or clearance of the 
                covered drug, device, biological, or medical supply by 
                the Food and Drug Administration.
                    ``(II) Four calendar years after the date such 
                payment or other transfer of value was made.

                ``(ii) Confidentiality of information prior to 
            publication.--Information described in clause (i) shall be 
            considered confidential and shall not be subject to 
            disclosure under section 552 of title 5, United States 
            Code, or any other similar Federal, State, or local law, 
            until on or after the date on which the information is made 
            available to the public under such clause.
        ``(2) Consultation.--In establishing the procedures under 
    paragraph (1), the Secretary shall consult with the Inspector 
    General of the Department of Health and Human Services, affected 
    industry, consumers, consumer advocates, and other interested 
    parties in order to ensure that the information made available to 
    the public under such paragraph is presented in the appropriate 
    overall context.
    ``(d) Annual Reports and Relation to State Laws.--
        ``(1) Annual report to congress.--Not later than April 1 of 
    each year beginning with 2013, the Secretary shall submit to 
    Congress a report that includes the following:
            ``(A) The information submitted under subsection (a) during 
        the preceding year, aggregated for each applicable manufacturer 
        and applicable group purchasing organization that submitted 
        such information during such year (except, in the case of 
        information submitted with respect to a payment or other 
        transfer of value described in subsection (c)(1)(E)(i), such 
        information shall be included in the first report submitted to 
        Congress after the date on which such information is made 
        available to the public under such subsection).
            ``(B) A description of any enforcement actions taken to 
        carry out this section, including any penalties imposed under 
        subsection (b), during the preceding year.
        ``(2) Annual reports to states.--Not later than September 30, 
    2013 and on June 30 of each calendar year thereafter, the Secretary 
    shall submit to States a report that includes a summary of the 
    information submitted under subsection (a) during the preceding 
    year with respect to covered recipients in the State (except, in 
    the case of information submitted with respect to a payment or 
    other transfer of value described in subsection (c)(1)(E)(i), such 
    information shall be included in the first report submitted to 
    States after the date on which such information is made available 
    to the public under such subsection).
        ``(3) Relation to state laws.--
            ``(A) In general.--In the case of a payment or other 
        transfer of value provided by an applicable manufacturer that 
        is received by a covered recipient (as defined in subsection 
        (e)) on or after January 1, 2012, subject to subparagraph (B), 
        the provisions of this section shall preempt any statute or 
        regulation of a State or of a political subdivision of a State 
        that requires an applicable manufacturer (as so defined) to 
        disclose or report, in any format, the type of information (as 
        described in subsection (a)) regarding such payment or other 
        transfer of value.
            ``(B) No preemption of additional requirements.--
        Subparagraph (A) shall not preempt any statute or regulation of 
        a State or of a political subdivision of a State that requires 
        the disclosure or reporting of information--
                ``(i) not of the type required to be disclosed or 
            reported under this section;
                ``(ii) described in subsection (e)(10)(B), except in 
            the case of information described in clause (i) of such 
            subsection;
                ``(iii) by any person or entity other than an 
            applicable manufacturer (as so defined) or a covered 
            recipient (as defined in subsection (e)); or
                ``(iv) to a Federal, State, or local governmental 
            agency for public health surveillance, investigation, or 
            other public health purposes or health oversight purposes.
            ``(C) Nothing in subparagraph (A) shall be construed to 
        limit the discovery or admissibility of information described 
        in such subparagraph in a criminal, civil, or administrative 
        proceeding.
        ``(4) Consultation.--The Secretary shall consult with the 
    Inspector General of the Department of Health and Human Services on 
    the implementation of this section.
    ``(e) Definitions.--In this section:
        ``(1) Applicable group purchasing organization.--The term 
    `applicable group purchasing organization' means a group purchasing 
    organization (as defined by the Secretary) that purchases, arranges 
    for, or negotiates the purchase of a covered drug, device, 
    biological, or medical supply which is operating in the United 
    States, or in a territory, possession, or commonwealth of the 
    United States.
        ``(2) Applicable manufacturer.--The term `applicable 
    manufacturer' means a manufacturer of a covered drug, device, 
    biological, or medical supply which is operating in the United 
    States, or in a territory, possession, or commonwealth of the 
    United States.
        ``(3) Clinical investigation.--The term `clinical 
    investigation' means any experiment involving 1 or more human 
    subjects, or materials derived from human subjects, in which a drug 
    or device is administered, dispensed, or used.
        ``(4) Covered device.--The term `covered device' means any 
    device for which payment is available under title XVIII or a State 
    plan under title XIX or XXI (or a waiver of such a plan).
        ``(5) Covered drug, device, biological, or medical supply.--The 
    term `covered drug, device, biological, or medical supply' means 
    any drug, biological product, device, or medical supply for which 
    payment is available under title XVIII or a State plan under title 
    XIX or XXI (or a waiver of such a plan).
        ``(6) Covered recipient.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the term `covered recipient' means the following:
                ``(i) A physician.
                ``(ii) A teaching hospital.
            ``(B) Exclusion.--Such term does not include a physician 
        who is an employee of the applicable manufacturer that is 
        required to submit information under subsection (a).
        ``(7) Employee.--The term `employee' has the meaning given such 
    term in section 1877(h)(2).
        ``(8) Knowingly.--The term `knowingly' has the meaning given 
    such term in section 3729(b) of title 31, United States Code.
        ``(9) Manufacturer of a covered drug, device, biological, or 
    medical supply.--The term `manufacturer of a covered drug, device, 
    biological, or medical supply' means any entity which is engaged in 
    the production, preparation, propagation, compounding, or 
    conversion of a covered drug, device, biological, or medical supply 
    (or any entity under common ownership with such entity which 
    provides assistance or support to such entity with respect to the 
    production, preparation, propagation, compounding, conversion, 
    marketing, promotion, sale, or distribution of a covered drug, 
    device, biological, or medical supply).
        ``(10) Payment or other transfer of value.--
            ``(A) In general.--The term `payment or other transfer of 
        value' means a transfer of anything of value. Such term does 
        not include a transfer of anything of value that is made 
        indirectly to a covered recipient through a third party in 
        connection with an activity or service in the case where the 
        applicable manufacturer is unaware of the identity of the 
        covered recipient.
            ``(B) Exclusions.--An applicable manufacturer shall not be 
        required to submit information under subsection (a) with 
        respect to the following:
                ``(i) A transfer of anything the value of which is less 
            than $10, unless the aggregate amount transferred to, 
            requested by, or designated on behalf of the covered 
            recipient by the applicable manufacturer during the 
            calendar year exceeds $100. For calendar years after 2012, 
            the dollar amounts specified in the preceding sentence 
            shall be increased by the same percentage as the percentage 
            increase in the consumer price index for all urban 
            consumers (all items; U.S. city average) for the 12-month 
            period ending with June of the previous year.
                ``(ii) Product samples that are not intended to be sold 
            and are intended for patient use.
                ``(iii) Educational materials that directly benefit 
            patients or are intended for patient use.
                ``(iv) The loan of a covered device for a short-term 
            trial period, not to exceed 90 days, to permit evaluation 
            of the covered device by the covered recipient.
                ``(v) Items or services provided under a contractual 
            warranty, including the replacement of a covered device, 
            where the terms of the warranty are set forth in the 
            purchase or lease agreement for the covered device.
                ``(vi) A transfer of anything of value to a covered 
            recipient when the covered recipient is a patient and not 
            acting in the professional capacity of a covered recipient.
                ``(vii) Discounts (including rebates).
                ``(viii) In-kind items used for the provision of 
            charity care.
                ``(ix) A dividend or other profit distribution from, or 
            ownership or investment interest in, a publicly traded 
            security and mutual fund (as described in section 1877(c)).
                ``(x) In the case of an applicable manufacturer who 
            offers a self-insured plan, payments for the provision of 
            health care to employees under the plan.
                ``(xi) In the case of a covered recipient who is a 
            licensed non-medical professional, a transfer of anything 
            of value to the covered recipient if the transfer is 
            payment solely for the non-medical professional services of 
            such licensed non-medical professional.
                ``(xii) In the case of a covered recipient who is a 
            physician, a transfer of anything of value to the covered 
            recipient if the transfer is payment solely for the 
            services of the covered recipient with respect to a civil 
            or criminal action or an administrative proceeding.
        ``(11) Physician.--The term `physician' has the meaning given 
    that term in section 1861(r).''.

SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY SERVICES 
              EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF-REFERRAL 
              FOR CERTAIN IMAGING SERVICES.

    (a) In General.--Section 1877(b)(2) of the Social Security Act (42 
U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new 
sentence: ``Such requirements shall, with respect to magnetic resonance 
imaging, computed tomography, positron emission tomography, and any 
other designated health services specified under subsection (h)(6)(D) 
that the Secretary determines appropriate, include a requirement that 
the referring physician inform the individual in writing at the time of 
the referral that the individual may obtain the services for which the 
individual is being referred from a person other than a person 
described in subparagraph (A)(i) and provide such individual with a 
written list of suppliers (as defined in section 1861(d)) who furnish 
such services in the area in which such individual resides.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after January 1, 2010.

SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 6002, is amended by inserting after 
section 1128G the following new section:

``SEC. 1128H. REPORTING OF INFORMATION RELATING TO DRUG SAMPLES.

    ``(a) In General.--Not later than April 1 of each year (beginning 
with 2012), each manufacturer and authorized distributor of record of 
an applicable drug shall submit to the Secretary (in a form and manner 
specified by the Secretary) the following information with respect to 
the preceding year:
        ``(1) In the case of a manufacturer or authorized distributor 
    of record which makes distributions by mail or common carrier under 
    subsection (d)(2) of section 503 of the Federal Food, Drug, and 
    Cosmetic Act (21 U.S.C. 353), the identity and quantity of drug 
    samples requested and the identity and quantity of drug samples 
    distributed under such subsection during that year, aggregated by--
            ``(A) the name, address, professional designation, and 
        signature of the practitioner making the request under 
        subparagraph (A)(i) of such subsection, or of any individual 
        who makes or signs for the request on behalf of the 
        practitioner; and
            ``(B) any other category of information determined 
        appropriate by the Secretary.
        ``(2) In the case of a manufacturer or authorized distributor 
    of record which makes distributions by means other than mail or 
    common carrier under subsection (d)(3) of such section 503, the 
    identity and quantity of drug samples requested and the identity 
    and quantity of drug samples distributed under such subsection 
    during that year, aggregated by--
            ``(A) the name, address, professional designation, and 
        signature of the practitioner making the request under 
        subparagraph (A)(i) of such subsection, or of any individual 
        who makes or signs for the request on behalf of the 
        practitioner; and
            ``(B) any other category of information determined 
        appropriate by the Secretary.
    ``(b) Definitions.--In this section:
        ``(1) Applicable drug.--The term `applicable drug' means a 
    drug--
            ``(A) which is subject to subsection (b) of such section 
        503; and
            ``(B) for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
        ``(2) Authorized distributor of record.--The term `authorized 
    distributor of record' has the meaning given that term in 
    subsection (e)(3)(A) of such section.
        ``(3) Manufacturer.--The term `manufacturer' has the meaning 
    given that term for purposes of subsection (d) of such section.''.

SEC. 6005. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1150 the following new 
section:

``SEC. 1150A. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    ``(a) Provision of Information.--A health benefits plan or any 
entity that provides pharmacy benefits management services on behalf of 
a health benefits plan (in this section referred to as a `PBM') that 
manages prescription drug coverage under a contract with--
        ``(1) a PDP sponsor of a prescription drug plan or an MA 
    organization offering an MA-PD plan under part D of title XVIII; or
        ``(2) a qualified health benefits plan offered through an 
    exchange established by a State under section 1311 of the Patient 
    Protection and Affordable Care Act,
shall provide the information described in subsection (b) to the 
Secretary and, in the case of a PBM, to the plan with which the PBM is 
under contract with, at such times, and in such form and manner, as the 
Secretary shall specify.
    ``(b) Information Described.--The information described in this 
subsection is the following with respect to services provided by a 
health benefits plan or PBM for a contract year:
        ``(1) The percentage of all prescriptions that were provided 
    through retail pharmacies compared to mail order pharmacies, and 
    the percentage of prescriptions for which a generic drug was 
    available and dispensed (generic dispensing rate), by pharmacy type 
    (which includes an independent pharmacy, chain pharmacy, 
    supermarket pharmacy, or mass merchandiser pharmacy that is 
    licensed as a pharmacy by the State and that dispenses medication 
    to the general public), that is paid by the health benefits plan or 
    PBM under the contract.
        ``(2) The aggregate amount, and the type of rebates, discounts, 
    or price concessions (excluding bona fide service fees, which 
    include but are not limited to distribution service fees, inventory 
    management fees, product stocking allowances, and fees associated 
    with administrative services agreements and patient care programs 
    (such as medication compliance programs and patient education 
    programs)) that the PBM negotiates that are attributable to patient 
    utilization under the plan, and the aggregate amount of the 
    rebates, discounts, or price concessions that are passed through to 
    the plan sponsor, and the total number of prescriptions that were 
    dispensed.
        ``(3) The aggregate amount of the difference between the amount 
    the health benefits plan pays the PBM and the amount that the PBM 
    pays retail pharmacies, and mail order pharmacies, and the total 
    number of prescriptions that were dispensed.
    ``(c) Confidentiality.--Information disclosed by a health benefits 
plan or PBM under this section is confidential and shall not be 
disclosed by the Secretary or by a plan receiving the information, 
except that the Secretary may disclose the information in a form which 
does not disclose the identity of a specific PBM, plan, or prices 
charged for drugs, for the following purposes:
        ``(1) As the Secretary determines to be necessary to carry out 
    this section or part D of title XVIII.
        ``(2) To permit the Comptroller General to review the 
    information provided.
        ``(3) To permit the Director of the Congressional Budget Office 
    to review the information provided.
        ``(4) To States to carry out section 1311 of the Patient 
    Protection and Affordable Care Act.
    ``(d) Penalties.--The provisions of subsection (b)(3)(C) of section 
1927 shall apply to a health benefits plan or PBM that fails to provide 
information required under subsection (a) on a timely basis or that 
knowingly provides false information in the same manner as such 
provisions apply to a manufacturer with an agreement under that 
section.''.

         Subtitle B--Nursing Home Transparency and Improvement

             PART I--IMPROVING TRANSPARENCY OF INFORMATION

SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE 
              PARTIES INFORMATION.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
        ``(1) Disclosure.--A facility shall have the information 
    described in paragraph (2) available--
            ``(A) during the period beginning on the date of the 
        enactment of this subsection and ending on the date such 
        information is made available to the public under section 
        6101(b) of the Patient Protection and Affordable Care Act for 
        submission to the Secretary, the Inspector General of the 
        Department of Health and Human Services, the State in which the 
        facility is located, and the State long-term care ombudsman in 
        the case where the Secretary, the Inspector General, the State, 
        or the State long-term care ombudsman requests such 
        information; and
            ``(B) beginning on the effective date of the final 
        regulations promulgated under paragraph (3)(A), for reporting 
        such information in accordance with such final regulations.
    Nothing in subparagraph (A) shall be construed as authorizing a 
    facility to dispose of or delete information described in such 
    subparagraph after the effective date of the final regulations 
    promulgated under paragraph (3)(A).
        ``(2) Information described.--
            ``(A) In general.--The following information is described 
        in this paragraph:
                ``(i) The information described in subsections (a) and 
            (b), subject to subparagraph (C).
                ``(ii) The identity of and information on--

                    ``(I) each member of the governing body of the 
                facility, including the name, title, and period of 
                service of each such member;
                    ``(II) each person or entity who is an officer, 
                director, member, partner, trustee, or managing 
                employee of the facility, including the name, title, 
                and period of service of each such person or entity; 
                and
                    ``(III) each person or entity who is an additional 
                disclosable party of the facility.

                ``(iii) The organizational structure of each additional 
            disclosable party of the facility and a description of the 
            relationship of each such additional disclosable party to 
            the facility and to one another.
            ``(B) Special rule where information is already reported or 
        submitted.--To the extent that information reported by a 
        facility to the Internal Revenue Service on Form 990, 
        information submitted by a facility to the Securities and 
        Exchange Commission, or information otherwise submitted to the 
        Secretary or any other Federal agency contains the information 
        described in clauses (i), (ii), or (iii) of subparagraph (A), 
        the facility may provide such Form or such information 
        submitted to meet the requirements of paragraph (1).
            ``(C) Special rule.--In applying subparagraph (A)(i)--
                ``(i) with respect to subsections (a) and (b), 
            `ownership or control interest' shall include direct or 
            indirect interests, including such interests in 
            intermediate entities; and
                ``(ii) subsection (a)(3)(A)(ii) shall include the owner 
            of a whole or part interest in any mortgage, deed of trust, 
            note, or other obligation secured, in whole or in part, by 
            the entity or any of the property or assets thereof, if the 
            interest is equal to or exceeds 5 percent of the total 
            property or assets of the entirety.
        ``(3) Reporting.--
            ``(A) In general.--Not later than the date that is 2 years 
        after the date of the enactment of this subsection, the 
        Secretary shall promulgate final regulations requiring, 
        effective on the date that is 90 days after the date on which 
        such final regulations are published in the Federal Register, a 
        facility to report the information described in paragraph (2) 
        to the Secretary in a standardized format, and such other 
        regulations as are necessary to carry out this subsection. Such 
        final regulations shall ensure that the facility certifies, as 
        a condition of participation and payment under the program 
        under title XVIII or XIX, that the information reported by the 
        facility in accordance with such final regulations is, to the 
        best of the facility's knowledge, accurate and current.
            ``(B) Guidance.--The Secretary shall provide guidance and 
        technical assistance to States on how to adopt the standardized 
        format under subparagraph (A).
        ``(4) No effect on existing reporting requirements.--Nothing in 
    this subsection shall reduce, diminish, or alter any reporting 
    requirement for a facility that is in effect as of the date of the 
    enactment of this subsection.
        ``(5) Definitions.--In this subsection:
            ``(A) Additional disclosable party.--The term `additional 
        disclosable party' means, with respect to a facility, any 
        person or entity who--
                ``(i) exercises operational, financial, or managerial 
            control over the facility or a part thereof, or provides 
            policies or procedures for any of the operations of the 
            facility, or provides financial or cash management services 
            to the facility;
                ``(ii) leases or subleases real property to the 
            facility, or owns a whole or part interest equal to or 
            exceeding 5 percent of the total value of such real 
            property; or
                ``(iii) provides management or administrative services, 
            management or clinical consulting services, or accounting 
            or financial services to the facility.
            ``(B) Facility.--The term `facility' means a disclosing 
        entity which is--
                ``(i) a skilled nursing facility (as defined in section 
            1819(a)); or
                ``(ii) a nursing facility (as defined in section 
            1919(a)).
            ``(C) Managing employee.--The term `managing employee' 
        means, with respect to a facility, an individual (including a 
        general manager, business manager, administrator, director, or 
        consultant) who directly or indirectly manages, advises, or 
        supervises any element of the practices, finances, or 
        operations of the facility.
            ``(D) Organizational structure.--The term `organizational 
        structure' means, in the case of--
                ``(i) a corporation, the officers, directors, and 
            shareholders of the corporation who have an ownership 
            interest in the corporation which is equal to or exceeds 5 
            percent;
                ``(ii) a limited liability company, the members and 
            managers of the limited liability company (including, as 
            applicable, what percentage each member and manager has of 
            the ownership interest in the limited liability company);
                ``(iii) a general partnership, the partners of the 
            general partnership;
                ``(iv) a limited partnership, the general partners and 
            any limited partners of the limited partnership who have an 
            ownership interest in the limited partnership which is 
            equal to or exceeds 10 percent;
                ``(v) a trust, the trustees of the trust;
                ``(vi) an individual, contact information for the 
            individual; and
                ``(vii) any other person or entity, such information as 
            the Secretary determines appropriate.''.
    (b) Public Availability of Information.--Not later than the date 
that is 1 year after the date on which the final regulations 
promulgated under section 1124(c)(3)(A) of the Social Security Act, as 
added by subsection (a), are published in the Federal Register, the 
Secretary of Health and Human Services shall make the information 
reported in accordance with such final regulations available to the 
public in accordance with procedures established by the Secretary.
    (c) Conforming Amendments.--
        (1) In general.--
            (A) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by 
        striking subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).
            (B) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking 
        subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).
        (2) Effective date.--The amendments made by paragraph (1) shall 
    take effect on the date on which the Secretary makes the 
    information described in subsection (b)(1) available to the public 
    under such subsection.

SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING FACILITIES 
              AND NURSING FACILITIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by sections 6002 and 6004, is amended by inserting 
after section 1128H the following new section:

``SEC. 1128I. ACCOUNTABILITY REQUIREMENTS FOR FACILITIES.

    ``(a) Definition of Facility.--In this section, the term `facility' 
means--
        ``(1) a skilled nursing facility (as defined in section 
    1819(a)); or
        ``(2) a nursing facility (as defined in section 1919(a)).
    ``(b) Effective Compliance and Ethics Programs.--
        ``(1) Requirement.--On or after the date that is 36 months 
    after the date of the enactment of this section, a facility shall, 
    with respect to the entity that operates the facility (in this 
    subparagraph referred to as the `operating organization' or 
    `organization'), have in operation a compliance and ethics program 
    that is effective in preventing and detecting criminal, civil, and 
    administrative violations under this Act and in promoting quality 
    of care consistent with regulations developed under paragraph (2).
        ``(2) Development of regulations.--
            ``(A) In general.--Not later than the date that is 2 years 
        after such date of the enactment, the Secretary, working 
        jointly with the Inspector General of the Department of Health 
        and Human Services, shall promulgate regulations for an 
        effective compliance and ethics program for operating 
        organizations, which may include a model compliance program.
            ``(B)  Design of regulations.--Such regulations with 
        respect to specific elements or formality of a program shall, 
        in the case of an organization that operates 5 or more 
        facilities, vary with the size of the organization, such that 
        larger organizations should have a more formal program and 
        include established written policies defining the standards and 
        procedures to be followed by its employees. Such requirements 
        may specifically apply to the corporate level management of 
        multi unit nursing home chains.
            ``(C) Evaluation.--Not later than 3 years after the date of 
        the promulgation of regulations under this paragraph, the 
        Secretary shall complete an evaluation of the compliance and 
        ethics programs required to be established under this 
        subsection. Such evaluation shall determine if such programs 
        led to changes in deficiency citations, changes in quality 
        performance, or changes in other metrics of patient quality of 
        care. The Secretary shall submit to Congress a report on such 
        evaluation and shall include in such report such 
        recommendations regarding changes in the requirements for such 
        programs as the Secretary determines appropriate.
        ``(3) Requirements for compliance and ethics programs.--In this 
    subsection, the term `compliance and ethics program' means, with 
    respect to a facility, a program of the operating organization 
    that--
            ``(A) has been reasonably designed, implemented, and 
        enforced so that it generally will be effective in preventing 
        and detecting criminal, civil, and administrative violations 
        under this Act and in promoting quality of care; and
            ``(B) includes at least the required components specified 
        in paragraph (4).
        ``(4) Required components of program.--The required components 
    of a compliance and ethics program of an operating organization are 
    the following:
            ``(A) The organization must have established compliance 
        standards and procedures to be followed by its employees and 
        other agents that are reasonably capable of reducing the 
        prospect of criminal, civil, and administrative violations 
        under this Act.
            ``(B) Specific individuals within high-level personnel of 
        the organization must have been assigned overall responsibility 
        to oversee compliance with such standards and procedures and 
        have sufficient resources and authority to assure such 
        compliance.
            ``(C) The organization must have used due care not to 
        delegate substantial discretionary authority to individuals 
        whom the organization knew, or should have known through the 
        exercise of due diligence, had a propensity to engage in 
        criminal, civil, and administrative violations under this Act.
            ``(D) The organization must have taken steps to communicate 
        effectively its standards and procedures to all employees and 
        other agents, such as by requiring participation in training 
        programs or by disseminating publications that explain in a 
        practical manner what is required.
            ``(E) The organization must have taken reasonable steps to 
        achieve compliance with its standards, such as by utilizing 
        monitoring and auditing systems reasonably designed to detect 
        criminal, civil, and administrative violations under this Act 
        by its employees and other agents and by having in place and 
        publicizing a reporting system whereby employees and other 
        agents could report violations by others within the 
        organization without fear of retribution.
            ``(F) The standards must have been consistently enforced 
        through appropriate disciplinary mechanisms, including, as 
        appropriate, discipline of individuals responsible for the 
        failure to detect an offense.
            ``(G) After an offense has been detected, the organization 
        must have taken all reasonable steps to respond appropriately 
        to the offense and to prevent further similar offenses, 
        including any necessary modification to its program to prevent 
        and detect criminal, civil, and administrative violations under 
        this Act.
            ``(H) The organization must periodically undertake 
        reassessment of its compliance program to identify changes 
        necessary to reflect changes within the organization and its 
        facilities.
    ``(c) Quality Assurance and Performance Improvement Program.--
        ``(1) In general.--Not later than December 31, 2011, the 
    Secretary shall establish and implement a quality assurance and 
    performance improvement program (in this subparagraph referred to 
    as the `QAPI program') for facilities, including multi unit chains 
    of facilities. Under the QAPI program, the Secretary shall 
    establish standards relating to quality assurance and performance 
    improvement with respect to facilities and provide technical 
    assistance to facilities on the development of best practices in 
    order to meet such standards. Not later than 1 year after the date 
    on which the regulations are promulgated under paragraph (2), a 
    facility must submit to the Secretary a plan for the facility to 
    meet such standards and implement such best practices, including 
    how to coordinate the implementation of such plan with quality 
    assessment and assurance activities conducted under sections 
    1819(b)(1)(B) and 1919(b)(1)(B), as applicable.
        ``(2) Regulations.--The Secretary shall promulgate regulations 
    to carry out this subsection.''.

SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
        (1) In general.--Section 1819 of the Social Security Act (42 
    U.S.C. 1395i-3) is amended--
            (A) by redesignating subsection (i) as subsection (j); and
            (B) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Nursing Home Compare Website.--
        ``(1) Inclusion of additional information.--
            ``(A) In general.--The Secretary shall ensure that the 
        Department of Health and Human Services includes, as part of 
        the information provided for comparison of nursing homes on the 
        official Internet website of the Federal Government for 
        Medicare beneficiaries (commonly referred to as the `Nursing 
        Home Compare' Medicare website) (or a successor website), the 
        following information in a manner that is prominent, updated on 
        a timely basis, easily accessible, readily understandable to 
        consumers of long-term care services, and searchable:
                ``(i) Staffing data for each facility (including 
            resident census data and data on the hours of care provided 
            per resident per day) based on data submitted under section 
            1128I(g), including information on staffing turnover and 
            tenure, in a format that is clearly understandable to 
            consumers of long-term care services and allows such 
            consumers to compare differences in staffing between 
            facilities and State and national averages for the 
            facilities. Such format shall include--

                    ``(I) concise explanations of how to interpret the 
                data (such as a plain English explanation of data 
                reflecting `nursing home staff hours per resident 
                day');
                    ``(II) differences in types of staff (such as 
                training associated with different categories of 
                staff);
                    ``(III) the relationship between nurse staffing 
                levels and quality of care; and
                    ``(IV) an explanation that appropriate staffing 
                levels vary based on patient case mix.

                ``(ii) Links to State Internet websites with 
            information regarding State survey and certification 
            programs, links to Form 2567 State inspection reports (or a 
            successor form) on such websites, information to guide 
            consumers in how to interpret and understand such reports, 
            and the facility plan of correction or other response to 
            such report. Any such links shall be posted on a timely 
            basis.
                ``(iii) The standardized complaint form developed under 
            section 1128I(f), including explanatory material on what 
            complaint forms are, how they are used, and how to file a 
            complaint with the State survey and certification program 
            and the State long-term care ombudsman program.
                ``(iv) Summary information on the number, type, 
            severity, and outcome of substantiated complaints.
                ``(v) The number of adjudicated instances of criminal 
            violations by a facility or the employees of a facility--

                    ``(I) that were committed inside the facility;
                    ``(II) with respect to such instances of violations 
                or crimes committed inside of the facility that were 
                the violations or crimes of abuse, neglect, and 
                exploitation, criminal sexual abuse, or other 
                violations or crimes that resulted in serious bodily 
                injury; and
                    ``(III) the number of civil monetary penalties 
                levied against the facility, employees, contractors, 
                and other agents.

            ``(B) Deadline for provision of information.--
                ``(i) In general.--Except as provided in clause (ii), 
            the Secretary shall ensure that the information described 
            in subparagraph (A) is included on such website (or a 
            successor website) not later than 1 year after the date of 
            the enactment of this subsection.
                ``(ii) Exception.--The Secretary shall ensure that the 
            information described in subparagraph (A)(i) is included on 
            such website (or a successor website) not later than the 
            date on which the requirements under section 1128I(g) are 
            implemented.
        ``(2) Review and modification of website.--
            ``(A) In general.--The Secretary shall establish a 
        process--
                ``(i) to review the accuracy, clarity of presentation, 
            timeliness, and comprehensiveness of information reported 
            on such website as of the day before the date of the 
            enactment of this subsection; and
                ``(ii) not later than 1 year after the date of the 
            enactment of this subsection, to modify or revamp such 
            website in accordance with the review conducted under 
            clause (i).
            ``(B) Consultation.--In conducting the review under 
        subparagraph (A)(i), the Secretary shall consult with--
                ``(i) State long-term care ombudsman programs;
                ``(ii) consumer advocacy groups;
                ``(iii) provider stakeholder groups; and
                ``(iv) any other representatives of programs or groups 
            the Secretary determines appropriate.''.
        (2) Timeliness of submission of survey and certification 
    information.--
            (A) In general.--Section 1819(g)(5) of the Social Security 
        Act (42 U.S.C. 1395i-3(g)(5)) is amended by adding at the end 
        the following new subparagraph:
            ``(E) Submission of survey and certification information to 
        the secretary.--In order to improve the timeliness of 
        information made available to the public under subparagraph (A) 
        and provided on the Nursing Home Compare Medicare website under 
        subsection (i), each State shall submit information respecting 
        any survey or certification made respecting a skilled nursing 
        facility (including any enforcement actions taken by the State) 
        to the Secretary not later than the date on which the State 
        sends such information to the facility. The Secretary shall use 
        the information submitted under the preceding sentence to 
        update the information provided on the Nursing Home Compare 
        Medicare website as expeditiously as practicable but not less 
        frequently than quarterly.''.
            (B) Effective date.--The amendment made by this paragraph 
        shall take effect 1 year after the date of the enactment of 
        this Act.
        (3) Special focus facility program.--Section 1819(f) of the 
    Social Security Act (42 U.S.C. 1395i-3(f)) is amended by adding at 
    the end the following new paragraph:
        ``(8) Special focus facility program.--
            ``(A) In general.--The Secretary shall conduct a special 
        focus facility program for enforcement of requirements for 
        skilled nursing facilities that the Secretary has identified as 
        having substantially failed to meet applicable requirement of 
        this Act.
            ``(B) Periodic surveys.--Under such program the Secretary 
        shall conduct surveys of each facility in the program not less 
        than once every 6 months.''.
    (b) Nursing Facilities.--
        (1) In general.--Section 1919 of the Social Security Act (42 
    U.S.C. 1396r) is amended--
            (A) by redesignating subsection (i) as subsection (j); and
            (B) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Nursing Home Compare Website.--
        ``(1) Inclusion of additional information.--
            ``(A) In general.--The Secretary shall ensure that the 
        Department of Health and Human Services includes, as part of 
        the information provided for comparison of nursing homes on the 
        official Internet website of the Federal Government for 
        Medicare beneficiaries (commonly referred to as the `Nursing 
        Home Compare' Medicare website) (or a successor website), the 
        following information in a manner that is prominent, updated on 
        a timely basis, easily accessible, readily understandable to 
        consumers of long-term care services, and searchable:
                ``(i) Staffing data for each facility (including 
            resident census data and data on the hours of care provided 
            per resident per day) based on data submitted under section 
            1128I(g), including information on staffing turnover and 
            tenure, in a format that is clearly understandable to 
            consumers of long-term care services and allows such 
            consumers to compare differences in staffing between 
            facilities and State and national averages for the 
            facilities. Such format shall include--

                    ``(I) concise explanations of how to interpret the 
                data (such as plain English explanation of data 
                reflecting `nursing home staff hours per resident 
                day');
                    ``(II) differences in types of staff (such as 
                training associated with different categories of 
                staff);
                    ``(III) the relationship between nurse staffing 
                levels and quality of care; and
                    ``(IV) an explanation that appropriate staffing 
                levels vary based on patient case mix.

                ``(ii) Links to State Internet websites with 
            information regarding State survey and certification 
            programs, links to Form 2567 State inspection reports (or a 
            successor form) on such websites, information to guide 
            consumers in how to interpret and understand such reports, 
            and the facility plan of correction or other response to 
            such report. Any such links shall be posted on a timely 
            basis.
                ``(iii) The standardized complaint form developed under 
            section 1128I(f), including explanatory material on what 
            complaint forms are, how they are used, and how to file a 
            complaint with the State survey and certification program 
            and the State long-term care ombudsman program.
                ``(iv) Summary information on the number, type, 
            severity, and outcome of substantiated complaints.
                ``(v) The number of adjudicated instances of criminal 
            violations by a facility or the employees of a facility--

                    ``(I) that were committed inside of the facility; 
                and
                    ``(II) with respect to such instances of violations 
                or crimes committed outside of the facility, that were 
                violations or crimes that resulted in the serious 
                bodily injury of an elder.

            ``(B) Deadline for provision of information.--
                ``(i) In general.--Except as provided in clause (ii), 
            the Secretary shall ensure that the information described 
            in subparagraph (A) is included on such website (or a 
            successor website) not later than 1 year after the date of 
            the enactment of this subsection.
                ``(ii) Exception.--The Secretary shall ensure that the 
            information described in subparagraph (A)(i) is included on 
            such website (or a successor website) not later than the 
            date on which the requirements under section 1128I(g) are 
            implemented.
        ``(2) Review and modification of website.--
            ``(A) In general.--The Secretary shall establish a 
        process--
                ``(i) to review the accuracy, clarity of presentation, 
            timeliness, and comprehensiveness of information reported 
            on such website as of the day before the date of the 
            enactment of this subsection; and
                ``(ii) not later than 1 year after the date of the 
            enactment of this subsection, to modify or revamp such 
            website in accordance with the review conducted under 
            clause (i).
            ``(B) Consultation.--In conducting the review under 
        subparagraph (A)(i), the Secretary shall consult with--
                ``(i) State long-term care ombudsman programs;
                ``(ii) consumer advocacy groups;
                ``(iii) provider stakeholder groups;
                ``(iv) skilled nursing facility employees and their 
            representatives; and
                ``(v) any other representatives of programs or groups 
            the Secretary determines appropriate.''.
        (2) Timeliness of submission of survey and certification 
    information.--
            (A) In general.--Section 1919(g)(5) of the Social Security 
        Act (42 U.S.C. 1396r(g)(5)) is amended by adding at the end the 
        following new subparagraph:
            ``(E) Submission of survey and certification information to 
        the secretary.--In order to improve the timeliness of 
        information made available to the public under subparagraph (A) 
        and provided on the Nursing Home Compare Medicare website under 
        subsection (i), each State shall submit information respecting 
        any survey or certification made respecting a nursing facility 
        (including any enforcement actions taken by the State) to the 
        Secretary not later than the date on which the State sends such 
        information to the facility. The Secretary shall use the 
        information submitted under the preceding sentence to update 
        the information provided on the Nursing Home Compare Medicare 
        website as expeditiously as practicable but not less frequently 
        than quarterly.''.
            (B) Effective date.--The amendment made by this paragraph 
        shall take effect 1 year after the date of the enactment of 
        this Act.
        (3) Special focus facility program.--Section 1919(f) of the 
    Social Security Act (42 U.S.C. 1396r(f)) is amended by adding at 
    the end of the following new paragraph:
        ``(10) Special focus facility program.--
            ``(A) In general.--The Secretary shall conduct a special 
        focus facility program for enforcement of requirements for 
        nursing facilities that the Secretary has identified as having 
        substantially failed to meet applicable requirements of this 
        Act.
            ``(B) Periodic surveys.--Under such program the Secretary 
        shall conduct surveys of each facility in the program not less 
        often than once every 6 months.''.
    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
        (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
    Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
    section 6101, is amended by adding at the end the following new 
    subparagraph:
            ``(C) Availability of survey, certification, and complaint 
        investigation reports.--A skilled nursing facility must--
                ``(i) have reports with respect to any surveys, 
            certifications, and complaint investigations made 
            respecting the facility during the 3 preceding years 
            available for any individual to review upon request; and
                ``(ii) post notice of the availability of such reports 
            in areas of the facility that are prominent and accessible 
            to the public.
        The facility shall not make available under clause (i) 
        identifying information about complainants or residents.''.
        (2) Nursing facilities.--Section 1919(d)(1) of the Social 
    Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 6101, 
    is amended by adding at the end the following new subparagraph:
            ``(V) Availability of survey, certification, and complaint 
        investigation reports.--A nursing facility must--
                ``(i) have reports with respect to any surveys, 
            certifications, and complaint investigations made 
            respecting the facility during the 3 preceding years 
            available for any individual to review upon request; and
                ``(ii) post notice of the availability of such reports 
            in areas of the facility that are prominent and accessible 
            to the public.
        The facility shall not make available under clause (i) 
        identifying information about complainants or residents.''.
        (3) Effective date.--The amendments made by this subsection 
    shall take effect 1 year after the date of the enactment of this 
    Act.
    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
        (1) Guidance.--The Secretary of Health and Human Services (in 
    this subtitle referred to as the ``Secretary'') shall provide 
    guidance to States on how States can establish electronic links to 
    Form 2567 State inspection reports (or a successor form), complaint 
    investigation reports, and a facility's plan of correction or other 
    response to such Form 2567 State inspection reports (or a successor 
    form) on the Internet website of the State that provides 
    information on skilled nursing facilities and nursing facilities 
    and the Secretary shall, if possible, include such information on 
    Nursing Home Compare.
        (2) Requirement.--Section 1902(a)(9) of the Social Security Act 
    (42 U.S.C. 1396a(a)(9)) is amended--
            (A) by striking ``and'' at the end of subparagraph (B);
            (B) by striking the semicolon at the end of subparagraph 
        (C) and inserting ``, and''; and
            (C) by adding at the end the following new subparagraph:
            ``(D) that the State maintain a consumer-oriented website 
        providing useful information to consumers regarding all skilled 
        nursing facilities and all nursing facilities in the State, 
        including for each facility, Form 2567 State inspection reports 
        (or a successor form), complaint investigation reports, the 
        facility's plan of correction, and such other information that 
        the State or the Secretary considers useful in assisting the 
        public to assess the quality of long term care options and the 
        quality of care provided by individual facilities;''.
        (3) Definitions.--In this subsection:
            (A) Nursing facility.--The term ``nursing facility'' has 
        the meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (B) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (C) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) 
        of the Social Security Act (42 U.S.C. 1395i-3(a)).
    (e) Development of Consumer Rights Information Page on Nursing Home 
Compare Website.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall ensure that the Department of Health and 
Human Services, as part of the information provided for comparison of 
nursing facilities on the Nursing Home Compare Medicare website 
develops and includes a consumer rights information page that contains 
links to descriptions of, and information with respect to, the 
following:
        (1) The documentation on nursing facilities that is available 
    to the public.
        (2) General information and tips on choosing a nursing facility 
    that meets the needs of the individual.
        (3) General information on consumer rights with respect to 
    nursing facilities.
        (4) The nursing facility survey process (on a national and 
    State-specific basis).
        (5) On a State-specific basis, the services available through 
    the State long-term care ombudsman for such State.

SEC. 6104. REPORTING OF EXPENDITURES.

    Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is 
amended by adding at the end the following new subsection:
    ``(f) Reporting of Direct Care Expenditures.--
        ``(1) In general.--For cost reports submitted under this title 
    for cost reporting periods beginning on or after the date that is 2 
    years after the date of the enactment of this subsection, skilled 
    nursing facilities shall separately report expenditures for wages 
    and benefits for direct care staff (breaking out (at a minimum) 
    registered nurses, licensed professional nurses, certified nurse 
    assistants, and other medical and therapy staff).
        ``(2) Modification of form.--The Secretary, in consultation 
    with private sector accountants experienced with Medicare and 
    Medicaid nursing facility home cost reports, shall redesign such 
    reports to meet the requirement of paragraph (1) not later than 1 
    year after the date of the enactment of this subsection.
        ``(3) Categorization by functional accounts.--Not later than 30 
    months after the date of the enactment of this subsection, the 
    Secretary, working in consultation with the Medicare Payment 
    Advisory Commission, the Medicaid and CHIP Payment and Access 
    Commission, the Inspector General of the Department of Health and 
    Human Services, and other expert parties the Secretary determines 
    appropriate, shall take the expenditures listed on cost reports, as 
    modified under paragraph (1), submitted by skilled nursing 
    facilities and categorize such expenditures, regardless of any 
    source of payment for such expenditures, for each skilled nursing 
    facility into the following functional accounts on an annual basis:
            ``(A) Spending on direct care services (including nursing, 
        therapy, and medical services).
            ``(B) Spending on indirect care (including housekeeping and 
        dietary services).
            ``(C) Capital assets (including building and land costs).
            ``(D) Administrative services costs.
        ``(4) Availability of information submitted.--The Secretary 
    shall establish procedures to make information on expenditures 
    submitted under this subsection readily available to interested 
    parties upon request, subject to such requirements as the Secretary 
    may specify under the procedures established under this 
    paragraph.''.

SEC. 6105. STANDARDIZED COMPLAINT FORM.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(f) Standardized Complaint Form.--
        ``(1) Development by the secretary.--The Secretary shall 
    develop a standardized complaint form for use by a resident (or a 
    person acting on the resident's behalf) in filing a complaint with 
    a State survey and certification agency and a State long-term care 
    ombudsman program with respect to a facility.
        ``(2) Complaint forms and resolution processes.--
            ``(A) Complaint forms.--The State must make the 
        standardized complaint form developed under paragraph (1) 
        available upon request to--
                ``(i) a resident of a facility; and
                ``(ii) any person acting on the resident's behalf.
            ``(B) Complaint resolution process.--The State must 
        establish a complaint resolution process in order to ensure 
        that the legal representative of a resident of a facility or 
        other responsible party is not denied access to such resident 
        or otherwise retaliated against if they have complained about 
        the quality of care provided by the facility or other issues 
        relating to the facility. Such complaint resolution process 
        shall include--
                ``(i) procedures to assure accurate tracking of 
            complaints received, including notification to the 
            complainant that a complaint has been received;
                ``(ii) procedures to determine the likely severity of a 
            complaint and for the investigation of the complaint; and
                ``(iii) deadlines for responding to a complaint and for 
            notifying the complainant of the outcome of the 
            investigation.
        ``(3) Rule of construction.--Nothing in this subsection shall 
    be construed as preventing a resident of a facility (or a person 
    acting on the resident's behalf) from submitting a complaint in a 
    manner or format other than by using the standardized complaint 
    form developed under paragraph (1) (including submitting a 
    complaint orally).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 6106. ENSURING STAFFING ACCOUNTABILITY.

    Section 1128I of the Social Security Act, as added and amended by 
this Act, is amended by adding at the end the following new subsection:
    ``(g) Submission of Staffing Information Based on Payroll Data in a 
Uniform Format.--Beginning not later than 2 years after the date of the 
enactment of this subsection, and after consulting with State long-term 
care ombudsman programs, consumer advocacy groups, provider stakeholder 
groups, employees and their representatives, and other parties the 
Secretary deems appropriate, the Secretary shall require a facility to 
electronically submit to the Secretary direct care staffing information 
(including information with respect to agency and contract staff) based 
on payroll and other verifiable and auditable data in a uniform format 
(according to specifications established by the Secretary in 
consultation with such programs, groups, and parties). Such 
specifications shall require that the information submitted under the 
preceding sentence--
        ``(1) specify the category of work a certified employee 
    performs (such as whether the employee is a registered nurse, 
    licensed practical nurse, licensed vocational nurse, certified 
    nursing assistant, therapist, or other medical personnel);
        ``(2) include resident census data and information on resident 
    case mix;
        ``(3) include a regular reporting schedule; and
        ``(4) include information on employee turnover and tenure and 
    on the hours of care provided by each category of certified 
    employees referenced in paragraph (1) per resident per day.
Nothing in this subsection shall be construed as preventing the 
Secretary from requiring submission of such information with respect to 
specific categories, such as nursing staff, before other categories of 
certified employees. Information under this subsection with respect to 
agency and contract staff shall be kept separate from information on 
employee staffing.''.

SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING SYSTEM.

    (a) Study.--The Comptroller General of the United States (in this 
section referred to as the ``Comptroller General'') shall conduct a 
study on the Five-Star Quality Rating System for nursing homes of the 
Centers for Medicare & Medicaid Services. Such study shall include an 
analysis of--
        (1) how such system is being implemented;
        (2) any problems associated with such system or its 
    implementation; and
        (3) how such system could be improved.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General shall submit to Congress a report 
containing the results of the study conducted under subsection (a), 
together with recommendations for such legislation and administrative 
action as the Comptroller General determines appropriate.

                     PART II--TARGETING ENFORCEMENT

SEC. 6111. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
        (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
    Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended--
            (A) by striking ``Penalties.--The Secretary'' and inserting 
        ``penalties.--

                    ``(I) In general.--Subject to subclause (II), the 
                Secretary''; and

            (B) by adding at the end the following new subclauses:

                    ``(II) Reduction of civil money penalties in 
                certain circumstances.--Subject to subclause (III), in 
                the case where a facility self-reports and promptly 
                corrects a deficiency for which a penalty was imposed 
                under this clause not later than 10 calendar days after 
                the date of such imposition, the Secretary may reduce 
                the amount of the penalty imposed by not more than 50 
                percent.
                    ``(III) Prohibitions on reduction for certain 
                deficiencies.--

                        ``(aa) Repeat deficiencies.--The Secretary may 
                    not reduce the amount of a penalty under subclause 
                    (II) if the Secretary had reduced a penalty imposed 
                    on the facility in the preceding year under such 
                    subclause with respect to a repeat deficiency.
                        ``(bb) Certain other deficiencies.--The 
                    Secretary may not reduce the amount of a penalty 
                    under subclause (II) if the penalty is imposed on 
                    the facility for a deficiency that is found to 
                    result in a pattern of harm or widespread harm, 
                    immediately jeopardizes the health or safety of a 
                    resident or residents of the facility, or results 
                    in the death of a resident of the facility.

                    ``(IV) Collection of civil money penalties.--In the 
                case of a civil money penalty imposed under this 
                clause, the Secretary shall issue regulations that--

                        ``(aa) subject to item (cc), not later than 30 
                    days after the imposition of the penalty, provide 
                    for the facility to have the opportunity to 
                    participate in an independent informal dispute 
                    resolution process which generates a written record 
                    prior to the collection of such penalty;
                        ``(bb) in the case where the penalty is imposed 
                    for each day of noncompliance, provide that a 
                    penalty may not be imposed for any day during the 
                    period beginning on the initial day of the 
                    imposition of the penalty and ending on the day on 
                    which the informal dispute resolution process under 
                    item (aa) is completed;
                        ``(cc) may provide for the collection of such 
                    civil money penalty and the placement of such 
                    amounts collected in an escrow account under the 
                    direction of the Secretary on the earlier of the 
                    date on which the informal dispute resolution 
                    process under item (aa) is completed or the date 
                    that is 90 days after the date of the imposition of 
                    the penalty;
                        ``(dd) may provide that such amounts collected 
                    are kept in such account pending the resolution of 
                    any subsequent appeals;
                        ``(ee) in the case where the facility 
                    successfully appeals the penalty, may provide for 
                    the return of such amounts collected (plus 
                    interest) to the facility; and
                        ``(ff) in the case where all such appeals are 
                    unsuccessful, may provide that some portion of such 
                    amounts collected may be used to support activities 
                    that benefit residents, including assistance to 
                    support and protect residents of a facility that 
                    closes (voluntarily or involuntarily) or is 
                    decertified (including offsetting costs of 
                    relocating residents to home and community-based 
                    settings or another facility), projects that 
                    support resident and family councils and other 
                    consumer involvement in assuring quality care in 
                    facilities, and facility improvement initiatives 
                    approved by the Secretary (including joint training 
                    of facility staff and surveyors, technical 
                    assistance for facilities implementing quality 
                    assurance programs, the appointment of temporary 
                    management firms, and other activities approved by 
                    the Secretary).''.
        (2) Conforming amendment.--The second sentence of section 
    1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5)) is 
    amended by inserting ``(ii)(IV),'' after ``(i),''.
    (b) Nursing Facilities.--
        (1) In general.--Section 1919(h)(3)(C)(ii) of the Social 
    Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended--
            (A) by striking ``Penalties.--The Secretary'' and inserting 
        ``penalties.--

                    ``(I) In general.--Subject to subclause (II), the 
                Secretary''; and

            (B) by adding at the end the following new subclauses:

                    ``(II) Reduction of civil money penalties in 
                certain circumstances.--Subject to subclause (III), in 
                the case where a facility self-reports and promptly 
                corrects a deficiency for which a penalty was imposed 
                under this clause not later than 10 calendar days after 
                the date of such imposition, the Secretary may reduce 
                the amount of the penalty imposed by not more than 50 
                percent.
                    ``(III) Prohibitions on reduction for certain 
                deficiencies.--

                        ``(aa) Repeat deficiencies.--The Secretary may 
                    not reduce the amount of a penalty under subclause 
                    (II) if the Secretary had reduced a penalty imposed 
                    on the facility in the preceding year under such 
                    subclause with respect to a repeat deficiency.
                        ``(bb) Certain other deficiencies.--The 
                    Secretary may not reduce the amount of a penalty 
                    under subclause (II) if the penalty is imposed on 
                    the facility for a deficiency that is found to 
                    result in a pattern of harm or widespread harm, 
                    immediately jeopardizes the health or safety of a 
                    resident or residents of the facility, or results 
                    in the death of a resident of the facility.

                    ``(IV) Collection of civil money penalties.--In the 
                case of a civil money penalty imposed under this 
                clause, the Secretary shall issue regulations that--

                        ``(aa) subject to item (cc), not later than 30 
                    days after the imposition of the penalty, provide 
                    for the facility to have the opportunity to 
                    participate in an independent informal dispute 
                    resolution process which generates a written record 
                    prior to the collection of such penalty;
                        ``(bb) in the case where the penalty is imposed 
                    for each day of noncompliance, provide that a 
                    penalty may not be imposed for any day during the 
                    period beginning on the initial day of the 
                    imposition of the penalty and ending on the day on 
                    which the informal dispute resolution process under 
                    item (aa) is completed;
                        ``(cc) may provide for the collection of such 
                    civil money penalty and the placement of such 
                    amounts collected in an escrow account under the 
                    direction of the Secretary on the earlier of the 
                    date on which the informal dispute resolution 
                    process under item (aa) is completed or the date 
                    that is 90 days after the date of the imposition of 
                    the penalty;
                        ``(dd) may provide that such amounts collected 
                    are kept in such account pending the resolution of 
                    any subsequent appeals;
                        ``(ee) in the case where the facility 
                    successfully appeals the penalty, may provide for 
                    the return of such amounts collected (plus 
                    interest) to the facility; and
                        ``(ff) in the case where all such appeals are 
                    unsuccessful, may provide that some portion of such 
                    amounts collected may be used to support activities 
                    that benefit residents, including assistance to 
                    support and protect residents of a facility that 
                    closes (voluntarily or involuntarily) or is 
                    decertified (including offsetting costs of 
                    relocating residents to home and community-based 
                    settings or another facility), projects that 
                    support resident and family councils and other 
                    consumer involvement in assuring quality care in 
                    facilities, and facility improvement initiatives 
                    approved by the Secretary (including joint training 
                    of facility staff and surveyors, technical 
                    assistance for facilities implementing quality 
                    assurance programs, the appointment of temporary 
                    management firms, and other activities approved by 
                    the Secretary).''.
        (2) Conforming amendment.--Section 1919(h)(5)(8) of the Social 
    Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by inserting 
    ``(ii)(IV),'' after ``(i),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 6112. NATIONAL INDEPENDENT MONITOR DEMONSTRATION PROJECT.

    (a) Establishment.--
        (1) In general.--The Secretary, in consultation with the 
    Inspector General of the Department of Health and Human Services, 
    shall conduct a demonstration project to develop, test, and 
    implement an independent monitor program to oversee interstate and 
    large intrastate chains of skilled nursing facilities and nursing 
    facilities.
        (2) Selection.--The Secretary shall select chains of skilled 
    nursing facilities and nursing facilities described in paragraph 
    (1) to participate in the demonstration project under this section 
    from among those chains that submit an application to the Secretary 
    at such time, in such manner, and containing such information as 
    the Secretary may require.
        (3) Duration.--The Secretary shall conduct the demonstration 
    project under this section for a 2-year period.
        (4) Implementation.--The Secretary shall implement the 
    demonstration project under this section not later than 1 year 
    after the date of the enactment of this Act.
    (b) Requirements.--The Secretary shall evaluate chains selected to 
participate in the demonstration project under this section based on 
criteria selected by the Secretary, including where evidence suggests 
that a number of the facilities of the chain are experiencing serious 
safety and quality of care problems. Such criteria may include the 
evaluation of a chain that includes a number of facilities 
participating in the ``Special Focus Facility'' program (or a successor 
program) or multiple facilities with a record of repeated serious 
safety and quality of care deficiencies.
    (c) Responsibilities.--An independent monitor that enters into a 
contract with the Secretary to participate in the conduct of the 
demonstration project under this section shall--
        (1) conduct periodic reviews and prepare root-cause quality and 
    deficiency analyses of a chain to assess if facilities of the chain 
    are in compliance with State and Federal laws and regulations 
    applicable to the facilities;
        (2) conduct sustained oversight of the efforts of the chain, 
    whether publicly or privately held, to achieve compliance by 
    facilities of the chain with State and Federal laws and regulations 
    applicable to the facilities;
        (3) analyze the management structure, distribution of 
    expenditures, and nurse staffing levels of facilities of the chain 
    in relation to resident census, staff turnover rates, and tenure;
        (4) report findings and recommendations with respect to such 
    reviews, analyses, and oversight to the chain and facilities of the 
    chain, to the Secretary, and to relevant States; and
        (5) publish the results of such reviews, analyses, and 
    oversight.
    (d) Implementation of Recommendations.--
        (1) Receipt of finding by chain.--Not later than 10 days after 
    receipt of a finding of an independent monitor under subsection 
    (c)(4), a chain participating in the demonstration project shall 
    submit to the independent monitor a report--
            (A) outlining corrective actions the chain will take to 
        implement the recommendations in such report; or
            (B) indicating that the chain will not implement such 
        recommendations, and why it will not do so.
        (2) Receipt of report by independent monitor.--Not later than 
    10 days after receipt of a report submitted by a chain under 
    paragraph (1), an independent monitor shall finalize its 
    recommendations and submit a report to the chain and facilities of 
    the chain, the Secretary, and the State or States, as appropriate, 
    containing such final recommendations.
    (e) Cost of Appointment.--A chain shall be responsible for a 
portion of the costs associated with the appointment of independent 
monitors under the demonstration project under this section. The chain 
shall pay such portion to the Secretary (in an amount and in accordance 
with procedures established by the Secretary).
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary for the purpose of carrying out 
the demonstration project under this section.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
        (1) Additional disclosable party.--The term ``additional 
    disclosable party'' has the meaning given such term in section 
    1124(c)(5)(A) of the Social Security Act, as added by section 
    4201(a).
        (2) Facility.--The term ``facility'' means a skilled nursing 
    facility or a nursing facility.
        (3) Nursing facility.--The term ``nursing facility'' has the 
    meaning given such term in section 1919(a) of the Social Security 
    Act (42 U.S.C. 1396r(a)).
        (4) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services, acting through the Assistant Secretary 
    for Planning and Evaluation.
        (5) Skilled nursing facility.--The term ``skilled nursing 
    facility'' has the meaning given such term in section 1819(a) of 
    the Social Security Act (42 U.S.C. 1395(a)).
    (i) Evaluation and Report.--
        (1) Evaluation.--The Secretary, in consultation with the 
    Inspector General of the Department of Health and Human Services, 
    shall evaluate the demonstration project conducted under this 
    section.
        (2) Report.--Not later than 180 days after the completion of 
    the demonstration project under this section, the Secretary shall 
    submit to Congress a report containing the results of the 
    evaluation conducted under paragraph (1), together with 
    recommendations--
            (A) as to whether the independent monitor program should be 
        established on a permanent basis;
            (B) if the Secretary recommends that such program be so 
        established, on appropriate procedures and mechanisms for such 
        establishment; and
            (C) for such legislation and administrative action as the 
        Secretary determines appropriate.

SEC. 6113. NOTIFICATION OF FACILITY CLOSURE.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(h) Notification of Facility Closure.--
        ``(1) In general.--Any individual who is the administrator of a 
    facility must--
            ``(A) submit to the Secretary, the State long-term care 
        ombudsman, residents of the facility, and the legal 
        representatives of such residents or other responsible parties, 
        written notification of an impending closure--
                ``(i) subject to clause (ii), not later than the date 
            that is 60 days prior to the date of such closure; and
                ``(ii) in the case of a facility where the Secretary 
            terminates the facility's participation under this title, 
            not later than the date that the Secretary determines 
            appropriate;
            ``(B) ensure that the facility does not admit any new 
        residents on or after the date on which such written 
        notification is submitted; and
            ``(C) include in the notice a plan for the transfer and 
        adequate relocation of the residents of the facility by a 
        specified date prior to closure that has been approved by the 
        State, including assurances that the residents will be 
        transferred to the most appropriate facility or other setting 
        in terms of quality, services, and location, taking into 
        consideration the needs, choice, and best interests of each 
        resident.
        ``(2) Relocation.--
            ``(A) In general.--The State shall ensure that, before a 
        facility closes, all residents of the facility have been 
        successfully relocated to another facility or an alternative 
        home and community-based setting.
            ``(B) Continuation of payments until residents relocated.--
        The Secretary may, as the Secretary determines appropriate, 
        continue to make payments under this title with respect to 
        residents of a facility that has submitted a notification under 
        paragraph (1) during the period beginning on the date such 
        notification is submitted and ending on the date on which the 
        resident is successfully relocated.
        ``(3) Sanctions.--Any individual who is the administrator of a 
    facility that fails to comply with the requirements of paragraph 
    (1)--
            ``(A) shall be subject to a civil monetary penalty of up to 
        $100,000;
            ``(B) may be subject to exclusion from participation in any 
        Federal health care program (as defined in section 1128B(f)); 
        and
            ``(C) shall be subject to any other penalties that may be 
        prescribed by law.
        ``(4) Procedure.--The provisions of section 1128A (other than 
    subsections (a) and (b) and the second sentence of subsection (f)) 
    shall apply to a civil money penalty or exclusion under paragraph 
    (3) in the same manner as such provisions apply to a penalty or 
    proceeding under section 1128A(a).''.
    (b) Conforming Amendments.--Section 1819(h)(4) of the Social 
Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
        (1) in the first sentence, by striking ``the Secretary shall 
    terminate'' and inserting ``the Secretary, subject to section 
    1128I(h), shall terminate''; and
        (2) in the second sentence, by striking ``subsection (c)(2)'' 
    and inserting ``subsection (c)(2) and section 1128I(h)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 6114. NATIONAL DEMONSTRATION PROJECTS ON CULTURE CHANGE AND USE OF 
              INFORMATION TECHNOLOGY IN NURSING HOMES.

    (a) In General.--The Secretary shall conduct 2 demonstration 
projects, 1 for the development of best practices in skilled nursing 
facilities and nursing facilities that are involved in the culture 
change movement (including the development of resources for facilities 
to find and access funding in order to undertake culture change) and 1 
for the development of best practices in skilled nursing facilities and 
nursing facilities for the use of information technology to improve 
resident care.
    (b) Conduct of Demonstration Projects.--
        (1) Grant award.--Under each demonstration project conducted 
    under this section, the Secretary shall award 1 or more grants to 
    facility-based settings for the development of best practices 
    described in subsection (a) with respect to the demonstration 
    project involved. Such award shall be made on a competitive basis 
    and may be allocated in 1 lump-sum payment.
        (2) Consideration of special needs of residents.--Each 
    demonstration project conducted under this section shall take into 
    consideration the special needs of residents of skilled nursing 
    facilities and nursing facilities who have cognitive impairment, 
    including dementia.
    (c) Duration and Implementation.--
        (1) Duration.--The demonstration projects shall each be 
    conducted for a period not to exceed 3 years.
        (2) Implementation.--The demonstration projects shall each be 
    implemented not later than 1 year after the date of the enactment 
    of this Act.
    (d) Definitions.--In this section:
        (1) Nursing facility.--The term ``nursing facility'' has the 
    meaning given such term in section 1919(a) of the Social Security 
    Act (42 U.S.C. 1396r(a)).
        (2) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.
        (3) Skilled nursing facility.--The term ``skilled nursing 
    facility'' has the meaning given such term in section 1819(a) of 
    the Social Security Act (42 U.S.C. 1395(a)).
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (f) Report.--Not later than 9 months after the completion of the 
demonstration project, the Secretary shall submit to Congress a report 
on such project, together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.

                   PART III--IMPROVING STAFF TRAINING

SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--
        (1) In general.--Section 1819(f)(2)(A)(i)(I) of the Social 
    Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by 
    inserting ``(including, in the case of initial training and, if the 
    Secretary determines appropriate, in the case of ongoing training, 
    dementia management training, and patient abuse prevention 
    training'' before ``, (II)''.
        (2) Clarification of definition of nurse aide.--Section 
    1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i-
    3(b)(5)(F)) is amended by adding at the end the following flush 
    sentence:
        ``Such term includes an individual who provides such services 
        through an agency or under a contract with the facility.''.
    (b) Nursing Facilities.--
        (1) In general.--Section 1919(f)(2)(A)(i)(I) of the Social 
    Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by 
    inserting ``(including, in the case of initial training and, if the 
    Secretary determines appropriate, in the case of ongoing training, 
    dementia management training, and patient abuse prevention 
    training'' before ``, (II)''.
        (2) Clarification of definition of nurse aide.--Section 
    1919(b)(5)(F) of the Social Security Act (42 U.S.C. 1396r(b)(5)(F)) 
    is amended by adding at the end the following flush sentence:
        ``Such term includes an individual who provides such services 
        through an agency or under a contract with the facility.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

Subtitle C--Nationwide Program for National and State Background Checks 
  on Direct Patient Access Employees of Long-term Care Facilities and 
                               Providers

SEC. 6201. NATIONWIDE PROGRAM FOR NATIONAL AND STATE BACKGROUND CHECKS 
              ON DIRECT PATIENT ACCESS EMPLOYEES OF LONG-TERM CARE 
              FACILITIES AND PROVIDERS.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary''), shall establish a 
program to identify efficient, effective, and economical procedures for 
long term care facilities or providers to conduct background checks on 
prospective direct patient access employees on a nationwide basis (in 
this subsection, such program shall be referred to as the ``nationwide 
program''). Except for the following modifications, the Secretary shall 
carry out the nationwide program under similar terms and conditions as 
the pilot program under section 307 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 
Stat. 2257), including the prohibition on hiring abusive workers and 
the authorization of the imposition of penalties by a participating 
State under subsection (b)(3)(A) and (b)(6), respectively, of such 
section 307:
        (1) Agreements.--
            (A) Newly participating states.--The Secretary shall enter 
        into agreements with each State--
                (i) that the Secretary has not entered into an 
            agreement with under subsection (c)(1) of such section 307;
                (ii) that agrees to conduct background checks under the 
            nationwide program on a Statewide basis; and
                (iii) that submits an application to the Secretary 
            containing such information and at such time as the 
            Secretary may specify.
            (B) Certain previously participating states.--The Secretary 
        shall enter into agreements with each State--
                (i) that the Secretary has entered into an agreement 
            with under such subsection (c)(1), but only in the case 
            where such agreement did not require the State to conduct 
            background checks under the program established under 
            subsection (a) of such section 307 on a Statewide basis;
                (ii) that agrees to conduct background checks under the 
            nationwide program on a Statewide basis; and
                (iii) that submits an application to the Secretary 
            containing such information and at such time as the 
            Secretary may specify.
        (2) Nonapplication of selection criteria.--The selection 
    criteria required under subsection (c)(3)(B) of such section 307 
    shall not apply.
        (3) Required fingerprint check as part of criminal history 
    background check.--The procedures established under subsection 
    (b)(1) of such section 307 shall--
            (A) require that the long-term care facility or provider 
        (or the designated agent of the long-term care facility or 
        provider) obtain State and national criminal history background 
        checks on the prospective employee through such means as the 
        Secretary determines appropriate, efficient, and effective that 
        utilize a search of State-based abuse and neglect registries 
        and databases, including the abuse and neglect registries of 
        another State in the case where a prospective employee 
        previously resided in that State, State criminal history 
        records, the records of any proceedings in the State that may 
        contain disqualifying information about prospective employees 
        (such as proceedings conducted by State professional licensing 
        and disciplinary boards and State Medicaid Fraud Control 
        Units), and Federal criminal history records, including a 
        fingerprint check using the Integrated Automated Fingerprint 
        Identification System of the Federal Bureau of Investigation;
            (B) require States to describe and test methods that reduce 
        duplicative fingerprinting, including providing for the 
        development of ``rap back'' capability by the State such that, 
        if a direct patient access employee of a long-term care 
        facility or provider is convicted of a crime following the 
        initial criminal history background check conducted with 
        respect to such employee, and the employee's fingerprints match 
        the prints on file with the State law enforcement department, 
        the department will immediately inform the State and the State 
        will immediately inform the long-term care facility or provider 
        which employs the direct patient access employee of such 
        conviction; and
            (C) require that criminal history background checks 
        conducted under the nationwide program remain valid for a 
        period of time specified by the Secretary.
        (4) State requirements.--An agreement entered into under 
    paragraph (1) shall require that a participating State--
            (A) be responsible for monitoring compliance with the 
        requirements of the nationwide program;
            (B) have procedures in place to--
                (i) conduct screening and criminal history background 
            checks under the nationwide program in accordance with the 
            requirements of this section;
                (ii) monitor compliance by long-term care facilities 
            and providers with the procedures and requirements of the 
            nationwide program;
                (iii) as appropriate, provide for a provisional period 
            of employment by a long-term care facility or provider of a 
            direct patient access employee, not to exceed 60 days, 
            pending completion of the required criminal history 
            background check and, in the case where the employee has 
            appealed the results of such background check, pending 
            completion of the appeals process, during which the 
            employee shall be subject to direct on-site supervision (in 
            accordance with procedures established by the State to 
            ensure that a long-term care facility or provider furnishes 
            such direct on-site supervision);
                (iv) provide an independent process by which a 
            provisional employee or an employee may appeal or dispute 
            the accuracy of the information obtained in a background 
            check performed under the nationwide program, including the 
            specification of criteria for appeals for direct patient 
            access employees found to have disqualifying information 
            which shall include consideration of the passage of time, 
            extenuating circumstances, demonstration of rehabilitation, 
            and relevancy of the particular disqualifying information 
            with respect to the current employment of the individual;
                (v) provide for the designation of a single State 
            agency as responsible for--

                    (I) overseeing the coordination of any State and 
                national criminal history background checks requested 
                by a long-term care facility or provider (or the 
                designated agent of the long-term care facility or 
                provider) utilizing a search of State and Federal 
                criminal history records, including a fingerprint check 
                of such records;
                    (II) overseeing the design of appropriate privacy 
                and security safeguards for use in the review of the 
                results of any State or national criminal history 
                background checks conducted regarding a prospective 
                direct patient access employee to determine whether the 
                employee has any conviction for a relevant crime;
                    (III) immediately reporting to the long-term care 
                facility or provider that requested the criminal 
                history background check the results of such review; 
                and
                    (IV) in the case of an employee with a conviction 
                for a relevant crime that is subject to reporting under 
                section 1128E of the Social Security Act (42 U.S.C. 
                1320a-7e), reporting the existence of such conviction 
                to the database established under that section;

                (vi) determine which individuals are direct patient 
            access employees (as defined in paragraph (6)(B)) for 
            purposes of the nationwide program;
                (vii) as appropriate, specify offenses, including 
            convictions for violent crimes, for purposes of the 
            nationwide program; and
                (viii) describe and test methods that reduce 
            duplicative fingerprinting, including providing for the 
            development of ``rap back'' capability such that, if a 
            direct patient access employee of a long-term care facility 
            or provider is convicted of a crime following the initial 
            criminal history background check conducted with respect to 
            such employee, and the employee's fingerprints match the 
            prints on file with the State law enforcement department--

                    (I) the department will immediately inform the 
                State agency designated under clause (v) and such 
                agency will immediately inform the facility or provider 
                which employs the direct patient access employee of 
                such conviction; and
                    (II) the State will provide, or will require the 
                facility to provide, to the employee a copy of the 
                results of the criminal history background check 
                conducted with respect to the employee at no charge in 
                the case where the individual requests such a copy.

        (5) Payments.--
            (A) Newly participating states.--
                (i) In general.--As part of the application submitted 
            by a State under paragraph (1)(A)(iii), the State shall 
            guarantee, with respect to the costs to be incurred by the 
            State in carrying out the nationwide program, that the 
            State will make available (directly or through donations 
            from public or private entities) a particular amount of 
            non-Federal contributions, as a condition of receiving the 
            Federal match under clause (ii).
                (ii) Federal match.--The payment amount to each State 
            that the Secretary enters into an agreement with under 
            paragraph (1)(A) shall be 3 times the amount that the State 
            guarantees to make available under clause (i), except that 
            in no case may the payment amount exceed $3,000,000.
            (B) Previously participating states.--
                (i) In general.--As part of the application submitted 
            by a State under paragraph (1)(B)(iii), the State shall 
            guarantee, with respect to the costs to be incurred by the 
            State in carrying out the nationwide program, that the 
            State will make available (directly or through donations 
            from public or private entities) a particular amount of 
            non-Federal contributions, as a condition of receiving the 
            Federal match under clause (ii).
                (ii) Federal match.--The payment amount to each State 
            that the Secretary enters into an agreement with under 
            paragraph (1)(B) shall be 3 times the amount that the State 
            guarantees to make available under clause (i), except that 
            in no case may the payment amount exceed $1,500,000.
        (6) Definitions.--Under the nationwide program:
            (A) Conviction for a relevant crime.--The term ``conviction 
        for a relevant crime'' means any Federal or State criminal 
        conviction for--
                (i) any offense described in section 1128(a) of the 
            Social Security Act (42 U.S.C. 1320a-7); or
                (ii) such other types of offenses as a participating 
            State may specify for purposes of conducting the program in 
            such State.
            (B) Disqualifying information.--The term ``disqualifying 
        information'' means a conviction for a relevant crime or a 
        finding of patient or resident abuse.
            (C) Finding of patient or resident abuse.--The term 
        ``finding of patient or resident abuse'' means any 
        substantiated finding by a State agency under section 
        1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security Act (42 
        U.S.C. 1395i-3(g)(1)(C), 1396r(g)(1)(C)) or a Federal agency 
        that a direct patient access employee has committed--
                (i) an act of patient or resident abuse or neglect or a 
            misappropriation of patient or resident property; or
                (ii) such other types of acts as a participating State 
            may specify for purposes of conducting the program in such 
            State.
            (D) Direct patient access employee.--The term ``direct 
        patient access employee'' means any individual who has access 
        to a patient or resident of a long-term care facility or 
        provider through employment or through a contract with such 
        facility or provider and has duties that involve (or may 
        involve) one-on-one contact with a patient or resident of the 
        facility or provider, as determined by the State for purposes 
        of the nationwide program. Such term does not include a 
        volunteer unless the volunteer has duties that are equivalent 
        to the duties of a direct patient access employee and those 
        duties involve (or may involve) one-on-one contact with a 
        patient or resident of the long-term care facility or provider.
            (E) Long-term care facility or provider.--The term ``long-
        term care facility or provider'' means the following facilities 
        or providers which receive payment for services under title 
        XVIII or XIX of the Social Security Act:
                (i) A skilled nursing facility (as defined in section 
            1819(a) of the Social Security Act (42 U.S.C. 1395i-3(a))).
                (ii) A nursing facility (as defined in section 1919(a) 
            of such Act (42 U.S.C. 1396r(a))).
                (iii) A home health agency.
                (iv) A provider of hospice care (as defined in section 
            1861(dd)(1) of such Act (42 U.S.C. 1395x(dd)(1))).
                (v) A long-term care hospital (as described in section 
            1886(d)(1)(B)(iv) of such Act (42 U.S.C. 
            1395ww(d)(1)(B)(iv))).
                (vi) A provider of personal care services.
                (vii) A provider of adult day care.
                (viii) A residential care provider that arranges for, 
            or directly provides, long-term care services, including an 
            assisted living facility that provides a level of care 
            established by the Secretary.
                (ix) An intermediate care facility for the mentally 
            retarded (as defined in section 1905(d) of such Act (42 
            U.S.C. 1396d(d))).
                (x) Any other facility or provider of long-term care 
            services under such titles as the participating State 
            determines appropriate.
        (7) Evaluation and report.--
            (A) Evaluation.--
                (i) In general.--The Inspector General of the 
            Department of Health and Human Services shall conduct an 
            evaluation of the nationwide program.
                (ii) Inclusion of specific topics.--The evaluation 
            conducted under clause (i) shall include the following:

                    (I) A review of the various procedures implemented 
                by participating States for long-term care facilities 
                or providers, including staffing agencies, to conduct 
                background checks of direct patient access employees 
                under the nationwide program and identification of the 
                most appropriate, efficient, and effective procedures 
                for conducting such background checks.
                    (II) An assessment of the costs of conducting such 
                background checks (including start up and 
                administrative costs).
                    (III) A determination of the extent to which 
                conducting such background checks leads to any 
                unintended consequences, including a reduction in the 
                available workforce for long-term care facilities or 
                providers.
                    (IV) An assessment of the impact of the nationwide 
                program on reducing the number of incidents of neglect, 
                abuse, and misappropriation of resident property to the 
                extent practicable.
                    (V) An evaluation of other aspects of the 
                nationwide program, as determined appropriate by the 
                Secretary.

            (B) Report.--Not later than 180 days after the completion 
        of the nationwide program, the Inspector General of the 
        Department of Health and Human Services shall submit a report 
        to Congress containing the results of the evaluation conducted 
        under subparagraph (A).
    (b) Funding.--
        (1) Notification.--The Secretary of Health and Human Services 
    shall notify the Secretary of the Treasury of the amount necessary 
    to carry out the nationwide program under this section for the 
    period of fiscal years 2010 through 2012, except that in no case 
    shall such amount exceed $160,000,000.
        (2) Transfer of funds.--
            (A) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        provide for the transfer to the Secretary of Health and Human 
        Services of the amount specified as necessary to carry out the 
        nationwide program under paragraph (1). Such amount shall 
        remain available until expended.
            (B) Reservation of funds for conduct of evaluation.--The 
        Secretary may reserve not more than $3,000,000 of the amount 
        transferred under subparagraph (A) to provide for the conduct 
        of the evaluation under subsection (a)(7)(A).

             Subtitle D--Patient-Centered Outcomes Research

SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by adding at the end the following new part:

         ``Part D--Comparative Clinical Effectiveness Research


              ``comparative clinical effectiveness research

    ``Sec. 1181.  (a) Definitions.--In this section:
        ``(1) Board.--The term `Board' means the Board of Governors 
    established under subsection (f).
        ``(2) Comparative clinical effectiveness research; research.--
            ``(A) In general.--The terms `comparative clinical 
        effectiveness research' and `research' mean research evaluating 
        and comparing health outcomes and the clinical effectiveness, 
        risks, and benefits of 2 or more medical treatments, services, 
        and items described in subparagraph (B).
            ``(B) Medical treatments, services, and items described.--
        The medical treatments, services, and items described in this 
        subparagraph are health care interventions, protocols for 
        treatment, care management, and delivery, procedures, medical 
        devices, diagnostic tools, pharmaceuticals (including drugs and 
        biologicals), integrative health practices, and any other 
        strategies or items being used in the treatment, management, 
        and diagnosis of, or prevention of illness or injury in, 
        individuals.
        ``(3) Conflict of interest.--The term `conflict of interest' 
    means an association, including a financial or personal 
    association, that have the potential to bias or have the appearance 
    of biasing an individual's decisions in matters related to the 
    Institute or the conduct of activities under this section.
        ``(4) Real conflict of interest.--The term `real conflict of 
    interest' means any instance where a member of the Board, the 
    methodology committee established under subsection (d)(6), or an 
    advisory panel appointed under subsection (d)(4), or a close 
    relative of such member, has received or could receive either of 
    the following:
            ``(A) A direct financial benefit of any amount deriving 
        from the result or findings of a study conducted under this 
        section.
            ``(B) A financial benefit from individuals or companies 
        that own or manufacture medical treatments, services, or items 
        to be studied under this section that in the aggregate exceeds 
        $10,000 per year. For purposes of the preceding sentence, a 
        financial benefit includes honoraria, fees, stock, or other 
        financial benefit and the current value of the member or close 
        relative's already existing stock holdings, in addition to any 
        direct financial benefit deriving from the results or findings 
        of a study conducted under this section.
    ``(b) Patient-Centered Outcomes Research Institute.--
        ``(1) Establishment.--There is authorized to be established a 
    nonprofit corporation, to be known as the `Patient-Centered 
    Outcomes Research Institute' (referred to in this section as the 
    `Institute') which is neither an agency nor establishment of the 
    United States Government.
        ``(2) Application of provisions.--The Institute shall be 
    subject to the provisions of this section, and, to the extent 
    consistent with this section, to the District of Columbia Nonprofit 
    Corporation Act.
        ``(3) Funding of comparative clinical effectiveness research.--
    For fiscal year 2010 and each subsequent fiscal year, amounts in 
    the Patient-Centered Outcomes Research Trust Fund (referred to in 
    this section as the `PCORTF') under section 9511 of the Internal 
    Revenue Code of 1986 shall be available, without further 
    appropriation, to the Institute to carry out this section.
    ``(c) Purpose.--The purpose of the Institute is to assist patients, 
clinicians, purchasers, and policy-makers in making informed health 
decisions by advancing the quality and relevance of evidence concerning 
the manner in which diseases, disorders, and other health conditions 
can effectively and appropriately be prevented, diagnosed, treated, 
monitored, and managed through research and evidence synthesis that 
considers variations in patient subpopulations, and the dissemination 
of research findings with respect to the relative health outcomes, 
clinical effectiveness, and appropriateness of the medical treatments, 
services, and items described in subsection (a)(2)(B).
    ``(d) Duties.--
        ``(1) Identifying research priorities and establishing research 
    project agenda.--
            ``(A) Identifying research priorities.--The Institute shall 
        identify national priorities for research, taking into account 
        factors of disease incidence, prevalence, and burden in the 
        United States (with emphasis on chronic conditions), gaps in 
        evidence in terms of clinical outcomes, practice variations and 
        health disparities in terms of delivery and outcomes of care, 
        the potential for new evidence to improve patient health, well-
        being, and the quality of care, the effect on national 
        expenditures associated with a health care treatment, strategy, 
        or health conditions, as well as patient needs, outcomes, and 
        preferences, the relevance to patients and clinicians in making 
        informed health decisions, and priorities in the National 
        Strategy for quality care established under section 399H of the 
        Public Health Service Act that are consistent with this 
        section.
            ``(B) Establishing research project agenda.--The Institute 
        shall establish and update a research project agenda for 
        research to address the priorities identified under 
        subparagraph (A), taking into consideration the types of 
        research that might address each priority and the relative 
        value (determined based on the cost of conducting research 
        compared to the potential usefulness of the information 
        produced by research) associated with the different types of 
        research, and such other factors as the Institute determines 
        appropriate.
        ``(2) Carrying out research project agenda.--
            ``(A) Research.--The Institute shall carry out the research 
        project agenda established under paragraph (1)(B) in accordance 
        with the methodological standards adopted under paragraph (9) 
        using methods, including the following:
                ``(i) Systematic reviews and assessments of existing 
            and future research and evidence including original 
            research conducted subsequent to the date of the enactment 
            of this section.
                ``(ii) Primary research, such as randomized clinical 
            trials, molecularly informed trials, and observational 
            studies.
                ``(iii) Any other methodologies recommended by the 
            methodology committee established under paragraph (6) that 
            are adopted by the Board under paragraph (9).
            ``(B) Contracts for the management of funding and conduct 
        of research.--
                ``(i) Contracts.--

                    ``(I) In general.--In accordance with the research 
                project agenda established under paragraph (1)(B), the 
                Institute shall enter into contracts for the management 
                of funding and conduct of research in accordance with 
                the following:

                        ``(aa) Appropriate agencies and 
                    instrumentalities of the Federal Government.
                        ``(bb) Appropriate academic research, private 
                    sector research, or study-conducting entities.

                    ``(II) Preference.--In entering into contracts 
                under subclause (I), the Institute shall give 
                preference to the Agency for Healthcare Research and 
                Quality and the National Institutes of Health, but only 
                if the research to be conducted or managed under such 
                contract is authorized by the governing statutes of 
                such Agency or Institutes.

                ``(ii) Conditions for contracts.--A contract entered 
            into under this subparagraph shall require that the agency, 
            instrumentality, or other entity--

                    ``(I) abide by the transparency and conflicts of 
                interest requirements under subsection (h) that apply 
                to the Institute with respect to the research managed 
                or conducted under such contract;
                    ``(II) comply with the methodological standards 
                adopted under paragraph (9) with respect to such 
                research;
                    ``(III) consult with the expert advisory panels for 
                clinical trials and rare disease appointed under 
                clauses (ii) and (iii), respectively, of paragraph 
                (4)(A);
                    ``(IV) subject to clause (iv), permit a researcher 
                who conducts original research under the contract for 
                the agency, instrumentality, or other entity to have 
                such research published in a peer-reviewed journal or 
                other publication;
                    ``(V) have appropriate processes in place to manage 
                data privacy and meet ethical standards for the 
                research;
                    ``(VI) comply with the requirements of the 
                Institute for making the information available to the 
                public under paragraph (8); and
                    ``(VII) comply with other terms and conditions 
                determined necessary by the Institute to carry out the 
                research agenda adopted under paragraph (2).

                ``(iii) Coverage of copayments or coinsurance.--A 
            contract entered into under this subparagraph may allow for 
            the coverage of copayments or coinsurance, or allow for 
            other appropriate measures, to the extent that such 
            coverage or other measures are necessary to preserve the 
            validity of a research project, such as in the case where 
            the research project must be blinded.
                ``(iv) Requirements for publication of research.--Any 
            research published under clause (ii)(IV) shall be within 
            the bounds of and entirely consistent with the evidence and 
            findings produced under the contract with the Institute 
            under this subparagraph. If the Institute determines that 
            those requirements are not met, the Institute shall not 
            enter into another contract with the agency, 
            instrumentality, or entity which managed or conducted such 
            research for a period determined appropriate by the 
            Institute (but not less than 5 years).
            ``(C) Review and update of evidence.--The Institute shall 
        review and update evidence on a periodic basis as appropriate.
            ``(D) Taking into account potential differences.--Research 
        shall be designed, as appropriate, to take into account the 
        potential for differences in the effectiveness of health care 
        treatments, services, and items as used with various 
        subpopulations, such as racial and ethnic minorities, women, 
        age, and groups of individuals with different comorbidities, 
        genetic and molecular sub-types, or quality of life preferences 
        and include members of such subpopulations as subjects in the 
        research as feasible and appropriate.
            ``(E) Differences in treatment modalities.--Research shall 
        be designed, as appropriate, to take into account different 
        characteristics of treatment modalities that may affect 
        research outcomes, such as the phase of the treatment modality 
        in the innovation cycle and the impact of the skill of the 
        operator of the treatment modality.
        ``(3) Data collection.--
            ``(A) In general.--The Secretary shall, with appropriate 
        safeguards for privacy, make available to the Institute such 
        data collected by the Centers for Medicare & Medicaid Services 
        under the programs under titles XVIII, XIX, and XXI, as well as 
        provide access to the data networks developed under section 
        937(f) of the Public Health Service Act, as the Institute and 
        its contractors may require to carry out this section. The 
        Institute may also request and obtain data from Federal, State, 
        or private entities, including data from clinical databases and 
        registries.
            ``(B) Use of data.--The Institute shall only use data 
        provided to the Institute under subparagraph (A) in accordance 
        with laws and regulations governing the release and use of such 
        data, including applicable confidentiality and privacy 
        standards.
        ``(4) Appointing expert advisory panels.--
            ``(A) Appointment.--
                ``(i) In general.--The Institute may appoint permanent 
            or ad hoc expert advisory panels as determined appropriate 
            to assist in identifying research priorities and 
            establishing the research project agenda under paragraph 
            (1) and for other purposes.
                ``(ii) Expert advisory panels for clinical trials.--The 
            Institute shall appoint expert advisory panels in carrying 
            out randomized clinical trials under the research project 
            agenda under paragraph (2)(A)(ii). Such expert advisory 
            panels shall advise the Institute and the agency, 
            instrumentality, or entity conducting the research on the 
            research question involved and the research design or 
            protocol, including important patient subgroups and other 
            parameters of the research. Such panels shall be available 
            as a resource for technical questions that may arise during 
            the conduct of such research.
                ``(iii) Expert advisory panel for rare disease.--In the 
            case of a research study for rare disease, the Institute 
            shall appoint an expert advisory panel for purposes of 
            assisting in the design of the research study and 
            determining the relative value and feasibility of 
            conducting the research study.
            ``(B) Composition.--An expert advisory panel appointed 
        under subparagraph (A) shall include representatives of 
        practicing and research clinicians, patients, and experts in 
        scientific and health services research, health services 
        delivery, and evidence-based medicine who have experience in 
        the relevant topic, and as appropriate, experts in integrative 
        health and primary prevention strategies. The Institute may 
        include a technical expert of each manufacturer or each medical 
        technology that is included under the relevant topic, project, 
        or category for which the panel is established.
        ``(5) Supporting patient and consumer representatives.--The 
    Institute shall provide support and resources to help patient and 
    consumer representatives effectively participate on the Board and 
    expert advisory panels appointed by the Institute under paragraph 
    (4).
        ``(6) Establishing methodology committee.--
            ``(A) In general.--The Institute shall establish a standing 
        methodology committee to carry out the functions described in 
        subparagraph (C).
            ``(B) Appointment and composition.--The methodology 
        committee established under subparagraph (A) shall be composed 
        of not more than 15 members appointed by the Comptroller 
        General of the United States. Members appointed to the 
        methodology committee shall be experts in their scientific 
        field, such as health services research, clinical research, 
        comparative clinical effectiveness research, biostatistics, 
        genomics, and research methodologies. Stakeholders with such 
        expertise may be appointed to the methodology committee. In 
        addition to the members appointed under the first sentence, the 
        Directors of the National Institutes of Health and the Agency 
        for Healthcare Research and Quality (or their designees) shall 
        each be included as members of the methodology committee.
            ``(C) Functions.--Subject to subparagraph (D), the 
        methodology committee shall work to develop and improve the 
        science and methods of comparative clinical effectiveness 
        research by, not later than 18 months after the establishment 
        of the Institute, directly or through subcontract, developing 
        and periodically updating the following:
                ``(i) Methodological standards for research. Such 
            methodological standards shall provide specific criteria 
            for internal validity, generalizability, feasibility, and 
            timeliness of research and for health outcomes measures, 
            risk adjustment, and other relevant aspects of research and 
            assessment with respect to the design of research. Any 
            methodological standards developed and updated under this 
            subclause shall be scientifically based and include methods 
            by which new information, data, or advances in technology 
            are considered and incorporated into ongoing research 
            projects by the Institute, as appropriate. The process for 
            developing and updating such standards shall include input 
            from relevant experts, stakeholders, and decisionmakers, 
            and shall provide opportunities for public comment. Such 
            standards shall also include methods by which patient 
            subpopulations can be accounted for and evaluated in 
            different types of research. As appropriate, such standards 
            shall build on existing work on methodological standards 
            for defined categories of health interventions and for each 
            of the major categories of comparative clinical 
            effectiveness research methods (determined as of the date 
            of enactment of the Patient Protection and Affordable Care 
            Act).
                ``(ii) A translation table that is designed to provide 
            guidance and act as a reference for the Board to determine 
            research methods that are most likely to address each 
            specific research question.
            ``(D) Consultation and conduct of examinations.--The 
        methodology committee may consult and contract with the 
        Institute of Medicine of the National Academies and academic, 
        nonprofit, or other private and governmental entities with 
        relevant expertise to carry out activities described in 
        subparagraph (C) and may consult with relevant stakeholders to 
        carry out such activities.
            ``(E) Reports.--The methodology committee shall submit 
        reports to the Board on the committee's performance of the 
        functions described in subparagraph (C). Reports shall contain 
        recommendations for the Institute to adopt methodological 
        standards developed and updated by the methodology committee as 
        well as other actions deemed necessary to comply with such 
        methodological standards.
        ``(7) Providing for a peer-review process for primary 
    research.--
            ``(A) In general.--The Institute shall ensure that there is 
        a process for peer review of primary research described in 
        subparagraph (A)(ii) of paragraph (2) that is conducted under 
        such paragraph. Under such process--
                ``(i) evidence from such primary research shall be 
            reviewed to assess scientific integrity and adherence to 
            methodological standards adopted under paragraph (9); and
                ``(ii) a list of the names of individuals contributing 
            to any peer-review process during the preceding year or 
            years shall be made public and included in annual reports 
            in accordance with paragraph (10)(D).
            ``(B) Composition.--Such peer-review process shall be 
        designed in a manner so as to avoid bias and conflicts of 
        interest on the part of the reviewers and shall be composed of 
        experts in the scientific field relevant to the research under 
        review.
            ``(C) Use of existing processes.--
                ``(i) Processes of another entity.--In the case where 
            the Institute enters into a contract or other agreement 
            with another entity for the conduct or management of 
            research under this section, the Institute may utilize the 
            peer-review process of such entity if such process meets 
            the requirements under subparagraphs (A) and (B).
                ``(ii) Processes of appropriate medical journals.--The 
            Institute may utilize the peer-review process of 
            appropriate medical journals if such process meets the 
            requirements under subparagraphs (A) and (B).
        ``(8) Release of research findings.--
            ``(A) In general.--The Institute shall, not later than 90 
        days after the conduct or receipt of research findings under 
        this part, make such research findings available to clinicians, 
        patients, and the general public. The Institute shall ensure 
        that the research findings--
                ``(i) convey the findings of research in a manner that 
            is comprehensible and useful to patients and providers in 
            making health care decisions;
                ``(ii) fully convey findings and discuss considerations 
            specific to certain subpopulations, risk factors, and 
            comorbidities, as appropriate;
                ``(iii) include limitations of the research and what 
            further research may be needed as appropriate;
                ``(iv) not be construed as mandates for practice 
            guidelines, coverage recommendations, payment, or policy 
            recommendations; and
                ``(v) not include any data which would violate the 
            privacy of research participants or any confidentiality 
            agreements made with respect to the use of data under this 
            section.
            ``(B) Definition of research findings.--In this paragraph, 
        the term `research findings' means the results of a study or 
        assessment.
        ``(9) Adoption.--Subject to subsection (h)(1), the Institute 
    shall adopt the national priorities identified under paragraph 
    (1)(A), the research project agenda established under paragraph 
    (1)(B), the methodological standards developed and updated by the 
    methodology committee under paragraph (6)(C)(i), and any peer-
    review process provided under paragraph (7) by majority vote. In 
    the case where the Institute does not adopt such processes in 
    accordance with the preceding sentence, the processes shall be 
    referred to the appropriate staff or entity within the Institute 
    (or, in the case of the methodological standards, the methodology 
    committee) for further review.
        ``(10) Annual reports.--The Institute shall submit an annual 
    report to Congress and the President, and shall make the annual 
    report available to the public. Such report shall contain--
            ``(A) a description of the activities conducted under this 
        section, research priorities identified under paragraph (1)(A) 
        and methodological standards developed and updated by the 
        methodology committee under paragraph (6)(C)(i) that are 
        adopted under paragraph (9) during the preceding year;
            ``(B) the research project agenda and budget of the 
        Institute for the following year;
            ``(C) any administrative activities conducted by the 
        Institute during the preceding year;
            ``(D) the names of individuals contributing to any peer-
        review process under paragraph (7), without identifying them 
        with a particular research project; and
            ``(E) any other relevant information (including information 
        on the membership of the Board, expert advisory panels, 
        methodology committee, and the executive staff of the 
        Institute, any conflicts of interest with respect to these 
        individuals, and any bylaws adopted by the Board during the 
        preceding year).
    ``(e) Administration.--
        ``(1) In general.--Subject to paragraph (2), the Board shall 
    carry out the duties of the Institute.
        ``(2) Nondelegable duties.--The activities described in 
    subsections (d)(1) and (d)(9) are nondelegable.
    ``(f) Board of Governors.--
        ``(1) In general.--The Institute shall have a Board of 
    Governors, which shall consist of the following members:
            ``(A) The Director of Agency for Healthcare Research and 
        Quality (or the Director's designee).
            ``(B) The Director of the National Institutes of Health (or 
        the Director's designee).
            ``(C) Seventeen members appointed, not later than 6 months 
        after the date of enactment of this section, by the Comptroller 
        General of the United States as follows:
                ``(i) 3 members representing patients and health care 
            consumers.
                ``(ii) 5 members representing physicians and providers, 
            including at least 1 surgeon, nurse, State-licensed 
            integrative health care practitioner, and representative of 
            a hospital.
                ``(iii) 3 members representing private payers, of whom 
            at least 1 member shall represent health insurance issuers 
            and at least 1 member shall represent employers who self-
            insure employee benefits.
                ``(iv) 3 members representing pharmaceutical, device, 
            and diagnostic manufacturers or developers.
                ``(v) 1 member representing quality improvement or 
            independent health service researchers.
                ``(vi) 2 members representing the Federal Government or 
            the States, including at least 1 member representing a 
            Federal health program or agency.
        ``(2) Qualifications.--The Board shall represent a broad range 
    of perspectives and collectively have scientific expertise in 
    clinical health sciences research, including epidemiology, 
    decisions sciences, health economics, and statistics. In appointing 
    the Board, the Comptroller General of the United States shall 
    consider and disclose any conflicts of interest in accordance with 
    subsection (h)(4)(B). Members of the Board shall be recused from 
    relevant Institute activities in the case where the member (or an 
    immediate family member of such member) has a real conflict of 
    interest directly related to the research project or the matter 
    that could affect or be affected by such participation.
        ``(3) Terms; vacancies.--A member of the Board shall be 
    appointed for a term of 6 years, except with respect to the members 
    first appointed, whose terms of appointment shall be staggered 
    evenly over 2-year increments. No individual shall be appointed to 
    the Board for more than 2 terms. Vacancies shall be filled in the 
    same manner as the original appointment was made.
        ``(4) Chairperson and vice-chairperson.--The Comptroller 
    General of the United States shall designate a Chairperson and Vice 
    Chairperson of the Board from among the members of the Board. Such 
    members shall serve as Chairperson or Vice Chairperson for a period 
    of 3 years.
        ``(5) Compensation.--Each member of the Board who is not an 
    officer or employee of the Federal Government shall be entitled to 
    compensation (equivalent to the rate provided for level IV of the 
    Executive Schedule under section 5315 of title 5, United States 
    Code) and expenses incurred while performing the duties of the 
    Board. An officer or employee of the Federal government who is a 
    member of the Board shall be exempt from compensation.
        ``(6) Director and staff; experts and consultants.--The Board 
    may employ and fix the compensation of an Executive Director and 
    such other personnel as may be necessary to carry out the duties of 
    the Institute and may seek such assistance and support of, or 
    contract with, experts and consultants that may be necessary for 
    the performance of the duties of the Institute.
        ``(7) Meetings and hearings.--The Board shall meet and hold 
    hearings at the call of the Chairperson or a majority of its 
    members. Meetings not solely concerning matters of personnel shall 
    be advertised at least 7 days in advance and open to the public. A 
    majority of the Board members shall constitute a quorum, but a 
    lesser number of members may meet and hold hearings.
    ``(g) Financial and Governmental Oversight.--
        ``(1) Contract for audit.--The Institute shall provide for the 
    conduct of financial audits of the Institute on an annual basis by 
    a private entity with expertise in conducting financial audits.
        ``(2) Review and annual reports.--
            ``(A) Review.--The Comptroller General of the United States 
        shall review the following:
                ``(i) Not less frequently than on an annual basis, the 
            financial audits conducted under paragraph (1).
                ``(ii) Not less frequently than every 5 years, the 
            processes established by the Institute, including the 
            research priorities and the conduct of research projects, 
            in order to determine whether information produced by such 
            research projects is objective and credible, is produced in 
            a manner consistent with the requirements under this 
            section, and is developed through a transparent process.
                ``(iii) Not less frequently than every 5 years, the 
            dissemination and training activities and data networks 
            established under section 937 of the Public Health Service 
            Act, including the methods and products used to disseminate 
            research, the types of training conducted and supported, 
            and the types and functions of the data networks 
            established, in order to determine whether the activities 
            and data are produced in a manner consistent with the 
            requirements under such section.
                ``(iv) Not less frequently than every 5 years, the 
            overall effectiveness of activities conducted under this 
            section and the dissemination, training, and capacity 
            building activities conducted under section 937 of the 
            Public Health Service Act. Such review shall include an 
            analysis of the extent to which research findings are used 
            by health care decision-makers, the effect of the 
            dissemination of such findings on reducing practice 
            variation and disparities in health care, and the effect of 
            the research conducted and disseminated on innovation and 
            the health care economy of the United States.
                ``(v) Not later than 8 years after the date of 
            enactment of this section, the adequacy and use of the 
            funding for the Institute and the activities conducted 
            under section 937 of the Public Health Service Act, 
            including a determination as to whether, based on the 
            utilization of research findings by public and private 
            payers, funding sources for the Patient-Centered Outcomes 
            Research Trust Fund under section 9511 of the Internal 
            Revenue Code of 1986 are appropriate and whether such 
            sources of funding should be continued or adjusted.
            ``(B) Annual reports.--Not later than April 1 of each year, 
        the Comptroller General of the United States shall submit to 
        Congress a report containing the results of the review 
        conducted under subparagraph (A) with respect to the preceding 
        year (or years, if applicable), together with recommendations 
        for such legislation and administrative action as the 
        Comptroller General determines appropriate.
    ``(h) Ensuring Transparency, Credibility, and Access.--The 
Institute shall establish procedures to ensure that the following 
requirements for ensuring transparency, credibility, and access are 
met:
        ``(1) Public comment periods.--The Institute shall provide for 
    a public comment period of not less than 45 days and not more than 
    60 days prior to the adoption under subsection (d)(9) of the 
    national priorities identified under subsection (d)(1)(A), the 
    research project agenda established under subsection (d)(1)(B), the 
    methodological standards developed and updated by the methodology 
    committee under subsection (d)(6)(C)(i), and the peer-review 
    process provided under paragraph (7), and after the release of 
    draft findings with respect to systematic reviews of existing 
    research and evidence.
        ``(2) Additional forums.--The Institute shall support forums to 
    increase public awareness and obtain and incorporate public input 
    and feedback through media (such as an Internet website) on 
    research priorities, research findings, and other duties, 
    activities, or processes the Institute determines appropriate.
        ``(3) Public availability.--The Institute shall make available 
    to the public and disclose through the official public Internet 
    website of the Institute the following:
            ``(A) Information contained in research findings as 
        specified in subsection (d)(9).
            ``(B) The process and methods for the conduct of research, 
        including the identity of the entity and the investigators 
        conducing such research and any conflicts of interests of such 
        parties, any direct or indirect links the entity has to 
        industry, and research protocols, including measures taken, 
        methods of research and analysis, research results, and such 
        other information the Institute determines appropriate) 
        concurrent with the release of research findings.
            ``(C) Notice of public comment periods under paragraph (1), 
        including deadlines for public comments.
            ``(D) Subsequent comments received during each of the 
        public comment periods.
            ``(E) In accordance with applicable laws and processes and 
        as the Institute determines appropriate, proceedings of the 
        Institute.
        ``(4) Disclosure of conflicts of interest.--
            ``(A) In general.--A conflict of interest shall be 
        disclosed in the following manner:
                ``(i) By the Institute in appointing members to an 
            expert advisory panel under subsection (d)(4), in selecting 
            individuals to contribute to any peer-review process under 
            subsection (d)(7), and for employment as executive staff of 
            the Institute.
                ``(ii) By the Comptroller General in appointing members 
            of the methodology committee under subsection (d)(6);
                ``(iii) By the Institute in the annual report under 
            subsection (d)(10), except that, in the case of individuals 
            contributing to any such peer review process, such 
            description shall be in a manner such that those 
            individuals cannot be identified with a particular research 
            project.
            ``(B) Manner of disclosure.--Conflicts of interest shall be 
        disclosed as described in subparagraph (A) as soon as 
        practicable on the Internet web site of the Institute and of 
        the Government Accountability Office. The information disclosed 
        under the preceding sentence shall include the type, nature, 
        and magnitude of the interests of the individual involved, 
        except to the extent that the individual recuses himself or 
        herself from participating in the consideration of or any other 
        activity with respect to the study as to which the potential 
        conflict exists.
    ``(i) Rules.--The Institute, its Board or staff, shall be 
prohibited from accepting gifts, bequeaths, or donations of services or 
property. In addition, the Institute shall be prohibited from 
establishing a corporation or generating revenues from activities other 
than as provided under this section.
    ``(j) Rules of Construction.--
        ``(1) Coverage.--Nothing in this section shall be construed--
            ``(A) to permit the Institute to mandate coverage, 
        reimbursement, or other policies for any public or private 
        payer; or
            ``(B) as preventing the Secretary from covering the routine 
        costs of clinical care received by an individual entitled to, 
        or enrolled for, benefits under title XVIII, XIX, or XXI in the 
        case where such individual is participating in a clinical trial 
        and such costs would otherwise be covered under such title with 
        respect to the beneficiary.''.
    (b) Dissemination and Building Capacity for Research.--Title IX of 
the Public Health Service Act (42 U.S.C. 299 et seq.), as amended by 
section 3606, is further amended by inserting after section 936 the 
following:

``SEC. 937. DISSEMINATION AND BUILDING CAPACITY FOR RESEARCH.

    ``(a) In General.--
        ``(1) Dissemination.--The Office of Communication and Knowledge 
    Transfer (referred to in this section as the `Office') at the 
    Agency for Healthcare Research and Quality (or any other relevant 
    office designated by Agency for Healthcare Research and Quality), 
    in consultation with the National Institutes of Health, shall 
    broadly disseminate the research findings that are published by the 
    Patient Centered Outcomes Research Institute established under 
    section 1181(b) of the Social Security Act (referred to in this 
    section as the `Institute') and other government-funded research 
    relevant to comparative clinical effectiveness research. The Office 
    shall create informational tools that organize and disseminate 
    research findings for physicians, health care providers, patients, 
    payers, and policy makers. The Office shall also develop a publicly 
    available resource database that collects and contains government-
    funded evidence and research from public, private, not-for profit, 
    and academic sources.
        ``(2) Requirements.--The Office shall provide for the 
    dissemination of the Institute's research findings and government-
    funded research relevant to comparative clinical effectiveness 
    research to physicians, health care providers, patients, vendors of 
    health information technology focused on clinical decision support, 
    appropriate professional associations, and Federal and private 
    health plans. Materials, forums, and media used to disseminate the 
    findings, informational tools, and resource databases shall--
            ``(A) include a description of considerations for specific 
        subpopulations, the research methodology, and the limitations 
        of the research, and the names of the entities, agencies, 
        instrumentalities, and individuals who conducted any research 
        which was published by the Institute; and
            ``(B) not be construed as mandates, guidelines, or 
        recommendations for payment, coverage, or treatment.
    ``(b) Incorporation of Research Findings.--The Office, in 
consultation with relevant medical and clinical associations, shall 
assist users of health information technology focused on clinical 
decision support to promote the timely incorporation of research 
findings disseminated under subsection (a) into clinical practices and 
to promote the ease of use of such incorporation.
    ``(c) Feedback.--The Office shall establish a process to receive 
feedback from physicians, health care providers, patients, and vendors 
of health information technology focused on clinical decision support, 
appropriate professional associations, and Federal and private health 
plans about the value of the information disseminated and the 
assistance provided under this section.
    ``(d) Rule of Construction.--Nothing in this section shall preclude 
the Institute from making its research findings publicly available as 
required under section 1181(d)(8) of the Social Security Act.
    ``(e) Training of Researchers.--The Agency for Health Care Research 
and Quality, in consultation with the National Institutes of Health, 
shall build capacity for comparative clinical effectiveness research by 
establishing a grant program that provides for the training of 
researchers in the methods used to conduct such research, including 
systematic reviews of existing research and primary research such as 
clinical trials. At a minimum, such training shall be in methods that 
meet the methodological standards adopted under section 1181(d)(9) of 
the Social Security Act.
    ``(f) Building Data for Research.--The Secretary shall provide for 
the coordination of relevant Federal health programs to build data 
capacity for comparative clinical effectiveness research, including the 
development and use of clinical registries and health outcomes research 
data networks, in order to develop and maintain a comprehensive, 
interoperable data network to collect, link, and analyze data on 
outcomes and effectiveness from multiple sources, including electronic 
health records.
    ``(g) Authority To Contract With the Institute.--Agencies and 
instrumentalities of the Federal Government may enter into agreements 
with the Institute, and accept and retain funds, for the conduct and 
support of research described in this part, provided that the research 
to be conducted or supported under such agreements is authorized under 
the governing statutes of such agencies and instrumentalities.''.
    (c) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a), is amended by adding at the end the following 
new section:


   ``limitations on certain uses of comparative clinical effectiveness 
                                research

    ``Sec. 1182.  (a) The Secretary may only use evidence and findings 
from research conducted under section 1181 to make a determination 
regarding coverage under title XVIII if such use is through an 
iterative and transparent process which includes public comment and 
considers the effect on subpopulations.
    ``(b) Nothing in section 1181 shall be construed as--
        ``(1) superceding or modifying the coverage of items or 
    services under title XVIII that the Secretary determines are 
    reasonable and necessary under section 1862(l)(1); or
        ``(2) authorizing the Secretary to deny coverage of items or 
    services under such title solely on the basis of comparative 
    clinical effectiveness research.
    ``(c)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 
1181 in determining coverage, reimbursement, or incentive programs 
under title XVIII in a manner that treats extending the life of an 
elderly, disabled, or terminally ill individual as of lower value than 
extending the life of an individual who is younger, nondisabled, or not 
terminally ill.
    ``(2) Paragraph (1) shall not be construed as preventing the 
Secretary from using evidence or findings from such comparative 
clinical effectiveness research in determining coverage, reimbursement, 
or incentive programs under title XVIII based upon a comparison of the 
difference in the effectiveness of alternative treatments in extending 
an individual's life due to the individual's age, disability, or 
terminal illness.
    ``(d)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 
1181 in determining coverage, reimbursement, or incentive programs 
under title XVIII in a manner that precludes, or with the intent to 
discourage, an individual from choosing a health care treatment based 
on how the individual values the tradeoff between extending the length 
of their life and the risk of disability.
    ``(2)(A) Paragraph (1) shall not be construed to--
        ``(i) limit the application of differential copayments under 
    title XVIII based on factors such as cost or type of service; or
        ``(ii) prevent the Secretary from using evidence or findings 
    from such comparative clinical effectiveness research in 
    determining coverage, reimbursement, or incentive programs under 
    such title based upon a comparison of the difference in the 
    effectiveness of alternative health care treatments in extending an 
    individual's life due to that individual's age, disability, or 
    terminal illness.
    ``(3) Nothing in the provisions of, or amendments made by the 
Patient Protection and Affordable Care Act, shall be construed to limit 
comparative clinical effectiveness research or any other research, 
evaluation, or dissemination of information concerning the likelihood 
that a health care treatment will result in disability.
    ``(e) The Patient-Centered Outcomes Research Institute established 
under section 1181(b)(1) shall not develop or employ a dollars-per-
quality adjusted life year (or similar measure that discounts the value 
of a life because of an individual's disability) as a threshold to 
establish what type of health care is cost effective or recommended. 
The Secretary shall not utilize such an adjusted life year (or such a 
similar measure) as a threshold to determine coverage, reimbursement, 
or incentive programs under title XVIII.''.
    (d) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a) and amended by subsection (c), is amended by 
adding at the end the following new section:


   ``trust fund transfers to patient-centered outcomes research trust 
                                  fund

    ``Sec. 1183.  (a) In General.--The Secretary shall provide for the 
transfer, from the Federal Hospital Insurance Trust Fund under section 
1817 and the Federal Supplementary Medical Insurance Trust Fund under 
section 1841, in proportion (as estimated by the Secretary) to the 
total expenditures during such fiscal year that are made under title 
XVIII from the respective trust fund, to the Patient-Centered Outcomes 
Research Trust Fund (referred to in this section as the `PCORTF') under 
section 9511 of the Internal Revenue Code of 1986, of the following:
        ``(1) For fiscal year 2013, an amount equal to $1 multiplied by 
    the average number of individuals entitled to benefits under part 
    A, or enrolled under part B, of title XVIII during such fiscal 
    year.
        ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 2018, 
    and 2019, an amount equal to $2 multiplied by the average number of 
    individuals entitled to benefits under part A, or enrolled under 
    part B, of title XVIII during such fiscal year.
    ``(b) Adjustments for Increases in Health Care Spending.--In the 
case of any fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a)(2) for such fiscal year shall be 
equal to the sum of such dollar amount for the previous fiscal year 
(determined after the application of this subsection), plus an amount 
equal to the product of--
        ``(1) such dollar amount for the previous fiscal year, 
    multiplied by
        ``(2) the percentage increase in the projected per capita 
    amount of National Health Expenditures, as most recently published 
    by the Secretary before the beginning of the fiscal year.''.
    (e) Patient-Centered Outcomes Research Trust Fund; Financing for 
Trust Fund.--
        (1) Establishment of trust fund.--
            (A) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to establishment of trust funds) 
        is amended by adding at the end the following new section:

``SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Patient-Centered 
Outcomes Research Trust Fund' (hereafter in this section referred to as 
the `PCORTF'), consisting of such amounts as may be appropriated or 
credited to such Trust Fund as provided in this section and section 
9602(b).
    ``(b) Transfers to Fund.--
        ``(1) Appropriation.--There are hereby appropriated to the 
    Trust Fund the following:
            ``(A) For fiscal year 2010, $10,000,000.
            ``(B) For fiscal year 2011, $50,000,000.
            ``(C) For fiscal year 2012, $150,000,000.
            ``(D) For fiscal year 2013--
                ``(i) an amount equivalent to the net revenues received 
            in the Treasury from the fees imposed under subchapter B of 
            chapter 34 (relating to fees on health insurance and self-
            insured plans) for such fiscal year; and
                ``(ii) $150,000,000.
            ``(E) For each of fiscal years 2014, 2015, 2016, 2017, 
        2018, and 2019--
                ``(i) an amount equivalent to the net revenues received 
            in the Treasury from the fees imposed under subchapter B of 
            chapter 34 (relating to fees on health insurance and self-
            insured plans) for such fiscal year; and
                ``(ii) $150,000,000.
        The amounts appropriated under subparagraphs (A), (B), (C), 
        (D)(ii), and (E)(ii) shall be transferred from the general fund 
        of the Treasury, from funds not otherwise appropriated.
        ``(2) Trust fund transfers.--In addition to the amounts 
    appropriated under paragraph (1), there shall be credited to the 
    PCORTF the amounts transferred under section 1183 of the Social 
    Security Act.
        ``(3) Limitation on transfers to pcortf.--No amount may be 
    appropriated or transferred to the PCORTF on and after the date of 
    any expenditure from the PCORTF which is not an expenditure 
    permitted under this section. The determination of whether an 
    expenditure is so permitted shall be made without regard to--
            ``(A) any provision of law which is not contained or 
        referenced in this chapter or in a revenue Act, and
            ``(B) whether such provision of law is a subsequently 
        enacted provision or directly or indirectly seeks to waive the 
        application of this paragraph.
    ``(c) Trustee.--The Secretary of the Treasury shall be a trustee of 
the PCORTF.
    ``(d) Expenditures From Fund.--
        ``(1) Amounts available to the patient-centered outcomes 
    research institute.--Subject to paragraph (2), amounts in the 
    PCORTF are available, without further appropriation, to the 
    Patient-Centered Outcomes Research Institute established under 
    section 1181(b) of the Social Security Act for carrying out part D 
    of title XI of the Social Security Act (as in effect on the date of 
    enactment of such Act).
        ``(2) Transfer of funds.--
            ``(A) In general.--The trustee of the PCORTF shall provide 
        for the transfer from the PCORTF of 20 percent of the amounts 
        appropriated or credited to the PCORTF for each of fiscal years 
        2011 through 2019 to the Secretary of Health and Human Services 
        to carry out section 937 of the Public Health Service Act.
            ``(B) Availability.--Amounts transferred under subparagraph 
        (A) shall remain available until expended.
            ``(C) Requirements.--Of the amounts transferred under 
        subparagraph (A) with respect to a fiscal year, the Secretary 
        of Health and Human Services shall distribute--
                ``(i) 80 percent to the Office of Communication and 
            Knowledge Transfer of the Agency for Healthcare Research 
            and Quality (or any other relevant office designated by 
            Agency for Healthcare Research and Quality) to carry out 
            the activities described in section 937 of the Public 
            Health Service Act; and
                ``(ii) 20 percent to the Secretary to carry out the 
            activities described in such section 937.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary of the Treasury 
based on the excess of--
        ``(1) the fees received in the Treasury under subchapter B of 
    chapter 34, over
        ``(2) the decrease in the tax imposed by chapter 1 resulting 
    from the fees imposed by such subchapter.
    ``(f) Termination.--No amounts shall be available for expenditure 
from the PCORTF after September 30, 2019, and any amounts in such Trust 
Fund after such date shall be transferred to the general fund of the 
Treasury.''.
            (B) Clerical amendment.--The table of sections for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end the following new item:
``Sec. 9511. Patient-centered outcomes research trust fund.''.
        (2) Financing for fund from fees on insured and self-insured 
    health plans.--
            (A) General rule.--Chapter 34 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subchapter:

         ``Subchapter B--Insured and Self-Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Self-insured health plans.
``Sec. 4377. Definitions and special rules.

``SEC. 4375. HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year ending after September 30, 
2012, a fee equal to the product of $2 ($1 in the case of policy years 
ending during fiscal year 2013) multiplied by the average number of 
lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall 
be paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section:
        ``(1) In general.--Except as otherwise provided in this 
    section, the term `specified health insurance policy' means any 
    accident or health insurance policy (including a policy under a 
    group health plan) issued with respect to individuals residing in 
    the United States.
        ``(2) Exemption for certain policies.--The term `specified 
    health insurance policy' does not include any insurance if 
    substantially all of its coverage is of excepted benefits described 
    in section 9832(c).
        ``(3) Treatment of prepaid health coverage arrangements.--
            ``(A) In general.--In the case of any arrangement described 
        in subparagraph (B), such arrangement shall be treated as a 
        specified health insurance policy, and the person referred to 
        in such subparagraph shall be treated as the issuer.
            ``(B) Description of arrangements.--An arrangement is 
        described in this subparagraph if under such arrangement fixed 
        payments or premiums are received as consideration for any 
        person's agreement to provide or arrange for the provision of 
        accident or health coverage to residents of the United States, 
        regardless of how such coverage is provided or arranged to be 
        provided.
    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any policy year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) 
for such policy year shall be equal to the sum of such dollar amount 
for policy years ending in the previous fiscal year (determined after 
the application of this subsection), plus an amount equal to the 
product of--
        ``(1) such dollar amount for policy years ending in the 
    previous fiscal year, multiplied by
        ``(2) the percentage increase in the projected per capita 
    amount of National Health Expenditures, as most recently published 
    by the Secretary before the beginning of the fiscal year.
    ``(e) Termination.--This section shall not apply to policy years 
ending after September 30, 2019.

``SEC. 4376. SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-
insured health plan for each plan year ending after September 30, 2012, 
there is hereby imposed a fee equal to $2 ($1 in the case of plan years 
ending during fiscal year 2013) multiplied by the average number of 
lives covered under the plan.
    ``(b) Liability for Fee.--
        ``(1) In general.--The fee imposed by subsection (a) shall be 
    paid by the plan sponsor.
        ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
    `plan sponsor' means--
            ``(A) the employer in the case of a plan established or 
        maintained by a single employer,
            ``(B) the employee organization in the case of a plan 
        established or maintained by an employee organization,
            ``(C) in the case of--
                ``(i) a plan established or maintained by 2 or more 
            employers or jointly by 1 or more employers and 1 or more 
            employee organizations,
                ``(ii) a multiple employer welfare arrangement, or
                ``(iii) a voluntary employees' beneficiary association 
            described in section 501(c)(9), the association, committee, 
            joint board of trustees, or other similar group of 
            representatives of the parties who establish or maintain 
            the plan, or
            ``(D) the cooperative or association described in 
        subsection (c)(2)(F) in the case of a plan established or 
        maintained by such a cooperative or association.
    ``(c) Applicable Self-insured Health Plan.--For purposes of this 
section, the term `applicable self-insured health plan' means any plan 
for providing accident or health coverage if--
        ``(1) any portion of such coverage is provided other than 
    through an insurance policy, and
        ``(2) such plan is established or maintained--
            ``(A) by 1 or more employers for the benefit of their 
        employees or former employees,
            ``(B) by 1 or more employee organizations for the benefit 
        of their members or former members,
            ``(C) jointly by 1 or more employers and 1 or more employee 
        organizations for the benefit of employees or former employees,
            ``(D) by a voluntary employees' beneficiary association 
        described in section 501(c)(9),
            ``(E) by any organization described in section 501(c)(6), 
        or
            ``(F) in the case of a plan not described in the preceding 
        subparagraphs, by a multiple employer welfare arrangement (as 
        defined in section 3(40) of Employee Retirement Income Security 
        Act of 1974), a rural electric cooperative (as defined in 
        section 3(40)(B)(iv) of such Act), or a rural telephone 
        cooperative association (as defined in section 3(40)(B)(v) of 
        such Act).
    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any plan year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) 
for such plan year shall be equal to the sum of such dollar amount for 
plan years ending in the previous fiscal year (determined after the 
application of this subsection), plus an amount equal to the product 
of--
        ``(1) such dollar amount for plan years ending in the previous 
    fiscal year, multiplied by
        ``(2) the percentage increase in the projected per capita 
    amount of National Health Expenditures, as most recently published 
    by the Secretary before the beginning of the fiscal year.
    ``(e) Termination.--This section shall not apply to plan years 
ending after September 30, 2019.

``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
        ``(1) Accident and health coverage.--The term `accident and 
    health coverage' means any coverage which, if provided by an 
    insurance policy, would cause such policy to be a specified health 
    insurance policy (as defined in section 4375(c)).
        ``(2) Insurance policy.--The term `insurance policy' means any 
    policy or other instrument whereby a contract of insurance is 
    issued, renewed, or extended.
        ``(3) United states.--The term `United States' includes any 
    possession of the United States.
    ``(b) Treatment of Governmental Entities.--
        ``(1) In general.--For purposes of this subchapter--
            ``(A) the term `person' includes any governmental entity, 
        and
            ``(B) notwithstanding any other law or rule of law, 
        governmental entities shall not be exempt from the fees imposed 
        by this subchapter except as provided in paragraph (2).
        ``(2) Treatment of exempt governmental programs.--In the case 
    of an exempt governmental program, no fee shall be imposed under 
    section 4375 or section 4376 on any covered life under such 
    program.
        ``(3) Exempt governmental program defined.--For purposes of 
    this subchapter, the term `exempt governmental program' means--
            ``(A) any insurance program established under title XVIII 
        of the Social Security Act,
            ``(B) the medical assistance program established by title 
        XIX or XXI of the Social Security Act,
            ``(C) any program established by Federal law for providing 
        medical care (other than through insurance policies) to 
        individuals (or the spouses and dependents thereof) by reason 
        of such individuals being members of the Armed Forces of the 
        United States or veterans, and
            ``(D) any program established by Federal law for providing 
        medical care (other than through insurance policies) to members 
        of Indian tribes (as defined in section 4(d) of the Indian 
        Health Care Improvement Act).
    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''.
            (B) Clerical amendments.--
                (i) Chapter 34 of such Code is amended by striking the 
            chapter heading and inserting the following:

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

           ``subchapter a. policies issued by foreign insurers

          ``subchapter b. insured and self-insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

                (ii) The table of chapters for subtitle D of such Code 
            is amended by striking the item relating to chapter 34 and 
            inserting the following new item:

          ``Chapter 34--Taxes on Certain Insurance Policies''.

    (f) Tax-exempt Status of the Patient-centered Outcomes Research 
Institute.--Subsection 501(l) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
        ``(4) The Patient-Centered Outcomes Research Institute 
    established under section 1181(b) of the Social Security Act.''.

SEC. 6302. FEDERAL COORDINATING COUNCIL FOR COMPARATIVE EFFECTIVENESS 
              RESEARCH.

    Notwithstanding any other provision of law, the Federal 
Coordinating Council for Comparative Effectiveness Research established 
under section 804 of Division A of the American Recovery and 
Reinvestment Act of 2009 (42 U.S.C. 299b-8), including the requirement 
under subsection (e)(2) of such section, shall terminate on the date of 
enactment of this Act.

 Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions

SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER 
              MEDICARE, MEDICAID, AND CHIP.

    (a) Medicare.--Section 1866(j) of the Social Security Act (42 
U.S.C. 1395cc(j)) is amended--
        (1) in paragraph (1)(A), by adding at the end the following: 
    ``Such process shall include screening of providers and suppliers 
    in accordance with paragraph (2), a provisional period of enhanced 
    oversight in accordance with paragraph (3), disclosure requirements 
    in accordance with paragraph (4), the imposition of temporary 
    enrollment moratoria in accordance with paragraph (5), and the 
    establishment of compliance programs in accordance with paragraph 
    (6).'';
        (2) by redesignating paragraph (2) as paragraph (7); and
        (3) by inserting after paragraph (1) the following:
        ``(2) Provider screening.--
            ``(A) Procedures.--Not later than 180 days after the date 
        of enactment of this paragraph, the Secretary, in consultation 
        with the Inspector General of the Department of Health and 
        Human Services, shall establish procedures under which 
        screening is conducted with respect to providers of medical or 
        other items or services and suppliers under the program under 
        this title, the Medicaid program under title XIX, and the CHIP 
        program under title XXI.
            ``(B) Level of screening.--The Secretary shall determine 
        the level of screening conducted under this paragraph according 
        to the risk of fraud, waste, and abuse, as determined by the 
        Secretary, with respect to the category of provider of medical 
        or other items or services or supplier. Such screening--
                ``(i) shall include a licensure check, which may 
            include such checks across States; and
                ``(ii) may, as the Secretary determines appropriate 
            based on the risk of fraud, waste, and abuse described in 
            the preceding sentence, include--

                    ``(I) a criminal background check;
                    ``(II) fingerprinting;
                    ``(III) unscheduled and unannounced site visits, 
                including preenrollment site visits;
                    ``(IV) database checks (including such checks 
                across States); and
                    ``(V) such other screening as the Secretary 
                determines appropriate.

            ``(C) Application fees.--
                ``(i) Individual providers.--Except as provided in 
            clause (iii), the Secretary shall impose a fee on each 
            individual provider of medical or other items or services 
            or supplier (such as a physician, physician assistant, 
            nurse practitioner, or clinical nurse specialist) with 
            respect to which screening is conducted under this 
            paragraph in an amount equal to--

                    ``(I) for 2010, $200; and
                    ``(II) for 2011 and each subsequent year, the 
                amount determined under this clause for the preceding 
                year, adjusted by the percentage change in the consumer 
                price index for all urban consumers (all items; United 
                States city average) for the 12-month period ending 
                with June of the previous year.

                ``(ii) Institutional providers.--Except as provided in 
            clause (iii), the Secretary shall impose a fee on each 
            institutional provider of medical or other items or 
            services or supplier (such as a hospital or skilled nursing 
            facility) with respect to which screening is conducted 
            under this paragraph in an amount equal to--

                    ``(I) for 2010, $500; and
                    ``(II) for 2011 and each subsequent year, the 
                amount determined under this clause for the preceding 
                year, adjusted by the percentage change in the consumer 
                price index for all urban consumers (all items; United 
                States city average) for the 12-month period ending 
                with June of the previous year.

                ``(iii) Hardship exception; waiver for certain medicaid 
            providers.--The Secretary may, on a case-by-case basis, 
            exempt a provider of medical or other items or services or 
            supplier from the imposition of an application fee under 
            this subparagraph if the Secretary determines that the 
            imposition of the application fee would result in a 
            hardship. The Secretary may waive the application fee under 
            this subparagraph for providers enrolled in a State 
            Medicaid program for whom the State demonstrates that 
            imposition of the fee would impede beneficiary access to 
            care.
                ``(iv) Use of funds.--Amounts collected as a result of 
            the imposition of a fee under this subparagraph shall be 
            used by the Secretary for program integrity efforts, 
            including to cover the costs of conducting screening under 
            this paragraph and to carry out this subsection and section 
            1128J.
            ``(D) Application and enforcement.--
                ``(i) New providers of services and suppliers.--The 
            screening under this paragraph shall apply, in the case of 
            a provider of medical or other items or services or 
            supplier who is not enrolled in the program under this 
            title, title XIX , or title XXI as of the date of enactment 
            of this paragraph, on or after the date that is 1 year 
            after such date of enactment.
                ``(ii) Current providers of services and suppliers.--
            The screening under this paragraph shall apply, in the case 
            of a provider of medical or other items or services or 
            supplier who is enrolled in the program under this title, 
            title XIX, or title XXI as of such date of enactment, on or 
            after the date that is 2 years after such date of 
            enactment.
                ``(iii) Revalidation of enrollment.--Effective 
            beginning on the date that is 180 days after such date of 
            enactment, the screening under this paragraph shall apply 
            with respect to the revalidation of enrollment of a 
            provider of medical or other items or services or supplier 
            in the program under this title, title XIX, or title XXI.
                ``(iv) Limitation on enrollment and revalidation of 
            enrollment.--In no case may a provider of medical or other 
            items or services or supplier who has not been screened 
            under this paragraph be initially enrolled or reenrolled in 
            the program under this title, title XIX, or title XXI on or 
            after the date that is 3 years after such date of 
            enactment.
            ``(E) Expedited rulemaking.--The Secretary may promulgate 
        an interim final rule to carry out this paragraph.
        ``(3) Provisional period of enhanced oversight for new 
    providers of services and suppliers.--
            ``(A) In general.--The Secretary shall establish procedures 
        to provide for a provisional period of not less than 30 days 
        and not more than 1 year during which new providers of medical 
        or other items or services and suppliers, as the Secretary 
        determines appropriate, including categories of providers or 
        suppliers, would be subject to enhanced oversight, such as 
        prepayment review and payment caps, under the program under 
        this title, the Medicaid program under title XIX. and the CHIP 
        program under title XXI.
            ``(B) Implementation.--The Secretary may establish by 
        program instruction or otherwise the procedures under this 
        paragraph.
        ``(4) Increased disclosure requirements.--
            ``(A) Disclosure.--A provider of medical or other items or 
        services or supplier who submits an application for enrollment 
        or revalidation of enrollment in the program under this title, 
        title XIX, or title XXI on or after the date that is 1 year 
        after the date of enactment of this paragraph shall disclose 
        (in a form and manner and at such time as determined by the 
        Secretary) any current or previous affiliation (directly or 
        indirectly) with a provider of medical or other items or 
        services or supplier that has uncollected debt, has been or is 
        subject to a payment suspension under a Federal health care 
        program (as defined in section 1128B(f)), has been excluded 
        from participation under the program under this title, the 
        Medicaid program under title XIX, or the CHIP program under 
        title XXI, or has had its billing privileges denied or revoked.
            ``(B) Authority to deny enrollment.--If the Secretary 
        determines that such previous affiliation poses an undue risk 
        of fraud, waste, or abuse, the Secretary may deny such 
        application. Such a denial shall be subject to appeal in 
        accordance with paragraph (7).
        ``(5) Authority to adjust payments of providers of services and 
    suppliers with the same tax identification number for past-due 
    obligations.--
            ``(A) In general.--Notwithstanding any other provision of 
        this title, in the case of an applicable provider of services 
        or supplier, the Secretary may make any necessary adjustments 
        to payments to the applicable provider of services or supplier 
        under the program under this title in order to satisfy any 
        past-due obligations described in subparagraph (B)(ii) of an 
        obligated provider of services or supplier.
            ``(B) Definitions.--In this paragraph:
                ``(i) In general.--The term `applicable provider of 
            services or supplier' means a provider of services or 
            supplier that has the same taxpayer identification number 
            assigned under section 6109 of the Internal Revenue Code of 
            1986 as is assigned to the obligated provider of services 
            or supplier under such section, regardless of whether the 
            applicable provider of services or supplier is assigned a 
            different billing number or national provider 
            identification number under the program under this title 
            than is assigned to the obligated provider of services or 
            supplier.
                ``(ii) Obligated provider of services or supplier.--The 
            term `obligated provider of services or supplier' means a 
            provider of services or supplier that owes a past-due 
            obligation under the program under this title (as 
            determined by the Secretary).
        ``(6) Temporary moratorium on enrollment of new providers.--
            ``(A) In general.--The Secretary may impose a temporary 
        moratorium on the enrollment of new providers of services and 
        suppliers, including categories of providers of services and 
        suppliers, in the program under this title, under the Medicaid 
        program under title XIX, or under the CHIP program under title 
        XXI if the Secretary determines such moratorium is necessary to 
        prevent or combat fraud, waste, or abuse under either such 
        program.
            ``(B) Limitation on review.--There shall be no judicial 
        review under section 1869, section 1878, or otherwise, of a 
        temporary moratorium imposed under subparagraph (A).
        ``(7) Compliance programs.--
            ``(A) In general.--On or after the date of implementation 
        determined by the Secretary under subparagraph (C), a provider 
        of medical or other items or services or supplier within a 
        particular industry sector or category shall, as a condition of 
        enrollment in the program under this title, title XIX, or title 
        XXI, establish a compliance program that contains the core 
        elements established under subparagraph (B) with respect to 
        that provider or supplier and industry or category.
            ``(B) Establishment of core elements.--The Secretary, in 
        consultation with the Inspector General of the Department of 
        Health and Human Services, shall establish core elements for a 
        compliance program under subparagraph (A) for providers or 
        suppliers within a particular industry or category.
            ``(C) Timeline for implementation.--The Secretary shall 
        determine the timeline for the establishment of the core 
        elements under subparagraph (B) and the date of the 
        implementation of subparagraph (A) for providers or suppliers 
        within a particular industry or category. The Secretary shall, 
        in determining such date of implementation, consider the extent 
        to which the adoption of compliance programs by a provider of 
        medical or other items or services or supplier is widespread in 
        a particular industry sector or with respect to a particular 
        provider or supplier category.''.
    (b) Medicaid.--
        (1) State plan amendment.--Section 1902(a) of the Social 
    Security Act (42 U.S.C. 1396a(a)), as amended by section 4302(b), 
    is amended--
            (A) in subsection (a)--
                (i) by striking ``and'' at the end of paragraph (75);
                (ii) by striking the period at the end of paragraph 
            (76) and inserting a semicolon; and
                (iii) by inserting after paragraph (76) the following:
        ``(77) provide that the State shall comply with provider and 
    supplier screening, oversight, and reporting requirements in 
    accordance with subsection (ii);''; and
            (B) by adding at the end the following:
    ``(ii) Provider and Supplier Screening, Oversight, and Reporting 
Requirements.--For purposes of subsection (a)(77), the requirements of 
this subsection are the following:
        ``(1) Screening.--The State complies with the process for 
    screening providers and suppliers under this title, as established 
    by the Secretary under section 1886(j)(2).
        ``(2) Provisional period of enhanced oversight for new 
    providers and suppliers.--The State complies with procedures to 
    provide for a provisional period of enhanced oversight for new 
    providers and suppliers under this title, as established by the 
    Secretary under section 1886(j)(3).
        ``(3) Disclosure requirements.--The State requires providers 
    and suppliers under the State plan or under a waiver of the plan to 
    comply with the disclosure requirements established by the 
    Secretary under section 1886(j)(4).
        ``(4) Temporary moratorium on enrollment of new providers or 
    suppliers.--
            ``(A) Temporary moratorium imposed by the secretary.--
                ``(i) In general.--Subject to clause (ii), the State 
            complies with any temporary moratorium on the enrollment of 
            new providers or suppliers imposed by the Secretary under 
            section 1886(j)(6).
                ``(ii) Exception.--A State shall not be required to 
            comply with a temporary moratorium described in clause (i) 
            if the State determines that the imposition of such 
            temporary moratorium would adversely impact beneficiaries' 
            access to medical assistance.
            ``(B) Moratorium on enrollment of providers and 
        suppliers.--At the option of the State, the State imposes, for 
        purposes of entering into participation agreements with 
        providers or suppliers under the State plan or under a waiver 
        of the plan, periods of enrollment moratoria, or numerical caps 
        or other limits, for providers or suppliers identified by the 
        Secretary as being at high-risk for fraud, waste, or abuse as 
        necessary to combat fraud, waste, or abuse, but only if the 
        State determines that the imposition of any such period, cap, 
        or other limits would not adversely impact beneficiaries' 
        access to medical assistance.
        ``(5) Compliance programs.--The State requires providers and 
    suppliers under the State plan or under a waiver of the plan to 
    establish, in accordance with the requirements of section 
    1866(j)(7), a compliance program that contains the core elements 
    established under subparagraph (B) of that section 1866(j)(7) for 
    providers or suppliers within a particular industry or category.
        ``(6) Reporting of adverse provider actions.--The State 
    complies with the national system for reporting criminal and civil 
    convictions, sanctions, negative licensure actions, and other 
    adverse provider actions to the Secretary, through the 
    Administrator of the Centers for Medicare & Medicaid Services, in 
    accordance with regulations of the Secretary.
        ``(7) Enrollment and npi of ordering or referring providers.--
    The State requires--
            ``(A) all ordering or referring physicians or other 
        professionals to be enrolled under the State plan or under a 
        waiver of the plan as a participating provider; and
            ``(B) the national provider identifier of any ordering or 
        referring physician or other professional to be specified on 
        any claim for payment that is based on an order or referral of 
        the physician or other professional.
        ``(8) Other state oversight.--Nothing in this subsection shall 
    be interpreted to preclude or limit the ability of a State to 
    engage in provider and supplier screening or enhanced provider and 
    supplier oversight activities beyond those required by the 
    Secretary.''.
        (2) Disclosure of medicare terminated providers and suppliers 
    to states.--The Administrator of the Centers for Medicare & 
    Medicaid Services shall establish a process for making available to 
    the each State agency with responsibility for administering a State 
    Medicaid plan (or a waiver of such plan) under title XIX of the 
    Social Security Act or a child health plan under title XXI the 
    name, national provider identifier, and other identifying 
    information for any provider of medical or other items or services 
    or supplier under the Medicare program under title XVIII or under 
    the CHIP program under title XXI that is terminated from 
    participation under that program within 30 days of the termination 
    (and, with respect to all such providers or suppliers who are 
    terminated from the Medicare program on the date of enactment of 
    this Act, within 90 days of such date).
        (3) Conforming amendment.--Section 1902(a)(23) of the Social 
    Security Act (42 U.S.C. 1396a), is amended by inserting before the 
    semicolon at the end the following: ``or by a provider or supplier 
    to which a moratorium under subsection (ii)(4) is applied during 
    the period of such moratorium''.
    (c) CHIP.--Section 2107(e)(1) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)), as amended by section 2101(d), is amended--
        (1) by redesignating subparagraphs (D) through (M) as 
    subparagraphs (E) through (N), respectively; and
        (2) by inserting after subparagraph (C), the following:
            ``(D) Subsections (a)(77) and (ii) of section 1902 
        (relating to provider and supplier screening, oversight, and 
        reporting requirements).''.

SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by sections 6002, 6004, and 6102, is 
amended by inserting after section 1128I the following new section:

``SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    ``(a) Data Matching.--
        ``(1) Integrated data repository.--
            ``(A) Inclusion of certain data.--
                ``(i) In general.--The Integrated Data Repository of 
            the Centers for Medicare & Medicaid Services shall include, 
            at a minimum, claims and payment data from the following:

                    ``(I) The programs under titles XVIII and XIX 
                (including parts A, B, C, and D of title XVIII).
                    ``(II) The program under title XXI.
                    ``(III) Health-related programs administered by the 
                Secretary of Veterans Affairs.
                    ``(IV) Health-related programs administered by the 
                Secretary of Defense.
                    ``(V) The program of old-age, survivors, and 
                disability insurance benefits established under title 
                II.
                    ``(VI) The Indian Health Service and the Contract 
                Health Service program.

                ``(ii) Priority for inclusion of certain data.--
            Inclusion of the data described in subclause (I) of such 
            clause in the Integrated Data Repository shall be a 
            priority. Data described in subclauses (II) through (VI) of 
            such clause shall be included in the Integrated Data 
            Repository as appropriate.
            ``(B) Data sharing and matching.--
                ``(i) In general.--The Secretary shall enter into 
            agreements with the individuals described in clause (ii) 
            under which such individuals share and match data in the 
            system of records of the respective agencies of such 
            individuals with data in the system of records of the 
            Department of Health and Human Services for the purpose of 
            identifying potential fraud, waste, and abuse under the 
            programs under titles XVIII and XIX.
                ``(ii) Individuals described.--The following 
            individuals are described in this clause:

                    ``(I) The Commissioner of Social Security.
                    ``(II) The Secretary of Veterans Affairs.
                    ``(III) The Secretary of Defense.
                    ``(IV) The Director of the Indian Health Service.

                ``(iii) Definition of system of records.--For purposes 
            of this paragraph, the term `system of records' has the 
            meaning given such term in section 552a(a)(5) of title 5, 
            United States Code.
        ``(2) Access to claims and payment databases.--For purposes of 
    conducting law enforcement and oversight activities and to the 
    extent consistent with applicable information, privacy, security, 
    and disclosure laws, including the regulations promulgated under 
    the Health Insurance Portability and Accountability Act of 1996 and 
    section 552a of title 5, United States Code, and subject to any 
    information systems security requirements under such laws or 
    otherwise required by the Secretary, the Inspector General of the 
    Department of Health and Human Services and the Attorney General 
    shall have access to claims and payment data of the Department of 
    Health and Human Services and its contractors related to titles 
    XVIII, XIX, and XXI.
    ``(b) OIG Authority To Obtain Information.--
        ``(1) In general.--Notwithstanding and in addition to any other 
    provision of law, the Inspector General of the Department of Health 
    and Human Services may, for purposes of protecting the integrity of 
    the programs under titles XVIII and XIX, obtain information from 
    any individual (including a beneficiary provided all applicable 
    privacy protections are followed) or entity that--
            ``(A) is a provider of medical or other items or services, 
        supplier, grant recipient, contractor, or subcontractor; or
            ``(B) directly or indirectly provides, orders, 
        manufactures, distributes, arranges for, prescribes, supplies, 
        or receives medical or other items or services payable by any 
        Federal health care program (as defined in section 1128B(f)) 
        regardless of how the item or service is paid for, or to whom 
        such payment is made.
        ``(2) Inclusion of certain information.--Information which the 
    Inspector General may obtain under paragraph (1) includes any 
    supporting documentation necessary to validate claims for payment 
    or payments under title XVIII or XIX, including a prescribing 
    physician's medical records for an individual who is prescribed an 
    item or service which is covered under part B of title XVIII, a 
    covered part D drug (as defined in section 1860D-2(e)) for which 
    payment is made under an MA-PD plan under part C of such title, or 
    a prescription drug plan under part D of such title, and any 
    records necessary for evaluation of the economy, efficiency, and 
    effectiveness of the programs under titles XVIII and XIX.
    ``(c) Administrative Remedy for Knowing Participation by 
Beneficiary in Health Care Fraud Scheme.--
        ``(1) In general.--In addition to any other applicable 
    remedies, if an applicable individual has knowingly participated in 
    a Federal health care fraud offense or a conspiracy to commit a 
    Federal health care fraud offense, the Secretary shall impose an 
    appropriate administrative penalty commensurate with the offense or 
    conspiracy.
        ``(2) Applicable individual.--For purposes of paragraph (1), 
    the term `applicable individual' means an individual--
            ``(A) entitled to, or enrolled for, benefits under part A 
        of title XVIII or enrolled under part B of such title;
            ``(B) eligible for medical assistance under a State plan 
        under title XIX or under a waiver of such plan; or
            ``(C) eligible for child health assistance under a child 
        health plan under title XXI.
    ``(d) Reporting and Returning of Overpayments.--
        ``(1) In general.--If a person has received an overpayment, the 
    person shall--
            ``(A) report and return the overpayment to the Secretary, 
        the State, an intermediary, a carrier, or a contractor, as 
        appropriate, at the correct address; and
            ``(B) notify the Secretary, State, intermediary, carrier, 
        or contractor to whom the overpayment was returned in writing 
        of the reason for the overpayment.
        ``(2) Deadline for reporting and returning overpayments.--An 
    overpayment must be reported and returned under paragraph (1) by 
    the later of--
            ``(A) the date which is 60 days after the date on which the 
        overpayment was identified; or
            ``(B) the date any corresponding cost report is due, if 
        applicable.
        ``(3) Enforcement.--Any overpayment retained by a person after 
    the deadline for reporting and returning the overpayment under 
    paragraph (2) is an obligation (as defined in section 3729(b)(3) of 
    title 31, United States Code) for purposes of section 3729 of such 
    title.
        ``(4) Definitions.--In this subsection:
            ``(A) Knowing and knowingly.--The terms `knowing' and 
        `knowingly' have the meaning given those terms in section 
        3729(b) of title 31, United States Code.
            ``(B) Overpayment.--The term ``overpayment'' means any 
        funds that a person receives or retains under title XVIII or 
        XIX to which the person, after applicable reconciliation, is 
        not entitled under such title.
            ``(C) Person.--
                ``(i) In general.--The term `person' means a provider 
            of services, supplier, medicaid managed care organization 
            (as defined in section 1903(m)(1)(A)), Medicare Advantage 
            organization (as defined in section 1859(a)(1)), or PDP 
            sponsor (as defined in section 1860D-41(a)(13)).
                ``(ii) Exclusion.--Such term does not include a 
            beneficiary.
    ``(e) Inclusion of National Provider Identifier on All Applications 
and Claims.--The Secretary shall promulgate a regulation that requires, 
not later than January 1, 2011, all providers of medical or other items 
or services and suppliers under the programs under titles XVIII and XIX 
that qualify for a national provider identifier to include their 
national provider identifier on all applications to enroll in such 
programs and on all claims for payment submitted under such 
programs.''.
    (b) Access to Data.--
        (1) Medicare part d.--Section 1860D-15(f)(2) of the Social 
    Security Act (42 U.S.C. 1395w-116(f)(2)) is amended by striking 
    ``may be used by'' and all that follows through the period at the 
    end and inserting ``may be used--
            ``(A) by officers, employees, and contractors of the 
        Department of Health and Human Services for the purposes of, 
        and to the extent necessary in--
                ``(i) carrying out this section; and
                ``(ii) conducting oversight, evaluation, and 
            enforcement under this title; and
            ``(B) by the Attorney General and the Comptroller General 
        of the United States for the purposes of, and to the extent 
        necessary in, carrying out health oversight activities.''.
        (2) Data matching.--Section 552a(a)(8)(B) of title 5, United 
    States Code, is amended--
            (A) in clause (vii), by striking ``or'' at the end;
            (B) in clause (viii), by inserting ``or'' after the 
        semicolon; and
            (C) by adding at the end the following new clause:
                ``(ix) matches performed by the Secretary of Health and 
            Human Services or the Inspector General of the Department 
            of Health and Human Services with respect to potential 
            fraud, waste, and abuse, including matches of a system of 
            records with non-Federal records;''.
        (3) Matching agreements with the commissioner of social 
    security.--Section 205(r) of the Social Security Act (42 U.S.C. 
    405(r)) is amended by adding at the end the following new 
    paragraph:
        ``(9)(A) The Commissioner of Social Security shall, upon the 
    request of the Secretary or the Inspector General of the Department 
    of Health and Human Services--
            ``(i) enter into an agreement with the Secretary or such 
        Inspector General for the purpose of matching data in the 
        system of records of the Social Security Administration and the 
        system of records of the Department of Health and Human 
        Services; and
            ``(ii) include in such agreement safeguards to assure the 
        maintenance of the confidentiality of any information 
        disclosed.
        ``(B) For purposes of this paragraph, the term `system of 
    records' has the meaning given such term in section 552a(a)(5) of 
    title 5, United States Code.''.
    (c) Withholding of Federal Matching Payments for States That Fail 
To Report Enrollee Encounter Data in the Medicaid Statistical 
Information System.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)) is amended--
        (1) in paragraph (23), by striking ``or'' at the end;
        (2) in paragraph (24), by striking the period at the end and 
    inserting ``; or''; and
        (3) by adding at the end the following new paragraph:.
        ``(25) with respect to any amounts expended for medical 
    assistance for individuals for whom the State does not report 
    enrollee encounter data (as defined by the Secretary) to the 
    Medicaid Statistical Information System (MSIS) in a timely manner 
    (as determined by the Secretary).''.
    (d) Permissive Exclusions and Civil Monetary Penalties.--
        (1) Permissive exclusions.--Section 1128(b) of the Social 
    Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the end 
    the following new paragraph:
        ``(16) Making false statements or misrepresentation of material 
    facts.--Any individual or entity that knowingly makes or causes to 
    be made any false statement, omission, or misrepresentation of a 
    material fact in any application, agreement, bid, or contract to 
    participate or enroll as a provider of services or supplier under a 
    Federal health care program (as defined in section 1128B(f)), 
    including Medicare Advantage organizations under part C of title 
    XVIII, prescription drug plan sponsors under part D of title XVIII, 
    medicaid managed care organizations under title XIX, and entities 
    that apply to participate as providers of services or suppliers in 
    such managed care organizations and such plans.''.
        (2) Civil monetary penalties.--
            (A) In general.--Section 1128A(a) of the Social Security 
        Act (42 U.S.C. 1320a-7a(a)) is amended--
                (i) in paragraph (1)(D), by striking ``was excluded'' 
            and all that follows through the period at the end and 
            inserting ``was excluded from the Federal health care 
            program (as defined in section 1128B(f)) under which the 
            claim was made pursuant to Federal law.'';
                (ii) in paragraph (6), by striking ``or'' at the end;
                (iii) by inserting after paragraph (7), the following 
            new paragraphs:
        ``(8) orders or prescribes a medical or other item or service 
    during a period in which the person was excluded from a Federal 
    health care program (as so defined), in the case where the person 
    knows or should know that a claim for such medical or other item or 
    service will be made under such a program;
        ``(9) knowingly makes or causes to be made any false statement, 
    omission, or misrepresentation of a material fact in any 
    application, bid, or contract to participate or enroll as a 
    provider of services or a supplier under a Federal health care 
    program (as so defined), including Medicare Advantage organizations 
    under part C of title XVIII, prescription drug plan sponsors under 
    part D of title XVIII, medicaid managed care organizations under 
    title XIX, and entities that apply to participate as providers of 
    services or suppliers in such managed care organizations and such 
    plans;
        ``(10) knows of an overpayment (as defined in paragraph (4) of 
    section 1128J(d)) and does not report and return the overpayment in 
    accordance with such section;'';
                (iv) in the first sentence--

                    (I) by striking the ``or'' after ``prohibited 
                relationship occurs;''; and
                    (II) by striking ``act)'' and inserting ``act; or 
                in cases under paragraph (9), $50,000 for each false 
                statement or misrepresentation of a material fact)''; 
                and

                (v) in the second sentence, by striking ``purpose)'' 
            and inserting ``purpose; or in cases under paragraph (9), 
            an assessment of not more than 3 times the total amount 
            claimed for each item or service for which payment was made 
            based upon the application containing the false statement 
            or misrepresentation of a material fact)''.
            (B) Clarification of treatment of certain charitable and 
        other innocuous programs.--Section 1128A(i)(6) of the Social 
        Security Act (42 U.S.C. 1320a-7a(i)(6)) is amended--
                (i) in subparagraph (C), by striking ``or'' at the end;
                (ii) in subparagraph (D), as redesignated by section 
            4331(e) of the Balanced Budget Act of 1997 (Public Law 105-
            33), by striking the period at the end and inserting a 
            semicolon;
                (iii) by redesignating subparagraph (D), as added by 
            section 4523(c) of such Act, as subparagraph (E) and 
            striking the period at the end and inserting ``; or''; and
                (iv) by adding at the end the following new 
            subparagraphs:
            ``(F) any other remuneration which promotes access to care 
        and poses a low risk of harm to patients and Federal health 
        care programs (as defined in section 1128B(f) and designated by 
        the Secretary under regulations);
            ``(G) the offer or transfer of items or services for free 
        or less than fair market value by a person, if--
                ``(i) the items or services consist of coupons, 
            rebates, or other rewards from a retailer;
                ``(ii) the items or services are offered or transferred 
            on equal terms available to the general public, regardless 
            of health insurance status; and
                ``(iii) the offer or transfer of the items or services 
            is not tied to the provision of other items or services 
            reimbursed in whole or in part by the program under title 
            XVIII or a State health care program (as defined in section 
            1128(h));
            ``(H) the offer or transfer of items or services for free 
        or less than fair market value by a person, if--
                ``(i) the items or services are not offered as part of 
            any advertisement or solicitation;
                ``(ii) the items or services are not tied to the 
            provision of other services reimbursed in whole or in part 
            by the program under title XVIII or a State health care 
            program (as so defined);
                ``(iii) there is a reasonable connection between the 
            items or services and the medical care of the individual; 
            and
                ``(iv) the person provides the items or services after 
            determining in good faith that the individual is in 
            financial need; or
            ``(I) effective on a date specified by the Secretary (but 
        not earlier than January 1, 2011), the waiver by a PDP sponsor 
        of a prescription drug plan under part D of title XVIII or an 
        MA organization offering an MA-PD plan under part C of such 
        title of any copayment for the first fill of a covered part D 
        drug (as defined in section 1860D-2(e)) that is a generic drug 
        for individuals enrolled in the prescription drug plan or MA-PD 
        plan, respectively.''.
    (e) Testimonial Subpoena Authority in Exclusion-only Cases.--
Section 1128(f) of the Social Security Act (42 U.S.C. 1320a-7(f)) is 
amended by adding at the end the following new paragraph:
        ``(4) The provisions of subsections (d) and (e) of section 205 
    shall apply with respect to this section to the same extent as they 
    are applicable with respect to title II. The Secretary may delegate 
    the authority granted by section 205(d) (as made applicable to this 
    section) to the Inspector General of the Department of Health and 
    Human Services for purposes of any investigation under this 
    section.''.
    (f) Health Care Fraud.--
        (1) Kickbacks.--Section 1128B of the Social Security Act (42 
    U.S.C. 1320a-7b) is amended by adding at the end the following new 
    subsection:
    ``(g) In addition to the penalties provided for in this section or 
section 1128A, a claim that includes items or services resulting from a 
violation of this section constitutes a false or fraudulent claim for 
purposes of subchapter III of chapter 37 of title 31, United States 
Code.''.
        (2) Revising the intent requirement.--Section 1128B of the 
    Social Security Act (42 U.S.C. 1320a-7b), as amended by paragraph 
    (1), is amended by adding at the end the following new subsection:
    ``(h) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (g) Surety Bond Requirements.--
        (1) Durable medical equipment.--Section 1834(a)(16)(B) of the 
    Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended by 
    inserting ``that the Secretary determines is commensurate with the 
    volume of the billing of the supplier'' before the period at the 
    end.
        (2) Home health agencies.--Section 1861(o)(7)(C) of the Social 
    Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by inserting 
    ``that the Secretary determines is commensurate with the volume of 
    the billing of the home health agency'' before the semicolon at the 
    end.
        (3) Requirements for certain other providers of services and 
    suppliers.--Section 1862 of the Social Security Act (42 U.S.C. 
    1395y) is amended by adding at the end the following new 
    subsection:
    ``(n) Requirement of a Surety Bond for Certain Providers of 
Services and Suppliers.--
        ``(1) In general.--The Secretary may require a provider of 
    services or supplier described in paragraph (2) to provide the 
    Secretary on a continuing basis with a surety bond in a form 
    specified by the Secretary in an amount (not less than $50,000) 
    that the Secretary determines is commensurate with the volume of 
    the billing of the provider of services or supplier. The Secretary 
    may waive the requirement of a bond under the preceding sentence in 
    the case of a provider of services or supplier that provides a 
    comparable surety bond under State law.
        ``(2) Provider of services or supplier described.--A provider 
    of services or supplier described in this paragraph is a provider 
    of services or supplier the Secretary determines appropriate based 
    on the level of risk involved with respect to the provider of 
    services or supplier, and consistent with the surety bond 
    requirements under sections 1834(a)(16)(B) and 1861(o)(7)(C).''.
    (h) Suspension of Medicare and Medicaid Payments Pending 
Investigation of Credible Allegations of Fraud.--
        (1) Medicare.--Section 1862 of the Social Security Act (42 
    U.S.C. 1395y), as amended by subsection (g)(3), is amended by 
    adding at the end the following new subsection:
    ``(o) Suspension of Payments Pending Investigation of Credible 
Allegations of Fraud.--
        ``(1) In general.--The Secretary may suspend payments to a 
    provider of services or supplier under this title pending an 
    investigation of a credible allegation of fraud against the 
    provider of services or supplier, unless the Secretary determines 
    there is good cause not to suspend such payments.
        ``(2) Consultation.--The Secretary shall consult with the 
    Inspector General of the Department of Health and Human Services in 
    determining whether there is a credible allegation of fraud against 
    a provider of services or supplier.
        ``(3) Promulgation of regulations.--The Secretary shall 
    promulgate regulations to carry out this subsection and section 
    1903(i)(2)(C).''.
        (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C. 
    1396b(i)(2)) is amended--
            (A) in subparagraph (A), by striking ``or'' at the end; and
            (B) by inserting after subparagraph (B), the following:
            ``(C) by any individual or entity to whom the State has 
        failed to suspend payments under the plan during any period 
        when there is pending an investigation of a credible allegation 
        of fraud against the individual or entity, as determined by the 
        State in accordance with regulations promulgated by the 
        Secretary for purposes of section 1862(o) and this 
        subparagraph, unless the State determines in accordance with 
        such regulations there is good cause not to suspend such 
        payments; or''.
    (i) Increased Funding To Fight Fraud and Abuse.--
        (1) In general.--Section 1817(k) of the Social Security Act (42 
    U.S.C. 1395i(k)) is amended--
            (A) by adding at the end the following new paragraph:
        ``(7) Additional funding.--In addition to the funds otherwise 
    appropriated to the Account from the Trust Fund under paragraphs 
    (3) and (4) and for purposes described in paragraphs (3)(C) and 
    (4)(A), there are hereby appropriated an additional $10,000,000 to 
    such Account from such Trust Fund for each of fiscal years 2011 
    through 2020. The funds appropriated under this paragraph shall be 
    allocated in the same proportion as the total funding appropriated 
    with respect to paragraphs (3)(A) and (4)(A) was allocated with 
    respect to fiscal year 2010, and shall be available without further 
    appropriation until expended.''; and
            (B) in paragraph (4)(A), by inserting ``until expended'' 
        after ``appropriation''.
        (2) Indexing of amounts appropriated.--
            (A) Departments of health and human services and justice.--
        Section 1817(k)(3)(A)(i) of the Social Security Act (42 U.S.C. 
        1395i(k)(3)(A)(i)) is amended--
                (i) in subclause (III), by inserting ``and'' at the 
            end;
                (ii) in subclause (IV)--

                    (I) by striking ``for each of fiscal years 2007, 
                2008, 2009, and 2010'' and inserting ``for each fiscal 
                year after fiscal year 2006''; and
                    (II) by striking ``; and'' and inserting a period; 
                and

                (iii) by striking subclause (V).
            (B) Office of the inspector general of the department of 
        health and human services.--Section 1817(k)(3)(A)(ii) of such 
        Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amended--
                (i) in subclause (VIII), by inserting ``and'' at the 
            end;
                (ii) in subclause (IX)--

                    (I) by striking ``for each of fiscal years 2008, 
                2009, and 2010'' and inserting ``for each fiscal year 
                after fiscal year 2007''; and
                    (II) by striking ``; and'' and inserting a period; 
                and

                (iii) by striking subclause (X).
            (C) Federal bureau of investigation.--Section 1817(k)(3)(B) 
        of the Social Security Act (42 U.S.C. 1395i(k)(3)(B)) is 
        amended--
                (i) in clause (vii), by inserting ``and'' at the end;
                (ii) in clause (viii)--

                    (I) by striking ``for each of fiscal years 2007, 
                2008, 2009, and 2010'' and inserting ``for each fiscal 
                year after fiscal year 2006''; and
                    (II) by striking ``; and'' and inserting a period; 
                and

                (iii) by striking clause (ix).
            (D) Medicare integrity program.--Section 1817(k)(4)(C) of 
        the Social Security Act (42 U.S.C. 1395i(k)(4)(C)) is amended 
        by adding at the end the following new clause:
                ``(ii) For each fiscal year after 2010, by the 
            percentage increase in the consumer price index for all 
            urban consumers (all items; United States city average) 
            over the previous year.''.
    (j) Medicare Integrity Program and Medicaid Integrity Program.--
        (1) Medicare integrity program.--
            (A) Requirement to provide performance statistics.--Section 
        1893(c) of the Social Security Act (42 U.S.C. 1395ddd(c)) is 
        amended--
                (i) in paragraph (3), by striking ``and'' at the end;
                (ii) by redesignating paragraph (4) as paragraph (5); 
            and
                (iii) by inserting after paragraph (3) the following 
            new paragraph:
        ``(4) the entity agrees to provide the Secretary and the 
    Inspector General of the Department of Health and Human Services 
    with such performance statistics (including the number and amount 
    of overpayments recovered, the number of fraud referrals, and the 
    return on investment of such activities by the entity) as the 
    Secretary or the Inspector General may request; and''.
            (B) Evaluations and annual report.--Section 1893 of the 
        Social Security Act (42 U.S.C. 1395ddd) is amended by adding at 
        the end the following new subsection:
    ``(i) Evaluations and Annual Report.--
        ``(1) Evaluations.--The Secretary shall conduct evaluations of 
    eligible entities which the Secretary contracts with under the 
    Program not less frequently than every 3 years.
        ``(2) Annual report.--Not later than 180 days after the end of 
    each fiscal year (beginning with fiscal year 2011), the Secretary 
    shall submit a report to Congress which identifies--
            ``(A) the use of funds, including funds transferred from 
        the Federal Hospital Insurance Trust Fund under section 1817 
        and the Federal Supplementary Insurance Trust Fund under 
        section 1841, to carry out this section; and
            ``(B) the effectiveness of the use of such funds.''.
            (C) Flexibility in pursuing fraud and abuse.--Section 
        1893(a) of the Social Security Act (42 U.S.C. 1395ddd(a)) is 
        amended by inserting ``, or otherwise,'' after ``entities''.
        (2) Medicaid integrity program.--
            (A) Requirement to provide performance statistics.--Section 
        1936(c)(2) of the Social Security Act (42 U.S.C. 1396u-6(c)(2)) 
        is amended--
                (i) by redesignating subparagraph (D) as subparagraph 
            (E); and
                (ii) by inserting after subparagraph (C) the following 
            new subparagraph:
            ``(D) The entity agrees to provide the Secretary and the 
        Inspector General of the Department of Health and Human 
        Services with such performance statistics (including the number 
        and amount of overpayments recovered, the number of fraud 
        referrals, and the return on investment of such activities by 
        the entity) as the Secretary or the Inspector General may 
        request.''.
            (B) Evaluations and annual report.--Section 1936(e) of the 
        Social Security Act (42 U.S.C. 1396u-7(e)) is amended--
                (i) by redesignating paragraph (4) as paragraph (5); 
            and
                (ii) by inserting after paragraph (3) the following new 
            paragraph:
        ``(4) Evaluations.--The Secretary shall conduct evaluations of 
    eligible entities which the Secretary contracts with under the 
    Program not less frequently than every 3 years.''.
    (k) Expanded Application of Hardship Waivers for Exclusions.--
Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 
1128A(i)(5)) of that program''.

SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
              AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER 
              DATA BANK.

    (a) Information Reported by Federal Agencies and Health Plans.--
Section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) is 
amended--
        (1) by striking subsection (a) and inserting the following:
    ``(a) In General.--The Secretary shall maintain a national health 
care fraud and abuse data collection program under this section for the 
reporting of certain final adverse actions (not including settlements 
in which no findings of liability have been made) against health care 
providers, suppliers, or practitioners as required by subsection (b), 
with access as set forth in subsection (d), and shall furnish the 
information collected under this section to the National Practitioner 
Data Bank established pursuant to the Health Care Quality Improvement 
Act of 1986 (42 U.S.C. 11101 et seq.).'';
        (2) by striking subsection (d) and inserting the following:
    ``(d) Access to Reported Information.--
        ``(1) Availability.--The information collected under this 
    section shall be available from the National Practitioner Data Bank 
    to the agencies, authorities, and officials which are provided 
    under section 1921(b) information reported under section 1921(a).
        ``(2) Fees for disclosure.--The Secretary may establish or 
    approve reasonable fees for the disclosure of information under 
    this section. The amount of such a fee may not exceed the costs of 
    processing the requests for disclosure and of providing such 
    information. Such fees shall be available to the Secretary to cover 
    such costs.'';
        (3) by striking subsection (f) and inserting the following:
    ``(f) Appropriate Coordination.--In implementing this section, the 
Secretary shall provide for the maximum appropriate coordination with 
part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 
11131 et seq.) and section 1921.''; and
        (4) in subsection (g)--
            (A) in paragraph (1)(A)--
                (i) in clause (iii)--

                    (I) by striking ``or State'' each place it appears;
                    (II) by redesignating subclauses (II) and (III) as 
                subclauses (III) and (IV), respectively; and
                    (III) by inserting after subclause (I) the 
                following new subclause:
                    ``(II) any dismissal or closure of the proceedings 
                by reason of the provider, supplier, or practitioner 
                surrendering their license or leaving the State or 
                jurisdiction''; and

                (ii) by striking clause (iv) and inserting the 
            following:
                ``(iv) Exclusion from participation in a Federal health 
            care program (as defined in section 1128B(f)).'';
            (B) in paragraph (3)--
                (i) by striking subparagraphs (D) and (E); and
                (ii) by redesignating subparagraph (F) as subparagraph 
            (D); and
            (C) in subparagraph (D) (as so redesignated), by striking 
        ``or State''.
    (b) Information Reported by State Law or Fraud Enforcement 
Agencies.--Section 1921 of the Social Security Act (42 U.S.C. 1396r-2) 
is amended--
        (1) in subsection (a)--
            (A) in paragraph (1)--
                (i) by striking ``system.--The State'' and all that 
            follows through the semicolon and inserting system.--
            ``(A) Licensing or certification actions.--The State must 
        have in effect a system of reporting the following information 
        with respect to formal proceedings (as defined by the Secretary 
        in regulations) concluded against a health care practitioner or 
        entity by a State licensing or certification agency:'';
                (ii) by redesignating subparagraphs (A) through (D) as 
            clauses (i) through (iv), respectively, and indenting 
            appropriately;
                (iii) in subparagraph (A)(iii) (as so redesignated)--

                    (I) by striking ``the license of'' and inserting 
                ``license or the right to apply for, or renew, a 
                license by''; and
                    (II) by inserting ``nonrenewability,'' after 
                ``voluntary surrender,''; and

                (iv) by adding at the end the following new 
            subparagraph:
            ``(B) Other final adverse actions.--The State must have in 
        effect a system of reporting information with respect to any 
        final adverse action (not including settlements in which no 
        findings of liability have been made) taken against a health 
        care provider, supplier, or practitioner by a State law or 
        fraud enforcement agency.''; and
            (B) in paragraph (2), by striking ``the authority described 
        in paragraph (1)'' and inserting ``a State licensing or 
        certification agency or State law or fraud enforcement 
        agency'';
        (2) in subsection (b)--
            (A) by striking paragraph (2) and inserting the following:
        ``(2) to State licensing or certification agencies and Federal 
    agencies responsible for the licensing and certification of health 
    care providers, suppliers, and licensed health care 
    practitioners;'';
            (B) in each of paragraphs (4) and (6), by inserting ``, but 
        only with respect to information provided pursuant to 
        subsection (a)(1)(A)'' before the comma at the end;
            (C) by striking paragraph (5) and inserting the following:
        ``(5) to State law or fraud enforcement agencies,'';
            (D) by redesignating paragraphs (7) and (8) as paragraphs 
        (8) and (9), respectively; and
            (E) by inserting after paragraph (6) the following new 
        paragraph:
        ``(7) to health plans (as defined in section 1128C(c));'';
        (3) by redesignating subsection (d) as subsection (h), and by 
    inserting after subsection (c) the following new subsections:
    ``(d) Disclosure and Correction of Information.--
        ``(1) Disclosure.--With respect to information reported 
    pursuant to subsection (a)(1), the Secretary shall--
            ``(A) provide for disclosure of the information, upon 
        request, to the health care practitioner who, or the entity 
        that, is the subject of the information reported; and
            ``(B) establish procedures for the case where the health 
        care practitioner or entity disputes the accuracy of the 
        information reported.
        ``(2) Corrections.--Each State licensing or certification 
    agency and State law or fraud enforcement agency shall report 
    corrections of information already reported about any formal 
    proceeding or final adverse action described in subsection (a), in 
    such form and manner as the Secretary prescribes by regulation.
    ``(e) Fees for Disclosure.--The Secretary may establish or approve 
reasonable fees for the disclosure of information under this section. 
The amount of such a fee may not exceed the costs of processing the 
requests for disclosure and of providing such information. Such fees 
shall be available to the Secretary to cover such costs.
    ``(f) Protection From Liability for Reporting.--No person or 
entity, including any agency designated by the Secretary in subsection 
(b), shall be held liable in any civil action with respect to any 
reporting of information as required under this section, without 
knowledge of the falsity of the information contained in the report.
    ``(g) References.--For purposes of this section:
        ``(1) State licensing or certification agency.--The term `State 
    licensing or certification agency' includes any authority of a 
    State (or of a political subdivision thereof) responsible for the 
    licensing of health care practitioners (or any peer review 
    organization or private accreditation entity reviewing the services 
    provided by health care practitioners) or entities.
        ``(2) State law or fraud enforcement agency.--The term `State 
    law or fraud enforcement agency' includes--
            ``(A) a State law enforcement agency; and
            ``(B) a State medicaid fraud control unit (as defined in 
        section 1903(q)).
        ``(3) Final adverse action.--
            ``(A) In general.--Subject to subparagraph (B), the term 
        `final adverse action' includes--
                ``(i) civil judgments against a health care provider, 
            supplier, or practitioner in State court related to the 
            delivery of a health care item or service;
                ``(ii) State criminal convictions related to the 
            delivery of a health care item or service;
                ``(iii) exclusion from participation in State health 
            care programs (as defined in section 1128(h));
                ``(iv) any licensing or certification action described 
            in subsection (a)(1)(A) taken against a supplier by a State 
            licensing or certification agency; and
                ``(v) any other adjudicated actions or decisions that 
            the Secretary shall establish by regulation.
            ``(B) Exception.--Such term does not include any action 
        with respect to a malpractice claim.''; and
        (4) in subsection (h), as so redesignated, by striking ``The 
    Secretary'' and all that follows through the period at the end and 
    inserting ``In implementing this section, the Secretary shall 
    provide for the maximum appropriate coordination with part B of the 
    Health Care Quality Improvement Act of 1986 (42 U.S.C. 11131 et 
    seq.) and section 1128E.''.
    (c) Conforming Amendment.--Section 1128C(a)(1) of the Social 
Security Act (42 U.S.C. 1320a-7c(a)(1)) is amended--
        (1) in subparagraph (C), by adding ``and'' after the comma at 
    the end;
        (2) in subparagraph (D), by striking ``, and'' and inserting a 
    period; and
        (3) by striking subparagraph (E).
    (d) Transition Process; Effective Date.--
        (1) In general.--Effective on the date of enactment of this 
    Act, the Secretary of Health and Human Services (in this section 
    referred to as the ``Secretary'') shall implement a transition 
    process under which, by not later than the end of the transition 
    period described in paragraph (5), the Secretary shall cease 
    operating the Healthcare Integrity and Protection Data Bank 
    established under section 1128E of the Social Security Act (as in 
    effect before the effective date specified in paragraph (6)) and 
    shall transfer all data collected in the Healthcare Integrity and 
    Protection Data Bank to the National Practitioner Data Bank 
    established pursuant to the Health Care Quality Improvement Act of 
    1986 (42 U.S.C. 11101 et seq.). During such transition process, the 
    Secretary shall have in effect appropriate procedures to ensure 
    that data collection and access to the Healthcare Integrity and 
    Protection Data Bank and the National Practitioner Data Bank are 
    not disrupted.
        (2) Regulations.--The Secretary shall promulgate regulations to 
    carry out the amendments made by subsections (a) and (b).
        (3) Funding.--
            (A) Availability of fees.--Fees collected pursuant to 
        section 1128E(d)(2) of the Social Security Act prior to the 
        effective date specified in paragraph (6) for the disclosure of 
        information in the Healthcare Integrity and Protection Data 
        Bank shall be available to the Secretary, without fiscal year 
        limitation, for payment of costs related to the transition 
        process described in paragraph (1). Any such fees remaining 
        after the transition period is complete shall be available to 
        the Secretary, without fiscal year limitation, for payment of 
        the costs of operating the National Practitioner Data Bank.
            (B) Availability of additional funds.--In addition to the 
        fees described in subparagraph (A), any funds available to the 
        Secretary or to the Inspector General of the Department of 
        Health and Human Services for a purpose related to combating 
        health care fraud, waste, or abuse shall be available to the 
        extent necessary for operating the Healthcare Integrity and 
        Protection Data Bank during the transition period, including 
        systems testing and other activities necessary to ensure that 
        information formerly reported to the Healthcare Integrity and 
        Protection Data Bank will be accessible through the National 
        Practitioner Data Bank after the end of such transition period.
        (4) Special provision for access to the national practitioner 
    data bank by the department of veterans affairs.--
            (A) In general.--Notwithstanding any other provision of 
        law, during the 1-year period that begins on the effective date 
        specified in paragraph (6), the information described in 
        subparagraph (B) shall be available from the National 
        Practitioner Data Bank to the Secretary of Veterans Affairs 
        without charge.
            (B) Information described.--For purposes of subparagraph 
        (A), the information described in this subparagraph is the 
        information that would, but for the amendments made by this 
        section, have been available to the Secretary of Veterans 
        Affairs from the Healthcare Integrity and Protection Data Bank.
        (5) Transition period defined.--For purposes of this 
    subsection, the term ``transition period'' means the period that 
    begins on the date of enactment of this Act and ends on the later 
    of--
            (A) the date that is 1 year after such date of enactment; 
        or
            (B) the effective date of the regulations promulgated under 
        paragraph (2).
        (6) Effective date.--The amendments made by subsections (a), 
    (b), and (c) shall take effect on the first day after the final day 
    of the transition period.

SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
              NOT MORE THAN 12 MONTHS.

    (a) Reducing Maximum Period for Submission.--
        (1) Part a.--Section 1814(a) of the Social Security Act (42 
    U.S.C. 1395f(a)(1)) is amended--
            (A) in paragraph (1), by striking ``period of 3 calendar 
        years'' and all that follows through the semicolon and 
        inserting ``period ending 1 calendar year after the date of 
        service;''; and
            (B) by adding at the end the following new sentence: ``In 
        applying paragraph (1), the Secretary may specify exceptions to 
        the 1 calendar year period specified in such paragraph.''
        (2) Part b.--
            (A) Section 1842(b)(3) of such Act (42 U.S.C. 
        1395u(b)(3)(B)) is amended--
                (i) in subparagraph (B), in the flush language 
            following clause (ii), by striking ``close of the calendar 
            year following the year in which such service is furnished 
            (deeming any service furnished in the last 3 months of any 
            calendar year to have been furnished in the succeeding 
            calendar year)'' and inserting ``period ending 1 calendar 
            year after the date of service''; and
                (ii) by adding at the end the following new sentence: 
            ``In applying subparagraph (B), the Secretary may specify 
            exceptions to the 1 calendar year period specified in such 
            subparagraph.''
            (B) Section 1835(a) of such Act (42 U.S.C. 1395n(a)) is 
        amended--
                (i) in paragraph (1), by striking ``period of 3 
            calendar years'' and all that follows through the semicolon 
            and inserting ``period ending 1 calendar year after the 
            date of service;''; and
                (ii) by adding at the end the following new sentence: 
            ``In applying paragraph (1), the Secretary may specify 
            exceptions to the 1 calendar year period specified in such 
            paragraph.''
    (b) Effective Date.--
        (1) In general.--The amendments made by subsection (a) shall 
    apply to services furnished on or after January 1, 2010.
        (2) Services furnished before 2010.--In the case of services 
    furnished before January 1, 2010, a bill or request for payment 
    under section 1814(a)(1), 1842(b)(3)(B), or 1835(a) shall be filed 
    not later that December 31, 2010.

SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO BE 
              MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42 
U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and 
inserting ``physician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B) that is enrolled under section 
1866(j)''.
    (b) Home Health Services.--
        (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C. 
    1395(a)(2)) is amended in the matter preceding subparagraph (A) by 
    inserting ``in the case of services described in subparagraph (C), 
    a physician enrolled under section 1866(j) or an eligible 
    professional under section 1848(k)(3)(B),'' before ``or, in the 
    case of services''.
        (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
    1395n(a)(2)) is amended in the matter preceding subparagraph (A) by 
    inserting ``, or in the case of services described in subparagraph 
    (A), a physician enrolled under section 1866(j) or an eligible 
    professional under section 1848(k)(3)(B),'' after ``a physician''.
    (c) Application to Other Items or Services.--The Secretary may 
extend the requirement applied by the amendments made by subsections 
(a) and (b) to durable medical equipment and home health services 
(relating to requiring certifications and written orders to be made by 
enrolled physicians and health professions) to all other categories of 
items or services under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), including covered part D drugs as defined in 
section 1860D-2(e) of such Act (42 U.S.C. 1395w-102), that are ordered, 
prescribed, or referred by a physician enrolled under section 1866(j) 
of such Act (42 U.S.C. 1395cc(j)) or an eligible professional under 
section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w-4(k)(3)(B)).
    (d) Effective Date.--The amendments made by this section shall 
apply to written orders and certifications made on or after July 1, 
2010.

SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
              REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social 
Security Act (42 U.S.C. 1395u(h)) is amended by adding at the end the 
following new paragraph:
    ``(9) The Secretary may revoke enrollment, for a period of not more 
than one year for each act, for a physician or supplier under section 
1866(j) if such physician or supplier fails to maintain and, upon 
request of the Secretary, provide access to documentation relating to 
written orders or requests for payment for durable medical equipment, 
certifications for home health services, or referrals for other items 
or services written or ordered by such physician or supplier under this 
title, as specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42 
U.S.C. 1395cc) is further amended--
        (1) in subparagraph (U), by striking at the end ``and'';
        (2) in subparagraph (V), by striking the period at the end and 
    adding ``; and''; and
        (3) by adding at the end the following new subparagraph:
            ``(W) maintain and, upon request of the Secretary, provide 
        access to documentation relating to written orders or requests 
        for payment for durable medical equipment, certifications for 
        home health services, or referrals for other items or services 
        written or ordered by the provider under this title, as 
        specified by the Secretary.''.
    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting 
``, ordering, referring for furnishing, or certifying the need for'' 
after ``furnishing''.
    (d) Effective Date.--The amendments made by this section shall 
apply to orders, certifications, and referrals made on or after January 
1, 2010.

SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
              PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH 
              SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
        (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
            (A) by striking ``and such services'' and inserting ``such 
        services''; and
            (B) by inserting after ``care of a physician'' the 
        following: ``, and, in the case of a certification made by a 
        physician after January 1, 2010, prior to making such 
        certification the physician must document that the physician 
        himself or herself has had a face-to-face encounter (including 
        through use of telehealth, subject to the requirements in 
        section 1834(m), and other than with respect to encounters that 
        are incident to services involved) with the individual within a 
        reasonable timeframe as determined by the Secretary''.
        (2) Part b.--Section 1835(a)(2)(A) of the Social Security Act 
    is amended--
            (A) by striking ``and'' before ``(iii)''; and
            (B) by inserting after ``care of a physician'' the 
        following: ``, and (iv) in the case of a certification after 
        January 1, 2010, prior to making such certification the 
        physician must document that the physician has had a face-to-
        face encounter (including through use of telehealth and other 
        than with respect to encounters that are incident to services 
        involved) with the individual during the 6-month period 
        preceding such certification, or other reasonable timeframe as 
        determined by the Secretary''.
    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) 
is amended--
        (1) by striking ``Order.--The Secretary'' and inserting 
    ``Order.--
                ``(i) In general.--The Secretary''; and
        (2) by adding at the end the following new clause:
                ``(ii) Requirement for face to face encounter.--The 
            Secretary shall require that such an order be written 
            pursuant to the physician documenting that a physician, a 
            physician assistant, a nurse practitioner, or a clinical 
            nurse specialist (as those terms are defined in section 
            1861(aa)(5)) has had a face-to-face encounter (including 
            through use of telehealth under subsection (m) and other 
            than with respect to encounters that are incident to 
            services involved) with the individual involved during the 
            6-month period preceding such written order, or other 
            reasonable timeframe as determined by the Secretary.''.
    (c) Application to Other Areas Under Medicare.--The Secretary may 
apply the face-to-face encounter requirement described in the 
amendments made by subsections (a) and (b) to other items and services 
for which payment is provided under title XVIII of the Social Security 
Act based upon a finding that such an decision would reduce the risk of 
waste, fraud, or abuse.
    (d) Application to Medicaid.--The requirements pursuant to the 
amendments made by subsections (a) and (b) shall apply in the case of 
physicians making certifications for home health services under title 
XIX of the Social Security Act in the same manner and to the same 
extent as such requirements apply in the case of physicians making such 
certifications under title XVIII of such Act.

SEC. 6408. ENHANCED PENALTIES.

    (a) Civil Monetary Penalties for False Statements or Delaying 
Inspections.--Section 1128A(a) of the Social Security Act (42 U.S.C. 
1320a-7a(a)), as amended by section 5002(d)(2)(A), is amended--
        (1) in paragraph (6), by striking ``or'' at the end; and
        (2) by inserting after paragraph (7) the following new 
    paragraphs:
        ``(8) knowingly makes, uses, or causes to be made or used, a 
    false record or statement material to a false or fraudulent claim 
    for payment for items and services furnished under a Federal health 
    care program; or
        ``(9) fails to grant timely access, upon reasonable request (as 
    defined by the Secretary in regulations), to the Inspector General 
    of the Department of Health and Human Services, for the purpose of 
    audits, investigations, evaluations, or other statutory functions 
    of the Inspector General of the Department of Health and Human 
    Services;''; and
        (3) in the first sentence--
            (A) by striking ``or in cases under paragraph (7)'' and 
        inserting ``in cases under paragraph (7)''; and
            (B) by striking ``act)'' and inserting ``act, in cases 
        under paragraph (8), $50,000 for each false record or 
        statement, or in cases under paragraph (9), $15,000 for each 
        day of the failure described in such paragraph)''.
    (b) Medicare Advantage and Part D Plans.--
        (1) Ensuring timely inspections relating to contracts with ma 
    organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 1395w-
    27(d)(2)) is amended--
            (A) in subparagraph (A), by inserting ``timely'' before 
        ``inspect''; and
            (B) in subparagraph (B), by inserting ``timely'' before 
        ``audit and inspect''.
        (2) Marketing violations.--Section 1857(g)(1) of the Social 
    Security Act (42 U.S.C. 1395w-27(g)(1)) is amended--
            (A) in subparagraph (F), by striking ``or'' at the end;
            (B) by inserting after subparagraph (G) the following new 
        subparagraphs:
            ``(H) except as provided under subparagraph (C) or (D) of 
        section 1860D-1(b)(1), enrolls an individual in any plan under 
        this part without the prior consent of the individual or the 
        designee of the individual;
            ``(I) transfers an individual enrolled under this part from 
        one plan to another without the prior consent of the individual 
        or the designee of the individual or solely for the purpose of 
        earning a commission;
            ``(J) fails to comply with marketing restrictions described 
        in subsections (h) and (j) of section 1851 or applicable 
        implementing regulations or guidance; or
            ``(K) employs or contracts with any individual or entity 
        who engages in the conduct described in subparagraphs (A) 
        through (J) of this paragraph;''; and
            (C) by adding at the end the following new sentence: ``The 
        Secretary may provide, in addition to any other remedies 
        authorized by law, for any of the remedies described in 
        paragraph (2), if the Secretary determines that any employee or 
        agent of such organization, or any provider or supplier who 
        contracts with such organization, has engaged in any conduct 
        described in subparagraphs (A) through (K) of this 
        paragraph.''.
        (3) Provision of false information.--Section 1857(g)(2)(A) of 
    the Social Security Act (42 U.S.C. 1395w-27(g)(2)(A)) is amended by 
    inserting ``except with respect to a determination under 
    subparagraph (E), an assessment of not more than the amount claimed 
    by such plan or plan sponsor based upon the misrepresentation or 
    falsified information involved,'' after ``for each such 
    determination,''.
    (c) Obstruction of Program Audits.--Section 1128(b)(2) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(2)) is amended--
        (1) in the heading, by inserting ``or audit'' after 
    ``investigation''; and
        (2) by striking ``investigation into'' and all that follows 
    through the period and inserting ``investigation or audit related 
    to--''
                ``(i) any offense described in paragraph (1) or in 
            subsection (a); or
                ``(ii) the use of funds received, directly or 
            indirectly, from any Federal health care program (as 
            defined in section 1128B(f)).''.
    (d) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to acts committed on or 
    after January 1, 2010.
        (2) Exception.--The amendments made by subsection (b)(1) take 
    effect on the date of enactment of this Act.

SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PROTOCOL.

    (a) Development of Self-Referral Disclosure Protocol.--
        (1) In general.--The Secretary of Health and Human Services, in 
    cooperation with the Inspector General of the Department of Health 
    and Human Services, shall establish, not later than 6 months after 
    the date of the enactment of this Act, a protocol to enable health 
    care providers of services and suppliers to disclose an actual or 
    potential violation of section 1877 of the Social Security Act (42 
    U.S.C. 1395nn) pursuant to a self-referral disclosure protocol (in 
    this section referred to as an ``SRDP''). The SRDP shall include 
    direction to health care providers of services and suppliers on--
            (A) a specific person, official, or office to whom such 
        disclosures shall be made; and
            (B) instruction on the implication of the SRDP on corporate 
        integrity agreements and corporate compliance agreements.
        (2) Publication on internet website of srdp information.--The 
    Secretary of Health and Human Services shall post information on 
    the public Internet website of the Centers for Medicare & Medicaid 
    Services to inform relevant stakeholders of how to disclose actual 
    or potential violations pursuant to an SRDP.
        (3) Relation to advisory opinions.--The SRDP shall be separate 
    from the advisory opinion process set forth in regulations 
    implementing section 1877(g) of the Social Security Act.
    (b) Reduction in Amounts Owed.--The Secretary of Health and Human 
Services is authorized to reduce the amount due and owing for all 
violations under section 1877 of the Social Security Act to an amount 
less than that specified in subsection (g) of such section. In 
establishing such amount for a violation, the Secretary may consider 
the following factors:
        (1) The nature and extent of the improper or illegal practice.
        (2) The timeliness of such self-disclosure.
        (3) The cooperation in providing additional information related 
    to the disclosure.
        (4) Such other factors as the Secretary considers appropriate.
    (c) Report.--Not later than 18 months after the date on which the 
SRDP protocol is established under subsection (a)(1), the Secretary 
shall submit to Congress a report on the implementation of this 
section. Such report shall include--
        (1) the number of health care providers of services and 
    suppliers making disclosures pursuant to the SRDP;
        (2) the amounts collected pursuant to the SRDP;
        (3) the types of violations reported under the SRDP; and
        (4) such other information as may be necessary to evaluate the 
    impact of this section.

SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT, 
              PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE 
              ACQUISITION PROGRAM.

    (a) Expansion of Round 2 of the DME Competitive Bidding Program.--
Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w-3(a)(1)) 
is amended--
        (1) in subparagraph (B)(i)(II), by striking ``70'' and 
    inserting ``91''; and
        (2) in subparagraph (D)(ii)--
            (A) in subclause (I), by striking ``and'' at the end;
            (B) by redesignating subclause (II) as subclause (III); and
            (C) by inserting after subclause (I) the following new 
        subclause:

                    ``(II) the Secretary shall include the next 21 
                largest metropolitan statistical areas by total 
                population (after those selected under subclause (I)) 
                for such round; and''.

    (b) Requirement to Either Competitively Bid Areas or Use 
Competitive Bid Prices by 2016.--Section 1834(a)(1)(F) of the Social 
Security Act (42 U.S.C. 1395m(a)(1)(F)) is amended--
        (1) in clause (i), by striking ``and'' at the end;
        (2) in clause (ii)--
            (A) by inserting ``(and, in the case of covered items 
        furnished on or after January 1, 2016, subject to clause (iii), 
        shall)'' after ``may''; and
            (B) by striking the period at the end and inserting ``; 
        and''; and
        (3) by adding at the end the following new clause:
                ``(iii) in the case of covered items furnished on or 
            after January 1, 2016, the Secretary shall continue to make 
            such adjustments described in clause (ii) as, under such 
            competitive acquisition programs, additional covered items 
            are phased in or information is updated as contracts under 
            section 1847 are recompeted in accordance with section 
            1847(b)(3)(B).''.

SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM.

    (a) Expansion to Medicaid.--
        (1) State plan amendment.--Section 1902(a)(42) of the Social 
    Security Act (42 U.S.C. 1396a(a)(42)) is amended--
            (A) by striking ``that the records'' and inserting ``that--
            ``(A) the records'';
            (B) by inserting ``and'' after the semicolon; and
            (C) by adding at the end the following:
            ``(B) not later than December 31, 2010, the State shall--
                ``(i) establish a program under which the State 
            contracts (consistent with State law and in the same manner 
            as the Secretary enters into contracts with recovery audit 
            contractors under section 1893(h), subject to such 
            exceptions or requirements as the Secretary may require for 
            purposes of this title or a particular State) with 1 or 
            more recovery audit contractors for the purpose of 
            identifying underpayments and overpayments and recouping 
            overpayments under the State plan and under any waiver of 
            the State plan with respect to all services for which 
            payment is made to any entity under such plan or waiver; 
            and
                ``(ii) provide assurances satisfactory to the Secretary 
            that--

                    ``(I) under such contracts, payment shall be made 
                to such a contractor only from amounts recovered;
                    ``(II) from such amounts recovered, payment--

                        ``(aa) shall be made on a contingent basis for 
                    collecting overpayments; and
                        ``(bb) may be made in such amounts as the State 
                    may specify for identifying underpayments;

                    ``(III) the State has an adequate process for 
                entities to appeal any adverse determination made by 
                such contractors; and
                    ``(IV) such program is carried out in accordance 
                with such requirements as the Secretary shall specify, 
                including--

                        ``(aa) for purposes of section 1903(a)(7), that 
                    amounts expended by the State to carry out the 
                    program shall be considered amounts expended as 
                    necessary for the proper and efficient 
                    administration of the State plan or a waiver of the 
                    plan;
                        ``(bb) that section 1903(d) shall apply to 
                    amounts recovered under the program; and
                        ``(cc) that the State and any such contractors 
                    under contract with the State shall coordinate such 
                    recovery audit efforts with other contractors or 
                    entities performing audits of entities receiving 
                    payments under the State plan or waiver in the 
                    State, including efforts with Federal and State law 
                    enforcement with respect to the Department of 
                    Justice, including the Federal Bureau of 
                    Investigations, the Inspector General of the 
                    Department of Health and Human Services, and the 
                    State medicaid fraud control unit; and''.
        (2) Coordination; regulations.--
            (A) In general.--The Secretary of Health and Human 
        Services, acting through the Administrator of the Centers for 
        Medicare & Medicaid Services, shall coordinate the expansion of 
        the Recovery Audit Contractor program to Medicaid with States, 
        particularly with respect to each State that enters into a 
        contract with a recovery audit contractor for purposes of the 
        State's Medicaid program prior to December 31, 2010.
            (B) Regulations.--The Secretary of Health and Human 
        Services shall promulgate regulations to carry out this 
        subsection and the amendments made by this subsection, 
        including with respect to conditions of Federal financial 
        participation, as specified by the Secretary.
    (b) Expansion to Medicare Parts C and D.--Section 1893(h) of the 
Social Security Act (42 U.S.C. 1395ddd(h)) is amended--
        (1) in paragraph (1), in the matter preceding subparagraph (A), 
    by striking ``part A or B'' and inserting ``this title'';
        (2) in paragraph (2), by striking ``parts A and B'' and 
    inserting ``this title'';
        (3) in paragraph (3), by inserting ``(not later than December 
    31, 2010, in the case of contracts relating to payments made under 
    part C or D)'' after ``2010'';
        (4) in paragraph (4), in the matter preceding subparagraph (A), 
    by striking ``part A or B'' and inserting ``this title''; and
        (5) by adding at the end the following:
        ``(9) Special rules relating to parts c and d.--The Secretary 
    shall enter into contracts under paragraph (1) to require recovery 
    audit contractors to--
            ``(A) ensure that each MA plan under part C has an anti-
        fraud plan in effect and to review the effectiveness of each 
        such anti-fraud plan;
            ``(B) ensure that each prescription drug plan under part D 
        has an anti-fraud plan in effect and to review the 
        effectiveness of each such anti-fraud plan;
            ``(C) examine claims for reinsurance payments under section 
        1860D-15(b) to determine whether prescription drug plans 
        submitting such claims incurred costs in excess of the 
        allowable reinsurance costs permitted under paragraph (2) of 
        that section; and
            ``(D) review estimates submitted by prescription drug plans 
        by private plans with respect to the enrollment of high cost 
        beneficiaries (as defined by the Secretary) and to compare such 
        estimates with the numbers of such beneficiaries actually 
        enrolled by such plans.''.
    (c) Annual Report.--The Secretary of Health and Human Services, 
acting through the Administrator of the Centers for Medicare & Medicaid 
Services, shall submit an annual report to Congress concerning the 
effectiveness of the Recovery Audit Contractor program under Medicaid 
and Medicare and shall include such reports recommendations for 
expanding or improving the program.

      Subtitle F--Additional Medicaid Program Integrity Provisions

SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF 
              TERMINATED UNDER MEDICARE OR OTHER STATE PLAN.

    Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42 U.S.C. 
1396a(a)) is amended by inserting after ``1128A,'' the following: 
``terminate the participation of any individual or entity in such 
program if (subject to such exceptions as are permitted with respect to 
exclusion under sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation 
of such individual or entity is terminated under title XVIII or any 
other State plan under this title,''.

SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN 
              OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as 
amended by section 6401(b), is amended by inserting after paragraph 
(77) the following:
        ``(78) provide that the State agency described in paragraph (9) 
    exclude, with respect to a period, any individual or entity from 
    participation in the program under the State plan if such 
    individual or entity owns, controls, or manages an entity that (or 
    if such entity is owned, controlled, or managed by an individual or 
    entity that)--
            ``(A) has unpaid overpayments (as defined by the Secretary) 
        under this title during such period determined by the Secretary 
        or the State agency to be delinquent;
            ``(B) is suspended or excluded from participation under or 
        whose participation is terminated under this title during such 
        period; or
            ``(C) is affiliated with an individual or entity that has 
        been suspended or excluded from participation under this title 
        or whose participation is terminated under this title during 
        such period;''.

SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by section 6502(a), is amended 
by inserting after paragraph (78), the following:
        ``(79) provide that any agent, clearinghouse, or other 
    alternate payee (as defined by the Secretary) that submits claims 
    on behalf of a health care provider must register with the State 
    and the Secretary in a form and manner specified by the 
    Secretary;''.

SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
              MMIS TO DETECT FRAUD AND ABUSE.

    (a) In General.--Section 1903(r)(1)(F) of the Social Security Act 
(42 U.S.C. 1396b(r)(1)(F)) is amended by inserting after ``necessary'' 
the following: ``and including, for data submitted to the Secretary on 
or after January 1, 2010, data elements from the automated data system 
that the Secretary determines to be necessary for program integrity, 
program oversight, and administration, at such frequency as the 
Secretary shall determine''.
    (b) Managed Care Organizations.--
        (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
    Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by inserting 
    ``and for the provision of such data to the State at a frequency 
    and level of detail to be specified by the Secretary'' after 
    ``patients''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    apply with respect to contract years beginning on or after January 
    1, 2010.

SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES LOCATED 
              OUTSIDE OF THE UNITED STATES.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396b(a)), as 
amended by section 6503, is amended by inserting after paragraph (79) 
the following new paragraph:
        ``(80) provide that the State shall not provide any payments 
    for items or services provided under the State plan or under a 
    waiver to any financial institution or entity located outside of 
    the United States;''.

SEC. 6506. OVERPAYMENTS.

    (a) Extension of Period for Collection of Overpayments Due to 
Fraud.--
        (1) In general.--Section 1903(d)(2) of the Social Security Act 
    (42 U.S.C. 1396b(d)(2)) is amended--
            (A) in subparagraph (C)--
                (i) in the first sentence, by striking ``60 days'' and 
            inserting ``1 year''; and
                (ii) in the second sentence, by striking ``60 days'' 
            and inserting ``1-year period''; and
            (B) in subparagraph (D)--
                (i) in inserting ``(i)'' after ``(D)''; and
                (ii) by adding at the end the following:
    ``(ii) In any case where the State is unable to recover a debt 
which represents an overpayment (or any portion thereof) made to a 
person or other entity due to fraud within 1 year of discovery because 
there is not a final determination of the amount of the overpayment 
under an administrative or judicial process (as applicable), including 
as a result of a judgment being under appeal, no adjustment shall be 
made in the Federal payment to such State on account of such 
overpayment (or portion thereof) before the date that is 30 days after 
the date on which a final judgment (including, if applicable, a final 
determination on an appeal) is made.''.
        (2) Effective date.--The amendments made by this subsection 
    take effect on the date of enactment of this Act and apply to 
    overpayments discovered on or after that date.
    (b) Corrective Action.--The Secretary shall promulgate regulations 
that require States to correct Federally identified claims 
overpayments, of an ongoing or recurring nature, with new Medicaid 
Management Information System (MMIS) edits, audits, or other 
appropriate corrective action.

SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

    Section 1903(r) of the Social Security Act (42 U.S.C. 1396b(r)) is 
amended--
        (1) in paragraph (1)(B)--
            (A) in clause (ii), by striking ``and'' at the end;
            (B) in clause (iii), by adding ``and'' after the semi-
        colon; and
            (C) by adding at the end the following new clause:
                ``(iv) effective for claims filed on or after October 
            1, 2010, incorporate compatible methodologies of the 
            National Correct Coding Initiative administered by the 
            Secretary (or any successor initiative to promote correct 
            coding and to control improper coding leading to 
            inappropriate payment) and such other methodologies of that 
            Initiative (or such other national correct coding 
            methodologies) as the Secretary identifies in accordance 
            with paragraph (4);''; and
        (2) by adding at the end the following new paragraph:
    ``(4) For purposes of paragraph (1)(B)(iv), the Secretary shall do 
the following:
        ``(A) Not later than September 1, 2010:
            ``(i) Identify those methodologies of the National Correct 
        Coding Initiative administered by the Secretary (or any 
        successor initiative to promote correct coding and to control 
        improper coding leading to inappropriate payment) which are 
        compatible to claims filed under this title.
            ``(ii) Identify those methodologies of such Initiative (or 
        such other national correct coding methodologies) that should 
        be incorporated into claims filed under this title with respect 
        to items or services for which States provide medical 
        assistance under this title and no national correct coding 
        methodologies have been established under such Initiative with 
        respect to title XVIII.
            ``(iii) Notify States of--
                ``(I) the methodologies identified under subparagraphs 
            (A) and (B) (and of any other national correct coding 
            methodologies identified under subparagraph (B)); and
                ``(II) how States are to incorporate such methodologies 
            into claims filed under this title.
        ``(B) Not later than March 1, 2011, submit a report to Congress 
    that includes the notice to States under clause (iii) of 
    subparagraph (A) and an analysis supporting the identification of 
    the methodologies made under clauses (i) and (ii) of subparagraph 
    (A).''.

SEC. 6508. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this subtitle, 
this subtitle and the amendments made by this subtitle take effect on 
January 1, 2011, without regard to whether final regulations to carry 
out such amendments and subtitle have been promulgated by that date.
    (b) Delay if State Legislation Required.--In the case of a State 
plan for medical assistance under title XIX of the Social Security Act 
or a child health plan under title XXI of such Act which the Secretary 
of Health and Human Services determines requires State legislation 
(other than legislation appropriating funds) in order for the plan to 
meet the additional requirement imposed by the amendments made by this 
subtitle, the State plan or child health plan shall not be regarded as 
failing to comply with the requirements of such title solely on the 
basis of its failure to meet this additional requirement before the 
first day of the first calendar quarter beginning after the close of 
the first regular session of the State legislature that begins after 
the date of the enactment of this Act. For purposes of the previous 
sentence, in the case of a State that has a 2-year legislative session, 
each year of such session shall be deemed to be a separate regular 
session of the State legislature.

          Subtitle G--Additional Program Integrity Provisions

SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    (a) Prohibition.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is 
amended by adding at the end the following:

``SEC. 519. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    ``No person, in connection with a plan or other arrangement that is 
multiple employer welfare arrangement described in section 3(40), shall 
make a false statement or false representation of fact, knowing it to 
be false, in connection with the marketing or sale of such plan or 
arrangement, to any employee, any member of an employee organization, 
any beneficiary, any employer, any employee organization, the 
Secretary, or any State, or the representative or agent of any such 
person, State, or the Secretary, concerning--
        ``(1) the financial condition or solvency of such plan or 
    arrangement;
        ``(2) the benefits provided by such plan or arrangement;
        ``(3) the regulatory status of such plan or other arrangement 
    under any Federal or State law governing collective bargaining, 
    labor management relations, or intern union affairs; or
        ``(4) the regulatory status of such plan or other arrangement 
    regarding exemption from state regulatory authority under this Act.
This section shall not apply to any plan or arrangement that does not 
fall within the meaning of the term `multiple employer welfare 
arrangement' under section 3(40)(A).''.
    (b) Criminal Penalties.--Section 501 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
        (1) by inserting ``(a)'' before ``Any person''; and
        (2) by adding at the end the following:
    ``(b) Any person that violates section 519 shall upon conviction be 
imprisoned not more than 10 years or fined under title 18, United 
States Code, or both.''.
    (c) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974 is amended by adding at the end the following:
``Sec. 519. Prohibition on false statement and representations.''.

SEC. 6602. CLARIFYING DEFINITION.

    Section 24(a)(2) of title 18, United States Code, is amended by 
inserting ``or section 411, 518, or 511 of the Employee Retirement 
Income Security Act of 1974,'' after ``1954 of this title''.

SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.) is amended by adding at the end the following:

``SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FORMAT.

    ``The Secretary shall request the National Association of Insurance 
Commissioners to develop a model uniform report form for private health 
insurance issuer seeking to refer suspected fraud and abuse to State 
insurance departments or other responsible State agencies for 
investigation. The Secretary shall request that the National 
Association of Insurance Commissioners develop recommendations for 
uniform reporting standards for such referrals.''.

SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6601, is further amended by adding at the end the 
following:

``SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    ``The Secretary may, for the purpose of identifying, preventing, or 
prosecuting fraud and abuse, adopt regulatory standards establishing, 
or issue an order relating to a specific person establishing, that a 
person engaged in the business of providing insurance through a 
multiple employer welfare arrangement described in section 3(40) is 
subject to the laws of the States in which such person operates which 
regulate insurance in such State, notwithstanding section 514(b)(6) of 
this Act or the Liability Risk Retention Act of 1986, and regardless of 
whether the law of the State is otherwise preempted under any of such 
provisions. This section shall not apply to any plan or arrangement 
that does not fall within the meaning of the term `multiple employer 
welfare arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6601, is further amended by adding at the 
end the following:
``Sec. 520. Applicability of State law to combat fraud and abuse.''.

SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO ISSUE ADMINISTRATIVE 
              SUMMARY CEASE AND DESIST ORDERS AND SUMMARY SEIZURES 
              ORDERS AGAINST PLANS THAT ARE IN FINANCIALLY HAZARDOUS 
              CONDITION.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6604, is further amended by adding at the end the 
following:

``SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST ORDERS AND SUMMARY 
              SEIZURE ORDERS AGAINST MULTIPLE EMPLOYER WELFARE 
              ARRANGEMENTS IN FINANCIALLY HAZARDOUS CONDITION.

    ``(a) In General.--The Secretary may issue a cease and desist (ex 
parte) order under this title if it appears to the Secretary that the 
alleged conduct of a multiple employer welfare arrangement described in 
section 3(40), other than a plan or arrangement described in subsection 
(g), is fraudulent, or creates an immediate danger to the public safety 
or welfare, or is causing or can be reasonably expected to cause 
significant, imminent, and irreparable public injury.
    ``(b) Hearing.--A person that is adversely affected by the issuance 
of a cease and desist order under subsection (a) may request a hearing 
by the Secretary regarding such order. The Secretary may require that a 
proceeding under this section, including all related information and 
evidence, be conducted in a confidential manner.
    ``(c) Burden of Proof.--The burden of proof in any hearing 
conducted under subsection (b) shall be on the party requesting the 
hearing to show cause why the cease and desist order should be set 
aside.
    ``(d) Determination.--Based upon the evidence presented at a 
hearing under subsection (b), the cease and desist order involved may 
be affirmed, modified, or set aside by the Secretary in whole or in 
part.
    ``(e) Seizure.--The Secretary may issue a summary seizure order 
under this title if it appears that a multiple employer welfare 
arrangement is in a financially hazardous condition.
    ``(f) Regulations.--The Secretary may promulgate such regulations 
or other guidance as may be necessary or appropriate to carry out this 
section.
    ``(g) Exception.--This section shall not apply to any plan or 
arrangement that does not fall within the meaning of the term `multiple 
employer welfare arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6604, is further amended by adding at the 
end the following:
``Sec. 521. Administrative summary cease and desist orders and summary 
          seizure orders against health plans in financially hazardous 
          condition.''.

SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR.

    Section 101(g) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1021(g)) is amended--
        (1) by striking ``Secretary may'' and inserting ``Secretary 
    shall''; and
        (2) by inserting ``to register with the Secretary prior to 
    operating in a State and may, by regulation, require such multiple 
    employer welfare arrangements'' after ``not group health plans''.

SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL 
              COMMUNICATIONS.

    Section 504 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1134) is amended by adding at the end the following:
    ``(d) The Secretary may promulgate a regulation that provides an 
evidentiary privilege for, and provides for the confidentiality of 
communications between or among, any of the following entities or their 
agents, consultants, or employees:
        ``(1) A State insurance department.
        ``(2) A State attorney general.
        ``(3) The National Association of Insurance Commissioners.
        ``(4) The Department of Labor.
        ``(5) The Department of the Treasury.
        ``(6) The Department of Justice.
        ``(7) The Department of Health and Human Services.
        ``(8) Any other Federal or State authority that the Secretary 
    determines is appropriate for the purposes of enforcing the 
    provisions of this title.
    ``(e) The privilege established under subsection (d) shall apply to 
communications related to any investigation, audit, examination, or 
inquiry conducted or coordinated by any of the agencies. A 
communication that is privileged under subsection (d) shall not waive 
any privilege otherwise available to the communicating agency or to any 
person who provided the information that is communicated.''.

                     Subtitle H--Elder Justice Act

SEC. 6701. SHORT TITLE OF SUBTITLE.

    This subtitle may be cited as the ``Elder Justice Act of 2009''.

SEC. 6702. DEFINITIONS.

    Except as otherwise specifically provided, any term that is defined 
in section 2011 of the Social Security Act (as added by section 
6703(a)) and is used in this subtitle has the meaning given such term 
by such section.

SEC. 6703. ELDER JUSTICE.

    (a) Elder Justice.--
        (1) In general.--Title XX of the Social Security Act (42 U.S.C. 
    1397 et seq.) is amended--
            (A) in the heading, by inserting ``AND ELDER JUSTICE'' 
        after ``SOCIAL SERVICES'';
            (B) by inserting before section 2001 the following:

      ``Subtitle A--Block Grants to States for Social Services'';

        and
            (C) by adding at the end the following:

                      ``Subtitle B--Elder Justice

``SEC. 2011. DEFINITIONS.

    ``In this subtitle:
        ``(1) Abuse.--The term `abuse' means the knowing infliction of 
    physical or psychological harm or the knowing deprivation of goods 
    or services that are necessary to meet essential needs or to avoid 
    physical or psychological harm.
        ``(2) Adult protective services.--The term `adult protective 
    services' means such services provided to adults as the Secretary 
    may specify and includes services such as--
            ``(A) receiving reports of adult abuse, neglect, or 
        exploitation;
            ``(B) investigating the reports described in subparagraph 
        (A);
            ``(C) case planning, monitoring, evaluation, and other case 
        work and services; and
            ``(D) providing, arranging for, or facilitating the 
        provision of medical, social service, economic, legal, housing, 
        law enforcement, or other protective, emergency, or support 
        services.
        ``(3) Caregiver.--The term `caregiver' means an individual who 
    has the responsibility for the care of an elder, either 
    voluntarily, by contract, by receipt of payment for care, or as a 
    result of the operation of law, and means a family member or other 
    individual who provides (on behalf of such individual or of a 
    public or private agency, organization, or institution) compensated 
    or uncompensated care to an elder who needs supportive services in 
    any setting.
        ``(4) Direct care.--The term `direct care' means care by an 
    employee or contractor who provides assistance or long-term care 
    services to a recipient.
        ``(5) Elder.--The term `elder' means an individual age 60 or 
    older.
        ``(6) Elder justice.--The term `elder justice' means--
            ``(A) from a societal perspective, efforts to--
                ``(i) prevent, detect, treat, intervene in, and 
            prosecute elder abuse, neglect, and exploitation; and
                ``(ii) protect elders with diminished capacity while 
            maximizing their autonomy; and
            ``(B) from an individual perspective, the recognition of an 
        elder's rights, including the right to be free of abuse, 
        neglect, and exploitation.
        ``(7) Eligible entity.--The term `eligible entity' means a 
    State or local government agency, Indian tribe or tribal 
    organization, or any other public or private entity that is engaged 
    in and has expertise in issues relating to elder justice or in a 
    field necessary to promote elder justice efforts.
        ``(8) Exploitation.--The term `exploitation' means the 
    fraudulent or otherwise illegal, unauthorized, or improper act or 
    process of an individual, including a caregiver or fiduciary, that 
    uses the resources of an elder for monetary or personal benefit, 
    profit, or gain, or that results in depriving an elder of rightful 
    access to, or use of, benefits, resources, belongings, or assets.
        ``(9) Fiduciary.--The term `fiduciary'--
            ``(A) means a person or entity with the legal 
        responsibility--
                ``(i) to make decisions on behalf of and for the 
            benefit of another person; and
                ``(ii) to act in good faith and with fairness; and
            ``(B) includes a trustee, a guardian, a conservator, an 
        executor, an agent under a financial power of attorney or 
        health care power of attorney, or a representative payee.
        ``(10) Grant.--The term `grant' includes a contract, 
    cooperative agreement, or other mechanism for providing financial 
    assistance.
        ``(11) Guardianship.--The term `guardianship' means--
            ``(A) the process by which a State court determines that an 
        adult individual lacks capacity to make decisions about self-
        care or property, and appoints another individual or entity 
        known as a guardian, as a conservator, or by a similar term, as 
        a surrogate decisionmaker;
            ``(B) the manner in which the court-appointed surrogate 
        decisionmaker carries out duties to the individual and the 
        court; or
            ``(C) the manner in which the court exercises oversight of 
        the surrogate decisionmaker.
        ``(12) Indian tribe.--
            ``(A) In general.--The term `Indian tribe' has the meaning 
        given such term in section 4 of the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450b).
            ``(B) Inclusion of pueblo and rancheria.--The term `Indian 
        tribe' includes any Pueblo or Rancheria.
        ``(13) Law enforcement.--The term `law enforcement' means the 
    full range of potential responders to elder abuse, neglect, and 
    exploitation including--
            ``(A) police, sheriffs, detectives, public safety officers, 
        and corrections personnel;
            ``(B) prosecutors;
            ``(C) medical examiners;
            ``(D) investigators; and
            ``(E) coroners.
        ``(14) Long-term care.--
            ``(A) In general.--The term `long-term care' means 
        supportive and health services specified by the Secretary for 
        individuals who need assistance because the individuals have a 
        loss of capacity for self-care due to illness, disability, or 
        vulnerability.
            ``(B) Loss of capacity for self-care.--For purposes of 
        subparagraph (A), the term `loss of capacity for self-care' 
        means an inability to engage in 1 or more activities of daily 
        living, including eating, dressing, bathing, management of 
        one's financial affairs, and other activities the Secretary 
        determines appropriate.
        ``(15) Long-term care facility.--The term `long-term care 
    facility' means a residential care provider that arranges for, or 
    directly provides, long-term care.
        ``(16) Neglect.--The term `neglect' means--
            ``(A) the failure of a caregiver or fiduciary to provide 
        the goods or services that are necessary to maintain the health 
        or safety of an elder; or
            ``(B) self-neglect.
        ``(17) Nursing facility.--
            ``(A) In general.--The term `nursing facility' has the 
        meaning given such term under section 1919(a).
            ``(B) Inclusion of skilled nursing facility.--The term 
        `nursing facility' includes a skilled nursing facility (as 
        defined in section 1819(a)).
        ``(18) Self-neglect.--The term `self-neglect' means an adult's 
    inability, due to physical or mental impairment or diminished 
    capacity, to perform essential self-care tasks including--
            ``(A) obtaining essential food, clothing, shelter, and 
        medical care;
            ``(B) obtaining goods and services necessary to maintain 
        physical health, mental health, or general safety; or
            ``(C) managing one's own financial affairs.
        ``(19) Serious bodily injury.--
            ``(A) In general.--The term `serious bodily injury' means 
        an injury--
                ``(i) involving extreme physical pain;
                ``(ii) involving substantial risk of death;
                ``(iii) involving protracted loss or impairment of the 
            function of a bodily member, organ, or mental faculty; or
                ``(iv) requiring medical intervention such as surgery, 
            hospitalization, or physical rehabilitation.
            ``(B) Criminal sexual abuse.--Serious bodily injury shall 
        be considered to have occurred if the conduct causing the 
        injury is conduct described in section 2241 (relating to 
        aggravated sexual abuse) or 2242 (relating to sexual abuse) of 
        title 18, United States Code, or any similar offense under 
        State law.
        ``(20) Social.--The term `social', when used with respect to a 
    service, includes adult protective services.
        ``(21) State legal assistance developer.--The term `State legal 
    assistance developer' means an individual described in section 731 
    of the Older Americans Act of 1965.
        ``(22) State long-term care ombudsman.--The term `State Long-
    Term Care Ombudsman' means the State Long-Term Care Ombudsman 
    described in section 712(a)(2) of the Older Americans Act of 1965.

``SEC. 2012. GENERAL PROVISIONS.

    ``(a) Protection of Privacy.--In pursuing activities under this 
subtitle, the Secretary shall ensure the protection of individual 
health privacy consistent with the regulations promulgated under 
section 264(c) of the Health Insurance Portability and Accountability 
Act of 1996 and applicable State and local privacy regulations.
    ``(b) Rule of Construction.--Nothing in this subtitle shall be 
construed to interfere with or abridge an elder's right to practice his 
or her religion through reliance on prayer alone for healing when this 
choice--
        ``(1) is contemporaneously expressed, either orally or in 
    writing, with respect to a specific illness or injury which the 
    elder has at the time of the decision by an elder who is competent 
    at the time of the decision;
        ``(2) is previously set forth in a living will, health care 
    proxy, or other advance directive document that is validly executed 
    and applied under State law; or
        ``(3) may be unambiguously deduced from the elder's life 
    history.

    ``PART I--NATIONAL COORDINATION OF ELDER JUSTICE ACTIVITIES AND 
                                RESEARCH

 ``Subpart A--Elder Justice Coordinating Council and Advisory Board on 
                 Elder Abuse, Neglect, and Exploitation

``SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL.

    ``(a) Establishment.--There is established within the Office of the 
Secretary an Elder Justice Coordinating Council (in this section 
referred to as the `Council').
    ``(b) Membership.--
        ``(1) In general.--The Council shall be composed of the 
    following members:
            ``(A) The Secretary (or the Secretary's designee).
            ``(B) The Attorney General (or the Attorney General's 
        designee).
            ``(C) The head of each Federal department or agency or 
        other governmental entity identified by the Chair referred to 
        in subsection (d) as having responsibilities, or administering 
        programs, relating to elder abuse, neglect, and exploitation.
        ``(2) Requirement.--Each member of the Council shall be an 
    officer or employee of the Federal Government.
    ``(c) Vacancies.--Any vacancy in the Council shall not affect its 
powers, but shall be filled in the same manner as the original 
appointment was made.
    ``(d) Chair.--The member described in subsection (b)(1)(A) shall be 
Chair of the Council.
    ``(e) Meetings.--The Council shall meet at least 2 times per year, 
as determined by the Chair.
    ``(f) Duties.--
        ``(1) In general.--The Council shall make recommendations to 
    the Secretary for the coordination of activities of the Department 
    of Health and Human Services, the Department of Justice, and other 
    relevant Federal, State, local, and private agencies and entities, 
    relating to elder abuse, neglect, and exploitation and other crimes 
    against elders.
        ``(2) Report.--Not later than the date that is 2 years after 
    the date of enactment of the Elder Justice Act of 2009 and every 2 
    years thereafter, the Council shall submit to the Committee on 
    Finance of the Senate and the Committee on Ways and Means and the 
    Committee on Energy and Commerce of the House of Representatives a 
    report that--
            ``(A) describes the activities and accomplishments of, and 
        challenges faced by--
                ``(i) the Council; and
                ``(ii) the entities represented on the Council; and
            ``(B) makes such recommendations for legislation, model 
        laws, or other action as the Council determines to be 
        appropriate.
    ``(g) Powers of the Council.--
        ``(1) Information from federal agencies.--Subject to the 
    requirements of section 2012(a), the Council may secure directly 
    from any Federal department or agency such information as the 
    Council considers necessary to carry out this section. Upon request 
    of the Chair of the Council, the head of such department or agency 
    shall furnish such information to the Council.
        ``(2) Postal services.--The Council may use the United States 
    mails in the same manner and under the same conditions as other 
    departments and agencies of the Federal Government.
    ``(h) Travel Expenses.--The members of the Council shall not 
receive compensation for the performance of services for the Council. 
The members shall be allowed travel expenses, including per diem in 
lieu of subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States Code, while 
away from their homes or regular places of business in the performance 
of services for the Council. Notwithstanding section 1342 of title 31, 
United States Code, the Secretary may accept the voluntary and 
uncompensated services of the members of the Council.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Council without reimbursement, and such 
detail shall be without interruption or loss of civil service status or 
privilege.
    ``(j) Status as Permanent Council.--Section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, AND EXPLOITATION.

    ``(a) Establishment.--There is established a board to be known as 
the `Advisory Board on Elder Abuse, Neglect, and Exploitation' (in this 
section referred to as the `Advisory Board') to create short- and long-
term multidisciplinary strategic plans for the development of the field 
of elder justice and to make recommendations to the Elder Justice 
Coordinating Council established under section 2021.
    ``(b) Composition.--The Advisory Board shall be composed of 27 
members appointed by the Secretary from among members of the general 
public who are individuals with experience and expertise in elder 
abuse, neglect, and exploitation prevention, detection, treatment, 
intervention, or prosecution.
    ``(c) Solicitation of Nominations.--The Secretary shall publish a 
notice in the Federal Register soliciting nominations for the 
appointment of members of the Advisory Board under subsection (b).
    ``(d) Terms.--
        ``(1) In general.--Each member of the Advisory Board shall be 
    appointed for a term of 3 years, except that, of the members first 
    appointed--
            ``(A) 9 shall be appointed for a term of 3 years;
            ``(B) 9 shall be appointed for a term of 2 years; and
            ``(C) 9 shall be appointed for a term of 1 year.
        ``(2) Vacancies.--
            ``(A) In general.--Any vacancy on the Advisory Board shall 
        not affect its powers, but shall be filled in the same manner 
        as the original appointment was made.
            ``(B) Filling unexpired term.--An individual chosen to fill 
        a vacancy shall be appointed for the unexpired term of the 
        member replaced.
        ``(3) Expiration of terms.--The term of any member shall not 
    expire before the date on which the member's successor takes 
    office.
    ``(e) Election of Officers.--The Advisory Board shall elect a Chair 
and Vice Chair from among its members. The Advisory Board shall elect 
its initial Chair and Vice Chair at its initial meeting.
    ``(f) Duties.--
        ``(1) Enhance communication on promoting quality of, and 
    preventing abuse, neglect, and exploitation in, long-term care.--
    The Advisory Board shall develop collaborative and innovative 
    approaches to improve the quality of, including preventing abuse, 
    neglect, and exploitation in, long-term care.
        ``(2) Collaborative efforts to develop consensus around the 
    management of certain quality-related factors.--
            ``(A) In general.--The Advisory Board shall establish 
        multidisciplinary panels to address, and develop consensus on, 
        subjects relating to improving the quality of long-term care. 
        At least 1 such panel shall address, and develop consensus on, 
        methods for managing resident-to-resident abuse in long-term 
        care.
            ``(B) Activities conducted.--The multidisciplinary panels 
        established under subparagraph (A) shall examine relevant 
        research and data, identify best practices with respect to the 
        subject of the panel, determine the best way to carry out those 
        best practices in a practical and feasible manner, and 
        determine an effective manner of distributing information on 
        such subject.
        ``(3) Report.--Not later than the date that is 18 months after 
    the date of enactment of the Elder Justice Act of 2009, and 
    annually thereafter, the Advisory Board shall prepare and submit to 
    the Elder Justice Coordinating Council, the Committee on Finance of 
    the Senate, and the Committee on Ways and Means and the Committee 
    on Energy and Commerce of the House of Representatives a report 
    containing--
            ``(A) information on the status of Federal, State, and 
        local public and private elder justice activities;
            ``(B) recommendations (including recommended priorities) 
        regarding--
                ``(i) elder justice programs, research, training, 
            services, practice, enforcement, and coordination;
                ``(ii) coordination between entities pursuing elder 
            justice efforts and those involved in related areas that 
            may inform or overlap with elder justice efforts, such as 
            activities to combat violence against women and child abuse 
            and neglect; and
                ``(iii) activities relating to adult fiduciary systems, 
            including guardianship and other fiduciary arrangements;
            ``(C) recommendations for specific modifications needed in 
        Federal and State laws (including regulations) or for programs, 
        research, and training to enhance prevention, detection, and 
        treatment (including diagnosis) of, intervention in (including 
        investigation of), and prosecution of elder abuse, neglect, and 
        exploitation;
            ``(D) recommendations on methods for the most effective 
        coordinated national data collection with respect to elder 
        justice, and elder abuse, neglect, and exploitation; and
            ``(E) recommendations for a multidisciplinary strategic 
        plan to guide the effective and efficient development of the 
        field of elder justice.
    ``(g) Powers of the Advisory Board.--
        ``(1) Information from federal agencies.--Subject to the 
    requirements of section 2012(a), the Advisory Board may secure 
    directly from any Federal department or agency such information as 
    the Advisory Board considers necessary to carry out this section. 
    Upon request of the Chair of the Advisory Board, the head of such 
    department or agency shall furnish such information to the Advisory 
    Board.
        ``(2) Sharing of data and reports.--The Advisory Board may 
    request from any entity pursuing elder justice activities under the 
    Elder Justice Act of 2009 or an amendment made by that Act, any 
    data, reports, or recommendations generated in connection with such 
    activities.
        ``(3) Postal services.--The Advisory Board may use the United 
    States mails in the same manner and under the same conditions as 
    other departments and agencies of the Federal Government.
    ``(h) Travel Expenses.--The members of the Advisory Board shall not 
receive compensation for the performance of services for the Advisory 
Board. The members shall be allowed travel expenses for up to 4 
meetings per year, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of chapter 57 
of title 5, United States Code, while away from their homes or regular 
places of business in the performance of services for the Advisory 
Board. Notwithstanding section 1342 of title 31, United States Code, 
the Secretary may accept the voluntary and uncompensated services of 
the members of the Advisory Board.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Advisory Board without reimbursement, 
and such detail shall be without interruption or loss of civil service 
status or privilege.
    ``(j) Status as Permanent Advisory Committee.--Section 14 of the 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
advisory board.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2023. RESEARCH PROTECTIONS.

    ``(a) Guidelines.--The Secretary shall promulgate guidelines to 
assist researchers working in the area of elder abuse, neglect, and 
exploitation, with issues relating to human subject protections.
    ``(b) Definition of Legally Authorized Representative for 
Application of Regulations.--For purposes of the application of subpart 
A of part 46 of title 45, Code of Federal Regulations, to research 
conducted under this subpart, the term `legally authorized 
representative' means, unless otherwise provided by law, the individual 
or judicial or other body authorized under the applicable law to 
consent to medical treatment on behalf of another person.

``SEC. 2024. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subpart--
        ``(1) for fiscal year 2011, $6,500,000; and
        ``(2) for each of fiscal years 2012 through 2014, $7,000,000.

  ``Subpart B--Elder Abuse, Neglect, and Exploitation Forensic Centers

``SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER ABUSE, NEGLECT, AND 
              EXPLOITATION FORENSIC CENTERS.

    ``(a) In General.--The Secretary, in consultation with the Attorney 
General, shall make grants to eligible entities to establish and 
operate stationary and mobile forensic centers, to develop forensic 
expertise regarding, and provide services relating to, elder abuse, 
neglect, and exploitation.
    ``(b) Stationary Forensic Centers.--The Secretary shall make 4 of 
the grants described in subsection (a) to institutions of higher 
education with demonstrated expertise in forensics or commitment to 
preventing or treating elder abuse, neglect, or exploitation, to 
establish and operate stationary forensic centers.
    ``(c) Mobile Centers.--The Secretary shall make 6 of the grants 
described in subsection (a) to appropriate entities to establish and 
operate mobile forensic centers.
    ``(d) Authorized Activities.--
        ``(1) Development of forensic markers and methodologies.--An 
    eligible entity that receives a grant under this section shall use 
    funds made available through the grant to assist in determining 
    whether abuse, neglect, or exploitation occurred and whether a 
    crime was committed and to conduct research to describe and 
    disseminate information on--
            ``(A) forensic markers that indicate a case in which elder 
        abuse, neglect, or exploitation may have occurred; and
            ``(B) methodologies for determining, in such a case, when 
        and how health care, emergency service, social and protective 
        services, and legal service providers should intervene and when 
        the providers should report the case to law enforcement 
        authorities.
        ``(2) Development of forensic expertise.--An eligible entity 
    that receives a grant under this section shall use funds made 
    available through the grant to develop forensic expertise regarding 
    elder abuse, neglect, and exploitation in order to provide medical 
    and forensic evaluation, therapeutic intervention, victim support 
    and advocacy, case review, and case tracking.
        ``(3) Collection of evidence.--The Secretary, in coordination 
    with the Attorney General, shall use data made available by grant 
    recipients under this section to develop the capacity of geriatric 
    health care professionals and law enforcement to collect forensic 
    evidence, including collecting forensic evidence relating to a 
    potential determination of elder abuse, neglect, or exploitation.
    ``(e) Application.--To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may require.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
        ``(1) for fiscal year 2011, $4,000,000;
        ``(2) for fiscal year 2012, $6,000,000; and
        ``(3) for each of fiscal years 2013 and 2014, $8,000,000.

              ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

``SEC. 2041. ENHANCEMENT OF LONG-TERM CARE.

    ``(a) Grants and Incentives for Long-Term Care Staffing.--
        ``(1) In general.--The Secretary shall carry out activities, 
    including activities described in paragraphs (2) and (3), to 
    provide incentives for individuals to train for, seek, and maintain 
    employment providing direct care in long-term care.
        ``(2) Specific programs to enhance training, recruitment, and 
    retention of staff.--
            ``(A) Coordination with secretary of labor to recruit and 
        train long-term care staff.--The Secretary shall coordinate 
        activities under this subsection with the Secretary of Labor in 
        order to provide incentives for individuals to train for and 
        seek employment providing direct care in long-term care.
            ``(B) Career ladders and wage or benefit increases to 
        increase staffing in long-term care.--
                ``(i) In general.--The Secretary shall make grants to 
            eligible entities to carry out programs through which the 
            entities--

                    ``(I) offer, to employees who provide direct care 
                to residents of an eligible entity or individuals 
                receiving community-based long-term care from an 
                eligible entity, continuing training and varying levels 
                of certification, based on observed clinical care 
                practices and the amount of time the employees spend 
                providing direct care; and
                    ``(II) provide, or make arrangements to provide, 
                bonuses or other increased compensation or benefits to 
                employees who achieve certification under such a 
                program.

                ``(ii) Application.--To be eligible to receive a grant 
            under this subparagraph, an eligible entity shall submit an 
            application to the Secretary at such time, in such manner, 
            and containing such information as the Secretary may 
            require (which may include evidence of consultation with 
            the State in which the eligible entity is located with 
            respect to carrying out activities funded under the grant).
                ``(iii) Authority to limit number of applicants.--
            Nothing in this subparagraph shall be construed as 
            prohibiting the Secretary from limiting the number of 
            applicants for a grant under this subparagraph.
        ``(3) Specific programs to improve management practices.--
            ``(A) In general.--The Secretary shall make grants to 
        eligible entities to enable the entities to provide training 
        and technical assistance.
            ``(B) Authorized activities.--An eligible entity that 
        receives a grant under subparagraph (A) shall use funds made 
        available through the grant to provide training and technical 
        assistance regarding management practices using methods that 
        are demonstrated to promote retention of individuals who 
        provide direct care, such as--
                ``(i) the establishment of standard human resource 
            policies that reward high performance, including policies 
            that provide for improved wages and benefits on the basis 
            of job reviews;
                ``(ii) the establishment of motivational and thoughtful 
            work organization practices;
                ``(iii) the creation of a workplace culture that 
            respects and values caregivers and their needs;
                ``(iv) the promotion of a workplace culture that 
            respects the rights of residents of an eligible entity or 
            individuals receiving community-based long-term care from 
            an eligible entity and results in improved care for the 
            residents or the individuals; and
                ``(v) the establishment of other programs that promote 
            the provision of high quality care, such as a continuing 
            education program that provides additional hours of 
            training, including on-the-job training, for employees who 
            are certified nurse aides.
            ``(C) Application.--To be eligible to receive a grant under 
        this paragraph, an eligible entity shall submit an application 
        to the Secretary at such time, in such manner, and containing 
        such information as the Secretary may require (which may 
        include evidence of consultation with the State in which the 
        eligible entity is located with respect to carrying out 
        activities funded under the grant).
            ``(D) Authority to limit number of applicants.--Nothing in 
        this paragraph shall be construed as prohibiting the Secretary 
        from limiting the number of applicants for a grant under this 
        paragraph.
        ``(4) Accountability measures.--The Secretary shall develop 
    accountability measures to ensure that the activities conducted 
    using funds made available under this subsection benefit 
    individuals who provide direct care and increase the stability of 
    the long-term care workforce.
        ``(5) Definitions.--In this subsection:
            ``(A) Community-based long-term care.--The term `community-
        based long-term care' has the meaning given such term by the 
        Secretary.
            ``(B) Eligible entity.--The term `eligible entity' means 
        the following:
                ``(i) A long-term care facility.
                ``(ii) A community-based long-term care entity (as 
            defined by the Secretary).
    ``(b) Certified EHR Technology Grant Program.--
        ``(1) Grants authorized.--The Secretary is authorized to make 
    grants to long-term care facilities for the purpose of assisting 
    such entities in offsetting the costs related to purchasing, 
    leasing, developing, and implementing certified EHR technology (as 
    defined in section 1848(o)(4)) designed to improve patient safety 
    and reduce adverse events and health care complications resulting 
    from medication errors.
        ``(2) Use of grant funds.--Funds provided under grants under 
    this subsection may be used for any of the following:
            ``(A) Purchasing, leasing, and installing computer software 
        and hardware, including handheld computer technologies.
            ``(B) Making improvements to existing computer software and 
        hardware.
            ``(C) Making upgrades and other improvements to existing 
        computer software and hardware to enable e-prescribing.
            ``(D) Providing education and training to eligible long-
        term care facility staff on the use of such technology to 
        implement the electronic transmission of prescription and 
        patient information.
        ``(3) Application.--
            ``(A) In general.--To be eligible to receive a grant under 
        this subsection, a long-term care facility shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may require (which 
        may include evidence of consultation with the State in which 
        the long-term care facility is located with respect to carrying 
        out activities funded under the grant).
            ``(B) Authority to limit number of applicants.--Nothing in 
        this subsection shall be construed as prohibiting the Secretary 
        from limiting the number of applicants for a grant under this 
        subsection.
        ``(4) Participation in state health exchanges.--A long-term 
    care facility that receives a grant under this subsection shall, 
    where available, participate in activities conducted by a State or 
    a qualified State-designated entity (as defined in section 3013(f) 
    of the Public Health Service Act) under a grant under section 3013 
    of the Public Health Service Act to coordinate care and for other 
    purposes determined appropriate by the Secretary.
        ``(5) Accountability measures.--The Secretary shall develop 
    accountability measures to ensure that the activities conducted 
    using funds made available under this subsection help improve 
    patient safety and reduce adverse events and health care 
    complications resulting from medication errors.
    ``(c) Adoption of Standards for Transactions Involving Clinical 
Data by Long-Term Care Facilities.--
        ``(1) Standards and compatibility.--The Secretary shall adopt 
    electronic standards for the exchange of clinical data by long-term 
    care facilities, including, where available, standards for 
    messaging and nomenclature. Standards adopted by the Secretary 
    under the preceding sentence shall be compatible with standards 
    established under part C of title XI, standards established under 
    subsections (b)(2)(B)(i) and (e)(4) of section 1860D-4, standards 
    adopted under section 3004 of the Public Health Service Act, and 
    general health information technology standards.
        ``(2) Electronic submission of data to the secretary.--
            ``(A) In general.--Not later than 10 years after the date 
        of enactment of the Elder Justice Act of 2009, the Secretary 
        shall have procedures in place to accept the optional 
        electronic submission of clinical data by long-term care 
        facilities pursuant to the standards adopted under paragraph 
        (1).
            ``(B) Rule of construction.--Nothing in this subsection 
        shall be construed to require a long-term care facility to 
        submit clinical data electronically to the Secretary.
        ``(3) Regulations.--The Secretary shall promulgate regulations 
    to carry out this subsection. Such regulations shall require a 
    State, as a condition of the receipt of funds under this part, to 
    conduct such data collection and reporting as the Secretary 
    determines are necessary to satisfy the requirements of this 
    subsection.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
        ``(1) for fiscal year 2011, $20,000,000;
        ``(2) for fiscal year 2012, $17,500,000; and
        ``(3) for each of fiscal years 2013 and 2014, $15,000,000.

``SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND GRANT PROGRAMS.

    ``(a) Secretarial Responsibilities.--
        ``(1) In general.--The Secretary shall ensure that the 
    Department of Health and Human Services--
            ``(A) provides funding authorized by this part to State and 
        local adult protective services offices that investigate 
        reports of the abuse, neglect, and exploitation of elders;
            ``(B) collects and disseminates data annually relating to 
        the abuse, exploitation, and neglect of elders in coordination 
        with the Department of Justice;
            ``(C) develops and disseminates information on best 
        practices regarding, and provides training on, carrying out 
        adult protective services;
            ``(D) conducts research related to the provision of adult 
        protective services; and
            ``(E) provides technical assistance to States and other 
        entities that provide or fund the provision of adult protective 
        services, including through grants made under subsections (b) 
        and (c).
        ``(2) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, $3,000,000 for fiscal 
    year 2011 and $4,000,000 for each of fiscal years 2012 through 
    2014.
    ``(b) Grants To Enhance the Provision of Adult Protective 
Services.--
        ``(1) Establishment.--There is established an adult protective 
    services grant program under which the Secretary shall annually 
    award grants to States in the amounts calculated under paragraph 
    (2) for the purposes of enhancing adult protective services 
    provided by States and local units of government.
        ``(2) Amount of payment.--
            ``(A) In general.--Subject to the availability of 
        appropriations and subparagraphs (B) and (C), the amount paid 
        to a State for a fiscal year under the program under this 
        subsection shall equal the amount appropriated for that year to 
        carry out this subsection multiplied by the percentage of the 
        total number of elders who reside in the United States who 
        reside in that State.
            ``(B) Guaranteed minimum payment amount.--
                ``(i) 50 states.--Subject to clause (ii), if the amount 
            determined under subparagraph (A) for a State for a fiscal 
            year is less than 0.75 percent of the amount appropriated 
            for such year, the Secretary shall increase such determined 
            amount so that the total amount paid under this subsection 
            to the State for the year is equal to 0.75 percent of the 
            amount so appropriated.
                ``(ii) Territories.--In the case of a State other than 
            1 of the 50 States, clause (i) shall be applied as if each 
            reference to `0.75' were a reference to `0.1'.
            ``(C) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the amounts described in subparagraph 
        (A) as are necessary to comply with the requirements of 
        subparagraph (B).
        ``(3) Authorized activities.--
            ``(A) Adult protective services.--Funds made available 
        pursuant to this subsection may only be used by States and 
        local units of government to provide adult protective services 
        and may not be used for any other purpose.
            ``(B) Use by agency.--Each State receiving funds pursuant 
        to this subsection shall provide such funds to the agency or 
        unit of State government having legal responsibility for 
        providing adult protective services within the State.
            ``(C) Supplement not supplant.--Each State or local unit of 
        government shall use funds made available pursuant to this 
        subsection to supplement and not supplant other Federal, State, 
        and local public funds expended to provide adult protective 
        services in the State.
        ``(4) State reports.--Each State receiving funds under this 
    subsection shall submit to the Secretary, at such time and in such 
    manner as the Secretary may require, a report on the number of 
    elders served by the grants awarded under this subsection.
        ``(5) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, $100,000,000 for each 
    of fiscal years 2011 through 2014.
    ``(c) State Demonstration Programs.--
        ``(1) Establishment.--The Secretary shall award grants to 
    States for the purposes of conducting demonstration programs in 
    accordance with paragraph (2).
        ``(2) Demonstration programs.--Funds made available pursuant to 
    this subsection may be used by States and local units of government 
    to conduct demonstration programs that test--
            ``(A) training modules developed for the purpose of 
        detecting or preventing elder abuse;
            ``(B) methods to detect or prevent financial exploitation 
        of elders;
            ``(C) methods to detect elder abuse;
            ``(D) whether training on elder abuse forensics enhances 
        the detection of elder abuse by employees of the State or local 
        unit of government; or
            ``(E) other matters relating to the detection or prevention 
        of elder abuse.
        ``(3) Application.--To be eligible to receive a grant under 
    this subsection, a State shall submit an application to the 
    Secretary at such time, in such manner, and containing such 
    information as the Secretary may require.
        ``(4) State reports.--Each State that receives funds under this 
    subsection shall submit to the Secretary a report at such time, in 
    such manner, and containing such information as the Secretary may 
    require on the results of the demonstration program conducted by 
    the State using funds made available under this subsection.
        ``(5) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, $25,000,000 for each 
    of fiscal years 2011 through 2014.

``SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM GRANTS AND TRAINING.

    ``(a) Grants To Support the Long-Term Care Ombudsman Program.--
        ``(1) In general.--The Secretary shall make grants to eligible 
    entities with relevant expertise and experience in abuse and 
    neglect in long-term care facilities or long-term care ombudsman 
    programs and responsibilities, for the purpose of--
            ``(A) improving the capacity of State long-term care 
        ombudsman programs to respond to and resolve complaints about 
        abuse and neglect;
            ``(B) conducting pilot programs with State long-term care 
        ombudsman offices or local ombudsman entities; and
            ``(C) providing support for such State long-term care 
        ombudsman programs and such pilot programs (such as through the 
        establishment of a national long-term care ombudsman resource 
        center).
        ``(2) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection--
            ``(A) for fiscal year 2011, $5,000,000;
            ``(B) for fiscal year 2012, $7,500,000; and
            ``(C) for each of fiscal years 2013 and 2014, $10,000,000.
    ``(b) Ombudsman Training Programs.--
        ``(1) In general.--The Secretary shall establish programs to 
    provide and improve ombudsman training with respect to elder abuse, 
    neglect, and exploitation for national organizations and State 
    long-term care ombudsman programs.
        ``(2) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, for each of fiscal 
    years 2011 through 2014, $10,000,000.

``SEC. 2044. PROVISION OF INFORMATION REGARDING, AND EVALUATIONS OF, 
              ELDER JUSTICE PROGRAMS.

    ``(a) Provision of Information.--To be eligible to receive a grant 
under this part, an applicant shall agree--
        ``(1) except as provided in paragraph (2), to provide the 
    eligible entity conducting an evaluation under subsection (b) of 
    the activities funded through the grant with such information as 
    the eligible entity may require in order to conduct such 
    evaluation; or
        ``(2) in the case of an applicant for a grant under section 
    2041(b), to provide the Secretary with such information as the 
    Secretary may require to conduct an evaluation or audit under 
    subsection (c).
    ``(b) Use of Eligible Entities To Conduct Evaluations.--
        ``(1) Evaluations required.--Except as provided in paragraph 
    (2), the Secretary shall--
            ``(A) reserve a portion (not less than 2 percent) of the 
        funds appropriated with respect to each program carried out 
        under this part; and
            ``(B) use the funds reserved under subparagraph (A) to 
        provide assistance to eligible entities to conduct evaluations 
        of the activities funded under each program carried out under 
        this part.
        ``(2) Certified ehr technology grant program not included.--The 
    provisions of this subsection shall not apply to the certified EHR 
    technology grant program under section 2041(b).
        ``(3) Authorized activities.--A recipient of assistance 
    described in paragraph (1)(B) shall use the funds made available 
    through the assistance to conduct a validated evaluation of the 
    effectiveness of the activities funded under a program carried out 
    under this part.
        ``(4) Applications.--To be eligible to receive assistance under 
    paragraph (1)(B), an entity shall submit an application to the 
    Secretary at such time, in such manner, and containing such 
    information as the Secretary may require, including a proposal for 
    the evaluation.
        ``(5) Reports.--Not later than a date specified by the 
    Secretary, an eligible entity receiving assistance under paragraph 
    (1)(B) shall submit to the Secretary, the Committee on Ways and 
    Means and the Committee on Energy and Commerce of the House of 
    Representatives, and the Committee on Finance of the Senate a 
    report containing the results of the evaluation conducted using 
    such assistance together with such recommendations as the entity 
    determines to be appropriate.
    ``(c) Evaluations and Audits of Certified EHR Technology Grant 
Program by the Secretary.--
        ``(1) Evaluations.--The Secretary shall conduct an evaluation 
    of the activities funded under the certified EHR technology grant 
    program under section 2041(b). Such evaluation shall include an 
    evaluation of whether the funding provided under the grant is 
    expended only for the purposes for which it is made.
        ``(2) Audits.--The Secretary shall conduct appropriate audits 
    of grants made under section 2041(b).

``SEC. 2045. REPORT.

    ``Not later than October 1, 2014, the Secretary shall submit to the 
Elder Justice Coordinating Council established under section 2021, the 
Committee on Ways and Means and the Committee on Energy and Commerce of 
the House of Representatives, and the Committee on Finance of the 
Senate a report--
        ``(1) compiling, summarizing, and analyzing the information 
    contained in the State reports submitted under subsections (b)(4) 
    and (c)(4) of section 2042; and
        ``(2) containing such recommendations for legislative or 
    administrative action as the Secretary determines to be 
    appropriate.

``SEC. 2046. RULE OF CONSTRUCTION.

    ``Nothing in this subtitle shall be construed as--
        ``(1) limiting any cause of action or other relief related to 
    obligations under this subtitle that is available under the law of 
    any State, or political subdivision thereof; or
        ``(2) creating a private cause of action for a violation of 
    this subtitle.''.
        (2) Option for state plan under program for temporary 
    assistance for needy families.--
            (A) In general.--Section 402(a)(1)(B) of the Social 
        Security Act (42 U.S.C. 602(a)(1)(B)) is amended by adding at 
        the end the following new clause:
                ``(v) The document shall indicate whether the State 
            intends to assist individuals to train for, seek, and 
            maintain employment--

                    ``(I) providing direct care in a long-term care 
                facility (as such terms are defined under section 
                2011); or
                    ``(II) in other occupations related to elder care 
                determined appropriate by the State for which the State 
                identifies an unmet need for service personnel,

            and, if so, shall include an overview of such 
            assistance.''.
            (B) Effective date.--The amendment made by subparagraph (A) 
        shall take effect on January 1, 2011.
    (b) Protecting Residents of Long-Term Care Facilities.--
        (1) National training institute for surveyors.--
            (A) In general.--The Secretary of Health and Human Services 
        shall enter into a contract with an entity for the purpose of 
        establishing and operating a National Training Institute for 
        Federal and State surveyors. Such Institute shall provide and 
        improve the training of surveyors with respect to investigating 
        allegations of abuse, neglect, and misappropriation of property 
        in programs and long-term care facilities that receive payments 
        under title XVIII or XIX of the Social Security Act.
            (B) Activities carried out by the institute.--The contract 
        entered into under subparagraph (A) shall require the Institute 
        established and operated under such contract to carry out the 
        following activities:
                (i) Assess the extent to which State agencies use 
            specialized surveyors for the investigation of reported 
            allegations of abuse, neglect, and misappropriation of 
            property in such programs and long-term care facilities.
                (ii) Evaluate how the competencies of surveyors may be 
            improved to more effectively investigate reported 
            allegations of such abuse, neglect, and misappropriation of 
            property, and provide feedback to Federal and State 
            agencies on the evaluations conducted.
                (iii) Provide a national program of training, tools, 
            and technical assistance to Federal and State surveyors on 
            investigating reports of such abuse, neglect, and 
            misappropriation of property.
                (iv) Develop and disseminate information on best 
            practices for the investigation of such abuse, neglect, and 
            misappropriation of property.
                (v) Assess the performance of State complaint intake 
            systems, in order to ensure that the intake of complaints 
            occurs 24 hours per day, 7 days a week (including 
            holidays).
                (vi) To the extent approved by the Secretary of Health 
            and Human Services, provide a national 24 hours per day, 7 
            days a week (including holidays), back-up system to State 
            complaint intake systems in order to ensure optimum 
            national responsiveness to complaints of such abuse, 
            neglect, and misappropriation of property.
                (vii) Analyze and report annually on the following:

                    (I) The total number and sources of complaints of 
                such abuse, neglect, and misappropriation of property.
                    (II) The extent to which such complaints are 
                referred to law enforcement agencies.
                    (III) General results of Federal and State 
                investigations of such complaints.

                (viii) Conduct a national study of the cost to State 
            agencies of conducting complaint investigations of skilled 
            nursing facilities and nursing facilities under sections 
            1819 and 1919, respectively, of the Social Security Act (42 
            U.S.C. 1395i-3; 1396r), and making recommendations to the 
            Secretary of Health and Human Services with respect to 
            options to increase the efficiency and cost-effectiveness 
            of such investigations.
            (C) Authorization.--There are authorized to be appropriated 
        to carry out this paragraph, for the period of fiscal years 
        2011 through 2014, $12,000,000.
        (2) Grants to state survey agencies.--
            (A) In general.--The Secretary of Health and Human Services 
        shall make grants to State agencies that perform surveys of 
        skilled nursing facilities or nursing facilities under sections 
        1819 or 1919, respectively, of the Social Security Act (42 
        U.S.C. 1395i-3; 1395r).
            (B) Use of funds.--A grant awarded under subparagraph (A) 
        shall be used for the purpose of designing and implementing 
        complaint investigations systems that--
                (i) promptly prioritize complaints in order to ensure a 
            rapid response to the most serious and urgent complaints;
                (ii) respond to complaints with optimum effectiveness 
            and timeliness; and
                (iii) optimize the collaboration between local 
            authorities, consumers, and providers, including--

                    (I) such State agency;
                    (II) the State Long-Term Care Ombudsman;
                    (III) local law enforcement agencies;
                    (IV) advocacy and consumer organizations;
                    (V) State aging units;
                    (VI) Area Agencies on Aging; and
                    (VII) other appropriate entities.

            (C) Authorization.--There are authorized to be appropriated 
        to carry out this paragraph, for each of fiscal years 2011 
        through 2014, $5,000,000.
        (3) Reporting of crimes in federally funded long-term care 
    facilities.--Part A of title XI of the Social Security Act (42 
    U.S.C. 1301 et seq.), as amended by section 6005, is amended by 
    inserting after section 1150A the following new section:


     ``reporting to law enforcement of crimes occurring in federally 
                    funded long-term care facilities

    ``Sec. 1150B.  (a) Determination and Notification.--
        ``(1) Determination.--The owner or operator of each long-term 
    care facility that receives Federal funds under this Act shall 
    annually determine whether the facility received at least $10,000 
    in such Federal funds during the preceding year.
        ``(2) Notification.--If the owner or operator determines under 
    paragraph (1) that the facility received at least $10,000 in such 
    Federal funds during the preceding year, such owner or operator 
    shall annually notify each covered individual (as defined in 
    paragraph (3)) of that individual's obligation to comply with the 
    reporting requirements described in subsection (b).
        ``(3) Covered individual defined.--In this section, the term 
    `covered individual' means each individual who is an owner, 
    operator, employee, manager, agent, or contractor of a long-term 
    care facility that is the subject of a determination described in 
    paragraph (1).
    ``(b) Reporting Requirements.--
        ``(1) In general.--Each covered individual shall report to the 
    Secretary and 1 or more law enforcement entities for the political 
    subdivision in which the facility is located any reasonable 
    suspicion of a crime (as defined by the law of the applicable 
    political subdivision) against any individual who is a resident of, 
    or is receiving care from, the facility.
        ``(2) Timing.--If the events that cause the suspicion--
            ``(A) result in serious bodily injury, the individual shall 
        report the suspicion immediately, but not later than 2 hours 
        after forming the suspicion; and
            ``(B) do not result in serious bodily injury, the 
        individual shall report the suspicion not later than 24 hours 
        after forming the suspicion.
    ``(c) Penalties.--
        ``(1) In general.--If a covered individual violates subsection 
    (b)--
            ``(A) the covered individual shall be subject to a civil 
        money penalty of not more than $200,000; and
            ``(B) the Secretary may make a determination in the same 
        proceeding to exclude the covered individual from participation 
        in any Federal health care program (as defined in section 
        1128B(f)).
        ``(2) Increased harm.--If a covered individual violates 
    subsection (b) and the violation exacerbates the harm to the victim 
    of the crime or results in harm to another individual--
            ``(A) the covered individual shall be subject to a civil 
        money penalty of not more than $300,000; and
            ``(B) the Secretary may make a determination in the same 
        proceeding to exclude the covered individual from participation 
        in any Federal health care program (as defined in section 
        1128B(f)).
        ``(3) Excluded individual.--During any period for which a 
    covered individual is classified as an excluded individual under 
    paragraph (1)(B) or (2)(B), a long-term care facility that employs 
    such individual shall be ineligible to receive Federal funds under 
    this Act.
        ``(4) Extenuating circumstances.--
            ``(A) In general.--The Secretary may take into account the 
        financial burden on providers with underserved populations in 
        determining any penalty to be imposed under this subsection.
            ``(B) Underserved population defined.--In this paragraph, 
        the term `underserved population' means the population of an 
        area designated by the Secretary as an area with a shortage of 
        elder justice programs or a population group designated by the 
        Secretary as having a shortage of such programs. Such areas or 
        groups designated by the Secretary may include--
                ``(i) areas or groups that are geographically isolated 
            (such as isolated in a rural area);
                ``(ii) racial and ethnic minority populations; and
                ``(iii) populations underserved because of special 
            needs (such as language barriers, disabilities, alien 
            status, or age).
    ``(d) Additional Penalties for Retaliation.--
        ``(1) In general.--A long-term care facility may not--
            ``(A) discharge, demote, suspend, threaten, harass, or deny 
        a promotion or other employment-related benefit to an employee, 
        or in any other manner discriminate against an employee in the 
        terms and conditions of employment because of lawful acts done 
        by the employee; or
            ``(B) file a complaint or a report against a nurse or other 
        employee with the appropriate State professional disciplinary 
        agency because of lawful acts done by the nurse or employee,
    for making a report, causing a report to be made, or for taking 
    steps in furtherance of making a report pursuant to subsection 
    (b)(1).
        ``(2) Penalties for retaliation.--If a long-term care facility 
    violates subparagraph (A) or (B) of paragraph (1) the facility 
    shall be subject to a civil money penalty of not more than $200,000 
    or the Secretary may classify the entity as an excluded entity for 
    a period of 2 years pursuant to section 1128(b), or both.
        ``(3) Requirement to post notice.--Each long-term care facility 
    shall post conspicuously in an appropriate location a sign (in a 
    form specified by the Secretary) specifying the rights of employees 
    under this section. Such sign shall include a statement that an 
    employee may file a complaint with the Secretary against a long-
    term care facility that violates the provisions of this subsection 
    and information with respect to the manner of filing such a 
    complaint.
    ``(e) Procedure.--The provisions of section 1128A (other than 
subsections (a) and (b) and the second sentence of subsection (f)) 
shall apply to a civil money penalty or exclusion under this section in 
the same manner as such provisions apply to a penalty or proceeding 
under section 1128A(a).
    ``(f) Definitions.--In this section, the terms `elder justice', 
`long-term care facility', and `law enforcement' have the meanings 
given those terms in section 2011.''.
    (c) National Nurse Aide Registry.--
        (1) Definition of nurse aide.--In this subsection, the term 
    ``nurse aide'' has the meaning given that term in sections 
    1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 
    U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
        (2) Study and report.--
            (A) In general.--The Secretary, in consultation with 
        appropriate government agencies and private sector 
        organizations, shall conduct a study on establishing a national 
        nurse aide registry.
            (B) Areas evaluated.--The study conducted under this 
        subsection shall include an evaluation of--
                (i) who should be included in the registry;
                (ii) how such a registry would comply with Federal and 
            State privacy laws and regulations;
                (iii) how data would be collected for the registry;
                (iv) what entities and individuals would have access to 
            the data collected;
                (v) how the registry would provide appropriate 
            information regarding violations of Federal and State law 
            by individuals included in the registry;
                (vi) how the functions of a national nurse aide 
            registry would be coordinated with the nationwide program 
            for national and State background checks on direct patient 
            access employees of long-term care facilities and providers 
            under section 4301; and
                (vii) how the information included in State nurse aide 
            registries developed and maintained under sections 
            1819(e)(2) and 1919(e)(2) of the Social Security Act (42 
            U.S.C. 1395i-3(e)(2); 1396r(e)(2)(2)) would be provided as 
            part of a national nurse aide registry.
            (C) Considerations.--In conducting the study and preparing 
        the report required under this subsection, the Secretary shall 
        take into consideration the findings and conclusions of 
        relevant reports and other relevant resources, including the 
        following:
                (i) The Department of Health and Human Services Office 
            of Inspector General Report, Nurse Aide Registries: State 
            Compliance and Practices (February 2005).
                (ii) The General Accounting Office (now known as the 
            Government Accountability Office) Report, Nursing Homes: 
            More Can Be Done to Protect Residents from Abuse (March 
            2002).
                (iii) The Department of Health and Human Services 
            Office of the Inspector General Report, Nurse Aide 
            Registries: Long-Term Care Facility Compliance and 
            Practices (July 2005).
                (iv) The Department of Health and Human Services Health 
            Resources and Services Administration Report, Nursing 
            Aides, Home Health Aides, and Related Health Care 
            Occupations--National and Local Workforce Shortages and 
            Associated Data Needs (2004) (in particular with respect to 
            chapter 7 and appendix F).
                (v) The 2001 Report to CMS from the School of Rural 
            Public Health, Texas A&M University, Preventing Abuse and 
            Neglect in Nursing Homes: The Role of Nurse Aide 
            Registries.
                (vi) Information included in State nurse aide 
            registries developed and maintained under sections 
            1819(e)(2) and 1919(e)(2) of the Social Security Act (42 
            U.S.C. 1395i-3(e)(2); 1396r(e)(2)(2)).
            (D) Report.--Not later than 18 months after the date of 
        enactment of this Act, the Secretary shall submit to the Elder 
        Justice Coordinating Council established under section 2021 of 
        the Social Security Act, as added by section 1805(a), the 
        Committee on Finance of the Senate, and the Committee on Ways 
        and Means and the Committee on Energy and Commerce of the House 
        of Representatives a report containing the findings and 
        recommendations of the study conducted under this paragraph.
            (E) Funding limitation.--Funding for the study conducted 
        under this subsection shall not exceed $500,000.
        (3) Congressional action.--After receiving the report submitted 
    by the Secretary under paragraph (2)(D), the Committee on Finance 
    of the Senate and the Committee on Ways and Means and the Committee 
    on Energy and Commerce of the House of Representatives shall, as 
    they deem appropriate, take action based on the recommendations 
    contained in the report.
        (4) Authorization of appropriations.--There are authorized to 
    be appropriated such sums as are necessary for the purpose of 
    carrying out this subsection.
    (d) Conforming Amendments.--
        (1) Title xx.--Title XX of the Social Security Act (42 U.S.C. 
    1397 et seq.), as amended by section 6703(a), is amended--
            (A) in the heading of section 2001, by striking ``title'' 
        and inserting ``subtitle''; and
            (B) in subtitle 1, by striking ``this title'' each place it 
        appears and inserting ``this subtitle''.
        (2) Title iv.--Title IV of the Social Security Act (42 U.S.C. 
    601 et seq.) is amended--
            (A) in section 404(d)--
                (i) in paragraphs (1)(A), (2)(A), and (3)(B), by 
            inserting ``subtitle 1 of'' before ``title XX'' each place 
            it appears;
                (ii) in the heading of paragraph (2), by inserting 
            ``subtitle 1 of'' before ``title xx''; and
                (iii) in the heading of paragraph (3)(B), by inserting 
            ``subtitle 1 of'' before ``title xx''; and
            (B) in sections 422(b), 471(a)(4), 472(h)(1), and 
        473(b)(2), by inserting ``subtitle 1 of'' before ``title XX'' 
        each place it appears.
        (3) Title xi.--Title XI of the Social Security Act (42 U.S.C. 
    1301 et seq.) is amended--
            (A) in section 1128(h)(3)--
                (i) by inserting ``subtitle 1 of'' before ``title XX''; 
            and
                (ii) by striking ``such title'' and inserting ``such 
            subtitle''; and
            (B) in section 1128A(i)(1), by inserting ``subtitle 1 of'' 
        before ``title XX''.

     Subtitle I--Sense of the Senate Regarding Medical Malpractice

SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

    It is the sense of the Senate that--
        (1) health care reform presents an opportunity to address 
    issues related to medical malpractice and medical liability 
    insurance;
        (2) States should be encouraged to develop and test 
    alternatives to the existing civil litigation system as a way of 
    improving patient safety, reducing medical errors, encouraging the 
    efficient resolution of disputes, increasing the availability of 
    prompt and fair resolution of disputes, and improving access to 
    liability insurance, while preserving an individual's right to seek 
    redress in court; and
        (3) Congress should consider establishing a State demonstration 
    program to evaluate alternatives to the existing civil litigation 
    system with respect to the resolution of medical malpractice 
    claims.

      TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES
         Subtitle A--Biologics Price Competition and Innovation

SEC. 7001. SHORT TITLE.

    (a) In General.--This subtitle may be cited as the ``Biologics 
Price Competition and Innovation Act of 2009''.
    (b) Sense of the Senate.--It is the sense of the Senate that a 
biosimilars pathway balancing innovation and consumer interests should 
be established.

SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) Licensure of Biological Products as Biosimilar or 
Interchangeable.--Section 351 of the Public Health Service Act (42 
U.S.C. 262) is amended--
        (1) in subsection (a)(1)(A), by inserting ``under this 
    subsection or subsection (k)'' after ``biologics license''; and
        (2) by adding at the end the following:
    ``(k) Licensure of Biological Products as Biosimilar or 
Interchangeable.--
        ``(1) In general.--Any person may submit an application for 
    licensure of a biological product under this subsection.
        ``(2) Content.--
            ``(A) In general.--
                ``(i) Required information.--An application submitted 
            under this subsection shall include information 
            demonstrating that--

                    ``(I) the biological product is biosimilar to a 
                reference product based upon data derived from--

                        ``(aa) analytical studies that demonstrate that 
                    the biological product is highly similar to the 
                    reference product notwithstanding minor differences 
                    in clinically inactive components;
                        ``(bb) animal studies (including the assessment 
                    of toxicity); and
                        ``(cc) a clinical study or studies (including 
                    the assessment of immunogenicity and 
                    pharmacokinetics or pharmacodynamics) that are 
                    sufficient to demonstrate safety, purity, and 
                    potency in 1 or more appropriate conditions of use 
                    for which the reference product is licensed and 
                    intended to be used and for which licensure is 
                    sought for the biological product;

                    ``(II) the biological product and reference product 
                utilize the same mechanism or mechanisms of action for 
                the condition or conditions of use prescribed, 
                recommended, or suggested in the proposed labeling, but 
                only to the extent the mechanism or mechanisms of 
                action are known for the reference product;
                    ``(III) the condition or conditions of use 
                prescribed, recommended, or suggested in the labeling 
                proposed for the biological product have been 
                previously approved for the reference product;
                    ``(IV) the route of administration, the dosage 
                form, and the strength of the biological product are 
                the same as those of the reference product; and
                    ``(V) the facility in which the biological product 
                is manufactured, processed, packed, or held meets 
                standards designed to assure that the biological 
                product continues to be safe, pure, and potent.

                ``(ii) Determination by secretary.--The Secretary may 
            determine, in the Secretary's discretion, that an element 
            described in clause (i)(I) is unnecessary in an application 
            submitted under this subsection.
                ``(iii) Additional information.--An application 
            submitted under this subsection--

                    ``(I) shall include publicly-available information 
                regarding the Secretary's previous determination that 
                the reference product is safe, pure, and potent; and
                    ``(II) may include any additional information in 
                support of the application, including publicly-
                available information with respect to the reference 
                product or another biological product.

            ``(B) Interchangeability.--An application (or a supplement 
        to an application) submitted under this subsection may include 
        information demonstrating that the biological product meets the 
        standards described in paragraph (4).
        ``(3) Evaluation by secretary.--Upon review of an application 
    (or a supplement to an application) submitted under this 
    subsection, the Secretary shall license the biological product 
    under this subsection if--
            ``(A) the Secretary determines that the information 
        submitted in the application (or the supplement) is sufficient 
        to show that the biological product--
                ``(i) is biosimilar to the reference product; or
                ``(ii) meets the standards described in paragraph (4), 
            and therefore is interchangeable with the reference 
            product; and
            ``(B) the applicant (or other appropriate person) consents 
        to the inspection of the facility that is the subject of the 
        application, in accordance with subsection (c).
        ``(4) Safety standards for determining interchangeability.--
    Upon review of an application submitted under this subsection or 
    any supplement to such application, the Secretary shall determine 
    the biological product to be interchangeable with the reference 
    product if the Secretary determines that the information submitted 
    in the application (or a supplement to such application) is 
    sufficient to show that--
            ``(A) the biological product--
                ``(i) is biosimilar to the reference product; and
                ``(ii) can be expected to produce the same clinical 
            result as the reference product in any given patient; and
            ``(B) for a biological product that is administered more 
        than once to an individual, the risk in terms of safety or 
        diminished efficacy of alternating or switching between use of 
        the biological product and the reference product is not greater 
        than the risk of using the reference product without such 
        alternation or switch.
        ``(5) General rules.--
            ``(A) One reference product per application.--A biological 
        product, in an application submitted under this subsection, may 
        not be evaluated against more than 1 reference product.
            ``(B) Review.--An application submitted under this 
        subsection shall be reviewed by the division within the Food 
        and Drug Administration that is responsible for the review and 
        approval of the application under which the reference product 
        is licensed.
            ``(C) Risk evaluation and mitigation strategies.--The 
        authority of the Secretary with respect to risk evaluation and 
        mitigation strategies under the Federal Food, Drug, and 
        Cosmetic Act shall apply to biological products licensed under 
        this subsection in the same manner as such authority applies to 
        biological products licensed under subsection (a).
        ``(6) Exclusivity for first interchangeable biological 
    product.--Upon review of an application submitted under this 
    subsection relying on the same reference product for which a prior 
    biological product has received a determination of 
    interchangeability for any condition of use, the Secretary shall 
    not make a determination under paragraph (4) that the second or 
    subsequent biological product is interchangeable for any condition 
    of use until the earlier of--
            ``(A) 1 year after the first commercial marketing of the 
        first interchangeable biosimilar biological product to be 
        approved as interchangeable for that reference product;
            ``(B) 18 months after--
                ``(i) a final court decision on all patents in suit in 
            an action instituted under subsection (l)(6) against the 
            applicant that submitted the application for the first 
            approved interchangeable biosimilar biological product; or
                ``(ii) the dismissal with or without prejudice of an 
            action instituted under subsection (l)(6) against the 
            applicant that submitted the application for the first 
            approved interchangeable biosimilar biological product; or
            ``(C)(i) 42 months after approval of the first 
        interchangeable biosimilar biological product if the applicant 
        that submitted such application has been sued under subsection 
        (l)(6) and such litigation is still ongoing within such 42-
        month period; or
            ``(ii) 18 months after approval of the first 
        interchangeable biosimilar biological product if the applicant 
        that submitted such application has not been sued under 
        subsection (l)(6).
    For purposes of this paragraph, the term `final court decision' 
    means a final decision of a court from which no appeal (other than 
    a petition to the United States Supreme Court for a writ of 
    certiorari) has been or can be taken.
        ``(7) Exclusivity for reference product.--
            ``(A) Effective date of biosimilar application approval.--
        Approval of an application under this subsection may not be 
        made effective by the Secretary until the date that is 12 years 
        after the date on which the reference product was first 
        licensed under subsection (a).
            ``(B) Filing period.--An application under this subsection 
        may not be submitted to the Secretary until the date that is 4 
        years after the date on which the reference product was first 
        licensed under subsection (a).
            ``(C) First licensure.--Subparagraphs (A) and (B) shall not 
        apply to a license for or approval of--
                ``(i) a supplement for the biological product that is 
            the reference product; or
                ``(ii) a subsequent application filed by the same 
            sponsor or manufacturer of the biological product that is 
            the reference product (or a licensor, predecessor in 
            interest, or other related entity) for--

                    ``(I) a change (not including a modification to the 
                structure of the biological product) that results in a 
                new indication, route of administration, dosing 
                schedule, dosage form, delivery system, delivery 
                device, or strength; or
                    ``(II) a modification to the structure of the 
                biological product that does not result in a change in 
                safety, purity, or potency.

        ``(8) Guidance documents.--
            ``(A) In general.--The Secretary may, after opportunity for 
        public comment, issue guidance in accordance, except as 
        provided in subparagraph (B)(i), with section 701(h) of the 
        Federal Food, Drug, and Cosmetic Act with respect to the 
        licensure of a biological product under this subsection. Any 
        such guidance may be general or specific.
            ``(B) Public comment.--
                ``(i) In general.--The Secretary shall provide the 
            public an opportunity to comment on any proposed guidance 
            issued under subparagraph (A) before issuing final 
            guidance.
                ``(ii) Input regarding most valuable guidance.--The 
            Secretary shall establish a process through which the 
            public may provide the Secretary with input regarding 
            priorities for issuing guidance.
            ``(C) No requirement for application consideration.--The 
        issuance (or non-issuance) of guidance under subparagraph (A) 
        shall not preclude the review of, or action on, an application 
        submitted under this subsection.
            ``(D) Requirement for product class-specific guidance.--If 
        the Secretary issues product class-specific guidance under 
        subparagraph (A), such guidance shall include a description 
        of--
                ``(i) the criteria that the Secretary will use to 
            determine whether a biological product is highly similar to 
            a reference product in such product class; and
                ``(ii) the criteria, if available, that the Secretary 
            will use to determine whether a biological product meets 
            the standards described in paragraph (4).
            ``(E) Certain product classes.--
                ``(i) Guidance.--The Secretary may indicate in a 
            guidance document that the science and experience, as of 
            the date of such guidance, with respect to a product or 
            product class (not including any recombinant protein) does 
            not allow approval of an application for a license as 
            provided under this subsection for such product or product 
            class.
                ``(ii) Modification or reversal.--The Secretary may 
            issue a subsequent guidance document under subparagraph (A) 
            to modify or reverse a guidance document under clause (i).
                ``(iii) No effect on ability to deny license.--Clause 
            (i) shall not be construed to require the Secretary to 
            approve a product with respect to which the Secretary has 
            not indicated in a guidance document that the science and 
            experience, as described in clause (i), does not allow 
            approval of such an application.
    ``(l) Patents.--
        ``(1) Confidential access to subsection (k) application.--
            ``(A) Application of paragraph.--Unless otherwise agreed to 
        by a person that submits an application under subsection (k) 
        (referred to in this subsection as the `subsection (k) 
        applicant') and the sponsor of the application for the 
        reference product (referred to in this subsection as the 
        `reference product sponsor'), the provisions of this paragraph 
        shall apply to the exchange of information described in this 
        subsection.
            ``(B) In general.--
                ``(i) Provision of confidential information.--When a 
            subsection (k) applicant submits an application under 
            subsection (k), such applicant shall provide to the persons 
            described in clause (ii), subject to the terms of this 
            paragraph, confidential access to the information required 
            to be produced pursuant to paragraph (2) and any other 
            information that the subsection (k) applicant determines, 
            in its sole discretion, to be appropriate (referred to in 
            this subsection as the `confidential information').
                ``(ii) Recipients of information.--The persons 
            described in this clause are the following:

                    ``(I) Outside counsel.--One or more attorneys 
                designated by the reference product sponsor who are 
                employees of an entity other than the reference product 
                sponsor (referred to in this paragraph as the `outside 
                counsel'), provided that such attorneys do not engage, 
                formally or informally, in patent prosecution relevant 
                or related to the reference product.
                    ``(II) In-house counsel.--One attorney that 
                represents the reference product sponsor who is an 
                employee of the reference product sponsor, provided 
                that such attorney does not engage, formally or 
                informally, in patent prosecution relevant or related 
                to the reference product.

                ``(iii) Patent owner access.--A representative of the 
            owner of a patent exclusively licensed to a reference 
            product sponsor with respect to the reference product and 
            who has retained a right to assert the patent or 
            participate in litigation concerning the patent may be 
            provided the confidential information, provided that the 
            representative informs the reference product sponsor and 
            the subsection (k) applicant of his or her agreement to be 
            subject to the confidentiality provisions set forth in this 
            paragraph, including those under clause (ii).
            ``(C) Limitation on disclosure.--No person that receives 
        confidential information pursuant to subparagraph (B) shall 
        disclose any confidential information to any other person or 
        entity, including the reference product sponsor employees, 
        outside scientific consultants, or other outside counsel 
        retained by the reference product sponsor, without the prior 
        written consent of the subsection (k) applicant, which shall 
        not be unreasonably withheld.
            ``(D) Use of confidential information.--Confidential 
        information shall be used for the sole and exclusive purpose of 
        determining, with respect to each patent assigned to or 
        exclusively licensed by the reference product sponsor, whether 
        a claim of patent infringement could reasonably be asserted if 
        the subsection (k) applicant engaged in the manufacture, use, 
        offering for sale, sale, or importation into the United States 
        of the biological product that is the subject of the 
        application under subsection (k).
            ``(E) Ownership of confidential information.--The 
        confidential information disclosed under this paragraph is, and 
        shall remain, the property of the subsection (k) applicant. By 
        providing the confidential information pursuant to this 
        paragraph, the subsection (k) applicant does not provide the 
        reference product sponsor or the outside counsel any interest 
        in or license to use the confidential information, for purposes 
        other than those specified in subparagraph (D).
            ``(F) Effect of infringement action.--In the event that the 
        reference product sponsor files a patent infringement suit, the 
        use of confidential information shall continue to be governed 
        by the terms of this paragraph until such time as a court 
        enters a protective order regarding the information. Upon entry 
        of such order, the subsection (k) applicant may redesignate 
        confidential information in accordance with the terms of that 
        order. No confidential information shall be included in any 
        publicly-available complaint or other pleading. In the event 
        that the reference product sponsor does not file an 
        infringement action by the date specified in paragraph (6), the 
        reference product sponsor shall return or destroy all 
        confidential information received under this paragraph, 
        provided that if the reference product sponsor opts to destroy 
        such information, it will confirm destruction in writing to the 
        subsection (k) applicant.
            ``(G) Rule of construction.--Nothing in this paragraph 
        shall be construed--
                ``(i) as an admission by the subsection (k) applicant 
            regarding the validity, enforceability, or infringement of 
            any patent; or
                ``(ii) as an agreement or admission by the subsection 
            (k) applicant with respect to the competency, relevance, or 
            materiality of any confidential information.
            ``(H) Effect of violation.--The disclosure of any 
        confidential information in violation of this paragraph shall 
        be deemed to cause the subsection (k) applicant to suffer 
        irreparable harm for which there is no adequate legal remedy 
        and the court shall consider immediate injunctive relief to be 
        an appropriate and necessary remedy for any violation or 
        threatened violation of this paragraph.
        ``(2) Subsection (k) application information.--Not later than 
    20 days after the Secretary notifies the subsection (k) applicant 
    that the application has been accepted for review, the subsection 
    (k) applicant--
            ``(A) shall provide to the reference product sponsor a copy 
        of the application submitted to the Secretary under subsection 
        (k), and such other information that describes the process or 
        processes used to manufacture the biological product that is 
        the subject of such application; and
            ``(B) may provide to the reference product sponsor 
        additional information requested by or on behalf of the 
        reference product sponsor.
        ``(3) List and description of patents.--
            ``(A) List by reference product sponsor.--Not later than 60 
        days after the receipt of the application and information under 
        paragraph (2), the reference product sponsor shall provide to 
        the subsection (k) applicant--
                ``(i) a list of patents for which the reference product 
            sponsor believes a claim of patent infringement could 
            reasonably be asserted by the reference product sponsor, or 
            by a patent owner that has granted an exclusive license to 
            the reference product sponsor with respect to the reference 
            product, if a person not licensed by the reference product 
            sponsor engaged in the making, using, offering to sell, 
            selling, or importing into the United States of the 
            biological product that is the subject of the subsection 
            (k) application; and
                ``(ii) an identification of the patents on such list 
            that the reference product sponsor would be prepared to 
            license to the subsection (k) applicant.
            ``(B) List and description by subsection (k) applicant.--
        Not later than 60 days after receipt of the list under 
        subparagraph (A), the subsection (k) applicant--
                ``(i) may provide to the reference product sponsor a 
            list of patents to which the subsection (k) applicant 
            believes a claim of patent infringement could reasonably be 
            asserted by the reference product sponsor if a person not 
            licensed by the reference product sponsor engaged in the 
            making, using, offering to sell, selling, or importing into 
            the United States of the biological product that is the 
            subject of the subsection (k) application;
                ``(ii) shall provide to the reference product sponsor, 
            with respect to each patent listed by the reference product 
            sponsor under subparagraph (A) or listed by the subsection 
            (k) applicant under clause (i)--

                    ``(I) a detailed statement that describes, on a 
                claim by claim basis, the factual and legal basis of 
                the opinion of the subsection (k) applicant that such 
                patent is invalid, unenforceable, or will not be 
                infringed by the commercial marketing of the biological 
                product that is the subject of the subsection (k) 
                application; or
                    ``(II) a statement that the subsection (k) 
                applicant does not intend to begin commercial marketing 
                of the biological product before the date that such 
                patent expires; and

                ``(iii) shall provide to the reference product sponsor 
            a response regarding each patent identified by the 
            reference product sponsor under subparagraph (A)(ii).
            ``(C) Description by reference product sponsor.--Not later 
        than 60 days after receipt of the list and statement under 
        subparagraph (B), the reference product sponsor shall provide 
        to the subsection (k) applicant a detailed statement that 
        describes, with respect to each patent described in 
        subparagraph (B)(ii)(I), on a claim by claim basis, the factual 
        and legal basis of the opinion of the reference product sponsor 
        that such patent will be infringed by the commercial marketing 
        of the biological product that is the subject of the subsection 
        (k) application and a response to the statement concerning 
        validity and enforceability provided under subparagraph 
        (B)(ii)(I).
        ``(4) Patent resolution negotiations.--
            ``(A) In general.--After receipt by the subsection (k) 
        applicant of the statement under paragraph (3)(C), the 
        reference product sponsor and the subsection (k) applicant 
        shall engage in good faith negotiations to agree on which, if 
        any, patents listed under paragraph (3) by the subsection (k) 
        applicant or the reference product sponsor shall be the subject 
        of an action for patent infringement under paragraph (6).
            ``(B) Failure to reach agreement.--If, within 15 days of 
        beginning negotiations under subparagraph (A), the subsection 
        (k) applicant and the reference product sponsor fail to agree 
        on a final and complete list of which, if any, patents listed 
        under paragraph (3) by the subsection (k) applicant or the 
        reference product sponsor shall be the subject of an action for 
        patent infringement under paragraph (6), the provisions of 
        paragraph (5) shall apply to the parties.
        ``(5) Patent resolution if no agreement.--
            ``(A) Number of patents.--The subsection (k) applicant 
        shall notify the reference product sponsor of the number of 
        patents that such applicant will provide to the reference 
        product sponsor under subparagraph (B)(i)(I).
            ``(B) Exchange of patent lists.--
                ``(i) In general.--On a date agreed to by the 
            subsection (k) applicant and the reference product sponsor, 
            but in no case later than 5 days after the subsection (k) 
            applicant notifies the reference product sponsor under 
            subparagraph (A), the subsection (k) applicant and the 
            reference product sponsor shall simultaneously exchange--

                    ``(I) the list of patents that the subsection (k) 
                applicant believes should be the subject of an action 
                for patent infringement under paragraph (6); and
                    ``(II) the list of patents, in accordance with 
                clause (ii), that the reference product sponsor 
                believes should be the subject of an action for patent 
                infringement under paragraph (6).

                ``(ii) Number of patents listed by reference product 
            sponsor.--

                    ``(I) In general.--Subject to subclause (II), the 
                number of patents listed by the reference product 
                sponsor under clause (i)(II) may not exceed the number 
                of patents listed by the subsection (k) applicant under 
                clause (i)(I).
                    ``(II) Exception.--If a subsection (k) applicant 
                does not list any patent under clause (i)(I), the 
                reference product sponsor may list 1 patent under 
                clause (i)(II).

        ``(6) Immediate patent infringement action.--
            ``(A) Action if agreement on patent list.--If the 
        subsection (k) applicant and the reference product sponsor 
        agree on patents as described in paragraph (4), not later than 
        30 days after such agreement, the reference product sponsor 
        shall bring an action for patent infringement with respect to 
        each such patent.
            ``(B) Action if no agreement on patent list.--If the 
        provisions of paragraph (5) apply to the parties as described 
        in paragraph (4)(B), not later than 30 days after the exchange 
        of lists under paragraph (5)(B), the reference product sponsor 
        shall bring an action for patent infringement with respect to 
        each patent that is included on such lists.
            ``(C) Notification and publication of complaint.--
                ``(i) Notification to secretary.--Not later than 30 
            days after a complaint is served to a subsection (k) 
            applicant in an action for patent infringement described 
            under this paragraph, the subsection (k) applicant shall 
            provide the Secretary with notice and a copy of such 
            complaint.
                ``(ii) Publication by secretary.--The Secretary shall 
            publish in the Federal Register notice of a complaint 
            received under clause (i).
        ``(7) Newly issued or licensed patents.--In the case of a 
    patent that--
            ``(A) is issued to, or exclusively licensed by, the 
        reference product sponsor after the date that the reference 
        product sponsor provided the list to the subsection (k) 
        applicant under paragraph (3)(A); and
            ``(B) the reference product sponsor reasonably believes 
        that, due to the issuance of such patent, a claim of patent 
        infringement could reasonably be asserted by the reference 
        product sponsor if a person not licensed by the reference 
        product sponsor engaged in the making, using, offering to sell, 
        selling, or importing into the United States of the biological 
        product that is the subject of the subsection (k) application,
    not later than 30 days after such issuance or licensing, the 
    reference product sponsor shall provide to the subsection (k) 
    applicant a supplement to the list provided by the reference 
    product sponsor under paragraph (3)(A) that includes such patent, 
    not later than 30 days after such supplement is provided, the 
    subsection (k) applicant shall provide a statement to the reference 
    product sponsor in accordance with paragraph (3)(B), and such 
    patent shall be subject to paragraph (8).
        ``(8) Notice of commercial marketing and preliminary 
    injunction.--
            ``(A) Notice of commercial marketing.--The subsection (k) 
        applicant shall provide notice to the reference product sponsor 
        not later than 180 days before the date of the first commercial 
        marketing of the biological product licensed under subsection 
        (k).
            ``(B) Preliminary injunction.--After receiving the notice 
        under subparagraph (A) and before such date of the first 
        commercial marketing of such biological product, the reference 
        product sponsor may seek a preliminary injunction prohibiting 
        the subsection (k) applicant from engaging in the commercial 
        manufacture or sale of such biological product until the court 
        decides the issue of patent validity, enforcement, and 
        infringement with respect to any patent that is--
                ``(i) included in the list provided by the reference 
            product sponsor under paragraph (3)(A) or in the list 
            provided by the subsection (k) applicant under paragraph 
            (3)(B); and
                ``(ii) not included, as applicable, on--

                    ``(I) the list of patents described in paragraph 
                (4); or
                    ``(II) the lists of patents described in paragraph 
                (5)(B).

            ``(C) Reasonable cooperation.--If the reference product 
        sponsor has sought a preliminary injunction under subparagraph 
        (B), the reference product sponsor and the subsection (k) 
        applicant shall reasonably cooperate to expedite such further 
        discovery as is needed in connection with the preliminary 
        injunction motion.
        ``(9) Limitation on declaratory judgment action.--
            ``(A) Subsection (k) application provided.--If a subsection 
        (k) applicant provides the application and information required 
        under paragraph (2)(A), neither the reference product sponsor 
        nor the subsection (k) applicant may, prior to the date notice 
        is received under paragraph (8)(A), bring any action under 
        section 2201 of title 28, United States Code, for a declaration 
        of infringement, validity, or enforceability of any patent that 
        is described in clauses (i) and (ii) of paragraph (8)(B).
            ``(B) Subsequent failure to act by subsection (k) 
        applicant.--If a subsection (k) applicant fails to complete an 
        action required of the subsection (k) applicant under paragraph 
        (3)(B)(ii), paragraph (5), paragraph (6)(C)(i), paragraph (7), 
        or paragraph (8)(A), the reference product sponsor, but not the 
        subsection (k) applicant, may bring an action under section 
        2201 of title 28, United States Code, for a declaration of 
        infringement, validity, or enforceability of any patent 
        included in the list described in paragraph (3)(A), including 
        as provided under paragraph (7).
            ``(C) Subsection (k) application not provided.--If a 
        subsection (k) applicant fails to provide the application and 
        information required under paragraph (2)(A), the reference 
        product sponsor, but not the subsection (k) applicant, may 
        bring an action under section 2201 of title 28, United States 
        Code, for a declaration of infringement, validity, or 
        enforceability of any patent that claims the biological product 
        or a use of the biological product.''.
    (b) Definitions.--Section 351(i) of the Public Health Service Act 
(42 U.S.C. 262(i)) is amended--
        (1) by striking ``In this section, the term `biological 
    product' means'' and inserting the following: ``In this section:
        ``(1) The term `biological product' means'';
        (2) in paragraph (1), as so designated, by inserting ``protein 
    (except any chemically synthesized polypeptide),'' after 
    ``allergenic product,''; and
        (3) by adding at the end the following:
        ``(2) The term `biosimilar' or `biosimilarity', in reference to 
    a biological product that is the subject of an application under 
    subsection (k), means--
            ``(A) that the biological product is highly similar to the 
        reference product notwithstanding minor differences in 
        clinically inactive components; and
            ``(B) there are no clinically meaningful differences 
        between the biological product and the reference product in 
        terms of the safety, purity, and potency of the product.
        ``(3) The term `interchangeable' or `interchangeability', in 
    reference to a biological product that is shown to meet the 
    standards described in subsection (k)(4), means that the biological 
    product may be substituted for the reference product without the 
    intervention of the health care provider who prescribed the 
    reference product.
        ``(4) The term `reference product' means the single biological 
    product licensed under subsection (a) against which a biological 
    product is evaluated in an application submitted under subsection 
    (k).''.
    (c) Conforming Amendments Relating to Patents.--
        (1) Patents.--Section 271(e) of title 35, United States Code, 
    is amended--
            (A) in paragraph (2)--
                (i) in subparagraph (A), by striking ``or'' at the end;
                (ii) in subparagraph (B), by adding ``or'' at the end; 
            and
                (iii) by inserting after subparagraph (B) the 
            following:
        ``(C)(i) with respect to a patent that is identified in the 
    list of patents described in section 351(l)(3) of the Public Health 
    Service Act (including as provided under section 351(l)(7) of such 
    Act), an application seeking approval of a biological product, or
        ``(ii) if the applicant for the application fails to provide 
    the application and information required under section 351(l)(2)(A) 
    of such Act, an application seeking approval of a biological 
    product for a patent that could be identified pursuant to section 
    351(l)(3)(A)(i) of such Act,''; and
                (iv) in the matter following subparagraph (C) (as added 
            by clause (iii)), by striking ``or veterinary biological 
            product'' and inserting ``, veterinary biological product, 
            or biological product'';
            (B) in paragraph (4)--
                (i) in subparagraph (B), by--

                    (I) striking ``or veterinary biological product'' 
                and inserting ``, veterinary biological product, or 
                biological product''; and
                    (II) striking ``and'' at the end;

                (ii) in subparagraph (C), by--

                    (I) striking ``or veterinary biological product'' 
                and inserting ``, veterinary biological product, or 
                biological product''; and
                    (II) striking the period and inserting ``, and'';

                (iii) by inserting after subparagraph (C) the 
            following:
        ``(D) the court shall order a permanent injunction prohibiting 
    any infringement of the patent by the biological product involved 
    in the infringement until a date which is not earlier than the date 
    of the expiration of the patent that has been infringed under 
    paragraph (2)(C), provided the patent is the subject of a final 
    court decision, as defined in section 351(k)(6) of the Public 
    Health Service Act, in an action for infringement of the patent 
    under section 351(l)(6) of such Act, and the biological product has 
    not yet been approved because of section 351(k)(7) of such Act.''; 
    and
                (iv) in the matter following subparagraph (D) (as added 
            by clause (iii)), by striking ``and (C)'' and inserting 
            ``(C), and (D)''; and
            (C) by adding at the end the following:
    ``(6)(A) Subparagraph (B) applies, in lieu of paragraph (4), in the 
case of a patent--
        ``(i) that is identified, as applicable, in the list of patents 
    described in section 351(l)(4) of the Public Health Service Act or 
    the lists of patents described in section 351(l)(5)(B) of such Act 
    with respect to a biological product; and
        ``(ii) for which an action for infringement of the patent with 
    respect to the biological product--
            ``(I) was brought after the expiration of the 30-day period 
        described in subparagraph (A) or (B), as applicable, of section 
        351(l)(6) of such Act; or
            ``(II) was brought before the expiration of the 30-day 
        period described in subclause (I), but which was dismissed 
        without prejudice or was not prosecuted to judgment in good 
        faith.
    ``(B) In an action for infringement of a patent described in 
subparagraph (A), the sole and exclusive remedy that may be granted by 
a court, upon a finding that the making, using, offering to sell, 
selling, or importation into the United States of the biological 
product that is the subject of the action infringed the patent, shall 
be a reasonable royalty.
    ``(C) The owner of a patent that should have been included in the 
list described in section 351(l)(3)(A) of the Public Health Service 
Act, including as provided under section 351(l)(7) of such Act for a 
biological product, but was not timely included in such list, may not 
bring an action under this section for infringement of the patent with 
respect to the biological product.''.
        (2) Conforming amendment under title 28.--Section 2201(b) of 
    title 28, United States Code, is amended by inserting before the 
    period the following: ``, or section 351 of the Public Health 
    Service Act''.
    (d) Conforming Amendments Under the Federal Food, Drug, and 
Cosmetic Act.--
        (1) Content and review of applications.--Section 505(b)(5)(B) 
    of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
    355(b)(5)(B)) is amended by inserting before the period at the end 
    of the first sentence the following: ``or, with respect to an 
    applicant for approval of a biological product under section 351(k) 
    of the Public Health Service Act, any necessary clinical study or 
    studies''.
        (2) New active ingredient.--Section 505B of the Federal Food, 
    Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by adding at the 
    end the following:
    ``(n) New Active Ingredient.--
        ``(1) Non-interchangeable biosimilar biological product.--A 
    biological product that is biosimilar to a reference product under 
    section 351 of the Public Health Service Act, and that the 
    Secretary has not determined to meet the standards described in 
    subsection (k)(4) of such section for interchangeability with the 
    reference product, shall be considered to have a new active 
    ingredient under this section.
        ``(2) Interchangeable biosimilar biological product.--A 
    biological product that is interchangeable with a reference product 
    under section 351 of the Public Health Service Act shall not be 
    considered to have a new active ingredient under this section.''.
    (e) Products Previously Approved Under Section 505.--
        (1) Requirement to follow section 351.--Except as provided in 
    paragraph (2), an application for a biological product shall be 
    submitted under section 351 of the Public Health Service Act (42 
    U.S.C. 262) (as amended by this Act).
        (2) Exception.--An application for a biological product may be 
    submitted under section 505 of the Federal Food, Drug, and Cosmetic 
    Act (21 U.S.C. 355) if--
            (A) such biological product is in a product class for which 
        a biological product in such product class is the subject of an 
        application approved under such section 505 not later than the 
        date of enactment of this Act; and
            (B) such application--
                (i) has been submitted to the Secretary of Health and 
            Human Services (referred to in this subtitle as the 
            ``Secretary'') before the date of enactment of this Act; or
                (ii) is submitted to the Secretary not later than the 
            date that is 10 years after the date of enactment of this 
            Act.
        (3) Limitation.--Notwithstanding paragraph (2), an application 
    for a biological product may not be submitted under section 505 of 
    the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) if there 
    is another biological product approved under subsection (a) of 
    section 351 of the Public Health Service Act that could be a 
    reference product with respect to such application (within the 
    meaning of such section 351) if such application were submitted 
    under subsection (k) of such section 351.
        (4) Deemed approved under section 351.--An approved application 
    for a biological product under section 505 of the Federal Food, 
    Drug, and Cosmetic Act (21 U.S.C. 355) shall be deemed to be a 
    license for the biological product under such section 351 on the 
    date that is 10 years after the date of enactment of this Act.
        (5) Definitions.--For purposes of this subsection, the term 
    ``biological product'' has the meaning given such term under 
    section 351 of the Public Health Service Act (42 U.S.C. 262) (as 
    amended by this Act).
    (f) Follow-on Biologics User Fees.--
        (1) Development of user fees for biosimilar biological 
    products.--
            (A) In general.--Beginning not later than October 1, 2010, 
        the Secretary shall develop recommendations to present to 
        Congress with respect to the goals, and plans for meeting the 
        goals, for the process for the review of biosimilar biological 
        product applications submitted under section 351(k) of the 
        Public Health Service Act (as added by this Act) for the first 
        5 fiscal years after fiscal year 2012. In developing such 
        recommendations, the Secretary shall consult with--
                (i) the Committee on Health, Education, Labor, and 
            Pensions of the Senate;
                (ii) the Committee on Energy and Commerce of the House 
            of Representatives;
                (iii) scientific and academic experts;
                (iv) health care professionals;
                (v) representatives of patient and consumer advocacy 
            groups; and
                (vi) the regulated industry.
            (B) Public review of recommendations.--After negotiations 
        with the regulated industry, the Secretary shall--
                (i) present the recommendations developed under 
            subparagraph (A) to the Congressional committees specified 
            in such subparagraph;
                (ii) publish such recommendations in the Federal 
            Register;
                (iii) provide for a period of 30 days for the public to 
            provide written comments on such recommendations;
                (iv) hold a meeting at which the public may present its 
            views on such recommendations; and
                (v) after consideration of such public views and 
            comments, revise such recommendations as necessary.
            (C) Transmittal of recommendations.--Not later than January 
        15, 2012, the Secretary shall transmit to Congress the revised 
        recommendations under subparagraph (B), a summary of the views 
        and comments received under such subparagraph, and any changes 
        made to the recommendations in response to such views and 
        comments.
        (2) Establishment of user fee program.--It is the sense of the 
    Senate that, based on the recommendations transmitted to Congress 
    by the Secretary pursuant to paragraph (1)(C), Congress should 
    authorize a program, effective on October 1, 2012, for the 
    collection of user fees relating to the submission of biosimilar 
    biological product applications under section 351(k) of the Public 
    Health Service Act (as added by this Act).
        (3) Transitional provisions for user fees for biosimilar 
    biological products.--
            (A) Application of the prescription drug user fee 
        provisions.--Section 735(1)(B) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended by striking 
        ``section 351'' and inserting ``subsection (a) or (k) of 
        section 351''.
            (B) Evaluation of costs of reviewing biosimilar biological 
        product applications.--During the period beginning on the date 
        of enactment of this Act and ending on October 1, 2010, the 
        Secretary shall collect and evaluate data regarding the costs 
        of reviewing applications for biological products submitted 
        under section 351(k) of the Public Health Service Act (as added 
        by this Act) during such period.
            (C) Audit.--
                (i) In general.--On the date that is 2 years after 
            first receiving a user fee applicable to an application for 
            a biological product under section 351(k) of the Public 
            Health Service Act (as added by this Act), and on a 
            biennial basis thereafter until October 1, 2013, the 
            Secretary shall perform an audit of the costs of reviewing 
            such applications under such section 351(k). Such an audit 
            shall compare--

                    (I) the costs of reviewing such applications under 
                such section 351(k) to the amount of the user fee 
                applicable to such applications; and
                    (II)(aa) such ratio determined under subclause (I); 
                to
                    (bb) the ratio of the costs of reviewing 
                applications for biological products under section 
                351(a) of such Act (as amended by this Act) to the 
                amount of the user fee applicable to such applications 
                under such section 351(a).

                (ii) Alteration of user fee.--If the audit performed 
            under clause (i) indicates that the ratios compared under 
            subclause (II) of such clause differ by more than 5 
            percent, then the Secretary shall alter the user fee 
            applicable to applications submitted under such section 
            351(k) to more appropriately account for the costs of 
            reviewing such applications.
                (iii) Accounting standards.--The Secretary shall 
            perform an audit under clause (i) in conformance with the 
            accounting principles, standards, and requirements 
            prescribed by the Comptroller General of the United States 
            under section 3511 of title 31, United State Code, to 
            ensure the validity of any potential variability.
        (4) Authorization of appropriations.--There is authorized to be 
    appropriated to carry out this subsection such sums as may be 
    necessary for each of fiscal years 2010 through 2012.
    (g) Pediatric Studies of Biological Products.--
        (1) In general.--Section 351 of the Public Health Service Act 
    (42 U.S.C. 262) is amended by adding at the end the following:
    ``(m) Pediatric Studies.--
        ``(1) Application of certain provisions.--The provisions of 
    subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q) of 
    section 505A of the Federal Food, Drug, and Cosmetic Act shall 
    apply with respect to the extension of a period under paragraphs 
    (2) and (3) to the same extent and in the same manner as such 
    provisions apply with respect to the extension of a period under 
    subsection (b) or (c) of section 505A of the Federal Food, Drug, 
    and Cosmetic Act.
        ``(2) Market exclusivity for new biological products.--If, 
    prior to approval of an application that is submitted under 
    subsection (a), the Secretary determines that information relating 
    to the use of a new biological product in the pediatric population 
    may produce health benefits in that population, the Secretary makes 
    a written request for pediatric studies (which shall include a 
    timeframe for completing such studies), the applicant agrees to the 
    request, such studies are completed using appropriate formulations 
    for each age group for which the study is requested within any such 
    timeframe, and the reports thereof are submitted and accepted in 
    accordance with section 505A(d)(3) of the Federal Food, Drug, and 
    Cosmetic Act--
            ``(A) the periods for such biological product referred to 
        in subsection (k)(7) are deemed to be 4 years and 6 months 
        rather than 4 years and 12 years and 6 months rather than 12 
        years; and
            ``(B) if the biological product is designated under section 
        526 for a rare disease or condition, the period for such 
        biological product referred to in section 527(a) is deemed to 
        be 7 years and 6 months rather than 7 years.
        ``(3) Market exclusivity for already-marketed biological 
    products.--If the Secretary determines that information relating to 
    the use of a licensed biological product in the pediatric 
    population may produce health benefits in that population and makes 
    a written request to the holder of an approved application under 
    subsection (a) for pediatric studies (which shall include a 
    timeframe for completing such studies), the holder agrees to the 
    request, such studies are completed using appropriate formulations 
    for each age group for which the study is requested within any such 
    timeframe, and the reports thereof are submitted and accepted in 
    accordance with section 505A(d)(3) of the Federal Food, Drug, and 
    Cosmetic Act--
            ``(A) the periods for such biological product referred to 
        in subsection (k)(7) are deemed to be 4 years and 6 months 
        rather than 4 years and 12 years and 6 months rather than 12 
        years; and
            ``(B) if the biological product is designated under section 
        526 for a rare disease or condition, the period for such 
        biological product referred to in section 527(a) is deemed to 
        be 7 years and 6 months rather than 7 years.
        ``(4) Exception.--The Secretary shall not extend a period 
    referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if the 
    determination under section 505A(d)(3) is made later than 9 months 
    prior to the expiration of such period.''.
        (2) Studies regarding pediatric research.--
            (A) Program for pediatric study of drugs.--Subsection 
        (a)(1) of section 409I of the Public Health Service Act (42 
        U.S.C. 284m) is amended by inserting ``, biological products,'' 
        after ``including drugs''.
            (B) Institute of medicine study.--Section 505A(p) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355b(p)) is 
        amended by striking paragraphs (4) and (5) and inserting the 
        following:
        ``(4) review and assess the number and importance of biological 
    products for children that are being tested as a result of the 
    amendments made by the Biologics Price Competition and Innovation 
    Act of 2009 and the importance for children, health care providers, 
    parents, and others of labeling changes made as a result of such 
    testing;
        ``(5) review and assess the number, importance, and 
    prioritization of any biological products that are not being tested 
    for pediatric use; and
        ``(6) offer recommendations for ensuring pediatric testing of 
    biological products, including consideration of any incentives, 
    such as those provided under this section or section 351(m) of the 
    Public Health Service Act.''.
    (h) Orphan Products.--If a reference product, as defined in section 
351 of the Public Health Service Act (42 U.S.C. 262) (as amended by 
this Act) has been designated under section 526 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or 
condition, a biological product seeking approval for such disease or 
condition under subsection (k) of such section 351 as biosimilar to, or 
interchangeable with, such reference product may be licensed by the 
Secretary only after the expiration for such reference product of the 
later of--
        (1) the 7-year period described in section 527(a) of the 
    Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and
        (2) the 12-year period described in subsection (k)(7) of such 
    section 351.

SEC. 7003. SAVINGS.

    (a) Determination.--The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall for each fiscal 
year determine the amount of savings to the Federal Government as a 
result of the enactment of this subtitle.
    (b) Use.--Notwithstanding any other provision of this subtitle (or 
an amendment made by this subtitle), the savings to the Federal 
Government generated as a result of the enactment of this subtitle 
shall be used for deficit reduction.

  Subtitle B--More Affordable Medicines for Children and Underserved 
                              Communities

SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 
256b(a)(4)) is amended by adding at the end the following:
            ``(M) A children's hospital excluded from the Medicare 
        prospective payment system pursuant to section 
        1886(d)(1)(B)(iii) of the Social Security Act, or a free-
        standing cancer hospital excluded from the Medicare prospective 
        payment system pursuant to section 1886(d)(1)(B)(v) of the 
        Social Security Act, that would meet the requirements of 
        subparagraph (L), including the disproportionate share 
        adjustment percentage requirement under clause (ii) of such 
        subparagraph, if the hospital were a subsection (d) hospital as 
        defined by section 1886(d)(1)(B) of the Social Security Act.
            ``(N) An entity that is a critical access hospital (as 
        determined under section 1820(c)(2) of the Social Security 
        Act), and that meets the requirements of subparagraph (L)(i).
            ``(O) An entity that is a rural referral center, as defined 
        by section 1886(d)(5)(C)(i) of the Social Security Act, or a 
        sole community hospital, as defined by section 
        1886(d)(5)(C)(iii) of such Act, and that both meets the 
        requirements of subparagraph (L)(i) and has a disproportionate 
        share adjustment percentage equal to or greater than 8 
        percent.''.
    (b) Extension of Discount to Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended--
        (1) in paragraphs (2), (5), (7), and (9) of subsection (a), by 
    striking ``outpatient'' each place it appears; and
        (2) in subsection (b)--
            (A) by striking ``Other Definition'' and all that follows 
        through ``In this section'' and inserting the following: 
        ``Other Definitions.--
        ``(1) In general.--In this section''; and
            (B) by adding at the end the following new paragraph:
        ``(2) Covered drug.--In this section, the term `covered drug'--
            ``(A) means a covered outpatient drug (as defined in 
        section 1927(k)(2) of the Social Security Act); and
            ``(B) includes, notwithstanding paragraph (3)(A) of section 
        1927(k) of such Act, a drug used in connection with an 
        inpatient or outpatient service provided by a hospital 
        described in subparagraph (L), (M), (N), or (O) of subsection 
        (a)(4) that is enrolled to participate in the drug discount 
        program under this section.''.
    (c) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
        (1) in paragraph (4)(L)--
            (A) in clause (i), by adding ``and'' at the end;
            (B) in clause (ii), by striking ``; and'' and inserting a 
        period; and
            (C) by striking clause (iii); and
        (2) in paragraph (5), as amended by subsection (b)--
            (A) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E); respectively; and
            (B) by inserting after subparagraph (B), the following:
            ``(C) Prohibition on group purchasing arrangements.--
                ``(i) In general.--A hospital described in subparagraph 
            (L), (M), (N), or (O) of paragraph (4) shall not obtain 
            covered outpatient drugs through a group purchasing 
            organization or other group purchasing arrangement, except 
            as permitted or provided for pursuant to clauses (ii) or 
            (iii).
                ``(ii) Inpatient drugs.--Clause (i) shall not apply to 
            drugs purchased for inpatient use.
                ``(iii) Exceptions.--The Secretary shall establish 
            reasonable exceptions to clause (i)--

                    ``(I) with respect to a covered outpatient drug 
                that is unavailable to be purchased through the program 
                under this section due to a drug shortage problem, 
                manufacturer noncompliance, or any other circumstance 
                beyond the hospital's control;
                    ``(II) to facilitate generic substitution when a 
                generic covered outpatient drug is available at a lower 
                price; or
                    ``(III) to reduce in other ways the administrative 
                burdens of managing both inventories of drugs subject 
                to this section and inventories of drugs that are not 
                subject to this section, so long as the exceptions do 
                not create a duplicate discount problem in violation of 
                subparagraph (A) or a diversion problem in violation of 
                subparagraph (B).

                ``(iv) Purchasing arrangements for inpatient drugs.--
            The Secretary shall ensure that a hospital described in 
            subparagraph (L), (M), (N), or (O) of subsection (a)(4) 
            that is enrolled to participate in the drug discount 
            program under this section shall have multiple options for 
            purchasing covered drugs for inpatients, including by 
            utilizing a group purchasing organization or other group 
            purchasing arrangement, establishing and utilizing its own 
            group purchasing program, purchasing directly from a 
            manufacturer, and any other purchasing arrangements that 
            the Secretary determines is appropriate to ensure access to 
            drug discount pricing under this section for inpatient 
            drugs taking into account the particular needs of small and 
            rural hospitals.''.
    (d) Medicaid Credits on Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended by striking 
subsection (c) and inserting the following:
    ``(c) Medicaid Credit.--Not later than 90 days after the date of 
filing of the hospital's most recently filed Medicare cost report, the 
hospital shall issue a credit as determined by the Secretary to the 
State Medicaid program for inpatient covered drugs provided to Medicaid 
recipients.''.
    (e) Effective Dates.--
        (1) In general.--The amendments made by this section and 
    section 7102 shall take effect on January 1, 2010, and shall apply 
    to drugs purchased on or after January 1, 2010.
        (2) Effectiveness.--The amendments made by this section and 
    section 7102 shall be effective and shall be taken into account in 
    determining whether a manufacturer is deemed to meet the 
    requirements of section 340B(a) of the Public Health Service Act 
    (42 U.S.C. 256b(a)), notwithstanding any other provision of law.

SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

    (a) Integrity Improvements.--Subsection (d) of section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended to read as 
follows:
    ``(d) Improvements in Program Integrity.--
        ``(1) Manufacturer compliance.--
            ``(A) In general.--From amounts appropriated under 
        paragraph (4), the Secretary shall provide for improvements in 
        compliance by manufacturers with the requirements of this 
        section in order to prevent overcharges and other violations of 
        the discounted pricing requirements specified in this section.
            ``(B) Improvements.--The improvements described in 
        subparagraph (A) shall include the following:
                ``(i) The development of a system to enable the 
            Secretary to verify the accuracy of ceiling prices 
            calculated by manufacturers under subsection (a)(1) and 
            charged to covered entities, which shall include the 
            following:

                    ``(I) Developing and publishing through an 
                appropriate policy or regulatory issuance, precisely 
                defined standards and methodology for the calculation 
                of ceiling prices under such subsection.
                    ``(II) Comparing regularly the ceiling prices 
                calculated by the Secretary with the quarterly pricing 
                data that is reported by manufacturers to the 
                Secretary.
                    ``(III) Performing spot checks of sales 
                transactions by covered entities.
                    ``(IV) Inquiring into the cause of any pricing 
                discrepancies that may be identified and either taking, 
                or requiring manufacturers to take, such corrective 
                action as is appropriate in response to such price 
                discrepancies.

                ``(ii) The establishment of procedures for 
            manufacturers to issue refunds to covered entities in the 
            event that there is an overcharge by the manufacturers, 
            including the following:

                    ``(I) Providing the Secretary with an explanation 
                of why and how the overcharge occurred, how the refunds 
                will be calculated, and to whom the refunds will be 
                issued.
                    ``(II) Oversight by the Secretary to ensure that 
                the refunds are issued accurately and within a 
                reasonable period of time, both in routine instances of 
                retroactive adjustment to relevant pricing data and 
                exceptional circumstances such as erroneous or 
                intentional overcharging for covered drugs.

                ``(iii) The provision of access through the Internet 
            website of the Department of Health and Human Services to 
            the applicable ceiling prices for covered drugs as 
            calculated and verified by the Secretary in accordance with 
            this section, in a manner (such as through the use of 
            password protection) that limits such access to covered 
            entities and adequately assures security and protection of 
            privileged pricing data from unauthorized re-disclosure.
                ``(iv) The development of a mechanism by which--

                    ``(I) rebates and other discounts provided by 
                manufacturers to other purchasers subsequent to the 
                sale of covered drugs to covered entities are reported 
                to the Secretary; and
                    ``(II) appropriate credits and refunds are issued 
                to covered entities if such discounts or rebates have 
                the effect of lowering the applicable ceiling price for 
                the relevant quarter for the drugs involved.

                ``(v) Selective auditing of manufacturers and 
            wholesalers to ensure the integrity of the drug discount 
            program under this section.
                ``(vi) The imposition of sanctions in the form of civil 
            monetary penalties, which--

                    ``(I) shall be assessed according to standards 
                established in regulations to be promulgated by the 
                Secretary not later than 180 days after the date of 
                enactment of the Patient Protection and Affordable Care 
                Act;
                    ``(II) shall not exceed $5,000 for each instance of 
                overcharging a covered entity that may have occurred; 
                and
                    ``(III) shall apply to any manufacturer with an 
                agreement under this section that knowingly and 
                intentionally charges a covered entity a price for 
                purchase of a drug that exceeds the maximum applicable 
                price under subsection (a)(1).

        ``(2) Covered entity compliance.--
            ``(A) In general.--From amounts appropriated under 
        paragraph (4), the Secretary shall provide for improvements in 
        compliance by covered entities with the requirements of this 
        section in order to prevent diversion and violations of the 
        duplicate discount provision and other requirements specified 
        under subsection (a)(5).
            ``(B) Improvements.--The improvements described in 
        subparagraph (A) shall include the following:
                ``(i) The development of procedures to enable and 
            require covered entities to regularly update (at least 
            annually) the information on the Internet website of the 
            Department of Health and Human Services relating to this 
            section.
                ``(ii) The development of a system for the Secretary to 
            verify the accuracy of information regarding covered 
            entities that is listed on the website described in clause 
            (i).
                ``(iii) The development of more detailed guidance 
            describing methodologies and options available to covered 
            entities for billing covered drugs to State Medicaid 
            agencies in a manner that avoids duplicate discounts 
            pursuant to subsection (a)(5)(A).
                ``(iv) The establishment of a single, universal, and 
            standardized identification system by which each covered 
            entity site can be identified by manufacturers, 
            distributors, covered entities, and the Secretary for 
            purposes of facilitating the ordering, purchasing, and 
            delivery of covered drugs under this section, including the 
            processing of chargebacks for such drugs.
                ``(v) The imposition of sanctions, in appropriate cases 
            as determined by the Secretary, additional to those to 
            which covered entities are subject under subsection 
            (a)(5)(E), through one or more of the following actions:

                    ``(I) Where a covered entity knowingly and 
                intentionally violates subsection (a)(5)(B), the 
                covered entity shall be required to pay a monetary 
                penalty to a manufacturer or manufacturers in the form 
                of interest on sums for which the covered entity is 
                found liable under subsection (a)(5)(E), such interest 
                to be compounded monthly and equal to the current short 
                term interest rate as determined by the Federal Reserve 
                for the time period for which the covered entity is 
                liable.
                    ``(II) Where the Secretary determines a violation 
                of subsection (a)(5)(B) was systematic and egregious as 
                well as knowing and intentional, removing the covered 
                entity from the drug discount program under this 
                section and disqualifying the entity from re-entry into 
                such program for a reasonable period of time to be 
                determined by the Secretary.
                    ``(III) Referring matters to appropriate Federal 
                authorities within the Food and Drug Administration, 
                the Office of Inspector General of Department of Health 
                and Human Services, or other Federal agencies for 
                consideration of appropriate action under other Federal 
                statutes, such as the Prescription Drug Marketing Act 
                (21 U.S.C. 353).

        ``(3) Administrative dispute resolution process.--
            ``(A) In general.--Not later than 180 days after the date 
        of enactment of the Patient Protection and Affordable Care Act, 
        the Secretary shall promulgate regulations to establish and 
        implement an administrative process for the resolution of 
        claims by covered entities that they have been overcharged for 
        drugs purchased under this section, and claims by 
        manufacturers, after the conduct of audits as authorized by 
        subsection (a)(5)(D), of violations of subsections (a)(5)(A) or 
        (a)(5)(B), including appropriate procedures for the provision 
        of remedies and enforcement of determinations made pursuant to 
        such process through mechanisms and sanctions described in 
        paragraphs (1)(B) and (2)(B).
            ``(B) Deadlines and procedures.--Regulations promulgated by 
        the Secretary under subparagraph (A) shall--
                ``(i) designate or establish a decision-making official 
            or decision-making body within the Department of Health and 
            Human Services to be responsible for reviewing and finally 
            resolving claims by covered entities that they have been 
            charged prices for covered drugs in excess of the ceiling 
            price described in subsection (a)(1), and claims by 
            manufacturers that violations of subsection (a)(5)(A) or 
            (a)(5)(B) have occurred;
                ``(ii) establish such deadlines and procedures as may 
            be necessary to ensure that claims shall be resolved 
            fairly, efficiently, and expeditiously;
                ``(iii) establish procedures by which a covered entity 
            may discover and obtain such information and documents from 
            manufacturers and third parties as may be relevant to 
            demonstrate the merits of a claim that charges for a 
            manufacturer's product have exceeded the applicable ceiling 
            price under this section, and may submit such documents and 
            information to the administrative official or body 
            responsible for adjudicating such claim;
                ``(iv) require that a manufacturer conduct an audit of 
            a covered entity pursuant to subsection (a)(5)(D) as a 
            prerequisite to initiating administrative dispute 
            resolution proceedings against a covered entity;
                ``(v) permit the official or body designated under 
            clause (i), at the request of a manufacturer or 
            manufacturers, to consolidate claims brought by more than 
            one manufacturer against the same covered entity where, in 
            the judgment of such official or body, consolidation is 
            appropriate and consistent with the goals of fairness and 
            economy of resources; and
                ``(vi) include provisions and procedures to permit 
            multiple covered entities to jointly assert claims of 
            overcharges by the same manufacturer for the same drug or 
            drugs in one administrative proceeding, and permit such 
            claims to be asserted on behalf of covered entities by 
            associations or organizations representing the interests of 
            such covered entities and of which the covered entities are 
            members.
            ``(C) Finality of administrative resolution.--The 
        administrative resolution of a claim or claims under the 
        regulations promulgated under subparagraph (A) shall be a final 
        agency decision and shall be binding upon the parties involved, 
        unless invalidated by an order of a court of competent 
        jurisdiction.
        ``(4) Authorization of appropriations.--There are authorized to 
    be appropriated to carry out this subsection, such sums as may be 
    necessary for fiscal year 2010 and each succeeding fiscal year.''.
    (b) Conforming Amendments.--Section 340B(a) of the Public Health 
Service Act (42 U.S.C. 256b(a)) is amended--
        (1) in subsection (a)(1), by adding at the end the following: 
    ``Each such agreement shall require that the manufacturer furnish 
    the Secretary with reports, on a quarterly basis, of the price for 
    each covered drug subject to the agreement that, according to the 
    manufacturer, represents the maximum price that covered entities 
    may permissibly be required to pay for the drug (referred to in 
    this section as the `ceiling price'), and shall require that the 
    manufacturer offer each covered entity covered drugs for purchase 
    at or below the applicable ceiling price if such drug is made 
    available to any other purchaser at any price.''; and
        (2) in the first sentence of subsection (a)(5)(E), as 
    redesignated by section 7101(c), by inserting ``after audit as 
    described in subparagraph (D) and'' after ``finds,''.

SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 340B 
              PROGRAM.

    (a) Report.--Not later than 18 months after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
to Congress a report that examines whether those individuals served by 
the covered entities under the program under section 340B of the Public 
Health Service Act (42 U.S.C. 256b) (referred to in this section as the 
``340B program'') are receiving optimal health care services.
    (b) Recommendations.--The report under subsection (a) shall include 
recommendations on the following:
        (1) Whether the 340B program should be expanded since it is 
    anticipated that the 47,000,000 individuals who are uninsured as of 
    the date of enactment of this Act will have health care coverage 
    once this Act is implemented.
        (2) Whether mandatory sales of certain products by the 340B 
    program could hinder patients access to those therapies through any 
    provider.
        (3) Whether income from the 340B program is being used by the 
    covered entities under the program to further the program 
    objectives.

                         TITLE VIII--CLASS ACT

SEC. 8001. SHORT TITLE OF TITLE.

    This title may be cited as the ``Community Living Assistance 
Services and Supports Act'' or the ``CLASS Act''.

SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
              PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND 
              SUPPORT.

    (a) Establishment of CLASS Program.--
        (1) In general.--The Public Health Service Act (42 U.S.C. 201 
    et seq.), as amended by section 4302(a), is amended by adding at 
    the end the following:

    ``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

``SEC. 3201. PURPOSE.

    ``The purpose of this title is to establish a national voluntary 
insurance program for purchasing community living assistance services 
and supports in order to--
        ``(1) provide individuals with functional limitations with 
    tools that will allow them to maintain their personal and financial 
    independence and live in the community through a new financing 
    strategy for community living assistance services and supports;
        ``(2) establish an infrastructure that will help address the 
    Nation's community living assistance services and supports needs;
        ``(3) alleviate burdens on family caregivers; and
        ``(4) address institutional bias by providing a financing 
    mechanism that supports personal choice and independence to live in 
    the community.

``SEC. 3202. DEFINITIONS.

    ``In this title:
        ``(1) Active enrollee.--The term `active enrollee' means an 
    individual who is enrolled in the CLASS program in accordance with 
    section 3204 and who has paid any premiums due to maintain such 
    enrollment.
        ``(2) Actively employed.--The term `actively employed' means an 
    individual who--
            ``(A) is reporting for work at the individual's usual place 
        of employment or at another location to which the individual is 
        required to travel because of the individual's employment (or 
        in the case of an individual who is a member of the uniformed 
        services, is on active duty and is physically able to perform 
        the duties of the individual's position); and
            ``(B) is able to perform all the usual and customary duties 
        of the individual's employment on the individual's regular work 
        schedule.
        ``(3) Activities of daily living.--The term `activities of 
    daily living' means each of the following activities specified in 
    section 7702B(c)(2)(B) of the Internal Revenue Code of 1986:
            ``(A) Eating.
            ``(B) Toileting.
            ``(C) Transferring.
            ``(D) Bathing.
            ``(E) Dressing.
            ``(F) Continence.
        ``(4) CLASS program.--The term `CLASS program' means the 
    program established under this title.
        ``(5) Eligibility assessment system.--The term `Eligibility 
    Assessment System' means the entity established by the Secretary 
    under section 3205(a)(2) to make functional eligibility 
    determinations for the CLASS program.
        ``(6) Eligible beneficiary.--
            ``(A) In general.--The term `eligible beneficiary' means 
        any individual who is an active enrollee in the CLASS program 
        and, as of the date described in subparagraph (B)--
                ``(i) has paid premiums for enrollment in such program 
            for at least 60 months;
                ``(ii) has earned, with respect to at least 3 calendar 
            years that occur during the first 60 months for which the 
            individual has paid premiums for enrollment in the program, 
            at least an amount equal to the amount of wages and self-
            employment income which an individual must have in order to 
            be credited with a quarter of coverage under section 213(d) 
            of the Social Security Act for the year; and
                ``(iii) has paid premiums for enrollment in such 
            program for at least 24 consecutive months, if a lapse in 
            premium payments of more than 3 months has occurred during 
            the period that begins on the date of the individual's 
            enrollment and ends on the date of such determination.
            ``(B) Date described.--For purposes of subparagraph (A), 
        the date described in this subparagraph is the date on which 
        the individual is determined to have a functional limitation 
        described in section 3203(a)(1)(C) that is expected to last for 
        a continuous period of more than 90 days.
            ``(C) Regulations.--The Secretary shall promulgate 
        regulations specifying exceptions to the minimum earnings 
        requirements under subparagraph (A)(ii) for purposes of being 
        considered an eligible beneficiary for certain populations.
        ``(7) Hospital; nursing facility; intermediate care facility 
    for the mentally retarded; institution for mental diseases.--The 
    terms `hospital', `nursing facility', `intermediate care facility 
    for the mentally retarded', and `institution for mental diseases' 
    have the meanings given such terms for purposes of Medicaid.
        ``(8) CLASS independence advisory council.--The term `CLASS 
    Independence Advisory Council' or `Council' means the Advisory 
    Council established under section 3207 to advise the Secretary.
        ``(9) CLASS independence benefit plan.--The term `CLASS 
    Independence Benefit Plan' means the benefit plan developed and 
    designated by the Secretary in accordance with section 3203.
        ``(10) CLASS independence fund.--The term `CLASS Independence 
    Fund' or `Fund' means the fund established under section 3206.
        ``(11) Medicaid.--The term `Medicaid' means the program 
    established under title XIX of the Social Security Act (42 U.S.C. 
    1396 et seq.).
        ``(12) Poverty line.--The term `poverty line' has the meaning 
    given that term in section 2110(c)(5) of the Social Security Act 
    (42 U.S.C. 1397jj(c)(5)).
        ``(13) Protection and advocacy system.--The term `Protection 
    and Advocacy System' means the system for each State established 
    under section 143 of the Developmental Disabilities Assistance and 
    Bill of Rights Act of 2000 (42 U.S.C. 15043).

``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

    ``(a) Process for Development.--
        ``(1) In general.--The Secretary, in consultation with 
    appropriate actuaries and other experts, shall develop at least 3 
    actuarially sound benefit plans as alternatives for consideration 
    for designation by the Secretary as the CLASS Independence Benefit 
    Plan under which eligible beneficiaries shall receive benefits 
    under this title. Each of the plan alternatives developed shall be 
    designed to provide eligible beneficiaries with the benefits 
    described in section 3205 consistent with the following 
    requirements:
            ``(A) Premiums.--
                ``(i) In general.--Beginning with the first year of the 
            CLASS program, and for each year thereafter, subject to 
            clauses (ii) and (iii), the Secretary shall establish all 
            premiums to be paid by enrollees for the year based on an 
            actuarial analysis of the 75-year costs of the program that 
            ensures solvency throughout such 75-year period.
                ``(ii) Nominal premium for poorest individuals and 
            full-time students.--

                    ``(I) In general.--The monthly premium for 
                enrollment in the CLASS program shall not exceed the 
                applicable dollar amount per month determined under 
                subclause (II) for--

                        ``(aa) any individual whose income does not 
                    exceed the poverty line; and
                        ``(bb) any individual who has not attained age 
                    22, and is actively employed during any period in 
                    which the individual is a full-time student (as 
                    determined by the Secretary).

                    ``(II) Applicable dollar amount.--The applicable 
                dollar amount described in this subclause is the amount 
                equal to $5, increased by the percentage increase in 
                the consumer price index for all urban consumers (U.S. 
                city average) for each year occurring after 2009 and 
                before such year.

                ``(iii) Class independence fund reserves.--At such time 
            as the CLASS program has been in operation for 10 years, 
            the Secretary shall establish all premiums to be paid by 
            enrollees for the year based on an actuarial analysis that 
            accumulated reserves in the CLASS Independence Fund would 
            not decrease in that year. At such time as the Secretary 
            determines the CLASS program demonstrates a sustained 
            ability to finance expected yearly expenses with expected 
            yearly premiums and interest credited to the CLASS 
            Independence Fund, the Secretary may decrease the required 
            amount of CLASS Independence Fund reserves.
            ``(B) Vesting period.--A 5-year vesting period for 
        eligibility for benefits.
            ``(C) Benefit triggers.--A benefit trigger for provision of 
        benefits that requires a determination that an individual has a 
        functional limitation, as certified by a licensed health care 
        practitioner, described in any of the following clauses that is 
        expected to last for a continuous period of more than 90 days:
                ``(i) The individual is determined to be unable to 
            perform at least the minimum number (which may be 2 or 3) 
            of activities of daily living as are required under the 
            plan for the provision of benefits without substantial 
            assistance (as defined by the Secretary) from another 
            individual.
                ``(ii) The individual requires substantial supervision 
            to protect the individual from threats to health and safety 
            due to substantial cognitive impairment.
                ``(iii) The individual has a level of functional 
            limitation similar (as determined under regulations 
            prescribed by the Secretary) to the level of functional 
            limitation described in clause (i) or (ii).
            ``(D) Cash benefit.--Payment of a cash benefit that 
        satisfies the following requirements:
                ``(i) Minimum required amount.--The benefit amount 
            provides an eligible beneficiary with not less than an 
            average of $50 per day (as determined based on the 
            reasonably expected distribution of beneficiaries receiving 
            benefits at various benefit levels).
                ``(ii) Amount scaled to functional ability.--The 
            benefit amount is varied based on a scale of functional 
            ability, with not less than 2, and not more than 6, benefit 
            level amounts.
                ``(iii) Daily or weekly.--The benefit is paid on a 
            daily or weekly basis.
                ``(iv) No lifetime or aggregate limit.--The benefit is 
            not subject to any lifetime or aggregate limit.
            ``(E) Coordination with supplemental coverage obtained 
        through the exchange.--The benefits allow for coordination with 
        any supplemental coverage purchased through an Exchange 
        established under section 1311 of the Patient Protection and 
        Affordable Care Act.
        ``(2) Review and recommendation by the class independence 
    advisory council.--The CLASS Independence Advisory Council shall--
            ``(A) evaluate the alternative benefit plans developed 
        under paragraph (1); and
            ``(B) recommend for designation as the CLASS Independence 
        Benefit Plan for offering to the public the plan that the 
        Council determines best balances price and benefits to meet 
        enrollees' needs in an actuarially sound manner, while 
        optimizing the probability of the long-term sustainability of 
        the CLASS program.
        ``(3) Designation by the secretary.--Not later than October 1, 
    2012, the Secretary, taking into consideration the recommendation 
    of the CLASS Independence Advisory Council under paragraph (2)(B), 
    shall designate a benefit plan as the CLASS Independence Benefit 
    Plan. The Secretary shall publish such designation, along with 
    details of the plan and the reasons for the selection by the 
    Secretary, in a final rule that allows for a period of public 
    comment.
    ``(b) Additional Premium Requirements.--
        ``(1) Adjustment of premiums.--
            ``(A) In general.--Except as provided in subparagraphs (B), 
        (C), (D), and (E), the amount of the monthly premium determined 
        for an individual upon such individual's enrollment in the 
        CLASS program shall remain the same for as long as the 
        individual is an active enrollee in the program.
            ``(B) Recalculated premium if required for program 
        solvency.--
                ``(i) In general.--Subject to clause (ii), if the 
            Secretary determines, based on the most recent report of 
            the Board of Trustees of the CLASS Independence Fund, the 
            advice of the CLASS Independence Advisory Council, and the 
            annual report of the Inspector General of the Department of 
            Health and Human Services, and waste, fraud, and abuse, or 
            such other information as the Secretary determines 
            appropriate, that the monthly premiums and income to the 
            CLASS Independence Fund for a year are projected to be 
            insufficient with respect to the 20-year period that begins 
            with that year, the Secretary shall adjust the monthly 
            premiums for individuals enrolled in the CLASS program as 
            necessary (but maintaining a nominal premium for enrollees 
            whose income is below the poverty line or who are full-time 
            students actively employed).
                ``(ii) Exemption from increase.--Any increase in a 
            monthly premium imposed as result of a determination 
            described in clause (i) shall not apply with respect to the 
            monthly premium of any active enrollee who--

                    ``(I) has attained age 65;
                    ``(II) has paid premiums for enrollment in the 
                program for at least 20 years; and
                    ``(III) is not actively employed.

            ``(C) Recalculated premium if reenrollment after more than 
        a 3-month lapse.--
                ``(i) In general.--The reenrollment of an individual 
            after a 90-day period during which the individual failed to 
            pay the monthly premium required to maintain the 
            individual's enrollment in the CLASS program shall be 
            treated as an initial enrollment for purposes of age-
            adjusting the premium for enrollment in the program.
                ``(ii) Credit for prior months if reenrolled within 5 
            years.--An individual who reenrolls in the CLASS program 
            after such a 90-day period and before the end of the 5-year 
            period that begins with the first month for which the 
            individual failed to pay the monthly premium required to 
            maintain the individual's enrollment in the program shall 
            be--

                    ``(I) credited with any months of paid premiums 
                that accrued prior to the individual's lapse in 
                enrollment; and
                    ``(II) notwithstanding the total amount of any such 
                credited months, required to satisfy section 
                3202(6)(A)(ii) before being eligible to receive 
                benefits.

            ``(D) No longer status as a full-time student.--An 
        individual subject to a nominal premium on the basis of being 
        described in subsection (a)(1)(A)(ii)(I)(bb) who ceases to be 
        described in that subsection, beginning with the first month 
        following the month in which the individual ceases to be so 
        described, shall be subject to the same monthly premium as the 
        monthly premium that applies to an individual of the same age 
        who first enrolls in the program under the most similar 
        circumstances as the individual (such as the first year of 
        eligibility for enrollment in the program or in a subsequent 
        year).
            ``(E) Penalty for reenollment after 5-year lapse.--In the 
        case of an individual who reenrolls in the CLASS program after 
        the end of the 5-year period described in subparagraph (C)(ii), 
        the monthly premium required for the individual shall be the 
        age-adjusted premium that would be applicable to an initially 
        enrolling individual who is the same age as the reenrolling 
        individual, increased by the greater of--
                ``(i) an amount that the Secretary determines is 
            actuarially sound for each month that occurs during the 
            period that begins with the first month for which the 
            individual failed to pay the monthly premium required to 
            maintain the individual's enrollment in the CLASS program 
            and ends with the month preceding the month in which the 
            reenollment is effective; or
                ``(ii) 1 percent of the applicable age-adjusted premium 
            for each such month occurring in such period.
        ``(2) Administrative expenses.--In determining the monthly 
    premiums for the CLASS program the Secretary may factor in costs 
    for administering the program, not to exceed for any year in which 
    the program is in effect under this title, an amount equal to 3 
    percent of all premiums paid during the year.
        ``(3) No underwriting requirements.--No underwriting (other 
    than on the basis of age in accordance with subparagraphs (D) and 
    (E) of paragraph (1)) shall be used to--
            ``(A) determine the monthly premium for enrollment in the 
        CLASS program; or
            ``(B) prevent an individual from enrolling in the program.
    ``(c) Self-attestation and Verification of Income.--The Secretary 
shall establish procedures to--
        ``(1) permit an individual who is eligible for the nominal 
    premium required under subsection (a)(1)(A)(ii), as part of their 
    automatic enrollment in the CLASS program, to self-attest that 
    their income does not exceed the poverty line or that their status 
    as a full-time student who is actively employed;
        ``(2) verify, using procedures similar to the procedures used 
    by the Commissioner of Social Security under section 
    1631(e)(1)(B)(ii) of the Social Security Act and consistent with 
    the requirements applicable to the conveyance of data and 
    information under section 1942 of such Act, the validity of such 
    self-attestation; and
        ``(3) require an individual to confirm, on at least an annual 
    basis, that their income does not exceed the poverty line or that 
    they continue to maintain such status.

``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

    ``(a) Automatic Enrollment.--
        ``(1) In general.--Subject to paragraph (2), the Secretary, in 
    coordination with the Secretary of the Treasury, shall establish 
    procedures under which each individual described in subsection (c) 
    may be automatically enrolled in the CLASS program by an employer 
    of such individual in the same manner as an employer may elect to 
    automatically enroll employees in a plan under section 401(k), 
    403(b), or 457 of the Internal Revenue Code of 1986.
        ``(2) Alternative enrollment procedures.--The procedures 
    established under paragraph (1) shall provide for an alternative 
    enrollment process for an individual described in subsection (c) in 
    the case of such an individual--
            ``(A) who is self-employed;
            ``(B) who has more than 1 employer; or
            ``(C) whose employer does not elect to participate in the 
        automatic enrollment process established by the Secretary.
        ``(3) Administration.--
            ``(A) In general.--The Secretary and the Secretary of the 
        Treasury shall, by regulation, establish procedures to ensure 
        that an individual is not automatically enrolled in the CLASS 
        program by more than 1 employer.
            ``(B) Form.--Enrollment in the CLASS program shall be made 
        in such manner as the Secretary may prescribe in order to 
        ensure ease of administration.
    ``(b) Election to Opt-Out.--An individual described in subsection 
(c) may elect to waive enrollment in the CLASS program at any time in 
such form and manner as the Secretary and the Secretary of the Treasury 
shall prescribe.
    ``(c) Individual Described.--For purposes of enrolling in the CLASS 
program, an individual described in this paragraph is an individual--
        ``(1) who has attained age 18;
        ``(2) who--
            ``(A) receives wages on which there is imposed a tax under 
        section 3201(a) of the Internal Revenue Code of 1986; or
            ``(B) derives self-employment income on which there is 
        imposed a tax under section 1401(a) of the Internal Revenue 
        Code of 1986;
        ``(3) who is actively employed; and
        ``(4) who is not--
            ``(A) a patient in a hospital or nursing facility, an 
        intermediate care facility for the mentally retarded, or an 
        institution for mental diseases and receiving medical 
        assistance under Medicaid; or
            ``(B) confined in a jail, prison, other penal institution 
        or correctional facility, or by court order pursuant to 
        conviction of a criminal offense or in connection with a 
        verdict or finding described in section 202(x)(1)(A)(ii) of the 
        Social Security Act (42 U.S.C. 402(x)(1)(A)(ii)).
    ``(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to satisfy 
subparagraph (B) or (C) of subsection (c)(1) in order to maintain 
enrollment in the CLASS program.
    ``(e) Payment.--
        ``(1) Payroll deduction.--An amount equal to the monthly 
    premium for the enrollment in the CLASS program of an individual 
    shall be deducted from the wages or self-employment income of such 
    individual in accordance with such procedures as the Secretary, in 
    coordination with the Secretary of the Treasury, shall establish 
    for employers who elect to deduct and withhold such premiums on 
    behalf of enrolled employees.
        ``(2) Alternative payment mechanism.--The Secretary, in 
    coordination with the Secretary of the Treasury, shall establish 
    alternative procedures for the payment of monthly premiums by an 
    individual enrolled in the CLASS program--
            ``(A) who does not have an employer who elects to deduct 
        and withhold premiums in accordance with subparagraph (A); or
            ``(B) who does not earn wages or derive self-employment 
        income.
    ``(f) Transfer of Premiums Collected.--
        ``(1) In general.--During each calendar year the Secretary of 
    the Treasury shall deposit into the CLASS Independence Fund a total 
    amount equal, in the aggregate, to 100 percent of the premiums 
    collected during that year.
        ``(2) Transfers based on estimates.--The amount deposited 
    pursuant to paragraph (1) shall be transferred in at least monthly 
    payments to the CLASS Independence Fund on the basis of estimates 
    by the Secretary and certified to the Secretary of the Treasury of 
    the amounts collected in accordance with subparagraphs (A) and (B) 
    of paragraph (5). Proper adjustments shall be made in amounts 
    subsequently transferred to the Fund to the extent prior estimates 
    were in excess of, or were less than, actual amounts collected.
    ``(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, shall 
establish procedures under which--
        ``(1) an individual who, in the year of the individual's 
    initial eligibility to enroll in the CLASS program, has elected to 
    waive enrollment in the program, is eligible to elect to enroll in 
    the program, in such form and manner as the Secretaries shall 
    establish, only during an open enrollment period established by the 
    Secretaries that is specific to the individual and that may not 
    occur more frequently than biennially after the date on which the 
    individual first elected to waive enrollment in the program; and
        ``(2) an individual shall only be permitted to disenroll from 
    the program (other than for nonpayment of premiums) during an 
    annual disenrollment period established by the Secretaries and in 
    such form and manner as the Secretaries shall establish.

``SEC. 3205. BENEFITS.

    ``(a) Determination of Eligibility.--
        ``(1) Application for receipt of benefits.--The Secretary shall 
    establish procedures under which an active enrollee shall apply for 
    receipt of benefits under the CLASS Independence Benefit Plan.
        ``(2) Eligibility assessments.--
            ``(A) In general.--Not later than January 1, 2012, the 
        Secretary shall--
                ``(i) establish an Eligibility Assessment System (other 
            than a service with which the Commissioner of Social 
            Security has entered into an agreement, with respect to any 
            State, to make disability determinations for purposes of 
            title II or XVI of the Social Security Act) to provide for 
            eligibility assessments of active enrollees who apply for 
            receipt of benefits;
                ``(ii) enter into an agreement with the Protection and 
            Advocacy System for each State to provide advocacy services 
            in accordance with subsection (d); and
                ``(iii) enter into an agreement with public and private 
            entities to provide advice and assistance counseling in 
            accordance with subsection (e).
            ``(B) Regulations.--The Secretary shall promulgate 
        regulations to develop an expedited nationally equitable 
        eligibility determination process, as certified by a licensed 
        health care practitioner, an appeals process, and a 
        redetermination process, as certified by a licensed health care 
        practitioner, including whether an active enrollee is eligible 
        for a cash benefit under the program and if so, the amount of 
        the cash benefit (in accordance the sliding scale established 
        under the plan).
            ``(C) Presumptive eligibility for certain institutionalized 
        enrollees planning to discharge.--An active enrollee shall be 
        deemed presumptively eligible if the enrollee--
                ``(i) has applied for, and attests is eligible for, the 
            maximum cash benefit available under the sliding scale 
            established under the CLASS Independence Benefit Plan;
                ``(ii) is a patient in a hospital (but only if the 
            hospitalization is for long-term care), nursing facility, 
            intermediate care facility for the mentally retarded, or an 
            institution for mental diseases; and
                ``(iii) is in the process of, or about to begin the 
            process of, planning to discharge from the hospital, 
            facility, or institution, or within 60 days from the date 
            of discharge from the hospital, facility, or institution.
            ``(D) Appeals.--The Secretary shall establish procedures 
        under which an applicant for benefits under the CLASS 
        Independence Benefit Plan shall be guaranteed the right to 
        appeal an adverse determination.
    ``(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
        ``(1) Cash benefit.--A cash benefit established by the 
    Secretary in accordance with the requirements of section 
    3203(a)(1)(D) that--
            ``(A) the first year in which beneficiaries receive the 
        benefits under the plan, is not less than the average dollar 
        amount specified in clause (i) of such section; and
            ``(B) for any subsequent year, is not less than the average 
        per day dollar limit applicable under this subparagraph for the 
        preceding year, increased by the percentage increase in the 
        consumer price index for all urban consumers (U.S. city 
        average) over the previous year.
        ``(2) Advocacy services.--Advocacy services in accordance with 
    subsection (d).
        ``(3) Advice and assistance counseling.--Advice and assistance 
    counseling in accordance with subsection (e).
        ``(4) Administrative expenses.--Advocacy services and advise 
    and assistance counseling services under paragraphs (2) and (3) of 
    this subsection shall be included as administrative expenses under 
    section 3203(b)(3).
    ``(c) Payment of Benefits.--
        ``(1) Life independence account.--
            ``(A) In general.--The Secretary shall establish procedures 
        for administering the provision of benefits to eligible 
        beneficiaries under the CLASS Independence Benefit Plan, 
        including the payment of the cash benefit for the beneficiary 
        into a Life Independence Account established by the Secretary 
        on behalf of each eligible beneficiary.
            ``(B) Use of cash benefits.--Cash benefits paid into a Life 
        Independence Account of an eligible beneficiary shall be used 
        to purchase nonmedical services and supports that the 
        beneficiary needs to maintain his or her independence at home 
        or in another residential setting of their choice in the 
        community, including (but not limited to) home modifications, 
        assistive technology, accessible transportation, homemaker 
        services, respite care, personal assistance services, home care 
        aides, and nursing support. Nothing in the preceding sentence 
        shall prevent an eligible beneficiary from using cash benefits 
        paid into a Life Independence Account for obtaining assistance 
        with decision making concerning medical care, including the 
        right to accept or refuse medical or surgical treatment and the 
        right to formulate advance directives or other written 
        instructions recognized under State law, such as a living will 
        or durable power of attorney for health care, in the case that 
        an injury or illness causes the individual to be unable to make 
        health care decisions.
            ``(C) Electronic management of funds.--The Secretary shall 
        establish procedures for--
                ``(i) crediting an account established on behalf of a 
            beneficiary with the beneficiary's cash daily benefit;
                ``(ii) allowing the beneficiary to access such account 
            through debit cards; and
                ``(iii) accounting for withdrawals by the beneficiary 
            from such account.
            ``(D) Primary payor rules for beneficiaries who are 
        enrolled in medicaid.--In the case of an eligible beneficiary 
        who is enrolled in Medicaid, the following payment rules shall 
        apply:
                ``(i) Institutionalized beneficiary.--If the 
            beneficiary is a patient in a hospital, nursing facility, 
            intermediate care facility for the mentally retarded, or an 
            institution for mental diseases, the beneficiary shall 
            retain an amount equal to 5 percent of the beneficiary's 
            daily or weekly cash benefit (as applicable) (which shall 
            be in addition to the amount of the beneficiary's personal 
            needs allowance provided under Medicaid), and the remainder 
            of such benefit shall be applied toward the facility's cost 
            of providing the beneficiary's care, and Medicaid shall 
            provide secondary coverage for such care.
                ``(ii) Beneficiaries receiving home and community-based 
            services.--

                    ``(I) 50 percent of benefit retained by 
                beneficiary.--Subject to subclause (II), if a 
                beneficiary is receiving medical assistance under 
                Medicaid for home and community based services, the 
                beneficiary shall retain an amount equal to 50 percent 
                of the beneficiary's daily or weekly cash benefit (as 
                applicable), and the remainder of the daily or weekly 
                cash benefit shall be applied toward the cost to the 
                State of providing such assistance (and shall not be 
                used to claim Federal matching funds under Medicaid), 
                and Medicaid shall provide secondary coverage for the 
                remainder of any costs incurred in providing such 
                assistance.
                    ``(II) Requirement for state offset.--A State shall 
                be paid the remainder of a beneficiary's daily or 
                weekly cash benefit under subclause (I) only if the 
                State home and community-based waiver under section 
                1115 of the Social Security Act (42 U.S.C. 1315) or 
                subsection (c) or (d) of section 1915 of such Act (42 
                U.S.C. 1396n), or the State plan amendment under 
                subsection (i) of such section does not include a 
                waiver of the requirements of section 1902(a)(1) of the 
                Social Security Act (relating to statewideness) or of 
                section 1902(a)(10)(B) of such Act (relating to 
                comparability) and the State offers at a minimum case 
                management services, personal care services, 
                habilitation services, and respite care under such a 
                waiver or State plan amendment.
                    ``(III) Definition of home and community-based 
                services.--In this clause, the term `home and 
                community-based services' means any services which may 
                be offered under a home and community-based waiver 
                authorized for a State under section 1115 of the Social 
                Security Act (42 U.S.C. 1315) or subsection (c) or (d) 
                of section 1915 of such Act (42 U.S.C. 1396n) or under 
                a State plan amendment under subsection (i) of such 
                section.

                ``(iii) Beneficiaries enrolled in programs of all-
            inclusive care for the elderly (pace).--

                    ``(I) In general.--Subject to subclause (II), if a 
                beneficiary is receiving medical assistance under 
                Medicaid for PACE program services under section 1934 
                of the Social Security Act (42 U.S.C. 1396u-4), the 
                beneficiary shall retain an amount equal to 50 percent 
                of the beneficiary's daily or weekly cash benefit (as 
                applicable), and the remainder of the daily or weekly 
                cash benefit shall be applied toward the cost to the 
                State of providing such assistance (and shall not be 
                used to claim Federal matching funds under Medicaid), 
                and Medicaid shall provide secondary coverage for the 
                remainder of any costs incurred in providing such 
                assistance.
                    ``(II) Institutionalized recipients of pace program 
                services.--If a beneficiary receiving assistance under 
                Medicaid for PACE program services is a patient in a 
                hospital, nursing facility, intermediate care facility 
                for the mentally retarded, or an institution for mental 
                diseases, the beneficiary shall be treated as in 
                institutionalized beneficiary under clause (i).

        ``(2) Authorized representatives.--
            ``(A) In general.--The Secretary shall establish procedures 
        to allow access to a beneficiary's cash benefits by an 
        authorized representative of the eligible beneficiary on whose 
        behalf such benefits are paid.
            ``(B) Quality assurance and protection against fraud and 
        abuse.--The procedures established under subparagraph (A) shall 
        ensure that authorized representatives of eligible 
        beneficiaries comply with standards of conduct established by 
        the Secretary, including standards requiring that such 
        representatives provide quality services on behalf of such 
        beneficiaries, do not have conflicts of interest, and do not 
        misuse benefits paid on behalf of such beneficiaries or 
        otherwise engage in fraud or abuse.
        ``(3) Commencement of benefits.--Benefits shall be paid to, or 
    on behalf of, an eligible beneficiary beginning with the first 
    month in which an application for such benefits is approved.
        ``(4) Rollover option for lump-sum payment.--An eligible 
    beneficiary may elect to--
            ``(A) defer payment of their daily or weekly benefit and to 
        rollover any such deferred benefits from month-to-month, but 
        not from year-to-year; and
            ``(B) receive a lump-sum payment of such deferred benefits 
        in an amount that may not exceed the lesser of--
                ``(i) the total amount of the accrued deferred 
            benefits; or
                ``(ii) the applicable annual benefit.
        ``(5) Period for determination of annual benefits.--
            ``(A) In general.--The applicable period for determining 
        with respect to an eligible beneficiary the applicable annual 
        benefit and the amount of any accrued deferred benefits is the 
        12-month period that commences with the first month in which 
        the beneficiary began to receive such benefits, and each 12-
        month period thereafter.
            ``(B) Inclusion of increased benefits.--The Secretary shall 
        establish procedures under which cash benefits paid to an 
        eligible beneficiary that increase or decrease as a result of a 
        change in the functional status of the beneficiary before the 
        end of a 12-month benefit period shall be included in the 
        determination of the applicable annual benefit paid to the 
        eligible beneficiary.
            ``(C) Recoupment of unpaid, accrued benefits.--
                ``(i) In general.--The Secretary, in coordination with 
            the Secretary of the Treasury, shall recoup any accrued 
            benefits in the event of--

                    ``(I) the death of a beneficiary; or
                    ``(II) the failure of a beneficiary to elect under 
                paragraph (4)(B) to receive such benefits as a lump-sum 
                payment before the end of the 12-month period in which 
                such benefits accrued.

                ``(ii) Payment into class independence fund.--Any 
            benefits recouped in accordance with clause (i) shall be 
            paid into the CLASS Independence Fund and used in 
            accordance with section 3206.
        ``(6) Requirement to recertify eligibility for receipt of 
    benefits.--An eligible beneficiary shall periodically, as 
    determined by the Secretary--
            ``(A) recertify by submission of medical evidence the 
        beneficiary's continued eligibility for receipt of benefits; 
        and
            ``(B) submit records of expenditures attributable to the 
        aggregate cash benefit received by the beneficiary during the 
        preceding year.
        ``(7) Supplement, not supplant other health care benefits.--
    Subject to the Medicaid payment rules under paragraph (1)(D), 
    benefits received by an eligible beneficiary shall supplement, but 
    not supplant, other health care benefits for which the beneficiary 
    is eligible under Medicaid or any other Federally funded program 
    that provides health care benefits or assistance.
    ``(d) Advocacy Services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and Advocacy 
System for the State to--
        ``(1) assign, as needed, an advocacy counselor to each eligible 
    beneficiary that is covered by such agreement and who shall provide 
    an eligible beneficiary with--
            ``(A) information regarding how to access the appeals 
        process established for the program;
            ``(B) assistance with respect to the annual recertification 
        and notification required under subsection (c)(6); and
            ``(C) such other assistance with obtaining services as the 
        Secretary, by regulation, shall require; and
        ``(2) ensure that the System and such counselors comply with 
    the requirements of subsection (h).
    ``(e) Advice and Assistance Counseling.--An agreement entered into 
under subsection (a)(2)(A)(iii) shall require the entity to assign, as 
requested by an eligible beneficiary that is covered by such agreement, 
an advice and assistance counselor who shall provide an eligible 
beneficiary with information regarding--
        ``(1) accessing and coordinating long-term services and 
    supports in the most integrated setting;
        ``(2) possible eligibility for other benefits and services;
        ``(3) development of a service and support plan;
        ``(4) information about programs established under the 
    Assistive Technology Act of 1998 and the services offered under 
    such programs;
        ``(5) available assistance with decision making concerning 
    medical care, including the right to accept or refuse medical or 
    surgical treatment and the right to formulate advance directives or 
    other written instructions recognized under State law, such as a 
    living will or durable power of attorney for health care, in the 
    case that an injury or illness causes the individual to be unable 
    to make health care decisions; and
        ``(6) such other services as the Secretary, by regulation, may 
    require.
    ``(f) No Effect on Eligibility for Other Benefits.--Benefits paid 
to an eligible beneficiary under the CLASS program shall be disregarded 
for purposes of determining or continuing the beneficiary's eligibility 
for receipt of benefits under any other Federal, State, or locally 
funded assistance program, including benefits paid under titles II, 
XVI, XVIII, XIX, or XXI of the Social Security Act (42 U.S.C. 401 et 
seq., 1381 et seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under 
the laws administered by the Secretary of Veterans Affairs, under low-
income housing assistance programs, or under the supplemental nutrition 
assistance program established under the Food and Nutrition Act of 2008 
(7 U.S.C. 2011 et seq.).
    ``(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS Independence 
Benefit Plan from being used to compensate a family caregiver for 
providing community living assistance services and supports to an 
eligible beneficiary.
    ``(h) Protection Against Conflict of Interests.--The Secretary 
shall establish procedures to ensure that the Eligibility Assessment 
System, the Protection and Advocacy System for a State, advocacy 
counselors for eligible beneficiaries, and any other entities that 
provide services to active enrollees and eligible beneficiaries under 
the CLASS program comply with the following:
        ``(1) If the entity provides counseling or planning services, 
    such services are provided in a manner that fosters the best 
    interests of the active enrollee or beneficiary.
        ``(2) The entity has established operating procedures that are 
    designed to avoid or minimize conflicts of interest between the 
    entity and an active enrollee or beneficiary.
        ``(3) The entity provides information about all services and 
    options available to the active enrollee or beneficiary, to the 
    best of its knowledge, including services available through other 
    entities or providers.
        ``(4) The entity assists the active enrollee or beneficiary to 
    access desired services, regardless of the provider.
        ``(5) The entity reports the number of active enrollees and 
    beneficiaries provided with assistance by age, disability, and 
    whether such enrollees and beneficiaries received services from the 
    entity or another entity.
        ``(6) If the entity provides counseling or planning services, 
    the entity ensures that an active enrollee or beneficiary is 
    informed of any financial interest that the entity has in a service 
    provider.
        ``(7) The entity provides an active enrollee or beneficiary 
    with a list of available service providers that can meet the needs 
    of the active enrollee or beneficiary.

``SEC. 3206. CLASS INDEPENDENCE FUND.

    ``(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund to be 
known as the `CLASS Independence Fund'. The Secretary of the Treasury 
shall serve as Managing Trustee of such Fund. The Fund shall consist of 
all amounts derived from payments into the Fund under sections 3204(f) 
and 3205(c)(5)(C)(ii), and remaining after investment of such amounts 
under subsection (b), including additional amounts derived as income 
from such investments. The amounts held in the Fund are appropriated 
and shall remain available without fiscal year limitation--
        ``(1) to be held for investment on behalf of individuals 
    enrolled in the CLASS program;
        ``(2) to pay the administrative expenses related to the Fund 
    and to investment under subsection (b); and
        ``(3) to pay cash benefits to eligible beneficiaries under the 
    CLASS Independence Benefit Plan.
    ``(b) Investment of Fund Balance.--The Secretary of the Treasury 
shall invest and manage the CLASS Independence Fund in the same manner, 
and to the same extent, as the Federal Supplementary Medical Insurance 
Trust Fund may be invested and managed under subsections (c), (d), and 
(e) of section 1841(d) of the Social Security Act (42 U.S.C. 1395t).
    ``(c) Board of Trustees.--
        ``(1) In general.--With respect to the CLASS Independence Fund, 
    there is hereby created a body to be known as the Board of Trustees 
    of the CLASS Independence Fund (hereinafter in this section 
    referred to as the `Board of Trustees') composed of the Secretary 
    of the Treasury, the Secretary of Labor, and the Secretary of 
    Health and Human Services, all ex officio, and of two members of 
    the public (both of whom may not be from the same political party), 
    who shall be nominated by the President for a term of 4 years and 
    subject to confirmation by the Senate. A member of the Board of 
    Trustees serving as a member of the public and nominated and 
    confirmed to fill a vacancy occurring during a term shall be 
    nominated and confirmed only for the remainder of such term. An 
    individual nominated and confirmed as a member of the public may 
    serve in such position after the expiration of such member's term 
    until the earlier of the time at which the member's successor takes 
    office or the time at which a report of the Board is first issued 
    under paragraph (2) after the expiration of the member's term. The 
    Secretary of the Treasury shall be the Managing Trustee of the 
    Board of Trustees. The Board of Trustees shall meet not less 
    frequently than once each calendar year. A person serving on the 
    Board of Trustees shall not be considered to be a fiduciary and 
    shall not be personally liable for actions taken in such capacity 
    with respect to the Trust Fund.
        ``(2) Duties.--
            ``(A) In general.--It shall be the duty of the Board of 
        Trustees to do the following:
                ``(i) Hold the CLASS Independence Fund.
                ``(ii) Report to the Congress not later than the first 
            day of April of each year on the operation and status of 
            the CLASS Independence Fund during the preceding fiscal 
            year and on its expected operation and status during the 
            current fiscal year and the next 2 fiscal years.
                ``(iii) Report immediately to the Congress whenever the 
            Board is of the opinion that the amount of the CLASS 
            Independence Fund is not actuarially sound in regards to 
            the projection under section 3203(b)(1)(B)(i).
                ``(iv) Review the general policies followed in managing 
            the CLASS Independence Fund, and recommend changes in such 
            policies, including necessary changes in the provisions of 
            law which govern the way in which the CLASS Independence 
            Fund is to be managed.
            ``(B) Report.--The report provided for in subparagraph 
        (A)(ii) shall--
                ``(i) include--

                    ``(I) a statement of the assets of, and the 
                disbursements made from, the CLASS Independence Fund 
                during the preceding fiscal year;
                    ``(II) an estimate of the expected income to, and 
                disbursements to be made from, the CLASS Independence 
                Fund during the current fiscal year and each of the 
                next 2 fiscal years;
                    ``(III) a statement of the actuarial status of the 
                CLASS Independence Fund for the current fiscal year, 
                each of the next 2 fiscal years, and as projected over 
                the 75-year period beginning with the current fiscal 
                year; and
                    ``(IV) an actuarial opinion by the Chief Actuary of 
                the Centers for Medicare & Medicaid Services certifying 
                that the techniques and methodologies used are 
                generally accepted within the actuarial profession and 
                that the assumptions and cost estimates used are 
                reasonable; and

                ``(ii) be printed as a House document of the session of 
            the Congress to which the report is made.
            ``(C) Recommendations.--If the Board of Trustees determines 
        that enrollment trends and expected future benefit claims on 
        the CLASS Independence Fund are not actuarially sound in 
        regards to the projection under section 3203(b)(1)(B)(i) and 
        are unlikely to be resolved with reasonable premium increases 
        or through other means, the Board of Trustees shall include in 
        the report provided for in subparagraph (A)(ii) recommendations 
        for such legislative action as the Board of Trustees determine 
        to be appropriate, including whether to adjust monthly premiums 
        or impose a temporary moratorium on new enrollments.

``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

    ``(a) Establishment.--There is hereby created an Advisory Committee 
to be known as the `CLASS Independence Advisory Council'.
    ``(b) Membership.--
        ``(1) In general.--The CLASS Independence Advisory Council 
    shall be composed of not more than 15 individuals, not otherwise in 
    the employ of the United States--
            ``(A) who shall be appointed by the President without 
        regard to the civil service laws and regulations; and
            ``(B) a majority of whom shall be representatives of 
        individuals who participate or are likely to participate in the 
        CLASS program, and shall include representatives of older and 
        younger workers, individuals with disabilities, family 
        caregivers of individuals who require services and supports to 
        maintain their independence at home or in another residential 
        setting of their choice in the community, individuals with 
        expertise in long-term care or disability insurance, actuarial 
        science, economics, and other relevant disciplines, as 
        determined by the Secretary.
        ``(2) Terms.--
            ``(A) In general.--The members of the CLASS Independence 
        Advisory Council shall serve overlapping terms of 3 years 
        (unless appointed to fill a vacancy occurring prior to the 
        expiration of a term, in which case the individual shall serve 
        for the remainder of the term).
            ``(B) Limitation.--A member shall not be eligible to serve 
        for more than 2 consecutive terms.
        ``(3) Chair.--The President shall, from time to time, appoint 
    one of the members of the CLASS Independence Advisory Council to 
    serve as the Chair.
    ``(c) Duties.--The CLASS Independence Advisory Council shall advise 
the Secretary on matters of general policy in the administration of the 
CLASS program established under this title and in the formulation of 
regulations under this title including with respect to--
        ``(1) the development of the CLASS Independence Benefit Plan 
    under section 3203;
        ``(2) the determination of monthly premiums under such plan; 
    and
        ``(3) the financial solvency of the program.
    ``(d) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.), other than section 14 of that Act, shall apply to the 
CLASS Independence Advisory Council.
    ``(e) Authorization of Appropriations.--
        ``(1) In general.--There are authorized to be appropriated to 
    the CLASS Independence Advisory Council to carry out its duties 
    under this section, such sums as may be necessary for fiscal year 
    2011 and for each fiscal year thereafter.
        ``(2) Availability.--Any sums appropriated under the 
    authorization contained in this section shall remain available, 
    without fiscal year limitation, until expended.

``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
              REPORT.

    ``(a) Solvency.--The Secretary shall regularly consult with the 
Board of Trustees of the CLASS Independence Fund and the CLASS 
Independence Advisory Council, for purposes of ensuring that enrollees 
premiums are adequate to ensure the financial solvency of the CLASS 
program, both with respect to fiscal years occurring in the near-term 
and fiscal years occurring over 20- and 75-year periods, taking into 
account the projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
    ``(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer funds 
shall be used for payment of benefits under a CLASS Independent Benefit 
Plan. For purposes of this subsection, the term `taxpayer funds' means 
any Federal funds from a source other than premiums deposited by CLASS 
program participants in the CLASS Independence Fund and any associated 
interest earnings.
    ``(c) Regulations.--The Secretary shall promulgate such regulations 
as are necessary to carry out the CLASS program in accordance with this 
title. Such regulations shall include provisions to prevent fraud and 
abuse under the program.
    ``(d) Annual Report.--Beginning January 1, 2014, the Secretary 
shall submit an annual report to Congress on the CLASS program. Each 
report shall include the following:
        ``(1) The total number of enrollees in the program.
        ``(2) The total number of eligible beneficiaries during the 
    fiscal year.
        ``(3) The total amount of cash benefits provided during the 
    fiscal year.
        ``(4) A description of instances of fraud or abuse identified 
    during the fiscal year.
        ``(5) Recommendations for such administrative or legislative 
    action as the Secretary determines is necessary to improve the 
    program, ensure the solvency of the program, or to prevent the 
    occurrence of fraud or abuse.

``SEC. 3209. INSPECTOR GENERAL'S REPORT.

    ``The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and Congress 
relating to the overall progress of the CLASS program and of the 
existence of waste, fraud, and abuse in the CLASS program. Each such 
report shall include findings in the following areas:
        ``(1) The eligibility determination process.
        ``(2) The provision of cash benefits.
        ``(3) Quality assurance and protection against waste, fraud, 
    and abuse.
        ``(4) Recouping of unpaid and accrued benefits.

``SEC. 3210. TAX TREATMENT OF PROGRAM.

    ``The CLASS program shall be treated for purposes of the Internal 
Revenue Code of 1986 in the same manner as a qualified long-term care 
insurance contract for qualified long-term care services.''.
        (2) Conforming amendments to medicaid.--Section 1902(a) of the 
    Social Security Act (42 U.S.C. 1396a(a)), as amended by section 
    6505, is amended by inserting after paragraph (80) the following:
        ``(81) provide that the State will comply with such regulations 
    regarding the application of primary and secondary payor rules with 
    respect to individuals who are eligible for medical assistance 
    under this title and are eligible beneficiaries under the CLASS 
    program established under title XXXII of the Public Health Service 
    Act as the Secretary shall establish; and''.
    (b) Assurance of Adequate Infrastructure for the Provision of 
Personal Care Attendant Workers.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is 
amended by inserting after paragraph (81) the following:
        ``(82) provide that, not later than 2 years after the date of 
    enactment of the Community Living Assistance Services and Supports 
    Act, each State shall--
            ``(A) assess the extent to which entities such as providers 
        of home care, home health services, home and community service 
        providers, public authorities created to provide personal care 
        services to individuals eligible for medical assistance under 
        the State plan, and nonprofit organizations, are serving or 
        have the capacity to serve as fiscal agents for, employers of, 
        and providers of employment-related benefits for, personal care 
        attendant workers who provide personal care services to 
        individuals receiving benefits under the CLASS program 
        established under title XXXII of the Public Health Service Act, 
        including in rural and underserved areas;
            ``(B) designate or create such entities to serve as fiscal 
        agents for, employers of, and providers of employment-related 
        benefits for, such workers to ensure an adequate supply of the 
        workers for individuals receiving benefits under the CLASS 
        program, including in rural and underserved areas; and
            ``(C) ensure that the designation or creation of such 
        entities will not negatively alter or impede existing programs, 
        models, methods, or administration of service delivery that 
        provide for consumer controlled or self-directed home and 
        community services and further ensure that such entities will 
        not impede the ability of individuals to direct and control 
        their home and community services, including the ability to 
        select, manage, dismiss, co-employ, or employ such workers or 
        inhibit such individuals from relying on family members for the 
        provision of personal care services.''.
    (c) Personal Care Attendants Workforce Advisory Panel.--
        (1) Establishment.--Not later than 90 days after the date of 
    enactment of this Act, the Secretary of Health and Human Services 
    shall establish a Personal Care Attendants Workforce Advisory Panel 
    for the purpose of examining and advising the Secretary and 
    Congress on workforce issues related to personal care attendant 
    workers, including with respect to the adequacy of the number of 
    such workers, the salaries, wages, and benefits of such workers, 
    and access to the services provided by such workers.
        (2) Membership.--In appointing members to the Personal Care 
    Attendants Workforce Advisory Panel, the Secretary shall ensure 
    that such members include the following:
            (A) Individuals with disabilities of all ages.
            (B) Senior individuals.
            (C) Representatives of individuals with disabilities.
            (D) Representatives of senior individuals.
            (E) Representatives of workforce and labor organizations.
            (F) Representatives of home and community-based service 
        providers.
            (G) Representatives of assisted living providers.
    (d) Inclusion of Information on Supplemental Coverage in the 
National Clearinghouse for Long-term Care Information; Extension of 
Funding.--Section 6021(d) of the Deficit Reduction Act of 2005 (42 
U.S.C. 1396p note) is amended--
        (1) in paragraph (2)(A)--
            (A) in clause (ii), by striking ``and'' at the end;
            (B) in clause (iii), by striking the period at the end and 
        inserting ``; and''; and
            (C) by adding at the end the following:
                ``(iv) include information regarding the CLASS program 
            established under title XXXII of the Public Health Service 
            Act and coverage available for purchase through a Exchange 
            established under section 1311 of the Patient Protection 
            and Affordable Care Act that is supplemental coverage to 
            the benefits provided under a CLASS Independence Benefit 
            Plan under that program, and information regarding how 
            benefits provided under a CLASS Independence Benefit Plan 
            differ from disability insurance benefits.''; and
        (2) in paragraph (3), by striking ``2010'' and inserting 
    ``2015''.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (d) take effect on January 1, 2011.
    (f) Rule of Construction.--Nothing in this title or the amendments 
made by this title are intended to replace or displace public or 
private disability insurance benefits, including such benefits that are 
for income replacement.

                      TITLE IX--REVENUE PROVISIONS
                 Subtitle A--Revenue Offset Provisions

SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986, 
as amended by section 1513, is amended by adding at the end the 
following:

``SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH 
              COVERAGE.

    ``(a) Imposition of Tax.--If--
        ``(1) an employee is covered under any applicable employer-
    sponsored coverage of an employer at any time during a taxable 
    period, and
        ``(2) there is any excess benefit with respect to the coverage,
there is hereby imposed a tax equal to 40 percent of the excess 
benefit.
    ``(b) Excess Benefit.--For purposes of this section--
        ``(1) In general.--The term `excess benefit' means, with 
    respect to any applicable employer-sponsored coverage made 
    available by an employer to an employee during any taxable period, 
    the sum of the excess amounts determined under paragraph (2) for 
    months during the taxable period.
        ``(2) Monthly excess amount.--The excess amount determined 
    under this paragraph for any month is the excess (if any) of--
            ``(A) the aggregate cost of the applicable employer-
        sponsored coverage of the employee for the month, over
            ``(B) an amount equal to \1/12\ of the annual limitation 
        under paragraph (3) for the calendar year in which the month 
        occurs.
        ``(3) Annual limitation.--For purposes of this subsection--
            ``(A) In general.--The annual limitation under this 
        paragraph for any calendar year is the dollar limit determined 
        under subparagraph (C) for the calendar year.
            ``(B) Applicable annual limitation.--The annual limitation 
        which applies for any month shall be determined on the basis of 
        the type of coverage (as determined under subsection (f)(1)) 
        provided to the employee by the employer as of the beginning of 
        the month.
            ``(C) Applicable dollar limit.--Except as provided in 
        subparagraph (D)--
                ``(i) 2013.--In the case of 2013, the dollar limit 
            under this subparagraph is--

                    ``(I) in the case of an employee with self-only 
                coverage, $8,500, and
                    ``(II) in the case of an employee with coverage 
                other than self-only coverage, $23,000.

                ``(ii) Exception for certain individuals.--In the case 
            of an individual who is a qualified retiree or who 
            participates in a plan sponsored by an employer the 
            majority of whose employees are engaged in a high-risk 
            profession or employed to repair or install electrical or 
            telecommunications lines--

                    ``(I) the dollar amount in clause (i)(I) 
                (determined after the application of subparagraph (D)) 
                shall be increased by $1,350, and
                    ``(II) the dollar amount in clause (i)(II) 
                (determined after the application of subparagraph (D)) 
                shall be increased by $3,000.

                ``(iii) Subsequent years.--In the case of any calendar 
            year after 2013, each of the dollar amounts under clauses 
            (i) and (ii) shall be increased to the amount equal to such 
            amount as in effect for the calendar year preceding such 
            year, increased by an amount equal to the product of--

                    ``(I) such amount as so in effect, multiplied by
                    ``(II) the cost-of-living adjustment determined 
                under section 1(f)(3) for such year (determined by 
                substituting the calendar year that is 2 years before 
                such year for `1992' in subparagraph (B) thereof), 
                increased by 1 percentage point.

            If any amount determined under this clause is not a 
            multiple of $50, such amount shall be rounded to the 
            nearest multiple of $50.
            ``(D) Transition rule for states with highest coverage 
        costs.--
                ``(i) In general.--If an employee is a resident of a 
            high cost State on the first day of any month beginning in 
            2013, 2014, or 2015, the annual limitation under this 
            paragraph for such month with respect to such employee 
            shall be an amount equal to the applicable percentage of 
            the annual limitation (determined without regard to this 
            subparagraph or subparagraph (C)(ii)).
                ``(ii) Applicable percentage.--The applicable 
            percentage is 120 percent for 2013, 110 percent for 2014, 
            and 105 percent for 2015.
                ``(iii) High cost state.--The term `high cost State' 
            means each of the 17 States which the Secretary of Health 
            and Human Services, in consultation with the Secretary, 
            estimates had the highest average cost during 2012 for 
            employer-sponsored coverage under health plans. The 
            Secretary's estimate shall be made on the basis of 
            aggregate premiums paid in the State for such health plans, 
            determined using the most recent data available as of 
            August 31, 2012.
    ``(c) Liability To Pay Tax.--
        ``(1) In general.--Each coverage provider shall pay the tax 
    imposed by subsection (a) on its applicable share of the excess 
    benefit with respect to an employee for any taxable period.
        ``(2) Coverage provider.--For purposes of this subsection, the 
    term `coverage provider' means each of the following:
            ``(A) Health insurance coverage.--If the applicable 
        employer-sponsored coverage consists of coverage under a group 
        health plan which provides health insurance coverage, the 
        health insurance issuer.
            ``(B) HSA and msa contributions.--If the applicable 
        employer-sponsored coverage consists of coverage under an 
        arrangement under which the employer makes contributions 
        described in subsection (b) or (d) of section 106, the 
        employer.
            ``(C) Other coverage.--In the case of any other applicable 
        employer-sponsored coverage, the person that administers the 
        plan benefits.
        ``(3) Applicable share.--For purposes of this subsection, a 
    coverage provider's applicable share of an excess benefit for any 
    taxable period is the amount which bears the same ratio to the 
    amount of such excess benefit as--
            ``(A) the cost of the applicable employer-sponsored 
        coverage provided by the provider to the employee during such 
        period, bears to
            ``(B) the aggregate cost of all applicable employer-
        sponsored coverage provided to the employee by all coverage 
        providers during such period.
        ``(4) Responsibility to calculate tax and applicable shares.--
            ``(A) In general.--Each employer shall--
                ``(i) calculate for each taxable period the amount of 
            the excess benefit subject to the tax imposed by subsection 
            (a) and the applicable share of such excess benefit for 
            each coverage provider, and
                ``(ii) notify, at such time and in such manner as the 
            Secretary may prescribe, the Secretary and each coverage 
            provider of the amount so determined for the provider.
            ``(B) Special rule for multiemployer plans.--In the case of 
        applicable employer-sponsored coverage made available to 
        employees through a multiemployer plan (as defined in section 
        414(f)), the plan sponsor shall make the calculations, and 
        provide the notice, required under subparagraph (A).
    ``(d) Applicable Employer-Sponsored Coverage; Cost.--For purposes 
of this section--
        ``(1) Applicable employer-sponsored coverage.--
            ``(A) In general.--The term `applicable employer-sponsored 
        coverage' means, with respect to any employee, coverage under 
        any group health plan made available to the employee by an 
        employer which is excludable from the employee's gross income 
        under section 106, or would be so excludable if it were 
        employer-provided coverage (within the meaning of such section 
        106).
            ``(B) Exceptions.--The term `applicable employer-sponsored 
        coverage' shall not include--
                ``(i) any coverage (whether through insurance or 
            otherwise) described in section 9832(c)(1)(A) or for long-
            term care, or
                ``(ii) any coverage described in section 9832(c)(3) the 
            payment for which is not excludable from gross income and 
            for which a deduction under section 162(l) is not 
            allowable.
            ``(C) Coverage includes employee paid portion.--Coverage 
        shall be treated as applicable employer-sponsored coverage 
        without regard to whether the employer or employee pays for the 
        coverage.
            ``(D) Self-employed individual.--In the case of an 
        individual who is an employee within the meaning of section 
        401(c)(1), coverage under any group health plan providing 
        health insurance coverage shall be treated as applicable 
        employer-sponsored coverage if a deduction is allowable under 
        section 162(l) with respect to all or any portion of the cost 
        of the coverage.
            ``(E) Governmental plans included.--Applicable employer-
        sponsored coverage shall include coverage under any group 
        health plan established and maintained primarily for its 
        civilian employees by the Government of the United States, by 
        the government of any State or political subdivision thereof, 
        or by any agency or instrumentality of any such government.
        ``(2) Determination of cost.--
            ``(A) In general.--The cost of applicable employer-
        sponsored coverage shall be determined under rules similar to 
        the rules of section 4980B(f)(4), except that in determining 
        such cost, any portion of the cost of such coverage which is 
        attributable to the tax imposed under this section shall not be 
        taken into account and the amount of such cost shall be 
        calculated separately for self-only coverage and other 
        coverage. In the case of applicable employer-sponsored coverage 
        which provides coverage to retired employees, the plan may 
        elect to treat a retired employee who has not attained the age 
        of 65 and a retired employee who has attained the age of 65 as 
        similarly situated beneficiaries.
            ``(B) Health fsas.--In the case of applicable employer-
        sponsored coverage consisting of coverage under a flexible 
        spending arrangement (as defined in section 106(c)(2)), the 
        cost of the coverage shall be equal to the sum of--
                ``(i) the amount of employer contributions under any 
            salary reduction election under the arrangement, plus
                ``(ii) the amount determined under subparagraph (A) 
            with respect to any reimbursement under the arrangement in 
            excess of the contributions described in clause (i).
            ``(C) Archer msas and hsas.--In the case of applicable 
        employer-sponsored coverage consisting of coverage under an 
        arrangement under which the employer makes contributions 
        described in subsection (b) or (d) of section 106, the cost of 
        the coverage shall be equal to the amount of employer 
        contributions under the arrangement.
            ``(D) Allocation on a monthly basis.--If cost is determined 
        on other than a monthly basis, the cost shall be allocated to 
        months in a taxable period on such basis as the Secretary may 
        prescribe.
    ``(e) Penalty for Failure To Properly Calculate Excess Benefit.--
        ``(1) In general.--If, for any taxable period, the tax imposed 
    by subsection (a) exceeds the tax determined under such subsection 
    with respect to the total excess benefit calculated by the employer 
    or plan sponsor under subsection (c)(4)--
            ``(A) each coverage provider shall pay the tax on its 
        applicable share (determined in the same manner as under 
        subsection (c)(4)) of the excess, but no penalty shall be 
        imposed on the provider with respect to such amount, and
            ``(B) the employer or plan sponsor shall, in addition to 
        any tax imposed by subsection (a), pay a penalty in an amount 
        equal to such excess, plus interest at the underpayment rate 
        determined under section 6621 for the period beginning on the 
        due date for the payment of tax imposed by subsection (a) to 
        which the excess relates and ending on the date of payment of 
        the penalty.
        ``(2) Limitations on penalty.--
            ``(A) Penalty not to apply where failure not discovered 
        exercising reasonable diligence.--No penalty shall be imposed 
        by paragraph (1)(B) on any failure to properly calculate the 
        excess benefit during any period for which it is established to 
        the satisfaction of the Secretary that the employer or plan 
        sponsor neither knew, nor exercising reasonable diligence would 
        have known, that such failure existed.
            ``(B) Penalty not to apply to failures corrected within 30 
        days.--No penalty shall be imposed by paragraph (1)(B) on any 
        such failure if--
                ``(i) such failure was due to reasonable cause and not 
            to willful neglect, and
                ``(ii) such failure is corrected during the 30-day 
            period beginning on the 1st date that the employer knew, or 
            exercising reasonable diligence would have known, that such 
            failure existed.
            ``(C) Waiver by secretary.--In the case of any such failure 
        which is due to reasonable cause and not to willful neglect, 
        the Secretary may waive part or all of the penalty imposed by 
        paragraph (1), to the extent that the payment of such penalty 
        would be excessive or otherwise inequitable relative to the 
        failure involved.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
        ``(1) Coverage determinations.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        an employee shall be treated as having self-only coverage with 
        respect to any applicable employer-sponsored coverage of an 
        employer.
            ``(B) Minimum essential coverage.--An employee shall be 
        treated as having coverage other than self-only coverage only 
        if the employee is enrolled in coverage other than self-only 
        coverage in a group health plan which provides minimum 
        essential coverage (as defined in section 5000A(f)) to the 
        employee and at least one other beneficiary, and the benefits 
        provided under such minimum essential coverage do not vary 
        based on whether any individual covered under such coverage is 
        the employee or another beneficiary.
        ``(2) Qualified retiree.--The term `qualified retiree' means 
    any individual who--
            ``(A) is receiving coverage by reason of being a retiree,
            ``(B) has attained age 55, and
            ``(C) is not entitled to benefits or eligible for 
        enrollment under the Medicare program under title XVIII of the 
        Social Security Act.
        ``(3) Employees engaged in high-risk profession.--The term 
    `employees engaged in a high-risk profession' means law enforcement 
    officers (as such term is defined in section 1204 of the Omnibus 
    Crime Control and Safe Streets Act of 1968), employees in fire 
    protection activities (as such term is defined in section 3(y) of 
    the Fair Labor Standards Act of 1938), individuals who provide out-
    of-hospital emergency medical care (including emergency medical 
    technicians, paramedics, and first-responders), and individuals 
    engaged in the construction, mining, agriculture (not including 
    food processing), forestry, and fishing industries. Such term 
    includes an employee who is retired from a high-risk profession 
    described in the preceding sentence, if such employee satisfied the 
    requirements of such sentence for a period of not less than 20 
    years during the employee's employment.
        ``(4) Group health plan.--The term `group health plan' has the 
    meaning given such term by section 5000(b)(1).
        ``(5) Health insurance coverage; health insurance issuer.--
            ``(A) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning given such term by section 
        9832(b)(1) (applied without regard to subparagraph (B) thereof, 
        except as provided by the Secretary in regulations).
            ``(B) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term by section 9832(b)(2).
        ``(6) Person that administers the plan benefits.--The term 
    `person that administers the plan benefits' shall include the plan 
    sponsor if the plan sponsor administers benefits under the plan.
        ``(7) Plan sponsor.--The term `plan sponsor' has the meaning 
    given such term in section 3(16)(B) of the Employee Retirement 
    Income Security Act of 1974.
        ``(8) Taxable period.--The term `taxable period' means the 
    calendar year or such shorter period as the Secretary may 
    prescribe. The Secretary may have different taxable periods for 
    employers of varying sizes.
        ``(9) Aggregation rules.--All employers treated as a single 
    employer under subsection (b), (c), (m), or (o) of section 414 
    shall be treated as a single employer.
        ``(10) Denial of deduction.--For denial of a deduction for the 
    tax imposed by this section, see section 275(a)(6).
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code, as amended by section 1513, is amended by adding at the end 
the following new item:
``Sec. 4980I. Excise tax on high cost employer-sponsored health 
          coverage.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON 
              W-2.

    (a) In General.--Section 6051(a) of the Internal Revenue Code of 
1986 (relating to receipts for employees) is amended by striking 
``and'' at the end of paragraph (12), by striking the period at the end 
of paragraph (13) and inserting ``, and'', and by adding after 
paragraph (13) the following new paragraph:
        ``(14) the aggregate cost (determined under rules similar to 
    the rules of section 4980B(f)(4)) of applicable employer-sponsored 
    coverage (as defined in section 4980I(d)(1)), except that this 
    paragraph shall not apply to--
            ``(A) coverage to which paragraphs (11) and (12) apply, or
            ``(B) the amount of any salary reduction contributions to a 
        flexible spending arrangement (within the meaning of section 
        125).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED 
              DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Such term shall include an amount paid for medicine or a drug only if 
such medicine or drug is a prescribed drug (determined without regard 
to whether such drug is available without a prescription) or is 
insulin.''.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following: ``Such term shall include an amount paid for medicine or a 
drug only if such medicine or drug is a prescribed drug (determined 
without regard to whether such drug is available without a 
prescription) or is insulin.''.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs 
and Insulin.--For purposes of this section and section 105, 
reimbursement for expenses incurred for a medicine or a drug shall be 
treated as a reimbursement for medical expenses only if such medicine 
or drug is a prescribed drug (determined without regard to whether such 
drug is available without a prescription) or is insulin.''.
    (d) Effective Dates.--
        (1) Distributions from savings accounts.--The amendments made 
    by subsections (a) and (b) shall apply to amounts paid with respect 
    to taxable years beginning after December 31, 2010.
        (2) Reimbursements.--The amendment made by subsection (c) shall 
    apply to expenses incurred with respect to taxable years beginning 
    after December 31, 2010.

SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM HSAS AND 
              ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL EXPENSES.

    (a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue Code of 
1986 is amended by striking ``10 percent'' and inserting ``20 
percent''.
    (b) Archer MSAs.--Section 220(f)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``15 percent'' and inserting ``20 
percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2010.

SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER 
              CAFETERIA PLANS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended--
        (1) by redesignating subsections (i) and (j) as subsections (j) 
    and (k), respectively, and
        (2) by inserting after subsection (h) the following new 
    subsection:
    ``(i) Limitation on Health Flexible Spending Arrangements.--For 
purposes of this section, if a benefit is provided under a cafeteria 
plan through employer contributions to a health flexible spending 
arrangement, such benefit shall not be treated as a qualified benefit 
unless the cafeteria plan provides that an employee may not elect for 
any taxable year to have salary reduction contributions in excess of 
$2,500 made to such arrangement.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

    (a) In General.--Section 6041 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsections:
    ``(h) Application to Corporations.--Notwithstanding any regulation 
prescribed by the Secretary before the date of the enactment of this 
subsection, for purposes of this section the term `person' includes any 
corporation that is not an organization exempt from tax under section 
501(a).
    ``(i) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be appropriate or necessary to carry out the 
purposes of this section, including rules to prevent duplicative 
reporting of transactions.''.
    (b) Payments for Property and Other Gross Proceeds.--Subsection (a) 
of section 6041 of the Internal Revenue Code of 1986 is amended--
        (1) by inserting ``amounts in consideration for property,'' 
    after ``wages,'',
        (2) by inserting ``gross proceeds,'' after ``emoluments, or 
    other'', and
        (3) by inserting ``gross proceeds,'' after ``setting forth the 
    amount of such''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made after December 31, 2011.

SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

    (a) Requirements To Qualify as Section 501(c)(3) Charitable 
Hospital Organization.--Section 501 of the Internal Revenue Code of 
1986 (relating to exemption from tax on corporations, certain trusts, 
etc.) is amended by redesignating subsection (r) as subsection (s) and 
by inserting after subsection (q) the following new subsection:
    ``(r) Additional Requirements for Certain Hospitals.--
        ``(1) In general.--A hospital organization to which this 
    subsection applies shall not be treated as described in subsection 
    (c)(3) unless the organization--
            ``(A) meets the community health needs assessment 
        requirements described in paragraph (3),
            ``(B) meets the financial assistance policy requirements 
        described in paragraph (4),
            ``(C) meets the requirements on charges described in 
        paragraph (5), and
            ``(D) meets the billing and collection requirement 
        described in paragraph (6).
        ``(2) Hospital organizations to which subsection applies.--
            ``(A) In general.--This subsection shall apply to--
                ``(i) an organization which operates a facility which 
            is required by a State to be licensed, registered, or 
            similarly recognized as a hospital, and
                ``(ii) any other organization which the Secretary 
            determines has the provision of hospital care as its 
            principal function or purpose constituting the basis for 
            its exemption under subsection (c)(3) (determined without 
            regard to this subsection).
            ``(B) Organizations with more than 1 hospital facility.--If 
        a hospital organization operates more than 1 hospital 
        facility--
                ``(i) the organization shall meet the requirements of 
            this subsection separately with respect to each such 
            facility, and
                ``(ii) the organization shall not be treated as 
            described in subsection (c)(3) with respect to any such 
            facility for which such requirements are not separately 
            met.
        ``(3) Community health needs assessments.--
            ``(A) In general.--An organization meets the requirements 
        of this paragraph with respect to any taxable year only if the 
        organization--
                ``(i) has conducted a community health needs assessment 
            which meets the requirements of subparagraph (B) in such 
            taxable year or in either of the 2 taxable years 
            immediately preceding such taxable year, and
                ``(ii) has adopted an implementation strategy to meet 
            the community health needs identified through such 
            assessment.
            ``(B) Community health needs assessment.--A community 
        health needs assessment meets the requirements of this 
        paragraph if such community health needs assessment--
                ``(i) takes into account input from persons who 
            represent the broad interests of the community served by 
            the hospital facility, including those with special 
            knowledge of or expertise in public health, and
                ``(ii) is made widely available to the public.
        ``(4) Financial assistance policy.--An organization meets the 
    requirements of this paragraph if the organization establishes the 
    following policies:
            ``(A) Financial assistance policy.--A written financial 
        assistance policy which includes--
                ``(i) eligibility criteria for financial assistance, 
            and whether such assistance includes free or discounted 
            care,
                ``(ii) the basis for calculating amounts charged to 
            patients,
                ``(iii) the method for applying for financial 
            assistance,
                ``(iv) in the case of an organization which does not 
            have a separate billing and collections policy, the actions 
            the organization may take in the event of non-payment, 
            including collections action and reporting to credit 
            agencies, and
                ``(v) measures to widely publicize the policy within 
            the community to be served by the organization.
            ``(B) Policy relating to emergency medical care.--A written 
        policy requiring the organization to provide, without 
        discrimination, care for emergency medical conditions (within 
        the meaning of section 1867 of the Social Security Act (42 
        U.S.C. 1395dd)) to individuals regardless of their eligibility 
        under the financial assistance policy described in subparagraph 
        (A).
        ``(5) Limitation on charges.--An organization meets the 
    requirements of this paragraph if the organization--
            ``(A) limits amounts charged for emergency or other 
        medically necessary care provided to individuals eligible for 
        assistance under the financial assistance policy described in 
        paragraph (4)(A) to not more than the lowest amounts charged to 
        individuals who have insurance covering such care, and
            ``(B) prohibits the use of gross charges.
        ``(6) Billing and collection requirements.--An organization 
    meets the requirement of this paragraph only if the organization 
    does not engage in extraordinary collection actions before the 
    organization has made reasonable efforts to determine whether the 
    individual is eligible for assistance under the financial 
    assistance policy described in paragraph (4)(A).
        ``(7) Regulatory authority.--The Secretary shall issue such 
    regulations and guidance as may be necessary to carry out the 
    provisions of this subsection, including guidance relating to what 
    constitutes reasonable efforts to determine the eligibility of a 
    patient under a financial assistance policy for purposes of 
    paragraph (6).''.
    (b) Excise Tax for Failures To Meet Hospital Exemption 
Requirements.--
        (1) In general.--Subchapter D of chapter 42 of the Internal 
    Revenue Code of 1986 (relating to failure by certain charitable 
    organizations to meet certain qualification requirements) is 
    amended by adding at the end the following new section:

``SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS.

    ``If a hospital organization to which section 501(r) applies fails 
to meet the requirement of section 501(r)(3) for any taxable year, 
there is imposed on the organization a tax equal to $50,000.''.
        (2) Conforming amendment.--The table of sections for subchapter 
    D of chapter 42 of such Code is amended by adding at the end the 
    following new item:
``Sec. 4959. Taxes on failures by hospital organizations.''.
    (c) Mandatory Review of Tax Exemption for Hospitals.--The Secretary 
of the Treasury or the Secretary's delegate shall review at least once 
every 3 years the community benefit activities of each hospital 
organization to which section 501(r) of the Internal Revenue Code of 
1986 (as added by this section) applies.
    (d) Additional Reporting Requirements.--
        (1) Community health needs assessments and audited financial 
    statements.--Section 6033(b) of the Internal Revenue Code of 1986 
    (relating to certain organizations described in section 501(c)(3)) 
    is amended by striking ``and'' at the end of paragraph (14), by 
    redesignating paragraph (15) as paragraph (16), and by inserting 
    after paragraph (14) the following new paragraph:
        ``(15) in the case of an organization to which the requirements 
    of section 501(r) apply for the taxable year--
            ``(A) a description of how the organization is addressing 
        the needs identified in each community health needs assessment 
        conducted under section 501(r)(3) and a description of any such 
        needs that are not being addressed together with the reasons 
        why such needs are not being addressed, and
            ``(B) the audited financial statements of such organization 
        (or, in the case of an organization the financial statements of 
        which are included in a consolidated financial statement with 
        other organizations, such consolidated financial statement).''.
        (2) Taxes.--Section 6033(b)(10) of such Code is amended by 
    striking ``and'' at the end of subparagraph (B), by inserting 
    ``and'' at the end of subparagraph (C), and by adding at the end 
    the following new subparagraph:
            ``(D) section 4959 (relating to taxes on failures by 
        hospital organizations),''.
    (e) Reports.--
        (1) Report on levels of charity care.--The Secretary of the 
    Treasury, in consultation with the Secretary of Health and Human 
    Services, shall submit to the Committees on Ways and Means, 
    Education and Labor, and Energy and Commerce of the House of 
    Representatives and to the Committees on Finance and Health, 
    Education, Labor, and Pensions of the Senate an annual report on 
    the following:
            (A) Information with respect to private tax-exempt, 
        taxable, and government-owned hospitals regarding--
                (i) levels of charity care provided,
                (ii) bad debt expenses,
                (iii) unreimbursed costs for services provided with 
            respect to means-tested government programs, and
                (iv) unreimbursed costs for services provided with 
            respect to non-means tested government programs.
            (B) Information with respect to private tax-exempt 
        hospitals regarding costs incurred for community benefit 
        activities.
        (2) Report on trends.--
            (A) Study.--The Secretary of the Treasury, in consultation 
        with the Secretary of Health and Human Services, shall conduct 
        a study on trends in the information required to be reported 
        under paragraph (1).
            (B) Report.--Not later than 5 years after the date of the 
        enactment of this Act, the Secretary of the Treasury, in 
        consultation with the Secretary of Health and Human Services, 
        shall submit a report on the study conducted under subparagraph 
        (A) to the Committees on Ways and Means, Education and Labor, 
        and Energy and Commerce of the House of Representatives and to 
        the Committees on Finance and Health, Education, Labor, and 
        Pensions of the Senate.
    (f) Effective Dates.--
        (1) In general.--Except as provided in paragraphs (2) and (3), 
    the amendments made by this section shall apply to taxable years 
    beginning after the date of the enactment of this Act.
        (2) Community health needs assessment.--The requirements of 
    section 501(r)(3) of the Internal Revenue Code of 1986, as added by 
    subsection (a), shall apply to taxable years beginning after the 
    date which is 2 years after the date of the enactment of this Act.
        (3) Excise tax.--The amendments made by subsection (b) shall 
    apply to failures occurring after the date of the enactment of this 
    Act.

SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION 
              PHARMACEUTICAL MANUFACTURERS AND IMPORTERS.

    (a) Imposition of Fee.--
        (1) In general.--Each covered entity engaged in the business of 
    manufacturing or importing branded prescription drugs shall pay to 
    the Secretary of the Treasury not later than the annual payment 
    date of each calendar year beginning after 2009 a fee in an amount 
    determined under subsection (b).
        (2) Annual payment date.--For purposes of this section, the 
    term ``annual payment date'' means with respect to any calendar 
    year the date determined by the Secretary, but in no event later 
    than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
        (1) In general.--With respect to each covered entity, the fee 
    under this section for any calendar year shall be equal to an 
    amount that bears the same ratio to $2,300,000,000 as--
            (A) the covered entity's branded prescription drug sales 
        taken into account during the preceding calendar year, bear to
            (B) the aggregate branded prescription drug sales of all 
        covered entities taken into account during such preceding 
        calendar year.
        (2) Sales taken into account.--For purposes of paragraph (1), 
    the branded prescription drug sales taken into account during any 
    calendar year with respect to any covered entity shall be 
    determined in accordance with the following table:

 
   With respect to a covered entity's
  aggregate branded prescription drug      The percentage of such sales
  sales during the calendar year that         taken into account is:
                  are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      10 percent
   than $125,000,000.
  More than $125,000,000 but not more    40 percent
   than $225,000,000.
  More than $225,000,000 but not more    75 percent
   than $400,000,000.
  More than $400,000,000...............  100 percent.
 

        (3) Secretarial determination.--The Secretary of the Treasury 
    shall calculate the amount of each covered entity's fee for any 
    calendar year under paragraph (1). In calculating such amount, the 
    Secretary of the Treasury shall determine such covered entity's 
    branded prescription drug sales on the basis of reports submitted 
    under subsection (g) and through the use of any other source of 
    information available to the Secretary of the Treasury.
    (c) Transfer of Fees to Medicare Part B Trust Fund.--There is 
hereby appropriated to the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the Social Security Act an 
amount equal to the fees received by the Secretary of the Treasury 
under subsection (a).
    (d) Covered Entity.--
        (1) In general.--For purposes of this section, the term 
    ``covered entity'' means any manufacturer or importer with gross 
    receipts from branded prescription drug sales.
        (2) Controlled groups.--
            (A) In general.--For purposes of this subsection, all 
        persons treated as a single employer under subsection (a) or 
        (b) of section 52 of the Internal Revenue Code of 1986 or 
        subsection (m) or (o) of section 414 of such Code shall be 
        treated as a single covered entity.
            (B) Inclusion of foreign corporations.--For purposes of 
        subparagraph (A), in applying subsections (a) and (b) of 
        section 52 of such Code to this section, section 1563 of such 
        Code shall be applied without regard to subsection (b)(2)(C) 
        thereof.
    (e) Branded Prescription Drug Sales.--For purposes of this 
section--
        (1) In general.--The term ``branded prescription drug sales'' 
    means sales of branded prescription drugs to any specified 
    government program or pursuant to coverage under any such program.
        (2) Branded prescription drugs.--
            (A) In general.--The term ``branded prescription drug'' 
        means--
                (i) any prescription drug the application for which was 
            submitted under section 505(b) of the Federal Food, Drug, 
            and Cosmetic Act (21 U.S.C. 355(b)), or
                (ii) any biological product the license for which was 
            submitted under section 351(a) of the Public Health Service 
            Act (42 U.S.C. 262(a)).
            (B) Prescription drug.--For purposes of subparagraph 
        (A)(i), the term ``prescription drug'' means any drug which is 
        subject to section 503(b) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 353(b)).
        (3) Exclusion of orphan drug sales.--The term ``branded 
    prescription drug sales'' shall not include sales of any drug or 
    biological product with respect to which a credit was allowed for 
    any taxable year under section 45C of the Internal Revenue Code of 
    1986. The preceding sentence shall not apply with respect to any 
    such drug or biological product after the date on which such drug 
    or biological product is approved by the Food and Drug 
    Administration for marketing for any indication other than the 
    treatment of the rare disease or condition with respect to which 
    such credit was allowed.
        (4) Specified government program.--The term ``specified 
    government program'' means--
            (A) the Medicare Part D program under part D of title XVIII 
        of the Social Security Act,
            (B) the Medicare Part B program under part B of title XVIII 
        of the Social Security Act,
            (C) the Medicaid program under title XIX of the Social 
        Security Act,
            (D) any program under which branded prescription drugs are 
        procured by the Department of Veterans Affairs,
            (E) any program under which branded prescription drugs are 
        procured by the Department of Defense, or
            (F) the TRICARE retail pharmacy program under section 1074g 
        of title 10, United States Code.
    (f) Tax Treatment of Fees.--The fees imposed by this section--
        (1) for purposes of subtitle F of the Internal Revenue Code of 
    1986, shall be treated as excise taxes with respect to which only 
    civil actions for refund under procedures of such subtitle shall 
    apply, and
        (2) for purposes of section 275 of such Code, shall be 
    considered to be a tax described in section 275(a)(6).
    (g) Reporting Requirement.--Not later than the date determined by 
the Secretary of the Treasury following the end of any calendar year, 
the Secretary of Health and Human Services, the Secretary of Veterans 
Affairs, and the Secretary of Defense shall report to the Secretary of 
the Treasury, in such manner as the Secretary of the Treasury 
prescribes, the total branded prescription drug sales for each covered 
entity with respect to each specified government program under such 
Secretary's jurisdiction using the following methodology:
        (1) Medicare part d program.--The Secretary of Health and Human 
    Services shall report, for each covered entity and for each branded 
    prescription drug of the covered entity covered by the Medicare 
    Part D program, the product of--
            (A) the per-unit ingredient cost, as reported to the 
        Secretary of Health and Human Services by prescription drug 
        plans and Medicare Advantage prescription drug plans, minus any 
        per-unit rebate, discount, or other price concession provided 
        by the covered entity, as reported to the Secretary of Health 
        and Human Services by the prescription drug plans and Medicare 
        Advantage prescription drug plans, and
            (B) the number of units of the branded prescription drug 
        paid for under the Medicare Part D program.
        (2) Medicare part b program.--The Secretary of Health and Human 
    Services shall report, for each covered entity and for each branded 
    prescription drug of the covered entity covered by the Medicare 
    Part B program under section 1862(a) of the Social Security Act, 
    the product of--
            (A) the per-unit average sales price (as defined in section 
        1847A(c) of the Social Security Act) or the per-unit Part B 
        payment rate for a separately paid branded prescription drug 
        without a reported average sales price, and
            (B) the number of units of the branded prescription drug 
        paid for under the Medicare Part B program.
    The Centers for Medicare and Medicaid Services shall establish a 
    process for determining the units and the allocated price for 
    purposes of this section for those branded prescription drugs that 
    are not separately payable or for which National Drug Codes are not 
    reported.
        (3) Medicaid program.--The Secretary of Health and Human 
    Services shall report, for each covered entity and for each branded 
    prescription drug of the covered entity covered under the Medicaid 
    program, the product of--
            (A) the per-unit ingredient cost paid to pharmacies by 
        States for the branded prescription drug dispensed to Medicaid 
        beneficiaries, minus any per-unit rebate paid by the covered 
        entity under section 1927 of the Social Security Act and any 
        State supplemental rebate, and
            (B) the number of units of the branded prescription drug 
        paid for under the Medicaid program.
        (4) Department of veterans affairs programs.--The Secretary of 
    Veterans Affairs shall report, for each covered entity and for each 
    branded prescription drug of the covered entity the total amount 
    paid for each such branded prescription drug procured by the 
    Department of Veterans Affairs for its beneficiaries.
        (5) Department of defense programs and tricare.--The Secretary 
    of Defense shall report, for each covered entity and for each 
    branded prescription drug of the covered entity, the sum of--
            (A) the total amount paid for each such branded 
        prescription drug procured by the Department of Defense for its 
        beneficiaries, and
            (B) for each such branded prescription drug dispensed under 
        the TRICARE retail pharmacy program, the product of--
                (i) the per-unit ingredient cost, minus any per-unit 
            rebate paid by the covered entity, and
                (ii) the number of units of the branded prescription 
            drug dispensed under such program.
    (h) Secretary.--For purposes of this section, the term 
``Secretary'' includes the Secretary's delegate.
    (i) Guidance.--The Secretary of the Treasury shall publish guidance 
necessary to carry out the purposes of this section.
    (j) Application of Section.--This section shall apply to any 
branded prescription drug sales after December 31, 2008.
    (k) Conforming Amendment.--Section 1841(a) of the Social Security 
Act is amended by inserting ``or section 9008(c) of the Patient 
Protection and Affordable Care Act of 2009'' after ``this part''.

SEC. 9009. IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS AND 
              IMPORTERS.

    (a) Imposition of Fee.--
        (1) In general.--Each covered entity engaged in the business of 
    manufacturing or importing medical devices shall pay to the 
    Secretary not later than the annual payment date of each calendar 
    year beginning after 2009 a fee in an amount determined under 
    subsection (b).
        (2) Annual payment date.--For purposes of this section, the 
    term ``annual payment date'' means with respect to any calendar 
    year the date determined by the Secretary, but in no event later 
    than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
        (1) In general.--With respect to each covered entity, the fee 
    under this section for any calendar year shall be equal to an 
    amount that bears the same ratio to $2,000,000,000 as--
            (A) the covered entity's gross receipts from medical device 
        sales taken into account during the preceding calendar year, 
        bear to
            (B) the aggregate gross receipts of all covered entities 
        from medical device sales taken into account during such 
        preceding calendar year.
        (2) Gross receipts from sales taken into account.--For purposes 
    of paragraph (1), the gross receipts from medical device sales 
    taken into account during any calendar year with respect to any 
    covered entity shall be determined in accordance with the following 
    table:

 
   With respect to a covered entity's
 aggregate gross receipts from medical       The percentage of gross
 device sales during the calendar year   receipts taken into account is:
               that are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $25,000,000.
  More than $25,000,000................  100 percent.
 

        (3) Secretarial determination.--The Secretary shall calculate 
    the amount of each covered entity's fee for any calendar year under 
    paragraph (1). In calculating such amount, the Secretary shall 
    determine such covered entity's gross receipts from medical device 
    sales on the basis of reports submitted by the covered entity under 
    subsection (f) and through the use of any other source of 
    information available to the Secretary.
    (c) Covered Entity.--
        (1) In general.--For purposes of this section, the term 
    ``covered entity'' means any manufacturer or importer with gross 
    receipts from medical device sales.
        (2) Controlled groups.--
            (A) In general.--For purposes of this subsection, all 
        persons treated as a single employer under subsection (a) or 
        (b) of section 52 of the Internal Revenue Code of 1986 or 
        subsection (m) or (o) of section 414 of such Code shall be 
        treated as a single covered entity.
            (B) Inclusion of foreign corporations.--For purposes of 
        subparagraph (A), in applying subsections (a) and (b) of 
        section 52 of such Code to this section, section 1563 of such 
        Code shall be applied without regard to subsection (b)(2)(C) 
        thereof.
    (d) Medical Device Sales.--For purposes of this section--
        (1) In general.--The term ``medical device sales'' means sales 
    for use in the United States of any medical device, other than the 
    sales of a medical device that--
            (A) has been classified in class II under section 513 of 
        the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360c) and 
        is primarily sold to consumers at retail for not more than $100 
        per unit, or
            (B) has been classified in class I under such section.
        (2) United states.--For purposes of paragraph (1), the term 
    ``United States'' means the several States, the District of 
    Columbia, the Commonwealth of Puerto Rico, and the possessions of 
    the United States.
        (3) Medical device.--For purposes of paragraph (1), the term 
    ``medical device'' means any device (as defined in section 201(h) 
    of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))) 
    intended for humans.
    (e) Tax Treatment of Fees.--The fees imposed by this section--
        (1) for purposes of subtitle F of the Internal Revenue Code of 
    1986, shall be treated as excise taxes with respect to which only 
    civil actions for refund under procedures of such subtitle shall 
    apply, and
        (2) for purposes of section 275 of such Code, shall be 
    considered to be a tax described in section 275(a)(6).
    (f) Reporting Requirement.--
        (1) In general.--Not later than the date determined by the 
    Secretary following the end of any calendar year, each covered 
    entity shall report to the Secretary, in such manner as the 
    Secretary prescribes, the gross receipts from medical device sales 
    of such covered entity during such calendar year.
        (2) Penalty for failure to report.--
            (A) In general.--In the case of any failure to make a 
        report containing the information required by paragraph (1) on 
        the date prescribed therefor (determined with regard to any 
        extension of time for filing), unless it is shown that such 
        failure is due to reasonable cause, there shall be paid by the 
        covered entity failing to file such report, an amount equal 
        to--
                (i) $10,000, plus
                (ii) the lesser of--

                    (I) an amount equal to $1,000, multiplied by the 
                number of days during which such failure continues, or
                    (II) the amount of the fee imposed by this section 
                for which such report was required.

            (B) Treatment of penalty.--The penalty imposed under 
        subparagraph (A)--
                (i) shall be treated as a penalty for purposes of 
            subtitle F of the Internal Revenue Code of 1986,
                (ii) shall be paid on notice and demand by the 
            Secretary and in the same manner as tax under such Code, 
            and
                (iii) with respect to which only civil actions for 
            refund under procedures of such subtitle F shall apply.
    (g) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.
    (h) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section, including identification of 
medical devices described in subsection (d)(1)(A) and with respect to 
the treatment of gross receipts from sales of medical devices to 
another covered entity or to another entity by reason of the 
application of subsection (c)(2).
    (i) Application of Section.--This section shall apply to any 
medical device sales after December 31, 2008.

SEC. 9010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.

    (a) Imposition of Fee.--
        (1) In general.--Each covered entity engaged in the business of 
    providing health insurance shall pay to the Secretary not later 
    than the annual payment date of each calendar year beginning after 
    2009 a fee in an amount determined under subsection (b).
        (2) Annual payment date.--For purposes of this section, the 
    term ``annual payment date'' means with respect to any calendar 
    year the date determined by the Secretary, but in no event later 
    than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
        (1) In general.--With respect to each covered entity, the fee 
    under this section for any calendar year shall be equal to an 
    amount that bears the same ratio to $6,700,000,000 as--
            (A) the sum of--
                (i) the covered entity's net premiums written with 
            respect to health insurance for any United States health 
            risk that are taken into account during the preceding 
            calendar year, plus
                (ii) 200 percent of the covered entity's third party 
            administration agreement fees that are taken into account 
            during the preceding calendar year, bears to
            (B) the sum of--
                (i) the aggregate net premiums written with respect to 
            such health insurance of all covered entities that are 
            taken into account during such preceding calendar year, 
            plus
                (ii) 200 percent of the aggregate third party 
            administration agreement fees of all covered entities that 
            are taken into account during such preceding calendar year.
        (2) Amounts taken into account.--For purposes of paragraph 
    (1)--
            (A) Net premiums written.--The net premiums written with 
        respect to health insurance for any United States health risk 
        that are taken into account during any calendar year with 
        respect to any covered entity shall be determined in accordance 
        with the following table:

 
 With respect to a covered entity's net   The percentage of net premiums
  premiums written during the calendar     written that are taken into
             year that are:                        account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 

            (B) Third party administration agreement fees.--The third 
        party administration agreement fees that are taken into account 
        during any calendar year with respect to any covered entity 
        shall be determined in accordance with the following table:

 
   With respect to a covered entity's     The percentage of third party
  third party administration agreement    administration agreement fees
fees during the calendar year that are:  that are taken into account is:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $10,000,000.
  More than $10,000,000................  100 percent.
 

        (3) Secretarial determination.--The Secretary shall calculate 
    the amount of each covered entity's fee for any calendar year under 
    paragraph (1). In calculating such amount, the Secretary shall 
    determine such covered entity's net premiums written with respect 
    to any United States health risk and third party administration 
    agreement fees on the basis of reports submitted by the covered 
    entity under subsection (g) and through the use of any other source 
    of information available to the Secretary.
    (c) Covered Entity.--
        (1) In general.--For purposes of this section, the term 
    ``covered entity'' means any entity which provides health insurance 
    for any United States health risk.
        (2) Exclusion.--Such term does not include--
            (A) any employer to the extent that such employer self-
        insures its employees' health risks, or
            (B) any governmental entity (except to the extent such an 
        entity provides health insurance coverage through the community 
        health insurance option under section 1323).
        (3) Controlled groups.--
            (A) In general.--For purposes of this subsection, all 
        persons treated as a single employer under subsection (a) or 
        (b) of section 52 of the Internal Revenue Code of 1986 or 
        subsection (m) or (o) of section 414 of such Code shall be 
        treated as a single covered entity (or employer for purposes of 
        paragraph (2)).
            (B) Inclusion of foreign corporations.--For purposes of 
        subparagraph (A), in applying subsections (a) and (b) of 
        section 52 of such Code to this section, section 1563 of such 
        Code shall be applied without regard to subsection (b)(2)(C) 
        thereof.
    (d) United States Health Risk.--For purposes of this section, the 
term ``United States health risk'' means the health risk of any 
individual who is--
        (1) a United States citizen,
        (2) a resident of the United States (within the meaning of 
    section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
        (3) located in the United States, with respect to the period 
    such individual is so located.
    (e) Third Party Administration Agreement Fees.--For purposes of 
this section, the term ``third party administration agreement fees'' 
means, with respect to any covered entity, amounts received from an 
employer which are in excess of payments made by such covered entity 
for health benefits under an arrangement under which such employer 
self-insures the United States health risk of its employees.
    (f) Tax Treatment of Fees.--The fees imposed by this section--
        (1) for purposes of subtitle F of the Internal Revenue Code of 
    1986, shall be treated as excise taxes with respect to which only 
    civil actions for refund under procedures of such subtitle shall 
    apply, and
        (2) for purposes of section 275 of such Code shall be 
    considered to be a tax described in section 275(a)(6).
    (g) Reporting Requirement.--
        (1) In general.--Not later than the date determined by the 
    Secretary following the end of any calendar year, each covered 
    entity shall report to the Secretary, in such manner as the 
    Secretary prescribes, the covered entity's net premiums written 
    with respect to health insurance for any United States health risk 
    and third party administration agreement fees for such calendar 
    year.
        (2) Penalty for failure to report.--
            (A) In general.--In the case of any failure to make a 
        report containing the information required by paragraph (1) on 
        the date prescribed therefor (determined with regard to any 
        extension of time for filing), unless it is shown that such 
        failure is due to reasonable cause, there shall be paid by the 
        covered entity failing to file such report, an amount equal 
        to--
                (i) $10,000, plus
                (ii) the lesser of--

                    (I) an amount equal to $1,000, multiplied by the 
                number of days during which such failure continues, or
                    (II) the amount of the fee imposed by this section 
                for which such report was required.

            (B) Treatment of penalty.--The penalty imposed under 
        subparagraph (A)--
                (i) shall be treated as a penalty for purposes of 
            subtitle F of the Internal Revenue Code of 1986,
                (ii) shall be paid on notice and demand by the 
            Secretary and in the same manner as tax under such Code, 
            and
                (iii) with respect to which only civil actions for 
            refund under procedures of such subtitle F shall apply.
    (h) Additional Definitions.--For purposes of this section--
        (1) Secretary.--The term ``Secretary'' means the Secretary of 
    the Treasury or the Secretary's delegate.
        (2) United states.--The term ``United States'' means the 
    several States, the District of Columbia, the Commonwealth of 
    Puerto Rico, and the possessions of the United States.
        (3) Health insurance.--The term ``health insurance'' shall not 
    include insurance for long-term care or disability.
    (i) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section.
    (j) Application of Section.--This section shall apply to any net 
premiums written after December 31, 2008, with respect to health 
insurance for any United States health risk, and any third party 
administration agreement fees received after such date.

SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH CARE.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study on the effect (if any) of the provisions of sections 9008, 9009, 
and 9010 on--
        (1) the cost of medical care provided to veterans, and
        (2) veterans' access to medical devices and branded 
    prescription drugs.
    (b) Report.--The Secretary of Veterans Affairs shall report the 
results of the study under subsection (a) to the Committee on Ways and 
Means of the House of Representatives and to the Committee on Finance 
of the Senate not later than December 31, 2012.

SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE 
              PART D SUBSIDY.

    (a) In General.--Section 139A of the Internal Revenue Code of 1986 
is amended by striking the second sentence.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 is amended by striking ``7.5 percent'' and 
inserting ``10 percent''.
    (b) Temporary Waiver of Increase for Certain Seniors.--Section 213 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new subsection:
    ``(f) Special Rule for 2013, 2014, 2015, and 2016.--In the case of 
any taxable year beginning after December 31, 2012, and ending before 
January 1, 2017, subsection (a) shall be applied with respect to a 
taxpayer by substituting `7.5 percent' for `10 percent' if such 
taxpayer or such taxpayer's spouse has attained age 65 before the close 
of such taxable year.''.
    (c) Conforming Amendment.--Section 56(b)(1)(B) of the Internal 
Revenue Code of 1986 is amended by striking ``by substituting `10 
percent' for `7.5 percent''' and inserting ``without regard to 
subsection (f) of such section''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH 
              INSURANCE PROVIDERS.

    (a) In General.--Section 162(m) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
        ``(6) Special rule for application to certain health insurance 
    providers.--
            ``(A) In general.--No deduction shall be allowed under this 
        chapter--
                ``(i) in the case of applicable individual remuneration 
            which is for any disqualified taxable year beginning after 
            December 31, 2012, and which is attributable to services 
            performed by an applicable individual during such taxable 
            year, to the extent that the amount of such remuneration 
            exceeds $500,000, or
                ``(ii) in the case of deferred deduction remuneration 
            for any taxable year beginning after December 31, 2012, 
            which is attributable to services performed by an 
            applicable individual during any disqualified taxable year 
            beginning after December 31, 2009, to the extent that the 
            amount of such remuneration exceeds $500,000 reduced (but 
            not below zero) by the sum of--

                    ``(I) the applicable individual remuneration for 
                such disqualified taxable year, plus
                    ``(II) the portion of the deferred deduction 
                remuneration for such services which was taken into 
                account under this clause in a preceding taxable year 
                (or which would have been taken into account under this 
                clause in a preceding taxable year if this clause were 
                applied by substituting `December 31, 2009' for 
                `December 31, 2012' in the matter preceding subclause 
                (I)).

            ``(B) Disqualified taxable year.--For purposes of this 
        paragraph, the term `disqualified taxable year' means, with 
        respect to any employer, any taxable year for which such 
        employer is a covered health insurance provider.
            ``(C) Covered health insurance provider.--For purposes of 
        this paragraph--
                ``(i) In general.--The term `covered health insurance 
            provider' means--

                    ``(I) with respect to taxable years beginning after 
                December 31, 2009, and before January 1, 2013, any 
                employer which is a health insurance issuer (as defined 
                in section 9832(b)(2)) and which receives premiums from 
                providing health insurance coverage (as defined in 
                section 9832(b)(1)), and
                    ``(II) with respect to taxable years beginning 
                after December 31, 2012, any employer which is a health 
                insurance issuer (as defined in section 9832(b)(2)) and 
                with respect to which not less than 25 percent of the 
                gross premiums received from providing health insurance 
                coverage (as defined in section 9832(b)(1)) is from 
                minimum essential coverage (as defined in section 
                5000A(f)).

                ``(ii) Aggregation rules.--Two or more persons who are 
            treated as a single employer under subsection (b), (c), 
            (m), or (o) of section 414 shall be treated as a single 
            employer, except that in applying section 1563(a) for 
            purposes of any such subsection, paragraphs (2) and (3) 
            thereof shall be disregarded.
            ``(D) Applicable individual remuneration.--For purposes of 
        this paragraph, the term `applicable individual remuneration' 
        means, with respect to any applicable individual for any 
        disqualified taxable year, the aggregate amount allowable as a 
        deduction under this chapter for such taxable year (determined 
        without regard to this subsection) for remuneration (as defined 
        in paragraph (4) without regard to subparagraphs (B), (C), and 
        (D) thereof) for services performed by such individual (whether 
        or not during the taxable year). Such term shall not include 
        any deferred deduction remuneration with respect to services 
        performed during the disqualified taxable year.
            ``(E) Deferred deduction remuneration.--For purposes of 
        this paragraph, the term `deferred deduction remuneration' 
        means remuneration which would be applicable individual 
        remuneration for services performed in a disqualified taxable 
        year but for the fact that the deduction under this chapter 
        (determined without regard to this paragraph) for such 
        remuneration is allowable in a subsequent taxable year.
            ``(F) Applicable individual.--For purposes of this 
        paragraph, the term `applicable individual' means, with respect 
        to any covered health insurance provider for any disqualified 
        taxable year, any individual--
                ``(i) who is an officer, director, or employee in such 
            taxable year, or
                ``(ii) who provides services for or on behalf of such 
            covered health insurance provider during such taxable year.
            ``(G) Coordination.--Rules similar to the rules of 
        subparagraphs (F) and (G) of paragraph (4) shall apply for 
        purposes of this paragraph.
            ``(H) Regulatory authority.--The Secretary may prescribe 
        such guidance, rules, or regulations as are necessary to carry 
        out the purposes of this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2009, with respect to 
services performed after such date.

SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS.

    (a) FICA.--
        (1) In general.--Section 3101(b) of the Internal Revenue Code 
    of 1986 is amended--
            (A) by striking ``In addition'' and inserting the 
        following:
        ``(1) In general.--In addition'',
            (B) by striking ``the following percentages of the'' and 
        inserting ``1.45 percent of the'',
            (C) by striking ``(as defined in section 3121(b))--'' and 
        all that follows and inserting ``(as defined in section 
        3121(b)).'', and
            (D) by adding at the end the following new paragraph:
        ``(2) Additional tax.--In addition to the tax imposed by 
    paragraph (1) and the preceding subsection, there is hereby imposed 
    on every taxpayer (other than a corporation, estate, or trust) a 
    tax equal to 0.5 percent of wages which are received with respect 
    to employment (as defined in section 3121(b)) during any taxable 
    year beginning after December 31, 2012, and which are in excess 
    of--
            ``(A) in the case of a joint return, $250,000, and
            ``(B) in any other case, $200,000.''.
        (2) Collection of tax.--Section 3102 of the Internal Revenue 
    Code of 1986 is amended by adding at the end the following new 
    subsection:
    ``(f) Special Rules for Additional Tax.--
        ``(1) In general.--In the case of any tax imposed by section 
    3101(b)(2), subsection (a) shall only apply to the extent to which 
    the taxpayer receives wages from the employer in excess of 
    $200,000, and the employer may disregard the amount of wages 
    received by such taxpayer's spouse.
        ``(2) Collection of amounts not withheld.--To the extent that 
    the amount of any tax imposed by section 3101(b)(2) is not 
    collected by the employer, such tax shall be paid by the employee.
        ``(3) Tax paid by recipient.--If an employer, in violation of 
    this chapter, fails to deduct and withhold the tax imposed by 
    section 3101(b)(2) and thereafter the tax is paid by the employee, 
    the tax so required to be deducted and withheld shall not be 
    collected from the employer, but this paragraph shall in no case 
    relieve the employer from liability for any penalties or additions 
    to tax otherwise applicable in respect of such failure to deduct 
    and withhold.''.
    (b) SECA.--
        (1) In general.--Section 1401(b) of the Internal Revenue Code 
    of 1986 is amended--
            (A) by striking ``In addition'' and inserting the 
        following:
        ``(1) In general.--In addition'', and
            (B) by adding at the end the following new paragraph:
        ``(2) Additional tax.--
            ``(A) In general.--In addition to the tax imposed by 
        paragraph (1) and the preceding subsection, there is hereby 
        imposed on every taxpayer (other than a corporation, estate, or 
        trust) for each taxable year beginning after December 31, 2012, 
        a tax equal to 0.5 percent of the self-employment income for 
        such taxable year which is in excess of--
                ``(i) in the case of a joint return, $250,000, and
                ``(ii) in any other case, $200,000.
            ``(B) Coordination with fica.--The amounts under clauses 
        (i) and (ii) of subparagraph (A) shall be reduced (but not 
        below zero) by the amount of wages taken into account in 
        determining the tax imposed under section 3121(b)(2) with 
        respect to the taxpayer.''.
        (2) No deduction for additional tax.--
            (A) In general.--Section 164(f) of such Code is amended by 
        inserting ``(other than the taxes imposed by section 
        1401(b)(2))'' after ``section 1401)''.
            (B) Deduction for net earnings from self-employment.--
        Subparagraph (B) of section 1402(a)(12) is amended by inserting 
        ``(determined without regard to the rate imposed under 
        paragraph (2) of section 1401(b))'' after ``for such year''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to remuneration received, and taxable years 
beginning, after December 31, 2012.

SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN HEALTH 
              ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 833 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
        ``(5) Nonapplication of section in case of low medical loss 
    ratio.--Notwithstanding the preceding paragraphs, this section 
    shall not apply to any organization unless such organization's 
    percentage of total premium revenue expended on reimbursement for 
    clinical services provided to enrollees under its policies during 
    such taxable year (as reported under section 2718 of the Public 
    Health Service Act) is not less than 85 percent.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2009.

SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986, 
as amended by this Act, is amended by adding at the end the following 
new chapter:

           ``CHAPTER 49--ELECTIVE COSMETIC MEDICAL PROCEDURES

``Sec. 5000B. Imposition of tax on elective cosmetic medical procedures.

``SEC. 5000B. IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL 
              PROCEDURES.

    ``(a) In General.--There is hereby imposed on any cosmetic surgery 
and medical procedure a tax equal to 5 percent of the amount paid for 
such procedure (determined without regard to this section), whether 
paid by insurance or otherwise.
    ``(b) Cosmetic Surgery and Medical Procedure.--For purposes of this 
section, the term `cosmetic surgery and medical procedure' means any 
cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar 
procedure which--
        ``(1) is performed by a licensed medical professional, and
        ``(2) is not necessary to ameliorate a deformity arising from, 
    or directly related to, a congenital abnormality, a personal injury 
    resulting from an accident or trauma, or disfiguring disease.
    ``(c) Payment of Tax.--
        ``(1) In general.--The tax imposed by this section shall be 
    paid by the individual on whom the procedure is performed.
        ``(2) Collection.--Every person receiving a payment for 
    procedures on which a tax is imposed under subsection (a) shall 
    collect the amount of the tax from the individual on whom the 
    procedure is performed and remit such tax quarterly to the 
    Secretary at such time and in such manner as provided by the 
    Secretary.
        ``(3) Secondary liability.--Where any tax imposed by subsection 
    (a) is not paid at the time payments for cosmetic surgery and 
    medical procedures are made, then to the extent that such tax is 
    not collected, such tax shall be paid by the person who performs 
    the procedure.''.
    (b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986, as amended by this Act, is amended 
by inserting after the item relating to chapter 48 the following new 
item:

          ``Chapter 49--Elective Cosmetic Medical Procedures''.

    (c) Effective Date.--The amendments made by this section shall 
apply to procedures performed on or after January 1, 2010.

                      Subtitle B--Other Provisions

SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL 
              GOVERNMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139C the following new section:

``SEC. 139D. INDIAN HEALTH CARE BENEFITS.

    ``(a) General Rule.--Except as otherwise provided in this section, 
gross income does not include the value of any qualified Indian health 
care benefit.
    ``(b) Qualified Indian Health Care Benefit.--For purposes of this 
section, the term `qualified Indian health care benefit' means--
        ``(1) any health service or benefit provided or purchased, 
    directly or indirectly, by the Indian Health Service through a 
    grant to or a contract or compact with an Indian tribe or tribal 
    organization, or through a third-party program funded by the Indian 
    Health Service,
        ``(2) medical care provided or purchased by, or amounts to 
    reimburse for such medical care provided by, an Indian tribe or 
    tribal organization for, or to, a member of an Indian tribe, 
    including a spouse or dependent of such a member,
        ``(3) coverage under accident or health insurance (or an 
    arrangement having the effect of accident or health insurance), or 
    an accident or health plan, provided by an Indian tribe or tribal 
    organization for medical care to a member of an Indian tribe, 
    include a spouse or dependent of such a member, and
        ``(4) any other medical care provided by an Indian tribe or 
    tribal organization that supplements, replaces, or substitutes for 
    a program or service relating to medical care provided by the 
    Federal government to Indian tribes or members of such a tribe.
    ``(c) Definitions.--For purposes of this section--
        ``(1) Indian tribe.--The term `Indian tribe' has the meaning 
    given such term by section 45A(c)(6).
        ``(2) Tribal organization.--The term `tribal organization' has 
    the meaning given such term by section 4(l) of the Indian Self-
    Determination and Education Assistance Act.
        ``(3) Medical care.--The term `medical care' has the same 
    meaning as when used in section 213.
        ``(4) Accident or health insurance; accident or health plan.--
    The terms `accident or health insurance' and `accident or health 
    plan' have the same meaning as when used in section 105.
        ``(5) Dependent.--The term `dependent' has the meaning given 
    such term by section 152, determined without regard to subsections 
    (b)(1), (b)(2), and (d)(1)(B) thereof.
    ``(d) Denial of Double Benefit.--Subsection (a) shall not apply to 
the amount of any qualified Indian health care benefit which is not 
includible in gross income of the beneficiary of such benefit under any 
other provision of this chapter, or to the amount of any such benefit 
for which a deduction is allowed to such beneficiary under any other 
provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 139C the 
following new item:
``Sec. 139D. Indian health care benefits.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to benefits and coverage provided after the date of the enactment 
of this Act.
    (d) No Inference.--Nothing in the amendments made by this section 
shall be construed to create an inference with respect to the exclusion 
from gross income of--
        (1) benefits provided by an Indian tribe or tribal organization 
    that are not within the scope of this section, and
        (2) benefits provided prior to the date of the enactment of 
    this Act.

SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL 
              BUSINESSES.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
(relating to cafeteria plans), as amended by this Act, is amended by 
redesignating subsections (j) and (k) as subsections (k) and (l), 
respectively, and by inserting after subsection (i) the following new 
subsection:
    ``(j) Simple Cafeteria Plans for Small Businesses.--
        ``(1) In general.--An eligible employer maintaining a simple 
    cafeteria plan with respect to which the requirements of this 
    subsection are met for any year shall be treated as meeting any 
    applicable nondiscrimination requirement during such year.
        ``(2) Simple cafeteria plan.--For purposes of this subsection, 
    the term `simple cafeteria plan' means a cafeteria plan--
            ``(A) which is established and maintained by an eligible 
        employer, and
            ``(B) with respect to which the contribution requirements 
        of paragraph (3), and the eligibility and participation 
        requirements of paragraph (4), are met.
        ``(3) Contribution requirements.--
            ``(A) In general.--The requirements of this paragraph are 
        met if, under the plan the employer is required, without regard 
        to whether a qualified employee makes any salary reduction 
        contribution, to make a contribution to provide qualified 
        benefits under the plan on behalf of each qualified employee in 
        an amount equal to--
                ``(i) a uniform percentage (not less than 2 percent) of 
            the employee's compensation for the plan year, or
                ``(ii) an amount which is not less than the lesser of--

                    ``(I) 6 percent of the employee's compensation for 
                the plan year, or
                    ``(II) twice the amount of the salary reduction 
                contributions of each qualified employee.

            ``(B) Matching contributions on behalf of highly 
        compensated and key employees.--The requirements of 
        subparagraph (A)(ii) shall not be treated as met if, under the 
        plan, the rate of contributions with respect to any salary 
        reduction contribution of a highly compensated or key employee 
        at any rate of contribution is greater than that with respect 
        to an employee who is not a highly compensated or key employee.
            ``(C) Additional contributions.--Subject to subparagraph 
        (B), nothing in this paragraph shall be treated as prohibiting 
        an employer from making contributions to provide qualified 
        benefits under the plan in addition to contributions required 
        under subparagraph (A).
            ``(D) Definitions.--For purposes of this paragraph--
                ``(i) Salary reduction contribution.--The term `salary 
            reduction contribution' means, with respect to a cafeteria 
            plan, any amount which is contributed to the plan at the 
            election of the employee and which is not includible in 
            gross income by reason of this section.
                ``(ii) Qualified employee.--The term `qualified 
            employee' means, with respect to a cafeteria plan, any 
            employee who is not a highly compensated or key employee 
            and who is eligible to participate in the plan.
                ``(iii) Highly compensated employee.--The term `highly 
            compensated employee' has the meaning given such term by 
            section 414(q).
                ``(iv) Key employee.--The term `key employee' has the 
            meaning given such term by section 416(i).
        ``(4) Minimum eligibility and participation requirements.--
            ``(A) In general.--The requirements of this paragraph shall 
        be treated as met with respect to any year if, under the plan--
                ``(i) all employees who had at least 1,000 hours of 
            service for the preceding plan year are eligible to 
            participate, and
                ``(ii) each employee eligible to participate in the 
            plan may, subject to terms and conditions applicable to all 
            participants, elect any benefit available under the plan.
            ``(B) Certain employees may be excluded.--For purposes of 
        subparagraph (A)(i), an employer may elect to exclude under the 
        plan employees--
                ``(i) who have not attained the age of 21 before the 
            close of a plan year,
                ``(ii) who have less than 1 year of service with the 
            employer as of any day during the plan year,
                ``(iii) who are covered under an agreement which the 
            Secretary of Labor finds to be a collective bargaining 
            agreement if there is evidence that the benefits covered 
            under the cafeteria plan were the subject of good faith 
            bargaining between employee representatives and the 
            employer, or
                ``(iv) who are described in section 410(b)(3)(C) 
            (relating to nonresident aliens working outside the United 
            States).
        A plan may provide a shorter period of service or younger age 
        for purposes of clause (i) or (ii).
        ``(5) Eligible employer.--For purposes of this subsection--
            ``(A) In general.--The term `eligible employer' means, with 
        respect to any year, any employer if such employer employed an 
        average of 100 or fewer employees on business days during 
        either of the 2 preceding years. For purposes of this 
        subparagraph, a year may only be taken into account if the 
        employer was in existence throughout the year.
            ``(B) Employers not in existence during preceding year.--If 
        an employer was not in existence throughout the preceding year, 
        the determination under subparagraph (A) shall be based on the 
        average number of employees that it is reasonably expected such 
        employer will employ on business days in the current year.
            ``(C) Growing employers retain treatment as small 
        employer.--
                ``(i) In general.--If--

                    ``(I) an employer was an eligible employer for any 
                year (a `qualified year'), and
                    ``(II) such employer establishes a simple cafeteria 
                plan for its employees for such year,

            then, notwithstanding the fact the employer fails to meet 
            the requirements of subparagraph (A) for any subsequent 
            year, such employer shall be treated as an eligible 
            employer for such subsequent year with respect to employees 
            (whether or not employees during a qualified year) of any 
            trade or business which was covered by the plan during any 
            qualified year.
                ``(ii) Exception.--This subparagraph shall cease to 
            apply if the employer employs an average of 200 or more 
            employees on business days during any year preceding any 
            such subsequent year.
            ``(D) Special rules.--
                ``(i) Predecessors.--Any reference in this paragraph to 
            an employer shall include a reference to any predecessor of 
            such employer.
                ``(ii) Aggregation rules.--All persons treated as a 
            single employer under subsection (a) or (b) of section 52, 
            or subsection (n) or (o) of section 414, shall be treated 
            as one person.
        ``(6) Applicable nondiscrimination requirement.--For purposes 
    of this subsection, the term `applicable nondiscrimination 
    requirement' means any requirement under subsection (b) of this 
    section, section 79(d), section 105(h), or paragraph (2), (3), (4), 
    or (8) of section 129(d).
        ``(7) Compensation.--The term `compensation' has the meaning 
    given such term by section 414(s).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2010.

SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48C the following new section:

``SEC. 48D. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
therapeutic discovery project credit for any taxable year is an amount 
equal to 50 percent of the qualified investment for such taxable year 
with respect to any qualifying therapeutic discovery project of an 
eligible taxpayer.
    ``(b) Qualified Investment.--
        ``(1) In general.--For purposes of subsection (a), the 
    qualified investment for any taxable year is the aggregate amount 
    of the costs paid or incurred in such taxable year for expenses 
    necessary for and directly related to the conduct of a qualifying 
    therapeutic discovery project.
        ``(2) Limitation.--The amount which is treated as qualified 
    investment for all taxable years with respect to any qualifying 
    therapeutic discovery project shall not exceed the amount certified 
    by the Secretary as eligible for the credit under this section.
        ``(3) Exclusions.--The qualified investment for any taxable 
    year with respect to any qualifying therapeutic discovery project 
    shall not take into account any cost--
            ``(A) for remuneration for an employee described in section 
        162(m)(3),
            ``(B) for interest expenses,
            ``(C) for facility maintenance expenses,
            ``(D) which is identified as a service cost under section 
        1.263A-1(e)(4) of title 26, Code of Federal Regulations, or
            ``(E) for any other expense as determined by the Secretary 
        as appropriate to carry out the purposes of this section.
        ``(4) Certain progress expenditure rules made applicable.--In 
    the case of costs described in paragraph (1) that are paid for 
    property of a character subject to an allowance for depreciation, 
    rules similar to the rules of subsections (c)(4) and (d) of section 
    46 (as in effect on the day before the date of the enactment of the 
    Revenue Reconciliation Act of 1990) shall apply for purposes of 
    this section.
        ``(5) Application of subsection.--An investment shall be 
    considered a qualified investment under this subsection only if 
    such investment is made in a taxable year beginning in 2009 or 
    2010.
    ``(c) Definitions.--
        ``(1) Qualifying therapeutic discovery project.--The term 
    `qualifying therapeutic discovery project' means a project which is 
    designed--
            ``(A) to treat or prevent diseases or conditions by 
        conducting pre-clinical activities, clinical trials, and 
        clinical studies, or carrying out research protocols, for the 
        purpose of securing approval of a product under section 505(b) 
        of the Federal Food, Drug, and Cosmetic Act or section 351(a) 
        of the Public Health Service Act,
            ``(B) to diagnose diseases or conditions or to determine 
        molecular factors related to diseases or conditions by 
        developing molecular diagnostics to guide therapeutic 
        decisions, or
            ``(C) to develop a product, process, or technology to 
        further the delivery or administration of therapeutics.
        ``(2) Eligible taxpayer.--
            ``(A) In general.--The term `eligible taxpayer' means a 
        taxpayer which employs not more than 250 employees in all 
        businesses of the taxpayer at the time of the submission of the 
        application under subsection (d)(2).
            ``(B) Aggregation rules.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52, or 
        subsection (m) or (o) of section 414, shall be so treated for 
        purposes of this paragraph.
        ``(3) Facility maintenance expenses.--The term `facility 
    maintenance expenses' means costs paid or incurred to maintain a 
    facility, including--
            ``(A) mortgage or rent payments,
            ``(B) insurance payments,
            ``(C) utility and maintenance costs, and
            ``(D) costs of employment of maintenance personnel.
    ``(d) Qualifying Therapeutic Discovery Project Program.--
        ``(1) Establishment.--
            ``(A) In general.--Not later than 60 days after the date of 
        the enactment of this section, the Secretary, in consultation 
        with the Secretary of Health and Human Services, shall 
        establish a qualifying therapeutic discovery project program to 
        consider and award certifications for qualified investments 
        eligible for credits under this section to qualifying 
        therapeutic discovery project sponsors.
            ``(B) Limitation.--The total amount of credits that may be 
        allocated under the program shall not exceed $1,000,000,000 for 
        the 2-year period beginning with 2009.
        ``(2) Certification.--
            ``(A) Application period.--Each applicant for certification 
        under this paragraph shall submit an application containing 
        such information as the Secretary may require during the period 
        beginning on the date the Secretary establishes the program 
        under paragraph (1).
            ``(B) Time for review of applications.--The Secretary shall 
        take action to approve or deny any application under 
        subparagraph (A) within 30 days of the submission of such 
        application.
            ``(C) Multi-year applications.--An application for 
        certification under subparagraph (A) may include a request for 
        an allocation of credits for more than 1 of the years described 
        in paragraph (1)(B).
        ``(3) Selection criteria.--In determining the qualifying 
    therapeutic discovery projects with respect to which qualified 
    investments may be certified under this section, the Secretary--
            ``(A) shall take into consideration only those projects 
        that show reasonable potential--
                ``(i) to result in new therapies--

                    ``(I) to treat areas of unmet medical need, or
                    ``(II) to prevent, detect, or treat chronic or 
                acute diseases and conditions,

                ``(ii) to reduce long-term health care costs in the 
            United States, or
                ``(iii) to significantly advance the goal of curing 
            cancer within the 30-year period beginning on the date the 
            Secretary establishes the program under paragraph (1), and
            ``(B) shall take into consideration which projects have the 
        greatest potential--
                ``(i) to create and sustain (directly or indirectly) 
            high quality, high-paying jobs in the United States, and
                ``(ii) to advance United States competitiveness in the 
            fields of life, biological, and medical sciences.
        ``(4) Disclosure of allocations.--The Secretary shall, upon 
    making a certification under this subsection, publicly disclose the 
    identity of the applicant and the amount of the credit with respect 
    to such applicant.
    ``(e) Special Rules.--
        ``(1) Basis adjustment.--For purposes of this subtitle, if a 
    credit is allowed under this section for an expenditure related to 
    property of a character subject to an allowance for depreciation, 
    the basis of such property shall be reduced by the amount of such 
    credit.
        ``(2) Denial of double benefit.--
            ``(A) Bonus depreciation.--A credit shall not be allowed 
        under this section for any investment for which bonus 
        depreciation is allowed under section 168(k), 1400L(b)(1), or 
        1400N(d)(1).
            ``(B) Deductions.--No deduction under this subtitle shall 
        be allowed for the portion of the expenses otherwise allowable 
        as a deduction taken into account in determining the credit 
        under this section for the taxable year which is equal to the 
        amount of the credit determined for such taxable year under 
        subsection (a) attributable to such portion. This subparagraph 
        shall not apply to expenses related to property of a character 
        subject to an allowance for depreciation the basis of which is 
        reduced under paragraph (1), or which are described in section 
        280C(g).
            ``(C) Credit for research activities.--
                ``(i) In general.--Except as provided in clause (ii), 
            any expenses taken into account under this section for a 
            taxable year shall not be taken into account for purposes 
            of determining the credit allowable under section 41 or 45C 
            for such taxable year.
                ``(ii) Expenses included in determining base period 
            research expenses.--Any expenses for any taxable year which 
            are qualified research expenses (within the meaning of 
            section 41(b)) shall be taken into account in determining 
            base period research expenses for purposes of applying 
            section 41 to subsequent taxable years.
    ``(f) Coordination With Department of Treasury Grants.--In the case 
of any investment with respect to which the Secretary makes a grant 
under section 9023(e) of the Patient Protection and Affordable Care Act 
of 2009--
        ``(1) Denial of credit.--No credit shall be determined under 
    this section with respect to such investment for the taxable year 
    in which such grant is made or any subsequent taxable year.
        ``(2) Recapture of credits for progress expenditures made 
    before grant.--If a credit was determined under this section with 
    respect to such investment for any taxable year ending before such 
    grant is made--
            ``(A) the tax imposed under subtitle A on the taxpayer for 
        the taxable year in which such grant is made shall be increased 
        by so much of such credit as was allowed under section 38,
            ``(B) the general business carryforwards under section 39 
        shall be adjusted so as to recapture the portion of such credit 
        which was not so allowed, and
            ``(C) the amount of such grant shall be determined without 
        regard to any reduction in the basis of any property of a 
        character subject to an allowance for depreciation by reason of 
        such credit.
        ``(3) Treatment of grants.--Any such grant shall not be 
    includible in the gross income of the taxpayer.''.
    (b) Inclusion as Part of Investment Credit.--Section 46 of the 
Internal Revenue Code of 1986 is amended--
        (1) by adding a comma at the end of paragraph (2),
        (2) by striking the period at the end of paragraph (5) and 
    inserting ``, and'', and
        (3) by adding at the end the following new paragraph:
        ``(6) the qualifying therapeutic discovery project credit.''.
    (c) Conforming Amendments.--
        (1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 is 
    amended--
            (A) by striking ``and'' at the end of clause (iv),
            (B) by striking the period at the end of clause (v) and 
        inserting ``, and'', and
            (C) by adding at the end the following new clause:
                ``(vi) the basis of any property to which paragraph (1) 
            of section 48D(e) applies which is part of a qualifying 
            therapeutic discovery project under such section 48D.''.
        (2) Section 280C of such Code is amended by adding at the end 
    the following new subsection:
    ``(g) Qualifying Therapeutic Discovery Project Credit.--
        ``(1) In general.--No deduction shall be allowed for that 
    portion of the qualified investment (as defined in section 48D(b)) 
    otherwise allowable as a deduction for the taxable year which--
            ``(A) would be qualified research expenses (as defined in 
        section 41(b)), basic research expenses (as defined in section 
        41(e)(2)), or qualified clinical testing expenses (as defined 
        in section 45C(b)) if the credit under section 41 or section 
        45C were allowed with respect to such expenses for such taxable 
        year, and
            ``(B) is equal to the amount of the credit determined for 
        such taxable year under section 48D(a), reduced by--
                ``(i) the amount disallowed as a deduction by reason of 
            section 48D(e)(2)(B), and
                ``(ii) the amount of any basis reduction under section 
            48D(e)(1).
        ``(2) Similar rule where taxpayer capitalizes rather than 
    deducts expenses.--In the case of expenses described in paragraph 
    (1)(A) taken into account in determining the credit under section 
    48D for the taxable year, if--
            ``(A) the amount of the portion of the credit determined 
        under such section with respect to such expenses, exceeds
            ``(B) the amount allowable as a deduction for such taxable 
        year for such expenses (determined without regard to paragraph 
        (1)),
    the amount chargeable to capital account for the taxable year for 
    such expenses shall be reduced by the amount of such excess.
        ``(3) Controlled groups.--Paragraph (3) of subsection (b) shall 
    apply for purposes of this subsection.''.
    (d) Clerical Amendment.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 48C the 
following new item:
``Sec. 48D. Qualifying therapeutic discovery project credit.''.
    (e) Grants for Qualified Investments in Therapeutic Discovery 
Projects in Lieu of Tax Credits.--
        (1) In general.--Upon application, the Secretary of the 
    Treasury shall, subject to the requirements of this subsection, 
    provide a grant to each person who makes a qualified investment in 
    a qualifying therapeutic discovery project in the amount of 50 
    percent of such investment. No grant shall be made under this 
    subsection with respect to any investment unless such investment is 
    made during a taxable year beginning in 2009 or 2010.
        (2) Application.--
            (A) In general.--At the stated election of the applicant, 
        an application for certification under section 48D(d)(2) of the 
        Internal Revenue Code of 1986 for a credit under such section 
        for the taxable year of the applicant which begins in 2009 
        shall be considered to be an application for a grant under 
        paragraph (1) for such taxable year.
            (B) Taxable years beginning in 2010.--An application for a 
        grant under paragraph (1) for a taxable year beginning in 2010 
        shall be submitted--
                (i) not earlier than the day after the last day of such 
            taxable year, and
                (ii) not later than the due date (including extensions) 
            for filing the return of tax for such taxable year.
            (C) Information to be submitted.--An application for a 
        grant under paragraph (1) shall include such information and be 
        in such form as the Secretary may require to state the amount 
        of the credit allowable (but for the receipt of a grant under 
        this subsection) under section 48D for the taxable year for the 
        qualified investment with respect to which such application is 
        made.
        (3) Time for payment of grant.--
            (A) In general.--The Secretary of the Treasury shall make 
        payment of the amount of any grant under paragraph (1) during 
        the 30-day period beginning on the later of--
                (i) the date of the application for such grant, or
                (ii) the date the qualified investment for which the 
            grant is being made is made.
            (B) Regulations.--In the case of investments of an ongoing 
        nature, the Secretary shall issue regulations to determine the 
        date on which a qualified investment shall be deemed to have 
        been made for purposes of this paragraph.
        (4) Qualified investment.--For purposes of this subsection, the 
    term ``qualified investment'' means a qualified investment that is 
    certified under section 48D(d) of the Internal Revenue Code of 1986 
    for purposes of the credit under such section 48D.
        (5) Application of certain rules.--
            (A) In general.--In making grants under this subsection, 
        the Secretary of the Treasury shall apply rules similar to the 
        rules of section 50 of the Internal Revenue Code of 1986. In 
        applying such rules, any increase in tax under chapter 1 of 
        such Code by reason of an investment ceasing to be a qualified 
        investment shall be imposed on the person to whom the grant was 
        made.
            (B) Special rules.--
                (i) Recapture of excessive grant amounts.--If the 
            amount of a grant made under this subsection exceeds the 
            amount allowable as a grant under this subsection, such 
            excess shall be recaptured under subparagraph (A) as if the 
            investment to which such excess portion of the grant 
            relates had ceased to be a qualified investment immediately 
            after such grant was made.
                (ii) Grant information not treated as return 
            information.--In no event shall the amount of a grant made 
            under paragraph (1), the identity of the person to whom 
            such grant was made, or a description of the investment 
            with respect to which such grant was made be treated as 
            return information for purposes of section 6103 of the 
            Internal Revenue Code of 1986.
        (6) Exception for certain non-taxpayers.--The Secretary of the 
    Treasury shall not make any grant under this subsection to--
            (A) any Federal, State, or local government (or any 
        political subdivision, agency, or instrumentality thereof),
            (B) any organization described in section 501(c) of the 
        Internal Revenue Code of 1986 and exempt from tax under section 
        501(a) of such Code,
            (C) any entity referred to in paragraph (4) of section 
        54(j) of such Code, or
            (D) any partnership or other pass-thru entity any partner 
        (or other holder of an equity or profits interest) of which is 
        described in subparagraph (A), (B) or (C).
    In the case of a partnership or other pass-thru entity described in 
    subparagraph (D), partners and other holders of any equity or 
    profits interest shall provide to such partnership or entity such 
    information as the Secretary of the Treasury may require to carry 
    out the purposes of this paragraph.
        (7) Secretary.--Any reference in this subsection to the 
    Secretary of the Treasury shall be treated as including the 
    Secretary's delegate.
        (8) Other terms.--Any term used in this subsection which is 
    also used in section 48D of the Internal Revenue Code of 1986 shall 
    have the same meaning for purposes of this subsection as when used 
    in such section.
        (9) Denial of double benefit.--No credit shall be allowed under 
    section 46(6) of the Internal Revenue Code of 1986 by reason of 
    section 48D of such Code for any investment for which a grant is 
    awarded under this subsection.
        (10) Appropriations.--There is hereby appropriated to the 
    Secretary of the Treasury such sums as may be necessary to carry 
    out this subsection.
        (11) Termination.--The Secretary of the Treasury shall not make 
    any grant to any person under this subsection unless the 
    application of such person for such grant is received before 
    January 1, 2013.
        (12) Protecting middle class families from tax increases.--It 
    is the sense of the Senate that the Senate should reject any 
    procedural maneuver that would raise taxes on middle class 
    families, such as a motion to commit the pending legislation to the 
    Committee on Finance, which is designed to kill legislation that 
    provides tax cuts for American workers and families, including the 
    affordability tax credit and the small business tax credit.
    (f) Effective Date.--The amendments made by subsections (a) through 
(d) of this section shall apply to amounts paid or incurred after 
December 31, 2008, in taxable years beginning after such date.

    TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL 
                               AMERICANS
               Subtitle A--Provisions Relating to Title I

SEC. 10101. AMENDMENTS TO SUBTITLE A.

    (a) Section 2711 of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended to read as follows:

``SEC. 2711. NO LIFETIME OR ANNUAL LIMITS.

    ``(a) Prohibition.--
        ``(1) In general.--A group health plan and a health insurance 
    issuer offering group or individual health insurance coverage may 
    not establish--
            ``(A) lifetime limits on the dollar value of benefits for 
        any participant or beneficiary; or
            ``(B) except as provided in paragraph (2), annual limits on 
        the dollar value of benefits for any participant or 
        beneficiary.
        ``(2) Annual limits prior to 2014.--With respect to plan years 
    beginning prior to January 1, 2014, a group health plan and a 
    health insurance issuer offering group or individual health 
    insurance coverage may only establish a restricted annual limit on 
    the dollar value of benefits for any participant or beneficiary 
    with respect to the scope of benefits that are essential health 
    benefits under section 1302(b) of the Patient Protection and 
    Affordable Care Act, as determined by the Secretary. In defining 
    the term `restricted annual limit' for purposes of the preceding 
    sentence, the Secretary shall ensure that access to needed services 
    is made available with a minimal impact on premiums.
    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be 
construed to prevent a group health plan or health insurance coverage 
from placing annual or lifetime per beneficiary limits on specific 
covered benefits that are not essential health benefits under section 
1302(b) of the Patient Protection and Affordable Care Act, to the 
extent that such limits are otherwise permitted under Federal or State 
law.''.
    (b) Section 2715(a) of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended by striking ``and providing to 
enrollees'' and inserting ``and providing to applicants, enrollees, and 
policyholders or certificate holders''.
    (c) Subpart II of part A of title XXVII of the Public Health 
Service Act, as added by section 1001(5), is amended by inserting after 
section 2715, the following:

``SEC. 2715A. PROVISION OF ADDITIONAL INFORMATION.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall comply with the 
provisions of section 1311(e)(3) of the Patient Protection and 
Affordable Care Act, except that a plan or coverage that is not offered 
through an Exchange shall only be required to submit the information 
required to the Secretary and the State insurance commissioner, and 
make such information available to the public.''.
    (d) Section 2716 of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended to read as follows:

``SEC. 2716. PROHIBITION ON DISCRIMINATION IN FAVOR OF HIGHLY 
              COMPENSATED INDIVIDUALS.

    ``(a) In General.--A group health plan (other than a self-insured 
plan) shall satisfy the requirements of section 105(h)(2) of the 
Internal Revenue Code of 1986 (relating to prohibition on 
discrimination in favor of highly compensated individuals).
    ``(b) Rules and Definitions.--For purposes of this section--
        ``(1) Certain rules to apply.--Rules similar to the rules 
    contained in paragraphs (3), (4), and (8) of section 105(h) of such 
    Code shall apply.
        ``(2) Highly compensated individual.--The term `highly 
    compensated individual' has the meaning given such term by section 
    105(h)(5) of such Code.''.
    (e) Section 2717 of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended--
        (1) by redesignating subsections (c) and (d) as subsections (d) 
    and (e), respectively; and
        (2) by inserting after subsection (b), the following:
    ``(c) Protection of Second Amendment Gun Rights.--
        ``(1) Wellness and prevention programs.--A wellness and health 
    promotion activity implemented under subsection (a)(1)(D) may not 
    require the disclosure or collection of any information relating 
    to--
            ``(A) the presence or storage of a lawfully-possessed 
        firearm or ammunition in the residence or on the property of an 
        individual; or
            ``(B) the lawful use, possession, or storage of a firearm 
        or ammunition by an individual.
        ``(2) Limitation on data collection.--None of the authorities 
    provided to the Secretary under the Patient Protection and 
    Affordable Care Act or an amendment made by that Act shall be 
    construed to authorize or may be used for the collection of any 
    information relating to--
            ``(A) the lawful ownership or possession of a firearm or 
        ammunition;
            ``(B) the lawful use of a firearm or ammunition; or
            ``(C) the lawful storage of a firearm or ammunition.
        ``(3) Limitation on databases or data banks.--None of the 
    authorities provided to the Secretary under the Patient Protection 
    and Affordable Care Act or an amendment made by that Act shall be 
    construed to authorize or may be used to maintain records of 
    individual ownership or possession of a firearm or ammunition.
        ``(4) Limitation on determination of premium rates or 
    eligibility for health insurance.--A premium rate may not be 
    increased, health insurance coverage may not be denied, and a 
    discount, rebate, or reward offered for participation in a wellness 
    program may not be reduced or withheld under any health benefit 
    plan issued pursuant to or in accordance with the Patient 
    Protection and Affordable Care Act or an amendment made by that Act 
    on the basis of, or on reliance upon--
            ``(A) the lawful ownership or possession of a firearm or 
        ammunition; or
            ``(B) the lawful use or storage of a firearm or ammunition.
        ``(5) Limitation on data collection requirements for 
    individuals.--No individual shall be required to disclose any 
    information under any data collection activity authorized under the 
    Patient Protection and Affordable Care Act or an amendment made by 
    that Act relating to--
            ``(A) the lawful ownership or possession of a firearm or 
        ammunition; or
            ``(B) the lawful use, possession, or storage of a firearm 
        or ammunition.''.
    (f) Section 2718 of the Public Health Service Act, as added by 
section 1001(5), is amended to read as follows:

``SEC. 2718. BRINGING DOWN THE COST OF HEALTH CARE COVERAGE.

    ``(a) Clear Accounting for Costs.--A health insurance issuer 
offering group or individual health insurance coverage (including a 
grandfathered health plan) shall, with respect to each plan year, 
submit to the Secretary a report concerning the ratio of the incurred 
loss (or incurred claims) plus the loss adjustment expense (or change 
in contract reserves) to earned premiums. Such report shall include the 
percentage of total premium revenue, after accounting for collections 
or receipts for risk adjustment and risk corridors and payments of 
reinsurance, that such coverage expends--
        ``(1) on reimbursement for clinical services provided to 
    enrollees under such coverage;
        ``(2) for activities that improve health care quality; and
        ``(3) on all other non-claims costs, including an explanation 
    of the nature of such costs, and excluding Federal and State taxes 
    and licensing or regulatory fees.
The Secretary shall make reports received under this section available 
to the public on the Internet website of the Department of Health and 
Human Services.
    ``(b) Ensuring That Consumers Receive Value for Their Premium 
Payments.--
        ``(1) Requirement to provide value for premium payments.--
            ``(A) Requirement.--Beginning not later than January 1, 
        2011, a health insurance issuer offering group or individual 
        health insurance coverage (including a grandfathered health 
        plan) shall, with respect to each plan year, provide an annual 
        rebate to each enrollee under such coverage, on a pro rata 
        basis, if the ratio of the amount of premium revenue expended 
        by the issuer on costs described in paragraphs (1) and (2) of 
        subsection (a) to the total amount of premium revenue 
        (excluding Federal and State taxes and licensing or regulatory 
        fees and after accounting for payments or receipts for risk 
        adjustment, risk corridors, and reinsurance under sections 
        1341, 1342, and 1343 of the Patient Protection and Affordable 
        Care Act) for the plan year (except as provided in subparagraph 
        (B)(ii)), is less than--
                ``(i) with respect to a health insurance issuer 
            offering coverage in the large group market, 85 percent, or 
            such higher percentage as a State may by regulation 
            determine; or
                ``(ii) with respect to a health insurance issuer 
            offering coverage in the small group market or in the 
            individual market, 80 percent, or such higher percentage as 
            a State may by regulation determine, except that the 
            Secretary may adjust such percentage with respect to a 
            State if the Secretary determines that the application of 
            such 80 percent may destabilize the individual market in 
            such State.
            ``(B) Rebate amount.--
                ``(i) Calculation of amount.--The total amount of an 
            annual rebate required under this paragraph shall be in an 
            amount equal to the product of--

                    ``(I) the amount by which the percentage described 
                in clause (i) or (ii) of subparagraph (A) exceeds the 
                ratio described in such subparagraph; and
                    ``(II) the total amount of premium revenue 
                (excluding Federal and State taxes and licensing or 
                regulatory fees and after accounting for payments or 
                receipts for risk adjustment, risk corridors, and 
                reinsurance under sections 1341, 1342, and 1343 of the 
                Patient Protection and Affordable Care Act) for such 
                plan year.

                ``(ii) Calculation based on average ratio.--Beginning 
            on January 1, 2014, the determination made under 
            subparagraph (A) for the year involved shall be based on 
            the averages of the premiums expended on the costs 
            described in such subparagraph and total premium revenue 
            for each of the previous 3 years for the plan.
        ``(2) Consideration in setting percentages.--In determining the 
    percentages under paragraph (1), a State shall seek to ensure 
    adequate participation by health insurance issuers, competition in 
    the health insurance market in the State, and value for consumers 
    so that premiums are used for clinical services and quality 
    improvements.
        ``(3) Enforcement.--The Secretary shall promulgate regulations 
    for enforcing the provisions of this section and may provide for 
    appropriate penalties.
    ``(c) Definitions.--Not later than December 31, 2010, and subject 
to the certification of the Secretary, the National Association of 
Insurance Commissioners shall establish uniform definitions of the 
activities reported under subsection (a) and standardized methodologies 
for calculating measures of such activities, including definitions of 
which activities, and in what regard such activities, constitute 
activities described in subsection (a)(2). Such methodologies shall be 
designed to take into account the special circumstances of smaller 
plans, different types of plans, and newer plans.
    ``(d) Adjustments.--The Secretary may adjust the rates described in 
subsection (b) if the Secretary determines appropriate on account of 
the volatility of the individual market due to the establishment of 
State Exchanges.
    ``(e) Standard Hospital Charges.--Each hospital operating within 
the United States shall for each year establish (and update) and make 
public (in accordance with guidelines developed by the Secretary) a 
list of the hospital's standard charges for items and services provided 
by the hospital, including for diagnosis-related groups established 
under section 1886(d)(4) of the Social Security Act.''.
    (g) Section 2719 of the Public Health Service Act, as added by 
section 1001(4) of this Act, is amended to read as follows:

``SEC. 2719. APPEALS PROCESS.

    ``(a) Internal Claims Appeals.--
        ``(1) In general.--A group health plan and a health insurance 
    issuer offering group or individual health insurance coverage shall 
    implement an effective appeals process for appeals of coverage 
    determinations and claims, under which the plan or issuer shall, at 
    a minimum--
            ``(A) have in effect an internal claims appeal process;
            ``(B) provide notice to enrollees, in a culturally and 
        linguistically appropriate manner, of available internal and 
        external appeals processes, and the availability of any 
        applicable office of health insurance consumer assistance or 
        ombudsman established under section 2793 to assist such 
        enrollees with the appeals processes; and
            ``(C) allow an enrollee to review their file, to present 
        evidence and testimony as part of the appeals process, and to 
        receive continued coverage pending the outcome of the appeals 
        process.
        ``(2) Established processes.--To comply with paragraph (1)--
            ``(A) a group health plan and a health insurance issuer 
        offering group health coverage shall provide an internal claims 
        and appeals process that initially incorporates the claims and 
        appeals procedures (including urgent claims) set forth at 
        section 2560.503-1 of title 29, Code of Federal Regulations, as 
        published on November 21, 2000 (65 Fed. Reg. 70256), and shall 
        update such process in accordance with any standards 
        established by the Secretary of Labor for such plans and 
        issuers; and
            ``(B) a health insurance issuer offering individual health 
        coverage, and any other issuer not subject to subparagraph (A), 
        shall provide an internal claims and appeals process that 
        initially incorporates the claims and appeals procedures set 
        forth under applicable law (as in existence on the date of 
        enactment of this section), and shall update such process in 
        accordance with any standards established by the Secretary of 
        Health and Human Services for such issuers.
    ``(b) External Review.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage--
        ``(1) shall comply with the applicable State external review 
    process for such plans and issuers that, at a minimum, includes the 
    consumer protections set forth in the Uniform External Review Model 
    Act promulgated by the National Association of Insurance 
    Commissioners and is binding on such plans; or
        ``(2) shall implement an effective external review process that 
    meets minimum standards established by the Secretary through 
    guidance and that is similar to the process described under 
    paragraph (1)--
            ``(A) if the applicable State has not established an 
        external review process that meets the requirements of 
        paragraph (1); or
            ``(B) if the plan is a self-insured plan that is not 
        subject to State insurance regulation (including a State law 
        that establishes an external review process described in 
        paragraph (1)).
    ``(c) Secretary Authority.--The Secretary may deem the external 
review process of a group health plan or health insurance issuer, in 
operation as of the date of enactment of this section, to be in 
compliance with the applicable process established under subsection 
(b), as determined appropriate by the Secretary.''.
    (h) Subpart II of part A of title XVIII of the Public Health 
Service Act, as added by section 1001(5) of this Act, is amended by 
inserting after section 2719 the following:

``SEC. 2719A. PATIENT PROTECTIONS.

    ``(a) Choice of Health Care Professional.--If a group health plan, 
or a health insurance issuer offering group or individual health 
insurance coverage, requires or provides for designation by a 
participant, beneficiary, or enrollee of a participating primary care 
provider, then the plan or issuer shall permit each participant, 
beneficiary, and enrollee to designate any participating primary care 
provider who is available to accept such individual.
    ``(b) Coverage of Emergency Services.--
        ``(1) In general.--If a group health plan, or a health 
    insurance issuer offering group or individual health insurance 
    issuer, provides or covers any benefits with respect to services in 
    an emergency department of a hospital, the plan or issuer shall 
    cover emergency services (as defined in paragraph (2)(B))--
            ``(A) without the need for any prior authorization 
        determination;
            ``(B) whether the health care provider furnishing such 
        services is a participating provider with respect to such 
        services;
            ``(C) in a manner so that, if such services are provided to 
        a participant, beneficiary, or enrollee--
                ``(i) by a nonparticipating health care provider with 
            or without prior authorization; or
                ``(ii)(I) such services will be provided without 
            imposing any requirement under the plan for prior 
            authorization of services or any limitation on coverage 
            where the provider of services does not have a contractual 
            relationship with the plan for the providing of services 
            that is more restrictive than the requirements or 
            limitations that apply to emergency department services 
            received from providers who do have such a contractual 
            relationship with the plan; and
                ``(II) if such services are provided out-of-network, 
            the cost-sharing requirement (expressed as a copayment 
            amount or coinsurance rate) is the same requirement that 
            would apply if such services were provided in-network;
            ``(D) without regard to any other term or condition of such 
        coverage (other than exclusion or coordination of benefits, or 
        an affiliation or waiting period, permitted under section 2701 
        of this Act, section 701 of the Employee Retirement Income 
        Security Act of 1974, or section 9801 of the Internal Revenue 
        Code of 1986, and other than applicable cost-sharing).
        ``(2) Definitions.--In this subsection:
            ``(A) Emergency medical condition.--The term `emergency 
        medical condition' means a medical condition manifesting itself 
        by acute symptoms of sufficient severity (including severe 
        pain) such that a prudent layperson, who possesses an average 
        knowledge of health and medicine, could reasonably expect the 
        absence of immediate medical attention to result in a condition 
        described in clause (i), (ii), or (iii) of section 
        1867(e)(1)(A) of the Social Security Act.
            ``(B) Emergency services.--The term `emergency services' 
        means, with respect to an emergency medical condition--
                ``(i) a medical screening examination (as required 
            under section 1867 of the Social Security Act) that is 
            within the capability of the emergency department of a 
            hospital, including ancillary services routinely available 
            to the emergency department to evaluate such emergency 
            medical condition, and
                ``(ii) within the capabilities of the staff and 
            facilities available at the hospital, such further medical 
            examination and treatment as are required under section 
            1867 of such Act to stabilize the patient.
            ``(C) Stabilize.--The term `to stabilize', with respect to 
        an emergency medical condition (as defined in subparagraph 
        (A)), has the meaning give in section 1867(e)(3) of the Social 
        Security Act (42 U.S.C. 1395dd(e)(3)).
    ``(c) Access to Pediatric Care.--
        ``(1) Pediatric care.--In the case of a person who has a child 
    who is a participant, beneficiary, or enrollee under a group health 
    plan, or health insurance coverage offered by a health insurance 
    issuer in the group or individual market, if the plan or issuer 
    requires or provides for the designation of a participating primary 
    care provider for the child, the plan or issuer shall permit such 
    person to designate a physician (allopathic or osteopathic) who 
    specializes in pediatrics as the child's primary care provider if 
    such provider participates in the network of the plan or issuer.
        ``(2) Construction.--Nothing in paragraph (1) shall be 
    construed to waive any exclusions of coverage under the terms and 
    conditions of the plan or health insurance coverage with respect to 
    coverage of pediatric care.
    ``(d) Patient Access to Obstetrical and Gynecological Care.--
        ``(1) General rights.--
            ``(A) Direct access.--A group health plan, or health 
        insurance issuer offering group or individual health insurance 
        coverage, described in paragraph (2) may not require 
        authorization or referral by the plan, issuer, or any person 
        (including a primary care provider described in paragraph 
        (2)(B)) in the case of a female participant, beneficiary, or 
        enrollee who seeks coverage for obstetrical or gynecological 
        care provided by a participating health care professional who 
        specializes in obstetrics or gynecology. Such professional 
        shall agree to otherwise adhere to such plan's or issuer's 
        policies and procedures, including procedures regarding 
        referrals and obtaining prior authorization and providing 
        services pursuant to a treatment plan (if any) approved by the 
        plan or issuer.
            ``(B) Obstetrical and gynecological care.--A group health 
        plan or health insurance issuer described in paragraph (2) 
        shall treat the provision of obstetrical and gynecological 
        care, and the ordering of related obstetrical and gynecological 
        items and services, pursuant to the direct access described 
        under subparagraph (A), by a participating health care 
        professional who specializes in obstetrics or gynecology as the 
        authorization of the primary care provider.
        ``(2) Application of paragraph.--A group health plan, or health 
    insurance issuer offering group or individual health insurance 
    coverage, described in this paragraph is a group health plan or 
    coverage that--
            ``(A) provides coverage for obstetric or gynecologic care; 
        and
            ``(B) requires the designation by a participant, 
        beneficiary, or enrollee of a participating primary care 
        provider.
        ``(3) Construction.--Nothing in paragraph (1) shall be 
    construed to--
            ``(A) waive any exclusions of coverage under the terms and 
        conditions of the plan or health insurance coverage with 
        respect to coverage of obstetrical or gynecological care; or
            ``(B) preclude the group health plan or health insurance 
        issuer involved from requiring that the obstetrical or 
        gynecological provider notify the primary care health care 
        professional or the plan or issuer of treatment decisions.''.
    (i) Section 2794 of the Public Health Service Act, as added by 
section 1003 of this Act, is amended--
        (1) in subsection (c)(1)--
            (A) in subparagraph (A), by striking ``and'' at the end;
            (B) in subparagraph (B), by striking the period and 
        inserting ``; and''; and
            (C) by adding at the end the following:
            ``(C) in establishing centers (consistent with subsection 
        (d)) at academic or other nonprofit institutions to collect 
        medical reimbursement information from health insurance 
        issuers, to analyze and organize such information, and to make 
        such information available to such issuers, health care 
        providers, health researchers, health care policy makers, and 
        the general public.''; and
        (2) by adding at the end the following:
    ``(d) Medical Reimbursement Data Centers.--
        ``(1) Functions.--A center established under subsection 
    (c)(1)(C) shall--
            ``(A) develop fee schedules and other database tools that 
        fairly and accurately reflect market rates for medical services 
        and the geographic differences in those rates;
            ``(B) use the best available statistical methods and data 
        processing technology to develop such fee schedules and other 
        database tools;
            ``(C) regularly update such fee schedules and other 
        database tools to reflect changes in charges for medical 
        services;
            ``(D) make health care cost information readily available 
        to the public through an Internet website that allows consumers 
        to understand the amounts that health care providers in their 
        area charge for particular medical services; and
            ``(E) regularly publish information concerning the 
        statistical methodologies used by the center to analyze health 
        charge data and make such data available to researchers and 
        policy makers.
        ``(2) Conflicts of interest.--A center established under 
    subsection (c)(1)(C) shall adopt by-laws that ensures that the 
    center (and all members of the governing board of the center) is 
    independent and free from all conflicts of interest. Such by-laws 
    shall ensure that the center is not controlled or influenced by, 
    and does not have any corporate relation to, any individual or 
    entity that may make or receive payments for health care services 
    based on the center's analysis of health care costs.
        ``(3) Rule of construction.--Nothing in this subsection shall 
    be construed to permit a center established under subsection 
    (c)(1)(C) to compel health insurance issuers to provide data to the 
    center.''.

SEC. 10102. AMENDMENTS TO SUBTITLE B.

    (a) Section 1102(a)(2)(B) of this Act is amended--
        (1) in the matter preceding clause (i), by striking ``group 
    health benefits plan'' and inserting ``group benefits plan 
    providing health benefits''; and
        (2) in clause (i)(I), by inserting ``or any agency or 
    instrumentality of any of the foregoing'' before the closed 
    parenthetical.
    (b) Section 1103(a) of this Act is amended--
        (1) in paragraph (1), by inserting ``, or small business in,'' 
    after ``residents of any''; and
        (2) by striking paragraph (2) and inserting the following:
        ``(2) Connecting to affordable coverage.--An Internet website 
    established under paragraph (1) shall, to the extent practicable, 
    provide ways for residents of, and small businesses in, any State 
    to receive information on at least the following coverage options:
            ``(A) Health insurance coverage offered by health insurance 
        issuers, other than coverage that provides reimbursement only 
        for the treatment or mitigation of--
                ``(i) a single disease or condition; or
                ``(ii) an unreasonably limited set of diseases or 
            conditions (as determined by the Secretary).
            ``(B) Medicaid coverage under title XIX of the Social 
        Security Act.
            ``(C) Coverage under title XXI of the Social Security Act.
            ``(D) A State health benefits high risk pool, to the extent 
        that such high risk pool is offered in such State; and
            ``(E) Coverage under a high risk pool under section 1101.
            ``(F) Coverage within the small group market for small 
        businesses and their employees, including reinsurance for early 
        retirees under section 1102, tax credits available under 
        section 45R of the Internal Revenue Code of 1986 (as added by 
        section 1421), and other information specifically for small 
        businesses regarding affordable health care options.''.

SEC. 10103. AMENDMENTS TO SUBTITLE C.

    (a) Section 2701(a)(5) of the Public Health Service Act, as added 
by section 1201(4) of this Act, is amended by inserting ``(other than 
self-insured group health plans offered in such market)'' after ``such 
market''.
    (b) Section 2708 of the Public Health Service Act, as added by 
section 1201(4) of this Act, is amended by striking ``or individual''.
    (c) Subpart I of part A of title XXVII of the Public Health Service 
Act, as added by section 1201(4) of this Act, is amended by inserting 
after section 2708, the following:

``SEC. 2709. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED 
              CLINICAL TRIALS.

    ``(a) Coverage.--
        ``(1) In general.--If a group health plan or a health insurance 
    issuer offering group or individual health insurance coverage 
    provides coverage to a qualified individual, then such plan or 
    issuer--
            ``(A) may not deny the individual participation in the 
        clinical trial referred to in subsection (b)(2);
            ``(B) subject to subsection (c), may not deny (or limit or 
        impose additional conditions on) the coverage of routine 
        patient costs for items and services furnished in connection 
        with participation in the trial; and
            ``(C) may not discriminate against the individual on the 
        basis of the individual's participation in such trial.
        ``(2) Routine patient costs.--
            ``(A) Inclusion.--For purposes of paragraph (1)(B), subject 
        to subparagraph (B), routine patient costs include all items 
        and services consistent with the coverage provided in the plan 
        (or coverage) that is typically covered for a qualified 
        individual who is not enrolled in a clinical trial.
            ``(B) Exclusion.--For purposes of paragraph (1)(B), routine 
        patient costs does not include--
                ``(i) the investigational item, device, or service, 
            itself;
                ``(ii) items and services that are provided solely to 
            satisfy data collection and analysis needs and that are not 
            used in the direct clinical management of the patient; or
                ``(iii) a service that is clearly inconsistent with 
            widely accepted and established standards of care for a 
            particular diagnosis.
        ``(3) Use of in-network providers.--If one or more 
    participating providers is participating in a clinical trial, 
    nothing in paragraph (1) shall be construed as preventing a plan or 
    issuer from requiring that a qualified individual participate in 
    the trial through such a participating provider if the provider 
    will accept the individual as a participant in the trial.
        ``(4) Use of out-of-network.--Notwithstanding paragraph (3), 
    paragraph (1) shall apply to a qualified individual participating 
    in an approved clinical trial that is conducted outside the State 
    in which the qualified individual resides.
    ``(b) Qualified Individual Defined.--For purposes of subsection 
(a), the term `qualified individual' means an individual who is a 
participant or beneficiary in a health plan or with coverage described 
in subsection (a)(1) and who meets the following conditions:
        ``(1) The individual is eligible to participate in an approved 
    clinical trial according to the trial protocol with respect to 
    treatment of cancer or other life-threatening disease or condition.
        ``(2) Either--
            ``(A) the referring health care professional is a 
        participating health care provider and has concluded that the 
        individual's participation in such trial would be appropriate 
        based upon the individual meeting the conditions described in 
        paragraph (1); or
            ``(B) the participant or beneficiary provides medical and 
        scientific information establishing that the individual's 
        participation in such trial would be appropriate based upon the 
        individual meeting the conditions described in paragraph (1).
    ``(c) Limitations on Coverage.--This section shall not be construed 
to require a group health plan, or a health insurance issuer offering 
group or individual health insurance coverage, to provide benefits for 
routine patient care services provided outside of the plan's (or 
coverage's) health care provider network unless out-of-network benefits 
are otherwise provided under the plan (or coverage).
    ``(d) Approved Clinical Trial Defined.--
        ``(1) In general.--In this section, the term `approved clinical 
    trial' means a phase I, phase II, phase III, or phase IV clinical 
    trial that is conducted in relation to the prevention, detection, 
    or treatment of cancer or other life-threatening disease or 
    condition and is described in any of the following subparagraphs:
            ``(A) Federally funded trials.--The study or investigation 
        is approved or funded (which may include funding through in-
        kind contributions) by one or more of the following:
                ``(i) The National Institutes of Health.
                ``(ii) The Centers for Disease Control and Prevention.
                ``(iii) The Agency for Health Care Research and 
            Quality.
                ``(iv) The Centers for Medicare & Medicaid Services.
                ``(v) cooperative group or center of any of the 
            entities described in clauses (i) through (iv) or the 
            Department of Defense or the Department of Veterans 
            Affairs.
                ``(vi) A qualified non-governmental research entity 
            identified in the guidelines issued by the National 
            Institutes of Health for center support grants.
                ``(vii) Any of the following if the conditions 
            described in paragraph (2) are met:

                    ``(I) The Department of Veterans Affairs.
                    ``(II) The Department of Defense.
                    ``(III) The Department of Energy.

            ``(B) The study or investigation is conducted under an 
        investigational new drug application reviewed by the Food and 
        Drug Administration.
            ``(C) The study or investigation is a drug trial that is 
        exempt from having such an investigational new drug 
        application.
        ``(2) Conditions for departments.--The conditions described in 
    this paragraph, for a study or investigation conducted by a 
    Department, are that the study or investigation has been reviewed 
    and approved through a system of peer review that the Secretary 
    determines--
            ``(A) to be comparable to the system of peer review of 
        studies and investigations used by the National Institutes of 
        Health, and
            ``(B) assures unbiased review of the highest scientific 
        standards by qualified individuals who have no interest in the 
        outcome of the review.
    ``(e) Life-threatening Condition Defined.--In this section, the 
term `life-threatening condition' means any disease or condition from 
which the likelihood of death is probable unless the course of the 
disease or condition is interrupted.
    ``(f) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.
    ``(g) Application to FEHBP.--Notwithstanding any provision of 
chapter 89 of title 5, United States Code, this section shall apply to 
health plans offered under the program under such chapter.
    ``(h) Preemption.--Notwithstanding any other provision of this Act, 
nothing in this section shall preempt State laws that require a 
clinical trials policy for State regulated health insurance plans that 
is in addition to the policy required under this section.''.
    (d) Section 1251(a) of this Act is amended--
        (1) in paragraph (2), by striking ``With'' and inserting 
    ``Except as provided in paragraph (3), with''; and
        (2) by adding at the end the following:
        ``(3) Application of certain provisions.--The provisions of 
    sections 2715 and 2718 of the Public Health Service Act (as added 
    by subtitle A) shall apply to grandfathered health plans for plan 
    years beginning on or after the date of enactment of this Act.''.
    (e) Section 1253 of this Act is amended insert before the period 
the following: ``, except that--
        ``(1) section 1251 shall take effect on the date of enactment 
    of this Act; and
        ``(2) the provisions of section 2704 of the Public Health 
    Service Act (as amended by section 1201), as they apply to 
    enrollees who are under 19 years of age, shall become effective for 
    plan years beginning on or after the date that is 6 months after 
    the date of enactment of this Act.''.
    (f) Subtitle C of title I of this Act is amended--
        (1) by redesignating section 1253 as section 1255; and
        (2) by inserting after section 1252, the following:

``SEC. 1253. ANNUAL REPORT ON SELF-INSURED PLANS.

    ``Not later than 1 year after the date of enactment of this Act, 
and annually thereafter, the Secretary of Labor shall prepare an 
aggregate annual report, using data collected from the Annual Return/
Report of Employee Benefit Plan (Department of Labor Form 5500), that 
shall include general information on self-insured group health plans 
(including plan type, number of participants, benefits offered, funding 
arrangements, and benefit arrangements) as well as data from the 
financial filings of self-insured employers (including information on 
assets, liabilities, contributions, investments, and expenses). The 
Secretary shall submit such reports to the appropriate committees of 
Congress.

``SEC. 1254. STUDY OF LARGE GROUP MARKET.

    ``(a) In General.--The Secretary of Health and Human Services shall 
conduct a study of the fully-insured and self-insured group health plan 
markets to--
        ``(1) compare the characteristics of employers (including 
    industry, size, and other characteristics as determined appropriate 
    by the Secretary), health plan benefits, financial solvency, 
    capital reserve levels, and the risks of becoming insolvent; and
        ``(2) determine the extent to which new insurance market 
    reforms are likely to cause adverse selection in the large group 
    market or to encourage small and midsize employers to self-insure.
    ``(b) Collection of Information.--In conducting the study under 
subsection (a), the Secretary, in coordination with the Secretary of 
Labor, shall collect information and analyze--
        ``(1) the extent to which self-insured group health plans can 
    offer less costly coverage and, if so, whether lower costs are due 
    to more efficient plan administration and lower overhead or to the 
    denial of claims and the offering very limited benefit packages;
        ``(2) claim denial rates, plan benefit fluctuations (to 
    evaluate the extent that plans scale back health benefits during 
    economic downturns), and the impact of the limited recourse options 
    on consumers; and
        ``(3) any potential conflict of interest as it relates to the 
    health care needs of self-insured enrollees and self-insured 
    employer's financial contribution or profit margin, and the impact 
    of such conflict on administration of the health plan.
    ``(c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to the appropriate committees of 
Congress a report concerning the results of the study conducted under 
subsection (a).''.

SEC. 10104. AMENDMENTS TO SUBTITLE D.

    (a) Section 1301(a) of this Act is amended by striking paragraph 
(2) and inserting the following:
        ``(2) Inclusion of co-op plans and multi-state qualified health 
    plans.--Any reference in this title to a qualified health plan 
    shall be deemed to include a qualified health plan offered through 
    the CO-OP program under section 1322, and a multi-State plan under 
    section 1334, unless specifically provided for otherwise.
        ``(3) Treatment of qualified direct primary care medical home 
    plans.--The Secretary of Health and Human Services shall permit a 
    qualified health plan to provide coverage through a qualified 
    direct primary care medical home plan that meets criteria 
    established by the Secretary, so long as the qualified health plan 
    meets all requirements that are otherwise applicable and the 
    services covered by the medical home plan are coordinated with the 
    entity offering the qualified health plan.
        ``(4) Variation based on rating area.--A qualified health plan, 
    including a multi-State qualified health plan, may as appropriate 
    vary premiums by rating area (as defined in section 2701(a)(2) of 
    the Public Health Service Act).''.
    (b) Section 1302 of this Act is amended--
        (1) in subsection (d)(2)(B), by striking ``may issue'' and 
    inserting ``shall issue''; and
        (2) by adding at the end the following:
    ``(g) Payments to Federally-qualified Health Centers.--If any item 
or service covered by a qualified health plan is provided by a 
Federally-qualified health center (as defined in section 1905(l)(2)(B) 
of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)) to an enrollee of 
the plan, the offeror of the plan shall pay to the center for the item 
or service an amount that is not less than the amount of payment that 
would have been paid to the center under section 1902(bb) of such Act 
(42 U.S.C. 1396a(bb)) for such item or service.''.
    (c) Section 1303 of this Act is amended to read as follows:

``SEC. 1303. SPECIAL RULES.

    ``(a) State Opt-out of Abortion Coverage.--
        ``(1) In general.--A State may elect to prohibit abortion 
    coverage in qualified health plans offered through an Exchange in 
    such State if such State enacts a law to provide for such 
    prohibition.
        ``(2) Termination of opt out.--A State may repeal a law 
    described in paragraph (1) and provide for the offering of such 
    services through the Exchange.
    ``(b) Special Rules Relating to Coverage of Abortion Services.--
        ``(1) Voluntary choice of coverage of abortion services.--
            ``(A) In general.--Notwithstanding any other provision of 
        this title (or any amendment made by this title)--
                ``(i) nothing in this title (or any amendment made by 
            this title), shall be construed to require a qualified 
            health plan to provide coverage of services described in 
            subparagraph (B)(i) or (B)(ii) as part of its essential 
            health benefits for any plan year; and
                ``(ii) subject to subsection (a), the issuer of a 
            qualified health plan shall determine whether or not the 
            plan provides coverage of services described in 
            subparagraph (B)(i) or (B)(ii) as part of such benefits for 
            the plan year.
            ``(B) Abortion services.--
                ``(i) Abortions for which public funding is 
            prohibited.--The services described in this clause are 
            abortions for which the expenditure of Federal funds 
            appropriated for the Department of Health and Human 
            Services is not permitted, based on the law as in effect as 
            of the date that is 6 months before the beginning of the 
            plan year involved.
                ``(ii) Abortions for which public funding is allowed.--
            The services described in this clause are abortions for 
            which the expenditure of Federal funds appropriated for the 
            Department of Health and Human Services is permitted, based 
            on the law as in effect as of the date that is 6 months 
            before the beginning of the plan year involved.
        ``(2) Prohibition on the use of federal funds.--
            ``(A) In general.--If a qualified health plan provides 
        coverage of services described in paragraph (1)(B)(i), the 
        issuer of the plan shall not use any amount attributable to any 
        of the following for purposes of paying for such services:
                ``(i) The credit under section 36B of the Internal 
            Revenue Code of 1986 (and the amount (if any) of the 
            advance payment of the credit under section 1412 of the 
            Patient Protection and Affordable Care Act).
                ``(ii) Any cost-sharing reduction under section 1402 of 
            the Patient Protection and Affordable Care Act (and the 
            amount (if any) of the advance payment of the reduction 
            under section 1412 of the Patient Protection and Affordable 
            Care Act).
            ``(B) Establishment of allocation accounts.--In the case of 
        a plan to which subparagraph (A) applies, the issuer of the 
        plan shall--
                ``(i) collect from each enrollee in the plan (without 
            regard to the enrollee's age, sex, or family status) a 
            separate payment for each of the following:

                    ``(I) an amount equal to the portion of the premium 
                to be paid directly by the enrollee for coverage under 
                the plan of services other than services described in 
                paragraph (1)(B)(i) (after reduction for credits and 
                cost-sharing reductions described in subparagraph (A)); 
                and
                    ``(II) an amount equal to the actuarial value of 
                the coverage of services described in paragraph 
                (1)(B)(i), and

                ``(ii) shall deposit all such separate payments into 
            separate allocation accounts as provided in subparagraph 
            (C).
        In the case of an enrollee whose premium for coverage under the 
        plan is paid through employee payroll deposit, the separate 
        payments required under this subparagraph shall each be paid by 
        a separate deposit.
            ``(C) Segregation of funds.--
                ``(i) In general.--The issuer of a plan to which 
            subparagraph (A) applies shall establish allocation 
            accounts described in clause (ii) for enrollees receiving 
            amounts described in subparagraph (A).
                ``(ii) Allocation accounts.--The issuer of a plan to 
            which subparagraph (A) applies shall deposit--

                    ``(I) all payments described in subparagraph 
                (B)(i)(I) into a separate account that consists solely 
                of such payments and that is used exclusively to pay 
                for services other than services described in paragraph 
                (1)(B)(i); and
                    ``(II) all payments described in subparagraph 
                (B)(i)(II) into a separate account that consists solely 
                of such payments and that is used exclusively to pay 
                for services described in paragraph (1)(B)(i).

            ``(D) Actuarial value.--
                ``(i) In general.--The issuer of a qualified health 
            plan shall estimate the basic per enrollee, per month cost, 
            determined on an average actuarial basis, for including 
            coverage under the qualified health plan of the services 
            described in paragraph (1)(B)(i).
                ``(ii) Considerations.--In making such estimate, the 
            issuer--

                    ``(I) may take into account the impact on overall 
                costs of the inclusion of such coverage, but may not 
                take into account any cost reduction estimated to 
                result from such services, including prenatal care, 
                delivery, or postnatal care;
                    ``(II) shall estimate such costs as if such 
                coverage were included for the entire population 
                covered; and
                    ``(III) may not estimate such a cost at less than 
                $1 per enrollee, per month.

            ``(E) Ensuring compliance with segregation requirements.--
                ``(i) In general.--Subject to clause (ii), State health 
            insurance commissioners shall ensure that health plans 
            comply with the segregation requirements in this subsection 
            through the segregation of plan funds in accordance with 
            applicable provisions of generally accepted accounting 
            requirements, circulars on funds management of the Office 
            of Management and Budget, and guidance on accounting of the 
            Government Accountability Office.
                ``(ii) Clarification.--Nothing in clause (i) shall 
            prohibit the right of an individual or health plan to 
            appeal such action in courts of competent jurisdiction.
        ``(3) Rules relating to notice.--
            ``(A) Notice.--A qualified health plan that provides for 
        coverage of the services described in paragraph (1)(B)(i) shall 
        provide a notice to enrollees, only as part of the summary of 
        benefits and coverage explanation, at the time of enrollment, 
        of such coverage.
            ``(B) Rules relating to payments.--The notice described in 
        subparagraph (A), any advertising used by the issuer with 
        respect to the plan, any information provided by the Exchange, 
        and any other information specified by the Secretary shall 
        provide information only with respect to the total amount of 
        the combined payments for services described in paragraph 
        (1)(B)(i) and other services covered by the plan.
        ``(4) No discrimination on basis of provision of abortion.--No 
    qualified health plan offered through an Exchange may discriminate 
    against any individual health care provider or health care facility 
    because of its unwillingness to provide, pay for, provide coverage 
    of, or refer for abortions
    ``(c) Application of State and Federal Laws Regarding Abortion.--
        ``(1) No preemption of state laws regarding abortion.--Nothing 
    in this Act shall be construed to preempt or otherwise have any 
    effect on State laws regarding the prohibition of (or requirement 
    of) coverage, funding, or procedural requirements on abortions, 
    including parental notification or consent for the performance of 
    an abortion on a minor.
        ``(2) No effect on federal laws regarding abortion.--
            ``(A) In general.--Nothing in this Act shall be construed 
        to have any effect on Federal laws regarding--
                ``(i) conscience protection;
                ``(ii) willingness or refusal to provide abortion; and
                ``(iii) discrimination on the basis of the willingness 
            or refusal to provide, pay for, cover, or refer for 
            abortion or to provide or participate in training to 
            provide abortion.
        ``(3) No effect on federal civil rights law.--Nothing in this 
    subsection shall alter the rights and obligations of employees and 
    employers under title VII of the Civil Rights Act of 1964.
    ``(d) Application of Emergency Services Laws.--Nothing in this Act 
shall be construed to relieve any health care provider from providing 
emergency services as required by State or Federal law, including 
section 1867 of the Social Security Act (popularly known as 
`EMTALA').''.
    (d) Section 1304 of this Act is amended by adding at the end the 
following:
    ``(e) Educated Health Care Consumers.--The term `educated health 
care consumer' means an individual who is knowledgeable about the 
health care system, and has background or experience in making informed 
decisions regarding health, medical, and scientific matters.''.
    (e) Section 1311(d) of this Act is amended--
        (1) in paragraph (3)(B), by striking clause (ii) and inserting 
    the following:
                ``(ii) State must assume cost.--A State shall make 
            payments--

                    ``(I) to an individual enrolled in a qualified 
                health plan offered in such State; or
                    ``(II) on behalf of an individual described in 
                subclause (I) directly to the qualified health plan in 
                which such individual is enrolled;

            to defray the cost of any additional benefits described in 
            clause (i).''; and
        (2) in paragraph (6)(A), by inserting ``educated'' before 
    ``health care''.
    (f) Section 1311(e) of this Act is amended--
        (1) in paragraph (2), by striking ``may'' in the second 
    sentence and inserting ``shall''; and
        (2) by adding at the end the following:
        ``(3) Transparency in coverage.--
            ``(A) In general.--The Exchange shall require health plans 
        seeking certification as qualified health plans to submit to 
        the Exchange, the Secretary, the State insurance commissioner, 
        and make available to the public, accurate and timely 
        disclosure of the following information:
                ``(i) Claims payment policies and practices.
                ``(ii) Periodic financial disclosures.
                ``(iii) Data on enrollment.
                ``(iv) Data on disenrollment.
                ``(v) Data on the number of claims that are denied.
                ``(vi) Data on rating practices.
                ``(vii) Information on cost-sharing and payments with 
            respect to any out-of-network coverage.
                ``(viii) Information on enrollee and participant rights 
            under this title.
                ``(ix) Other information as determined appropriate by 
            the Secretary.
            ``(B) Use of plain language.--The information required to 
        be submitted under subparagraph (A) shall be provided in plain 
        language. The term `plain language' means language that the 
        intended audience, including individuals with limited English 
        proficiency, can readily understand and use because that 
        language is concise, well-organized, and follows other best 
        practices of plain language writing. The Secretary and the 
        Secretary of Labor shall jointly develop and issue guidance on 
        best practices of plain language writing.
            ``(C) Cost sharing transparency.--The Exchange shall 
        require health plans seeking certification as qualified health 
        plans to permit individuals to learn the amount of cost-sharing 
        (including deductibles, copayments, and coinsurance) under the 
        individual's plan or coverage that the individual would be 
        responsible for paying with respect to the furnishing of a 
        specific item or service by a participating provider in a 
        timely manner upon the request of the individual. At a minimum, 
        such information shall be made available to such individual 
        through an Internet website and such other means for 
        individuals without access to the Internet.
            ``(D) Group health plans.--The Secretary of Labor shall 
        update and harmonize the Secretary's rules concerning the 
        accurate and timely disclosure to participants by group health 
        plans of plan disclosure, plan terms and conditions, and 
        periodic financial disclosure with the standards established by 
        the Secretary under subparagraph (A).''.
    (g) Section 1311(g)(1) of this Act is amended--
        (1) in subparagraph (C), by striking ``; and'' and inserting a 
    semicolon;
        (2) in subparagraph (D), by striking the period and inserting 
    ``; and''; and
        (3) by adding at the end the following:
            ``(E) the implementation of activities to reduce health and 
        health care disparities, including through the use of language 
        services, community outreach, and cultural competency 
        trainings.''.
    (h) Section 1311(i)(2)((B) of this Act is amended by striking 
``small business development centers'' and inserting ``resource 
partners of the Small Business Administration''.
    (i) Section 1312 of this Act is amended--
        (1) in subsection (a)(1), by inserting ``and for which such 
    individual is eligible'' before the period;
        (2) in subsection (e)--
            (A) in paragraph (1), by inserting ``and employers'' after 
        ``enroll individuals''; and
            (B) by striking the flush sentence at the end; and
        (3) in subsection (f)(1)(A)(ii), by striking the parenthetical.
    (j)(1) Subparagraph (B) of section 1313(a)(6) of this Act is hereby 
deemed null, void, and of no effect.
    (2) Section 3730(e) of title 31, United States Code, is amended by 
striking paragraph (4) and inserting the following:
        ``(4)(A) The court shall dismiss an action or claim under this 
    section, unless opposed by the Government, if substantially the 
    same allegations or transactions as alleged in the action or claim 
    were publicly disclosed--
            ``(i) in a Federal criminal, civil, or administrative 
        hearing in which the Government or its agent is a party;
            ``(ii) in a congressional, Government Accountability 
        Office, or other Federal report, hearing, audit, or 
        investigation; or
            ``(iii) from the news media,
    unless the action is brought by the Attorney General or the person 
    bringing the action is an original source of the information.
        ``(B) For purposes of this paragraph, ``original source'' means 
    an individual who either (i) prior to a public disclosure under 
    subsection (e)(4)(a), has voluntarily disclosed to the Government 
    the information on which allegations or transactions in a claim are 
    based, or (2) who has knowledge that is independent of and 
    materially adds to the publicly disclosed allegations or 
    transactions, and who has voluntarily provided the information to 
    the Government before filing an action under this section.''.
    (k) Section 1313(b) of this Act is amended--
        (1) in paragraph (3), by striking ``and'' at the end;
        (2) by redesignating paragraph (4) as paragraph (5); and
        (3) by inserting after paragraph (3) the following:
        ``(4) a survey of the cost and affordability of health care 
    insurance provided under the Exchanges for owners and employees of 
    small business concerns (as defined under section 3 of the Small 
    Business Act (15 U.S.C. 632)), including data on enrollees in 
    Exchanges and individuals purchasing health insurance coverage 
    outside of Exchanges; and''.
    (l) Section 1322(b) of this Act is amended--
        (1) by redesignating paragraph (3) as paragraph (4); and
        (2) by inserting after paragraph (2), the following:
        ``(3) Repayment of loans and grants.--Not later than July 1, 
    2013, and prior to awarding loans and grants under the CO-OP 
    program, the Secretary shall promulgate regulations with respect to 
    the repayment of such loans and grants in a manner that is 
    consistent with State solvency regulations and other similar State 
    laws that may apply. In promulgating such regulations, the 
    Secretary shall provide that such loans shall be repaid within 5 
    years and such grants shall be repaid within 15 years, taking into 
    consideration any appropriate State reserve requirements, solvency 
    regulations, and requisite surplus note arrangements that must be 
    constructed in a State to provide for such repayment prior to 
    awarding such loans and grants.''.
    (m) Part III of subtitle D of title I of this Act is amended by 
striking section 1323.
    (n) Section 1324(a) of this Act is amended by striking ``, a 
community health'' and all that follows through ``1333(b)'' and 
inserting ``, or a multi-State qualified health plan under section 
1334''.
    (o) Section 1331 of this Act is amended--
        (1) in subsection (d)(3)(A)(i), by striking ``85'' and 
    inserting ``95''; and
        (2) in subsection (e)(1)(B), by inserting before the semicolon 
    the following: ``, or, in the case of an alien lawfully present in 
    the United States, whose income is not greater than 133 percent of 
    the poverty line for the size of the family involved but who is not 
    eligible for the Medicaid program under title XIX of the Social 
    Security Act by reason of such alien status''.
    (p) Section 1333 of this Act is amended by striking subsection (b).
    (q) Part IV of subtitle D of title I of this Act is amended by 
adding at the end the following:

``SEC. 1334. MULTI-STATE PLANS.

    ``(a) Oversight by the Office of Personnel Management.--
        ``(1) In general.--The Director of the Office of Personnel 
    Management (referred to in this section as the `Director') shall 
    enter into contracts with health insurance issuers (which may 
    include a group of health insurance issuers affiliated either by 
    common ownership and control or by the common use of a nationally 
    licensed service mark), without regard to section 5 of title 41, 
    United States Code, or other statutes requiring competitive 
    bidding, to offer at least 2 multi-State qualified health plans 
    through each Exchange in each State. Such plans shall provide 
    individual, or in the case of small employers, group coverage.
        ``(2) Terms.--Each contract entered into under paragraph (1) 
    shall be for a uniform term of at least 1 year, but may be made 
    automatically renewable from term to term in the absence of notice 
    of termination by either party. In entering into such contracts, 
    the Director shall ensure that health benefits coverage is provided 
    in accordance with the types of coverage provided for under section 
    2701(a)(1)(A)(i) of the Public Health Service Act.
        ``(3) Non-profit entities.--In entering into contracts under 
    paragraph (1), the Director shall ensure that at least one contract 
    is entered into with a non-profit entity.
        ``(4) Administration.--The Director shall implement this 
    subsection in a manner similar to the manner in which the Director 
    implements the contracting provisions with respect to carriers 
    under the Federal employees health benefit program under chapter 89 
    of title 5, United States Code, including (through negotiating with 
    each multi-state plan)--
            ``(A) a medical loss ratio;
            ``(B) a profit margin;
            ``(C) the premiums to be charged; and
            ``(D) such other terms and conditions of coverage as are in 
        the interests of enrollees in such plans.
        ``(5) Authority to protect consumers.--The Director may 
    prohibit the offering of any multi-State health plan that does not 
    meet the terms and conditions defined by the Director with respect 
    to the elements described in subparagraphs (A) through (D) of 
    paragraph (4).
        ``(6) Assured availability of varied coverage.--In entering 
    into contracts under this subsection, the Director shall ensure 
    that with respect to multi-State qualified health plans offered in 
    an Exchange, there is at least one such plan that does not provide 
    coverage of services described in section 1303(b)(1)(B)(i).
        ``(7) Withdrawal.--Approval of a contract under this subsection 
    may be withdrawn by the Director only after notice and opportunity 
    for hearing to the issuer concerned without regard to subchapter II 
    of chapter 5 and chapter 7 of title 5, United States Code.
    ``(b) Eligibility.--A health insurance issuer shall be eligible to 
enter into a contract under subsection (a)(1) if such issuer--
        ``(1) agrees to offer a multi-State qualified health plan that 
    meets the requirements of subsection (c) in each Exchange in each 
    State;
        ``(2) is licensed in each State and is subject to all 
    requirements of State law not inconsistent with this section, 
    including the standards and requirements that a State imposes that 
    do not prevent the application of a requirement of part A of title 
    XXVII of the Public Health Service Act or a requirement of this 
    title;
        ``(3) otherwise complies with the minimum standards prescribed 
    for carriers offering health benefits plans under section 8902(e) 
    of title 5, United States Code, to the extent that such standards 
    do not conflict with a provision of this title; and
        ``(4) meets such other requirements as determined appropriate 
    by the Director, in consultation with the Secretary.
    ``(c) Requirements for Multi-State Qualified Health Plan.--
        ``(1) In general.--A multi-State qualified health plan meets 
    the requirements of this subsection if, in the determination of the 
    Director--
            ``(A) the plan offers a benefits package that is uniform in 
        each State and consists of the essential benefits described in 
        section 1302;
            ``(B) the plan meets all requirements of this title with 
        respect to a qualified health plan, including requirements 
        relating to the offering of the bronze, silver, and gold levels 
        of coverage and catastrophic coverage in each State Exchange;
            ``(C) except as provided in paragraph (5), the issuer 
        provides for determinations of premiums for coverage under the 
        plan on the basis of the rating requirements of part A of title 
        XXVII of the Public Health Service Act; and
            ``(D) the issuer offers the plan in all geographic regions, 
        and in all States that have adopted adjusted community rating 
        before the date of enactment of this Act.
        ``(2) States may offer additional benefits.--Nothing in 
    paragraph (1)(A) shall preclude a State from requiring that 
    benefits in addition to the essential health benefits required 
    under such paragraph be provided to enrollees of a multi-State 
    qualified health plan offered in such State.
        ``(3) Credits.--
            ``(A) In general.--An individual enrolled in a multi-State 
        qualified health plan under this section shall be eligible for 
        credits under section 36B of the Internal Revenue Code of 1986 
        and cost sharing assistance under section 1402 in the same 
        manner as an individual who is enrolled in a qualified health 
        plan.
            ``(B) No additional federal cost.--A requirement by a State 
        under paragraph (2) that benefits in addition to the essential 
        health benefits required under paragraph (1)(A) be provided to 
        enrollees of a multi-State qualified health plan shall not 
        affect the amount of a premium tax credit provided under 
        section 36B of the Internal Revenue Code of 1986 with respect 
        to such plan.
        ``(4) State must assume cost.--A State shall make payments--
            ``(A) to an individual enrolled in a multi-State qualified 
        health plan offered in such State; or
            ``(B) on behalf of an individual described in subparagraph 
        (A) directly to the multi-State qualified health plan in which 
        such individual is enrolled;
    to defray the cost of any additional benefits described in 
    paragraph (2).
        ``(5) Application of certain state rating requirements.--With 
    respect to a multi-State qualified health plan that is offered in a 
    State with age rating requirements that are lower than 3:1, the 
    State may require that Exchanges operating in such State only 
    permit the offering of such multi-State qualified health plans if 
    such plans comply with the State's more protective age rating 
    requirements.
    ``(d) Plans Deemed To Be Certified.--A multi-State qualified health 
plan that is offered under a contract under subsection (a) shall be 
deemed to be certified by an Exchange for purposes of section 
1311(d)(4)(A).
    ``(e) Phase-in.--Notwithstanding paragraphs (1) and (2) of 
subsection (b), the Director shall enter into a contract with a health 
insurance issuer for the offering of a multi-State qualified health 
plan under subsection (a) if--
        ``(1) with respect to the first year for which the issuer 
    offers such plan, such issuer offers the plan in at least 60 
    percent of the States;
        ``(2) with respect to the second such year, such issuer offers 
    the plan in at least 70 percent of the States;
        ``(3) with respect to the third such year, such issuer offers 
    the plan in at least 85 percent of the States; and
        ``(4) with respect to each subsequent year, such issuer offers 
    the plan in all States.
    ``(f) Applicability.--The requirements under chapter 89 of title 5, 
United States Code, applicable to health benefits plans under such 
chapter shall apply to multi-State qualified health plans provided for 
under this section to the extent that such requirements do not conflict 
with a provision of this title.
    ``(g) Continued Support for FEHBP.--
        ``(1) Maintenance of effort.--Nothing in this section shall be 
    construed to permit the Director to allocate fewer financial or 
    personnel resources to the functions of the Office of Personnel 
    Management related to the administration of the Federal Employees 
    Health Benefit Program under chapter 89 of title 5, United States 
    Code.
        ``(2) Separate risk pool.--Enrollees in multi-State qualified 
    health plans under this section shall be treated as a separate risk 
    pool apart from enrollees in the Federal Employees Health Benefit 
    Program under chapter 89 of title 5, United States Code.
        ``(3) Authority to establish separate entities.--The Director 
    may establish such separate units or offices within the Office of 
    Personnel Management as the Director determines to be appropriate 
    to ensure that the administration of multi-State qualified health 
    plans under this section does not interfere with the effective 
    administration of the Federal Employees Health Benefit Program 
    under chapter 89 of title 5, United States Code.
        ``(4) Effective oversight.--The Director may appoint such 
    additional personnel as may be necessary to enable the Director to 
    carry out activities under this section.
        ``(5) Assurance of separate program.--In carrying out this 
    section, the Director shall ensure that the program under this 
    section is separate from the Federal Employees Health Benefit 
    Program under chapter 89 of title 5, United States Code. Premiums 
    paid for coverage under a multi-State qualified health plan under 
    this section shall not be considered to be Federal funds for any 
    purposes.
        ``(6) FEHBP plans not required to participate.--Nothing in this 
    section shall require that a carrier offering coverage under the 
    Federal Employees Health Benefit Program under chapter 89 of title 
    5, United States Code, also offer a multi-State qualified health 
    plan under this section.
    ``(h) Advisory Board.--The Director shall establish an advisory 
board to provide recommendations on the activities described in this 
section. A significant percentage of the members of such board shall be 
comprised of enrollees in a multi-State qualified health plan, or 
representatives of such enrollees.
    ``(i) Authorization of Appropriations.--There is authorized to be 
appropriated, such sums as may be necessary to carry out this 
section.''.
    (r) Section 1341 of this Act is amended--
        (1) in the section heading, by striking ``and small group 
    markets'' and inserting ``market'';
        (2) in subsection (b)(2)(B), by striking ``paragraph (1)(A)'' 
    and inserting ``paragraph (1)(B)''; and
        (3) in subsection (c)(1)(A), by striking ``and small group 
    markets'' and inserting ``market''.

SEC. 10105. AMENDMENTS TO SUBTITLE E.

    (a) Section 36B(b)(3)(A)(ii) of the Internal Revenue Code of 1986, 
as added by section 1401(a) of this Act, is amended by striking ``is in 
excess of'' and inserting ``equals or exceeds''.
    (b) Section 36B(c)(1)(A) of the Internal Revenue Code of 1986, as 
added by section 1401(a) of this Act, is amended by inserting ``equals 
or'' before ``exceeds''.
    (c) Section 36B(c)(2)(C)(iv) of the Internal Revenue Code of 1986, 
as added by section 1401(a) of this Act, is amended by striking 
``subsection (b)(3)(A)(ii)'' and inserting ``subsection 
(b)(3)(A)(iii)''.
    (d) Section 1401(d) of this Act is amended by adding at the end the 
following:
        ``(3) Section 6211(b)(4)(A) of the Internal Revenue Code of 
    1986 is amended by inserting `36B,' after `36A,'.''.
    (e)(1) Subparagraph (B) of section 45R(d)(3) of the Internal 
Revenue Code of 1986, as added by section 1421(a) of this Act, is 
amended to read as follows:
            ``(B) Dollar amount.--For purposes of paragraph (1)(B) and 
        subsection (c)(2)--
                ``(i) 2010, 2011, 2012, and 2013.--The dollar amount in 
            effect under this paragraph for taxable years beginning in 
            2010, 2011, 2012, or 2013 is $25,000.
                ``(ii) Subsequent years.--In the case of a taxable year 
            beginning in a calendar year after 2013, the dollar amount 
            in effect under this paragraph shall be equal to $25,000, 
            multiplied by the cost-of-living adjustment under section 
            1(f)(3) for the calendar year, determined by substituting 
            `calendar year 2012' for `calendar year 1992' in 
            subparagraph (B) thereof.''.
    (2) Subsection (g) of section 45R of the Internal Revenue Code of 
1986, as added by section 1421(a) of this Act, is amended by striking 
``2011'' both places it appears and inserting ``2010, 2011''.
    (3) Section 280C(h) of the Internal Revenue Code of 1986, as added 
by section 1421(d)(1) of this Act, is amended by striking ``2011'' and 
inserting ``2010, 2011''.
    (4) Section 1421(f) of this Act is amended by striking ``2010'' 
both places it appears and inserting ``2009''.
    (5) The amendments made by this subsection shall take effect as if 
included in the enactment of section 1421 of this Act.
    (f) Part I of subtitle E of title I of this Act is amended by 
adding at the end of subpart B, the following:

``SEC. 1416. STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF FPL.

    ``(a) In General.--The Secretary shall conduct a study to examine 
the feasibility and implication of adjusting the application of the 
Federal poverty level under this subtitle (and the amendments made by 
this subtitle) for different geographic areas so as to reflect the 
variations in cost-of-living among different areas within the United 
States. If the Secretary determines that an adjustment is feasible, the 
study should include a methodology to make such an adjustment. Not 
later than January 1, 2013, the Secretary shall submit to Congress a 
report on such study and shall include such recommendations as the 
Secretary determines appropriate.
    ``(b) Inclusion of Territories.--
        ``(1) In general.--The Secretary shall ensure that the study 
    under subsection (a) covers the territories of the United States 
    and that special attention is paid to the disparity that exists 
    among poverty levels and the cost of living in such territories and 
    to the impact of such disparity on efforts to expand health 
    coverage and ensure health care.
        ``(2) Territories defined.--In this subsection, the term 
    `territories of the United States' includes the Commonwealth of 
    Puerto Rico, the United States Virgin Islands, Guam, the Northern 
    Mariana Islands, and any other territory or possession of the 
    United States.''.

SEC. 10106. AMENDMENTS TO SUBTITLE F.

    (a) Section 1501(a)(2) of this Act is amended to read as follows:
        ``(2) Effects on the national economy and interstate 
    commerce.--The effects described in this paragraph are the 
    following:
            ``(A) The requirement regulates activity that is commercial 
        and economic in nature: economic and financial decisions about 
        how and when health care is paid for, and when health insurance 
        is purchased. In the absence of the requirement, some 
        individuals would make an economic and financial decision to 
        forego health insurance coverage and attempt to self-insure, 
        which increases financial risks to households and medical 
        providers.
            ``(B) Health insurance and health care services are a 
        significant part of the national economy. National health 
        spending is projected to increase from $2,500,000,000,000, or 
        17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 
        2019. Private health insurance spending is projected to be 
        $854,000,000,000 in 2009, and pays for medical supplies, drugs, 
        and equipment that are shipped in interstate commerce. Since 
        most health insurance is sold by national or regional health 
        insurance companies, health insurance is sold in interstate 
        commerce and claims payments flow through interstate commerce.
            ``(C) The requirement, together with the other provisions 
        of this Act, will add millions of new consumers to the health 
        insurance market, increasing the supply of, and demand for, 
        health care services, and will increase the number and share of 
        Americans who are insured.
            ``(D) The requirement achieves near-universal coverage by 
        building upon and strengthening the private employer-based 
        health insurance system, which covers 176,000,000 Americans 
        nationwide. In Massachusetts, a similar requirement has 
        strengthened private employer-based coverage: despite the 
        economic downturn, the number of workers offered employer-based 
        coverage has actually increased.
            ``(E) The economy loses up to $207,000,000,000 a year 
        because of the poorer health and shorter lifespan of the 
        uninsured. By significantly reducing the number of the 
        uninsured, the requirement, together with the other provisions 
        of this Act, will significantly reduce this economic cost.
            ``(F) The cost of providing uncompensated care to the 
        uninsured was $43,000,000,000 in 2008. To pay for this cost, 
        health care providers pass on the cost to private insurers, 
        which pass on the cost to families. This cost-shifting 
        increases family premiums by on average over $1,000 a year. By 
        significantly reducing the number of the uninsured, the 
        requirement, together with the other provisions of this Act, 
        will lower health insurance premiums.
            ``(G) 62 percent of all personal bankruptcies are caused in 
        part by medical expenses. By significantly increasing health 
        insurance coverage, the requirement, together with the other 
        provisions of this Act, will improve financial security for 
        families.
            ``(H) Under the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act 
        (42 U.S.C. 201 et seq.), and this Act, the Federal Government 
        has a significant role in regulating health insurance. The 
        requirement is an essential part of this larger regulation of 
        economic activity, and the absence of the requirement would 
        undercut Federal regulation of the health insurance market.
            ``(I) Under sections 2704 and 2705 of the Public Health 
        Service Act (as added by section 1201 of this Act), if there 
        were no requirement, many individuals would wait to purchase 
        health insurance until they needed care. By significantly 
        increasing health insurance coverage, the requirement, together 
        with the other provisions of this Act, will minimize this 
        adverse selection and broaden the health insurance risk pool to 
        include healthy individuals, which will lower health insurance 
        premiums. The requirement is essential to creating effective 
        health insurance markets in which improved health insurance 
        products that are guaranteed issue and do not exclude coverage 
        of pre-existing conditions can be sold.
            ``(J) Administrative costs for private health insurance, 
        which were $90,000,000,000 in 2006, are 26 to 30 percent of 
        premiums in the current individual and small group markets. By 
        significantly increasing health insurance coverage and the size 
        of purchasing pools, which will increase economies of scale, 
        the requirement, together with the other provisions of this 
        Act, will significantly reduce administrative costs and lower 
        health insurance premiums. The requirement is essential to 
        creating effective health insurance markets that do not require 
        underwriting and eliminate its associated administrative 
        costs.''.
    (b)(1) Section 5000A(b)(1) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended to read as follows:
        ``(1) In general.--If a taxpayer who is an applicable 
    individual, or an applicable individual for whom the taxpayer is 
    liable under paragraph (3), fails to meet the requirement of 
    subsection (a) for 1 or more months, then, except as provided in 
    subsection (e), there is hereby imposed on the taxpayer a penalty 
    with respect to such failures in the amount determined under 
    subsection (c).''.
        (2) Paragraphs (1) and (2) of section 5000A(c) of the Internal 
    Revenue Code of 1986, as so added, are amended to read as follows:
        ``(1) In general.--The amount of the penalty imposed by this 
    section on any taxpayer for any taxable year with respect to 
    failures described in subsection (b)(1) shall be equal to the 
    lesser of--
            ``(A) the sum of the monthly penalty amounts determined 
        under paragraph (2) for months in the taxable year during which 
        1 or more such failures occurred, or
            ``(B) an amount equal to the national average premium for 
        qualified health plans which have a bronze level of coverage, 
        provide coverage for the applicable family size involved, and 
        are offered through Exchanges for plan years beginning in the 
        calendar year with or within which the taxable year ends.
        ``(2) Monthly penalty amounts.--For purposes of paragraph 
    (1)(A), the monthly penalty amount with respect to any taxpayer for 
    any month during which any failure described in subsection (b)(1) 
    occurred is an amount equal to \1/12\ of the greater of the 
    following amounts:
            ``(A) Flat dollar amount.--An amount equal to the lesser 
        of--
                ``(i) the sum of the applicable dollar amounts for all 
            individuals with respect to whom such failure occurred 
            during such month, or
                ``(ii) 300 percent of the applicable dollar amount 
            (determined without regard to paragraph (3)(C)) for the 
            calendar year with or within which the taxable year ends.
            ``(B) Percentage of income.--An amount equal to the 
        following percentage of the taxpayer's household income for the 
        taxable year:
                ``(i) 0.5 percent for taxable years beginning in 2014.
                ``(ii) 1.0 percent for taxable years beginning in 2015.
                ``(iii) 2.0 percent for taxable years beginning after 
            2015.''.
    (3) Section 5000A(c)(3) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended by striking ``$350'' 
and inserting ``$495''.
    (c) Section 5000A(d)(2)(A) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended to read as follows:
            ``(A) Religious conscience exemption.--Such term shall not 
        include any individual for any month if such individual has in 
        effect an exemption under section 1311(d)(4)(H) of the Patient 
        Protection and Affordable Care Act which certifies that such 
        individual is--
                ``(i) a member of a recognized religious sect or 
            division thereof which is described in section 1402(g)(1), 
            and
                ``(ii) an adherent of established tenets or teachings 
            of such sect or division as described in such section.''.
    (d) Section 5000A(e)(1)(C) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended to read as follows:
            ``(C) Special rules for individuals related to employees.--
        For purposes of subparagraph (B)(i), if an applicable 
        individual is eligible for minimum essential coverage through 
        an employer by reason of a relationship to an employee, the 
        determination under subparagraph (A) shall be made by reference 
        to required contribution of the employee.''.
    (e) Section 4980H(b) of the Internal Revenue Code of 1986, as added 
by section 1513(a) of this Act, is amended to read as follows:
    ``(b) Large Employers With Waiting Periods Exceeding 60 Days.--
        ``(1) In general.--In the case of any applicable large employer 
    which requires an extended waiting period to enroll in any minimum 
    essential coverage under an employer-sponsored plan (as defined in 
    section 5000A(f)(2)), there is hereby imposed on the employer an 
    assessable payment of $600 for each full-time employee of the 
    employer to whom the extended waiting period applies.
        ``(2) Extended waiting period.--The term `extended waiting 
    period' means any waiting period (as defined in section 2701(b)(4) 
    of the Public Health Service Act) which exceeds 60 days.''.
    (f)(1) Subparagraph (A) of section 4980H(d)(4) of the Internal 
Revenue Code of 1986, as added by section 1513(a) of this Act, is 
amended by inserting ``, with respect to any month,'' after ``means''.
    (2) Section 4980H(d)(2) of the Internal Revenue Code of 1986, as 
added by section 1513(a) of this Act, is amended by adding at the end 
the following:
            ``(D) Application to construction industry employers.--In 
        the case of any employer the substantial annual gross receipts 
        of which are attributable to the construction industry--
                ``(i) subparagraph (A) shall be applied by substituting 
            `who employed an average of at least 5 full-time employees 
            on business days during the preceding calendar year and 
            whose annual payroll expenses exceed $250,000 for such 
            preceding calendar year' for `who employed an average of at 
            least 50 full-time employees on business days during the 
            preceding calendar year', and
                ``(ii) subparagraph (B) shall be applied by 
            substituting `5' for `50'.''.
    (3) The amendment made by paragraph (2) shall apply to months 
beginning after December 31, 2013.
    (g) Section 6056(b) of the Internal Revenue Code of 1986, as added 
by section 1514(a) of the Act, is amended by adding at the end the 
following new flush sentence:
``The Secretary shall have the authority to review the accuracy of the 
information provided under this subsection, including the applicable 
large employer's share under paragraph (2)(C)(iv).''.

SEC. 10107. AMENDMENTS TO SUBTITLE G.

    (a) Section 1562 of this Act is amended, in the amendment made by 
subsection (a)(2)(B)(iii), by striking ``subpart 1'' and inserting 
``subparts I and II''; and
    (b) Subtitle G of title I of this Act is amended--
        (1) by redesignating section 1562 (as amended) as section 1563; 
    and
        (2) by inserting after section 1561 the following:

``SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL OF COVERAGE AND 
              ENROLLMENT BY HEALTH INSURANCE ISSUERS AND GROUP HEALTH 
              PLANS.

    ``(a) In General.--The Comptroller General of the United States 
(referred to in this section as the `Comptroller General') shall 
conduct a study of the incidence of denials of coverage for medical 
services and denials of applications to enroll in health insurance 
plans, as described in subsection (b), by group health plans and health 
insurance issuers.
    ``(b) Data.--
        ``(1) In general.--In conducting the study described in 
    subsection (a), the Comptroller General shall consider samples of 
    data concerning the following:
            ``(A)(i) denials of coverage for medical services to a plan 
        enrollees, by the types of services for which such coverage was 
        denied; and
            ``(ii) the reasons such coverage was denied; and
            ``(B)(i) incidents in which group health plans and health 
        insurance issuers deny the application of an individual to 
        enroll in a health insurance plan offered by such group health 
        plan or issuer; and
            ``(ii) the reasons such applications are denied.
        ``(2) Scope of data.--
            ``(A) Favorably resolved disputes.--The data that the 
        Comptroller General considers under paragraph (1) shall include 
        data concerning denials of coverage for medical services and 
        denials of applications for enrollment in a plan by a group 
        health plan or health insurance issuer, where such group health 
        plan or health insurance issuer later approves such coverage or 
        application.
            ``(B) All health plans.--The study under this section shall 
        consider data from varied group health plans and health 
        insurance plans offered by health insurance issuers, including 
        qualified health plans and health plans that are not qualified 
        health plans.
    ``(c) Report.--Not later than one year after the date of enactment 
of this Act, the Comptroller General shall submit to the Secretaries of 
Health and Human Services and Labor a report describing the results of 
the study conducted under this section.
    ``(d) Publication of Report.--The Secretaries of Health and Human 
Services and Labor shall make the report described in subsection (c) 
available to the public on an Internet website.

``SEC. 1563. SMALL BUSINESS PROCUREMENT.

    ``Part 19 of the Federal Acquisition Regulation, section 15 of the 
Small Business Act (15 U.S.C. 644), and any other applicable laws or 
regulations establishing procurement requirements relating to small 
business concerns (as defined in section 3 of the Small Business Act 
(15 U.S.C. 632)) may not be waived with respect to any contract awarded 
under any program or other authority under this Act or an amendment 
made by this Act.''.

SEC. 10108. FREE CHOICE VOUCHERS.

    (a) In General.--An offering employer shall provide free choice 
vouchers to each qualified employee of such employer.
    (b) Offering Employer.--For purposes of this section, the term 
``offering employer'' means any employer who--
        (1) offers minimum essential coverage to its employees 
    consisting of coverage through an eligible employer-sponsored plan; 
    and
        (2) pays any portion of the costs of such plan.
    (c) Qualified Employee.--For purposes of this section--
        (1) In general.--The term ``qualified employee'' means, with 
    respect to any plan year of an offering employer, any employee--
            (A) whose required contribution (as determined under 
        section 5000A(e)(1)(B)) for minimum essential coverage through 
        an eligible employer-sponsored plan--
                (i) exceeds 8 percent of such employee's household 
            income for the taxable year described in section 
            1412(b)(1)(B) which ends with or within in the plan year; 
            and
                (ii) does not exceed 9.8 percent of such employee's 
            household income for such taxable year;
            (B) whose household income for such taxable year is not 
        greater than 400 percent of the poverty line for a family of 
        the size involved; and
            (C) who does not participate in a health plan offered by 
        the offering employer.
        (2) Indexing.--In the case of any calendar year beginning after 
    2014, the Secretary shall adjust the 8 percent under paragraph 
    (1)(A)(i) and 9.8 percent under paragraph (1)(A)(ii) for the 
    calendar year to reflect the rate of premium growth between the 
    preceding calendar year and 2013 over the rate of income growth for 
    such period.
    (d) Free Choice Voucher.--
        (1) Amount.--
            (A) In general.--The amount of any free choice voucher 
        provided under subsection (a) shall be equal to the monthly 
        portion of the cost of the eligible employer-sponsored plan 
        which would have been paid by the employer if the employee were 
        covered under the plan with respect to which the employer pays 
        the largest portion of the cost of the plan. Such amount shall 
        be equal to the amount the employer would pay for an employee 
        with self-only coverage unless such employee elects family 
        coverage (in which case such amount shall be the amount the 
        employer would pay for family coverage).
            (B) Determination of cost.--The cost of any health plan 
        shall be determined under the rules similar to the rules of 
        section 2204 of the Public Health Service Act, except that such 
        amount shall be adjusted for age and category of enrollment in 
        accordance with regulations established by the Secretary.
        (2) Use of vouchers.--An Exchange shall credit the amount of 
    any free choice voucher provided under subsection (a) to the 
    monthly premium of any qualified health plan in the Exchange in 
    which the qualified employee is enrolled and the offering employer 
    shall pay any amounts so credited to the Exchange.
        (3) Payment of excess amounts.--If the amount of the free 
    choice voucher exceeds the amount of the premium of the qualified 
    health plan in which the qualified employee is enrolled for such 
    month, such excess shall be paid to the employee.
    (e) Other Definitions.--Any term used in this section which is also 
used in section 5000A of the Internal Revenue Code of 1986 shall have 
the meaning given such term under such section 5000A.
    (f) Exclusion From Income for Employee.--
        (1) In general.--Part III of subchapter B of chapter 1 of the 
    Internal Revenue Code of 1986 is amended by inserting after section 
    139C the following new section:

``SEC. 139D. FREE CHOICE VOUCHERS.

    ``Gross income shall not include the amount of any free choice 
voucher provided by an employer under section 10108 of the Patient 
Protection and Affordable Care Act to the extent that the amount of 
such voucher does not exceed the amount paid for a qualified health 
plan (as defined in section 1301 of such Act) by the taxpayer.''.
        (2) Clerical amendment.--The table of sections for part III of 
    subchapter B of chapter 1 of such Code is amended by inserting 
    after the item relating to section 139C the following new item:
``Sec. 139D. Free choice vouchers.''.
        (3) Effective date.--The amendments made by this subsection 
    shall apply to vouchers provided after December 31, 2013.
    (g) Deduction Allowed to Employer.--
        (1) In general.--Section 162(a) of the Internal Revenue Code of 
    1986 is amended by adding at the end the following new sentence: 
    ``For purposes of paragraph (1), the amount of a free choice 
    voucher provided under section 10108 of the Patient Protection and 
    Affordable Care Act shall be treated as an amount for compensation 
    for personal services actually rendered.''.
        (2) Effective date.--The amendments made by this subsection 
    shall apply to vouchers provided after December 31, 2013.
    (h) Voucher Taken Into Account in Determining Premium Credit.--
        (1) In general.--Subsection (c)(2) of section 36B of the 
    Internal Revenue Code of 1986, as added by section 1401, is amended 
    by adding at the end the following new subparagraph:
            ``(D) Exception for individual receiving free choice 
        vouchers.--The term `coverage month' shall not include any 
        month in which such individual has a free choice voucher 
        provided under section 10108 of the Patient Protection and 
        Affordable Care Act.''.
        (2) Effective date.--The amendment made by this subsection 
    shall apply to taxable years beginning after December 31, 2013.
    (i) Coordination With Employer Responsibilities.--
        (1) Shared responsibility penalty.--
            (A) In general.--Subsection (c) of section 4980H of the 
        Internal Revenue Code of 1986, as added by section 1513, is 
        amended by adding at the end the following new paragraph:
        ``(3) Special rules for employers providing free choice 
    vouchers.--No assessable payment shall be imposed under paragraph 
    (1) for any month with respect to any employee to whom the employer 
    provides a free choice voucher under section 10108 of the Patient 
    Protection and Affordable Care Act for such month.''.
            (B) Effective date.--The amendment made by this paragraph 
        shall apply to months beginning after December 31, 2013.
        (2) Notification requirement.--Section 18B(a)(3) of the Fair 
    Labor Standards Act of 1938, as added by section 1512, is amended--
            (A) by inserting ``and the employer does not offer a free 
        choice voucher'' after ``Exchange''; and
            (B) by striking ``will lose'' and inserting ``may lose''.
    (j) Employer Reporting.--
        (1) In general.--Subsection (a) of section 6056 of the Internal 
    Revenue Code of 1986, as added by section 1514, is amended by 
    inserting ``and every offering employer'' before ``shall''.
        (2) Offering employers.--Subsection (f) of section 6056 of such 
    Code, as added by section 1514, is amended to read as follows:
    ``(f) Definitions.--For purposes of this section--
        ``(1) Offering employer.--
            ``(A) In general.--The term `offering employer' means any 
        offering employer (as defined in section 10108(b) of the 
        Patient Protection and Affordable Care Act) if the required 
        contribution (within the meaning of section 5000A(e)(1)(B)(i)) 
        of any employee exceeds 8 percent of the wages (as defined in 
        section 3121(a)) paid to such employee by such employer.
            ``(B) Indexing.--In the case of any calendar year beginning 
        after 2014, the 8 percent under subparagraph (A) shall be 
        adjusted for the calendar year to reflect the rate of premium 
        growth between the preceding calendar year and 2013 over the 
        rate of income growth for such period.
        ``(2) Other definitions.--Any term used in this section which 
    is also used in section 4980H shall have the meaning given such 
    term by section 4980H.''.
        (3) Conforming amendments.--
            (A) The heading of section 6056 of such Code, as added by 
        section 1514, is amended by striking ``large'' and inserting 
        ``certain''.
            (B) Section 6056(b)(2)(C) of such Code is amended--
                (i) by inserting ``in the case of an applicable large 
            employer,'' before ``the length'' in clause (i);
                (ii) by striking ``and'' at the end of clause (iii);
                (iii) by striking ``applicable large employer'' in 
            clause (iv) and inserting ``employer'';
                (iv) by inserting ``and'' at the end of clause (iv); 
            and
                (v) by inserting at the end the following new clause:
                ``(v) in the case of an offering employer, the option 
            for which the employer pays the largest portion of the cost 
            of the plan and the portion of the cost paid by the 
            employer in each of the enrollment categories under such 
            option,''.
            (C) Section 6056(d)(2) of such Code is amended by inserting 
        ``or offering employer'' after ``applicable large employer''.
            (D) Section 6056(e) of such Code is amended by inserting 
        ``or offering employer'' after ``applicable large employer''.
            (E) Section 6724(d)(1)(B)(xxv) of such Code, as added by 
        section 1514, is amended by striking ``large'' and inserting 
        ``certain''.
            (F) Section 6724(d)(2)(HH) of such Code, as added by 
        section 1514, is amended by striking ``large'' and inserting 
        ``certain''.
            (G) The table of sections for subpart D of part III of 
        subchapter A of chapter 1 of such Code, as amended by section 
        1514, is amended by striking ``Large employers'' in the item 
        relating to section 6056 and inserting ``Certain employers''.
        (4) Effective date.--The amendments made by this subsection 
    shall apply to periods beginning after December 31, 2013.

SEC. 10109. DEVELOPMENT OF STANDARDS FOR FINANCIAL AND ADMINISTRATIVE 
              TRANSACTIONS.

    (a) Additional Transaction Standards and Operating Rules.--
        (1) Development of additional transaction standards and 
    operating rules.--Section 1173(a) of the Social Security Act (42 
    U.S.C. 1320d-2(a)), as amended by section 1104(b)(2), is amended--
            (A) in paragraph (1)(B), by inserting before the period the 
        following: ``, and subject to the requirements under paragraph 
        (5)''; and
            (B) by adding at the end the following new paragraph:
        ``(5) Consideration of standardization of activities and 
    items.--
            ``(A) In general.--For purposes of carrying out paragraph 
        (1)(B), the Secretary shall solicit, not later than January 1, 
        2012, and not less than every 3 years thereafter, input from 
        entities described in subparagraph (B) on--
                ``(i) whether there could be greater uniformity in 
            financial and administrative activities and items, as 
            determined appropriate by the Secretary; and
                ``(ii) whether such activities should be considered 
            financial and administrative transactions (as described in 
            paragraph (1)(B)) for which the adoption of standards and 
            operating rules would improve the operation of the health 
            care system and reduce administrative costs.
            ``(B) Solicitation of input.--For purposes of subparagraph 
        (A), the Secretary shall seek input from--
                ``(i) the National Committee on Vital and Health 
            Statistics, the Health Information Technology Policy 
            Committee, and the Health Information Technology Standards 
            Committee; and
                ``(ii) standard setting organizations and stakeholders, 
            as determined appropriate by the Secretary.''.
    (b) Activities and Items for Initial Consideration.--For purposes 
of section 1173(a)(5) of the Social Security Act, as added by 
subsection (a), the Secretary of Health and Human Services (in this 
section referred to as the ``Secretary'') shall, not later than January 
1, 2012, seek input on activities and items relating to the following 
areas:
        (1) Whether the application process, including the use of a 
    uniform application form, for enrollment of health care providers 
    by health plans could be made electronic and standardized.
        (2) Whether standards and operating rules described in section 
    1173 of the Social Security Act should apply to the health care 
    transactions of automobile insurance, worker's compensation, and 
    other programs or persons not described in section 1172(a) of such 
    Act (42 U.S.C. 1320d-1(a)).
        (3) Whether standardized forms could apply to financial audits 
    required by health plans, Federal and State agencies (including 
    State auditors, the Office of the Inspector General of the 
    Department of Health and Human Services, and the Centers for 
    Medicare & Medicaid Services), and other relevant entities as 
    determined appropriate by the Secretary.
        (4) Whether there could be greater transparency and consistency 
    of methodologies and processes used to establish claim edits used 
    by health plans (as described in section 1171(5) of the Social 
    Security Act (42 U.S.C. 1320d(5))).
        (5) Whether health plans should be required to publish their 
    timeliness of payment rules.
    (c) ICD Coding Crosswalks.--
        (1) ICD-9 to icd-10 crosswalk.--The Secretary shall task the 
    ICD-9-CM Coordination and Maintenance Committee to convene a 
    meeting, not later than January 1, 2011, to receive input from 
    appropriate stakeholders (including health plans, health care 
    providers, and clinicians) regarding the crosswalk between the 
    Ninth and Tenth Revisions of the International Classification of 
    Diseases (ICD-9 and ICD-10, respectively) that is posted on the 
    website of the Centers for Medicare & Medicaid Services, and make 
    recommendations about appropriate revisions to such crosswalk.
        (2) Revision of crosswalk.--For purposes of the crosswalk 
    described in paragraph (1), the Secretary shall make appropriate 
    revisions and post any such revised crosswalk on the website of the 
    Centers for Medicare & Medicaid Services.
        (3) Use of revised crosswalk.--For purposes of paragraph (2), 
    any revised crosswalk shall be treated as a code set for which a 
    standard has been adopted by the Secretary for purposes of section 
    1173(c)(1)(B) of the Social Security Act (42 U.S.C. 1320d-
    2(c)(1)(B)).
        (4) Subsequent crosswalks.--For subsequent revisions of the 
    International Classification of Diseases that are adopted by the 
    Secretary as a standard code set under section 1173(c) of the 
    Social Security Act (42 U.S.C. 1320d-2(c)), the Secretary shall, 
    after consultation with the appropriate stakeholders, post on the 
    website of the Centers for Medicare & Medicaid Services a crosswalk 
    between the previous and subsequent version of the International 
    Classification of Diseases not later than the date of 
    implementation of such subsequent revision.

              Subtitle B--Provisions Relating to Title II

                       PART I--MEDICAID AND CHIP

SEC. 10201. AMENDMENTS TO THE SOCIAL SECURITY ACT AND TITLE II OF THIS 
              ACT.

    (a)(1) Section 1902(a)(10)(A)(i)(IX) of the Social Security Act (42 
U.S.C. 1396a(a)(10)(A)(i)(IX)), as added by section 2004(a), is amended 
to read as follows:

                    ``(IX) who--

                        ``(aa) are under 26 years of age;
                        ``(bb) are not described in or enrolled under 
                    any of subclauses (I) through (VII) of this clause 
                    or are described in any of such subclauses but have 
                    income that exceeds the level of income applicable 
                    under the State plan for eligibility to enroll for 
                    medical assistance under such subclause;
                        ``(cc) were in foster care under the 
                    responsibility of the State on the date of 
                    attaining 18 years of age or such higher age as the 
                    State has elected under section 475(8)(B)(iii); and
                        ``(dd) were enrolled in the State plan under 
                    this title or under a waiver of the plan while in 
                    such foster care;''.
    (2) Section 1902(a)(10) of the Social Security Act (42 U.S.C. 
1396a(a)(10), as amended by section 2001(a)(5)(A), is amended in the 
matter following subparagraph (G), by striking ``and (XV)'' and 
inserting ``(XV)'', and by inserting ``and (XVI) if an individual is 
described in subclause (IX) of subparagraph (A)(i) and is also 
described in subclause (VIII) of that subparagraph, the medical 
assistance shall be made available to the individual through subclause 
(IX) instead of through subclause (VIII)'' before the semicolon.
    (3) Section 2004(d) of this Act is amended by striking ``2019'' and 
inserting ``2014''.
    (b) Section 1902(k)(2) of the Social Security Act (42 U.S.C. 
1396a(k)(2)), as added by section 2001(a)(4)(A), is amended by striking 
``January 1, 2011'' and inserting ``April 1, 2010''.
    (c) Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 
amended by sections 2001(a)(3), 2001(a)(5)(C), 2006, and 4107(a)(2), is 
amended--
        (1) in subsection (a), in the matter preceding paragraph (1), 
    by inserting in clause (xiv), ``or 1902(a)(10)(A)(i)(IX)'' before 
    the comma;
        (2) in subsection (b), in the first sentence, by inserting ``, 
    (z),'' before ``and (aa)'';
        (3) in subsection (y)--
            (A) in paragraph (1)(B)(ii)(II), in the first sentence, by 
        inserting ``includes inpatient hospital services,'' after ``100 
        percent of the poverty line, that''; and
            (B) in paragraph (2)(A), by striking ``on the date of 
        enactment of the Patient Protection and Affordable Care Act'' 
        and inserting ``as of December 1, 2009'';
        (4) by inserting after subsection (y) the following:
    ``(z) Equitable Support for Certain States.--
        ``(1)(A) During the period that begins on January 1, 2014, and 
    ends on September 30, 2019, notwithstanding subsection (b), the 
    Federal medical assistance percentage otherwise determined under 
    subsection (b) with respect to a fiscal year occurring during that 
    period shall be increased by 2.2 percentage points for any State 
    described in subparagraph (B) for amounts expended for medical 
    assistance for individuals who are not newly eligible (as defined 
    in subsection (y)(2)) individuals described in subclause (VIII) of 
    section 1902(a)(10)(A)(i).
        ``(B) For purposes of subparagraph (A), a State described in 
    this subparagraph is a State that--
            ``(i) is an expansion State described in subsection 
        (y)(1)(B)(ii)(II);
            ``(ii) the Secretary determines will not receive any 
        payments under this title on the basis of an increased Federal 
        medical assistance percentage under subsection (y) for 
        expenditures for medical assistance for newly eligible 
        individuals (as so defined); and
            ``(iii) has not been approved by the Secretary to divert a 
        portion of the DSH allotment for a State to the costs of 
        providing medical assistance or other health benefits coverage 
        under a waiver that is in effect on July 2009.
    ``(2)(A) During the period that begins on January 1, 2014, and ends 
on December 31, 2016, notwithstanding subsection (b), the Federal 
medical assistance percentage otherwise determined under subsection (b) 
with respect to all or any portion of a fiscal year occurring during 
that period shall be increased by .5 percentage point for a State 
described in subparagraph (B) for amounts expended for medical 
assistance under the State plan under this title or under a waiver of 
that plan during that period.
    ``(B) For purposes of subparagraph (A), a State described in this 
subparagraph is a State that--
        ``(i) is described in clauses (i) and (ii) of paragraph (1)(B); 
    and
        ``(ii) is the State with the highest percentage of its 
    population insured during 2008, based on the Current Population 
    Survey.
    ``(3) Notwithstanding subsection (b) and paragraphs (1) and (2) of 
this subsection, the Federal medical assistance percentage otherwise 
determined under subsection (b) with respect to all or any portion of a 
fiscal year that begins on or after January 1, 2017, for the State of 
Nebraska, with respect to amounts expended for newly eligible 
individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), 
shall be determined as provided for under subsection (y)(1)(A) 
(notwithstanding the period provided for in such paragraph).
    ``(4) The increase in the Federal medical assistance percentage for 
a State under paragraphs (1), (2), or (3) shall apply only for purposes 
of this title and shall not apply with respect to--
        ``(A) disproportionate share hospital payments described in 
    section 1923;
        ``(B) payments under title IV;
        ``(C) payments under title XXI; and
        ``(D) payments under this title that are based on the enhanced 
    FMAP described in section 2105(b).'';
        (5) in subsection (aa), is amended by striking ``without regard 
    to this subsection and subsection (y)'' and inserting ``without 
    regard to this subsection, subsection (y), subsection (z), and 
    section 10202 of the Patient Protection and Affordable Care Act'' 
    each place it appears;
        (6) by adding after subsection (bb), the following:
    ``(cc) Requirement for Certain States.--Notwithstanding subsections 
(y), (z), and (aa), in the case of a State that requires political 
subdivisions within the State to contribute toward the non-Federal 
share of expenditures required under the State plan under section 
1902(a)(2), the State shall not be eligible for an increase in its 
Federal medical assistance percentage under such subsections if it 
requires that political subdivisions pay a greater percentage of the 
non-Federal share of such expenditures, or a greater percentage of the 
non-Federal share of payments under section 1923, than the respective 
percentages that would have been required by the State under the State 
plan under this title, State law, or both, as in effect on December 31, 
2009, and without regard to any such increase. Voluntary contributions 
by a political subdivision to the non-Federal share of expenditures 
under the State plan under this title or to the non-Federal share of 
payments under section 1923, shall not be considered to be required 
contributions for purposes of this subsection. The treatment of 
voluntary contributions, and the treatment of contributions required by 
a State under the State plan under this title, or State law, as 
provided by this subsection, shall also apply to the increases in the 
Federal medical assistance percentage under section 5001 of the 
American Recovery and Reinvestment Act of 2009.''.
    (d) Section 1108(g)(4)(B) of the Social Security Act (42 U.S.C. 
1308(g)(4)(B)), as added by section 2005(b), is amended by striking 
``income eligibility level in effect for that population under title 
XIX or under a waiver'' and inserting ``the highest income eligibility 
level in effect for parents under the commonwealth's or territory's 
State plan under title XIX or under a waiver of the plan''.
    (e)(1) Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-
4(f)), as amended by section 2551, is amended--
        (A) in paragraph (6)--
            (i) by striking the paragraph heading and inserting the 
        following: ``Allotment adjustments''; and
            (ii) in subparagraph (B), by adding at the end the 
        following:
                ``(iii) Allotment for 2d, 3rd, and 4th quarter of 
            fiscal year 2012, fiscal year 2013, and succeeding fiscal 
            years.--Notwithstanding the table set forth in paragraph 
            (2) or paragraph (7):

                    ``(I) 2d, 3rd, and 4th quarter of fiscal year 
                2012.--The DSH allotment for Hawaii for the 2d, 3rd, 
                and 4th quarters of fiscal year 2012 shall be 
                $7,500,000.
                    ``(II) Treatment as a low-dsh state for fiscal year 
                2013 and succeeding fiscal years.--With respect to 
                fiscal year 2013, and each fiscal year thereafter, the 
                DSH allotment for Hawaii shall be increased in the same 
                manner as allotments for low DSH States are increased 
                for such fiscal year under clause (iii) of paragraph 
                (5)(B).
                    ``(III) Certain hospital payments.--The Secretary 
                may not impose a limitation on the total amount of 
                payments made to hospitals under the QUEST section 1115 
                Demonstration Project except to the extent that such 
                limitation is necessary to ensure that a hospital does 
                not receive payments in excess of the amounts described 
                in subsection (g), or as necessary to ensure that such 
                payments under the waiver and such payments pursuant to 
                the allotment provided in this clause do not, in the 
                aggregate in any year, exceed the amount that the 
                Secretary determines is equal to the Federal medical 
                assistance percentage component attributable to 
                disproportionate share hospital payment adjustments for 
                such year that is reflected in the budget neutrality 
                provision of the QUEST Demonstration Project.''; and

        (B) in paragraph (7)--
            (i) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``subparagraph (E)'' and inserting 
        ``subparagraphs (E) and (G)'';
            (ii) in subparagraph (B)--
                (I) in clause (i), by striking subclauses (I) and (II), 
            and inserting the following:

                    ``(I) if the State is a low DSH State described in 
                paragraph (5)(B) and has spent not more than 99.90 
                percent of the DSH allotments for the State on average 
                for the period of fiscal years 2004 through 2008, as of 
                September 30, 2009, the applicable percentage is equal 
                to 25 percent;
                    ``(II) if the State is a low DSH State described in 
                paragraph (5)(B) and has spent more than 99.90 percent 
                of the DSH allotments for the State on average for the 
                period of fiscal years 2004 through 2008, as of 
                September 30, 2009, the applicable percentage is equal 
                to 17.5 percent;
                    ``(III) if the State is not a low DSH State 
                described in paragraph (5)(B) and has spent not more 
                than 99.90 percent of the DSH allotments for the State 
                on average for the period of fiscal years 2004 through 
                2008, as of September 30, 2009, the applicable 
                percentage is equal to 50 percent; and
                    ``(IV) if the State is not a low DSH State 
                described in paragraph (5)(B) and has spent more than 
                99.90 percent of the DSH allotments for the State on 
                average for the period of fiscal years 2004 through 
                2008, as of September 30, 2009, the applicable 
                percentage is equal to 35 percent.'';

                (II) in clause (ii), by striking subclauses (I) and 
            (II), and inserting the following:

                    ``(I) if the State is a low DSH State described in 
                paragraph (5)(B) and has spent not more than 99.90 
                percent of the DSH allotments for the State on average 
                for the period of fiscal years 2004 through 2008, as of 
                September 30, 2009, the applicable percentage is equal 
                to the product of the percentage reduction in uncovered 
                individuals for the fiscal year from the preceding 
                fiscal year and 27.5 percent;
                    ``(II) if the State is a low DSH State described in 
                paragraph (5)(B) and has spent more than 99.90 percent 
                of the DSH allotments for the State on average for the 
                period of fiscal years 2004 through 2008, as of 
                September 30, 2009, the applicable percentage is equal 
                to the product of the percentage reduction in uncovered 
                individuals for the fiscal year from the preceding 
                fiscal year and 20 percent;
                    ``(III) if the State is not a low DSH State 
                described in paragraph (5)(B) and has spent not more 
                than 99.90 percent of the DSH allotments for the State 
                on average for the period of fiscal years 2004 through 
                2008, as of September 30, 2009, the applicable 
                percentage is equal to the product of the percentage 
                reduction in uncovered individuals for the fiscal year 
                from the preceding fiscal year and 55 percent; and
                    ``(IV) if the State is not a low DSH State 
                described in paragraph (5)(B) and has spent more than 
                99.90 percent of the DSH allotments for the State on 
                average for the period of fiscal years 2004 through 
                2008, as of September 30, 2009, the applicable 
                percentage is equal to the product of the percentage 
                reduction in uncovered individuals for the fiscal year 
                from the preceding fiscal year and 40 percent.'';

                (III) in subparagraph (E), by striking ``35 percent'' 
            and inserting ``50 percent''; and
                (IV) by adding at the end the following:
            ``(G) Nonapplication.--The preceding provisions of this 
        paragraph shall not apply to the DSH allotment determined for 
        the State of Hawaii for a fiscal year under paragraph (6).''.
    (f) Section 2551 of this Act is amended by striking subsection (b).
    (g) Section 2105(d)(3)(B) of the Social Security Act (42 U.S.C. 
1397ee(d)(3)(B)), as added by section 2101(b)(1), is amended by adding 
at the end the following: ``For purposes of eligibility for premium 
assistance for the purchase of a qualified health plan under section 
36B of the Internal Revenue Code of 1986 and reduced cost-sharing under 
section 1402 of the Patient Protection and Affordable Care Act, 
children described in the preceding sentence shall be deemed to be 
ineligible for coverage under the State child health plan.''.
    (h) Clause (i) of subparagraph (C) of section 513(b)(2) of the 
Social Security Act, as added by section 2953 of this Act, is amended 
to read as follows:
                ``(i) Healthy relationships, including marriage and 
            family interactions.''.
    (i) Section 1115 of the Social Security Act (42 U.S.C. 1315) is 
amended by inserting after subsection (c) the following:
    ``(d)(1) An application or renewal of any experimental, pilot, or 
demonstration project undertaken under subsection (a) to promote the 
objectives of title XIX or XXI in a State that would result in an 
impact on eligibility, enrollment, benefits, cost-sharing, or financing 
with respect to a State program under title XIX or XXI (in this 
subsection referred to as a `demonstration project') shall be 
considered by the Secretary in accordance with the regulations required 
to be promulgated under paragraph (2).
    ``(2) Not later than 180 days after the date of enactment of this 
subsection, the Secretary shall promulgate regulations relating to 
applications for, and renewals of, a demonstration project that provide 
for--
        ``(A) a process for public notice and comment at the State 
    level, including public hearings, sufficient to ensure a meaningful 
    level of public input;
        ``(B) requirements relating to--
            ``(i) the goals of the program to be implemented or renewed 
        under the demonstration project;
            ``(ii) the expected State and Federal costs and coverage 
        projections of the demonstration project; and
            ``(iii) the specific plans of the State to ensure that the 
        demonstration project will be in compliance with title XIX or 
        XXI;
        ``(C) a process for providing public notice and comment after 
    the application is received by the Secretary, that is sufficient to 
    ensure a meaningful level of public input;
        ``(D) a process for the submission to the Secretary of periodic 
    reports by the State concerning the implementation of the 
    demonstration project; and
        ``(E) a process for the periodic evaluation by the Secretary of 
    the demonstration project.
    ``(3) The Secretary shall annually report to Congress concerning 
actions taken by the Secretary with respect to applications for 
demonstration projects under this section.''.
    (j) Subtitle F of title III of this Act is amended by adding at the 
end the following:

``SEC. 3512. GAO STUDY AND REPORT ON CAUSES OF ACTION.

    ``(a) Study.--
        ``(1) In general.--The Comptroller General of the United States 
    shall conduct a study of whether the development, recognition, or 
    implementation of any guideline or other standards under a 
    provision described in paragraph (2) would result in the 
    establishment of a new cause of action or claim.
        ``(2) Provisions described.--The provisions described in this 
    paragraph include the following:
            ``(A) Section 2701 (adult health quality measures).
            ``(B) Section 2702 (payment adjustments for health care 
        acquired conditions).
            ``(C) Section 3001 (Hospital Value-Based Purchase Program).
            ``(D) Section 3002 (improvements to the Physician Quality 
        Reporting Initiative).
            ``(E) Section 3003 (improvements to the Physician Feedback 
        Program).
            ``(F) Section 3007 (value based payment modifier under 
        physician fee schedule).
            ``(G) Section 3008 (payment adjustment for conditions 
        acquired in hospitals).
            ``(H) Section 3013 (quality measure development).
            ``(I) Section 3014 (quality measurement).
            ``(J) Section 3021 (Establishment of Center for Medicare 
        and Medicaid Innovation).
            ``(K) Section 3025 (hospital readmission reduction 
        program).
            ``(L) Section 3501 (health care delivery system research, 
        quality improvement).
            ``(M) Section 4003 (Task Force on Clinical and Preventive 
        Services).
            ``(N) Section 4301 (research to optimize deliver of public 
        health services).
    ``(b) Report.--Not later than 2 years after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
to the appropriate committees of Congress, a report containing the 
findings made by the Comptroller General under the study under 
subsection (a).''.

SEC. 10202. INCENTIVES FOR STATES TO OFFER HOME AND COMMUNITY-BASED 
              SERVICES AS A LONG-TERM CARE ALTERNATIVE TO NURSING 
              HOMES.

    (a) State Balancing Incentive Payments Program.--Notwithstanding 
section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the 
case of a balancing incentive payment State, as defined in subsection 
(b), that meets the conditions described in subsection (c), during the 
balancing incentive period, the Federal medical assistance percentage 
determined for the State under section 1905(b) of such Act and, if 
applicable, increased under subsection (z) or (aa) shall be increased 
by the applicable percentage points determined under subsection (d) 
with respect to eligible medical assistance expenditures described in 
subsection (e).
    (b) Balancing Incentive Payment State.--A balancing incentive 
payment State is a State--
        (1) in which less than 50 percent of the total expenditures for 
    medical assistance under the State Medicaid program for a fiscal 
    year for long-term services and supports (as defined by the 
    Secretary under subsection (f))(1)) are for non-institutionally-
    based long-term services and supports described in subsection 
    (f)(1)(B);
        (2) that submits an application and meets the conditions 
    described in subsection (c); and
        (3) that is selected by the Secretary to participate in the 
    State balancing incentive payment program established under this 
    section.
    (c) Conditions.--The conditions described in this subsection are 
the following:
        (1) Application.--The State submits an application to the 
    Secretary that includes, in addition to such other information as 
    the Secretary shall require--
            (A) a proposed budget that details the State's plan to 
        expand and diversify medical assistance for non-
        institutionally-based long-term services and supports described 
        in subsection (f)(1)(B) under the State Medicaid program during 
        the balancing incentive period and achieve the target spending 
        percentage applicable to the State under paragraph (2), 
        including through structural changes to how the State furnishes 
        such assistance, such as through the establishment of a ``no 
        wrong door--single entry point system'', optional presumptive 
        eligibility, case management services, and the use of core 
        standardized assessment instruments, and that includes a 
        description of the new or expanded offerings of such services 
        that the State will provide and the projected costs of such 
        services; and
            (B) in the case of a State that proposes to expand the 
        provision of home and community-based services under its State 
        Medicaid program through a State plan amendment under section 
        1915(i) of the Social Security Act, at the option of the State, 
        an election to increase the income eligibility for such 
        services from 150 percent of the poverty line to such higher 
        percentage as the State may establish for such purpose, not to 
        exceed 300 percent of the supplemental security income benefit 
        rate established by section 1611(b)(1) of the Social Security 
        Act (42 U.S.C. 1382(b)(1)).
        (2) Target spending percentages.--
            (A) In the case of a balancing incentive payment State in 
        which less than 25 percent of the total expenditures for long-
        term services and supports under the State Medicaid program for 
        fiscal year 2009 are for home and community-based services, the 
        target spending percentage for the State to achieve by not 
        later than October 1, 2015, is that 25 percent of the total 
        expenditures for long-term services and supports under the 
        State Medicaid program are for home and community-based 
        services.
            (B) In the case of any other balancing incentive payment 
        State, the target spending percentage for the State to achieve 
        by not later than October 1, 2015, is that 50 percent of the 
        total expenditures for long-term services and supports under 
        the State Medicaid program are for home and community-based 
        services.
        (3) Maintenance of eligibility requirements.--The State does 
    not apply eligibility standards, methodologies, or procedures for 
    determining eligibility for medical assistance for non-
    institutionally-based long-term services and supports described in 
    subsection (f)(1)(B) under the State Medicaid program that are more 
    restrictive than the eligibility standards, methodologies, or 
    procedures in effect for such purposes on December 31, 2010.
        (4) Use of additional funds.--The State agrees to use the 
    additional Federal funds paid to the State as a result of this 
    section only for purposes of providing new or expanded offerings of 
    non-institutionally-based long-term services and supports described 
    in subsection (f)(1)(B) under the State Medicaid program.
        (5) Structural changes.--The State agrees to make, not later 
    than the end of the 6-month period that begins on the date the 
    State submits an application under this section, the following 
    changes:
            (A) ``No wrong door--single entry point system''.--
        Development of a statewide system to enable consumers to access 
        all long-term services and supports through an agency, 
        organization, coordinated network, or portal, in accordance 
        with such standards as the State shall establish and that shall 
        provide information regarding the availability of such 
        services, how to apply for such services, referral services for 
        services and supports otherwise available in the community, and 
        determinations of financial and functional eligibility for such 
        services and supports, or assistance with assessment processes 
        for financial and functional eligibility.
            (B) Conflict-free case management services.--Conflict-free 
        case management services to develop a service plan, arrange for 
        services and supports, support the beneficiary (and, if 
        appropriate, the beneficiary's caregivers) in directing the 
        provision of services and supports for the beneficiary, and 
        conduct ongoing monitoring to assure that services and supports 
        are delivered to meet the beneficiary's needs and achieve 
        intended outcomes.
            (C) Core standardized assessment instruments.--Development 
        of core standardized assessment instruments for determining 
        eligibility for non-institutionally-based long-term services 
        and supports described in subsection (f)(1)(B), which shall be 
        used in a uniform manner throughout the State, to determine a 
        beneficiary's needs for training, support services, medical 
        care, transportation, and other services, and develop an 
        individual service plan to address such needs.
        (6) Data collection.--The State agrees to collect from 
    providers of services and through such other means as the State 
    determines appropriate the following data:
            (A) Services data.--Services data from providers of non-
        institutionally-based long-term services and supports described 
        in subsection (f)(1)(B) on a per-beneficiary basis and in 
        accordance with such standardized coding procedures as the 
        State shall establish in consultation with the Secretary.
            (B) Quality data.--Quality data on a selected set of core 
        quality measures agreed upon by the Secretary and the State 
        that are linked to population-specific outcomes measures and 
        accessible to providers.
            (C) Outcomes measures.--Outcomes measures data on a 
        selected set of core population-specific outcomes measures 
        agreed upon by the Secretary and the State that are accessible 
        to providers and include--
                (i) measures of beneficiary and family caregiver 
            experience with providers;
                (ii) measures of beneficiary and family caregiver 
            satisfaction with services; and
                (iii) measures for achieving desired outcomes 
            appropriate to a specific beneficiary, including 
            employment, participation in community life, health 
            stability, and prevention of loss in function.
    (d) Applicable Percentage Points Increase in FMAP.--The applicable 
percentage points increase is--
        (1) in the case of a balancing incentive payment State subject 
    to the target spending percentage described in subsection 
    (c)(2)(A), 5 percentage points; and
        (2) in the case of any other balancing incentive payment State, 
    2 percentage points.
    (e) Eligible Medical Assistance Expenditures.--
        (1) In general.--Subject to paragraph (2), medical assistance 
    described in this subsection is medical assistance for non-
    institutionally-based long-term services and supports described in 
    subsection (f)(1)(B) that is provided by a balancing incentive 
    payment State under its State Medicaid program during the balancing 
    incentive payment period.
        (2) Limitation on payments.--In no case may the aggregate 
    amount of payments made by the Secretary to balancing incentive 
    payment States under this section during the balancing incentive 
    period exceed $3,000,000,000.
    (f) Definitions.--In this section:
        (1) Long-term services and supports defined.--The term ``long-
    term services and supports'' has the meaning given that term by 
    Secretary and may include any of the following (as defined for 
    purposes of State Medicaid programs):
            (A) Institutionally-based long-term services and 
        supports.--Services provided in an institution, including the 
        following:
                (i) Nursing facility services.
                (ii) Services in an intermediate care facility for the 
            mentally retarded described in subsection (a)(15) of 
            section 1905 of such Act.
            (B) Non-institutionally-based long-term services and 
        supports.--Services not provided in an institution, including 
        the following:
                (i) Home and community-based services provided under 
            subsection (c), (d), or (i) of section 1915 of such Act or 
            under a waiver under section 1115 of such Act.
                (ii) Home health care services.
                (iii) Personal care services.
                (iv) Services described in subsection (a)(26) of 
            section 1905 of such Act (relating to PACE program 
            services).
                (v) Self-directed personal assistance services 
            described in section 1915(j) of such Act.
        (2) Balancing incentive period.--The term ``balancing incentive 
    period'' means the period that begins on October 1, 2011, and ends 
    on September 30, 2015.
        (3) Poverty line.--The term ``poverty line'' has the meaning 
    given that term in section 2110(c)(5) of the Social Security Act 
    (42 U.S.C. 1397jj(c)(5)).
        (4) State medicaid program.--The term ``State Medicaid 
    program'' means the State program for medical assistance provided 
    under a State plan under title XIX of the Social Security Act and 
    under any waiver approved with respect to such State plan.

SEC. 10203. EXTENSION OF FUNDING FOR CHIP THROUGH FISCAL YEAR 2015 AND 
              OTHER CHIP-RELATED PROVISIONS.

    (a) Section 1311(c)(1) of this Act is amended by striking ``and'' 
at the end of subparagraph (G), by striking the period at the end of 
subparagraph (H) and inserting ``; and'', and by adding at the end the 
following:
            ``(I) report to the Secretary at least annually and in such 
        manner as the Secretary shall require, pediatric quality 
        reporting measures consistent with the pediatric quality 
        reporting measures established under section 1139A of the 
        Social Security Act.''.
    (b) Effective as if included in the enactment of the Children's 
Health Insurance Program Reauthorization Act of 2009 (Public Law 111-
3):
        (1) Section 1906(e)(2) of the Social Security Act (42 U.S.C. 
    1396e(e)(2)) is amended by striking ``means'' and all that follows 
    through the period and inserting ``has the meaning given that term 
    in section 2105(c)(3)(A).''.
        (2)(A) Section 1906A(a) of the Social Security Act (42 U.S.C. 
    1396e-1(a)), is amended by inserting before the period the 
    following: ``and the offering of such a subsidy is cost-effective, 
    as defined for purposes of section 2105(c)(3)(A)''.
        (B) This Act shall be applied without regard to subparagraph 
    (A) of section 2003(a)(1) of this Act and that subparagraph and the 
    amendment made by that subparagraph are hereby deemed null, void, 
    and of no effect.
        (3) Section 2105(c)(10) of the Social Security Act (42 U.S.C. 
    1397ee(c)(10)) is amended--
            (A) in subparagraph (A), in the first sentence, by 
        inserting before the period the following: ``if the offering of 
        such a subsidy is cost-effective, as defined for purposes of 
        paragraph (3)(A)'';
            (B) by striking subparagraph (M); and
            (C) by redesignating subparagraph (N) as subparagraph (M).
        (4) Section 2105(c)(3)(A) of the Social Security Act (42 U.S.C. 
    1397ee(c)(3)(A)) is amended--
            (A) in the matter preceding clause (i), by striking ``to'' 
        and inserting ``to--''; and
            (B) in clause (ii), by striking the period and inserting a 
        semicolon.
    (c) Section 2105 of the Social Security Act (42 U.S.C. 1397ee), as 
amended by section 2101, is amended--
        (1) in subsection (b), in the second sentence, by striking 
    ``2013'' and inserting ``2015''; and
        (2) in subsection (d)(3)--
            (A) in subparagraph (A)--
                (i) in the first sentence, by inserting ``as a 
            condition of receiving payments under section 1903(a),'' 
            after ``2019,'';
                (ii) in clause (i), by striking ``or'' at the end;
                (iii) by redesignating clause (ii) as clause (iii); and
                (iv) by inserting after clause (i), the following:
                ``(ii) after September 30, 2015, enrolling children 
            eligible to be targeted low-income children under the State 
            child health plan in a qualified health plan that has been 
            certified by the Secretary under subparagraph (C); or'';
            (B) in subparagraph (B), by striking ``provided coverage'' 
        and inserting ``screened for eligibility for medical assistance 
        under the State plan under title XIX or a waiver of that plan 
        and, if found eligible, enrolled in such plan or a waiver. In 
        the case of such children who, as a result of such screening, 
        are determined to not be eligible for medical assistance under 
        the State plan or a waiver under title XIX, the State shall 
        establish procedures to ensure that the children are enrolled 
        in a qualified health plan that has been certified by the 
        Secretary under subparagraph (C) and is offered''; and
            (C) by adding at the end the following:
            ``(C) Certification of comparability of pediatric coverage 
        offered by qualified health plans.--With respect to each State, 
        the Secretary, not later than April 1, 2015, shall review the 
        benefits offered for children and the cost-sharing imposed with 
        respect to such benefits by qualified health plans offered 
        through an Exchange established by the State under section 1311 
        of the Patient Protection and Affordable Care Act and shall 
        certify those plans that offer benefits for children and impose 
        cost-sharing with respect to such benefits that the Secretary 
        determines are at least comparable to the benefits offered and 
        cost-sharing protections provided under the State child health 
        plan.''.
    (d)(1) Section 2104(a) of such Act (42 U.S.C. 1397dd(a)) is 
amended--
        (A) in paragraph (15), by striking ``and'' at the end; and
        (B) by striking paragraph (16) and inserting the following:
        ``(16) for fiscal year 2013, $17,406,000,000;
        ``(17) for fiscal year 2014, $19,147,000,000; and
        ``(18) for fiscal year 2015, for purposes of making 2 semi-
    annual allotments--
            ``(A) $2,850,000,000 for the period beginning on October 1, 
        2014, and ending on March 31, 2015, and
            ``(B) $2,850,000,000 for the period beginning on April 1, 
        2015, and ending on September 30, 2015.''.
    (2)(A) Section 2104(m) of such Act (42 U.S.C. 1397dd(m)), as 
amended by section 2102(a)(1), is amended--
        (i) in the subsection heading, by striking ``2013'' and 
    inserting ``2015'';
        (ii) in paragraph (2)--
            (I) in the paragraph heading, by striking ``2012'' and 
        inserting ``2014''; and
            (II) by adding at the end the following:
            ``(B) Fiscal years 2013 and 2014.--Subject to paragraphs 
        (4) and (6), from the amount made available under paragraphs 
        (16) and (17) of subsection (a) for fiscal years 2013 and 2014, 
        respectively, the Secretary shall compute a State allotment for 
        each State (including the District of Columbia and each 
        commonwealth and territory) for each such fiscal year as 
        follows:
                ``(i) Rebasing in fiscal year 2013.--For fiscal year 
            2013, the allotment of the State is equal to the Federal 
            payments to the State that are attributable to (and 
            countable towards) the total amount of allotments available 
            under this section to the State in fiscal year 2012 
            (including payments made to the State under subsection (n) 
            for fiscal year 2012 as well as amounts redistributed to 
            the State in fiscal year 2012), multiplied by the allotment 
            increase factor under paragraph (5) for fiscal year 2013.
                ``(ii) Growth factor update for fiscal year 2014.--For 
            fiscal year 2014, the allotment of the State is equal to 
            the sum of--

                    ``(I) the amount of the State allotment under 
                clause (i) for fiscal year 2013; and
                    ``(II) the amount of any payments made to the State 
                under subsection (n) for fiscal year 2013,

            multiplied by the allotment increase factor under paragraph 
            (5) for fiscal year 2014.'';
            (iii) in paragraph (3)--
                (I) in the paragraph heading, by striking ``2013'' and 
            inserting ``2015'';
                (II) in subparagraphs (A) and (B), by striking 
            ``paragraph (16)'' each place it appears and inserting 
            ``paragraph (18)'';
                (III) in subparagraph (C)--

                    (aa) by striking ``2012'' each place it appears and 
                inserting ``2014''; and
                    (bb) by striking ``2013'' and inserting ``2015''; 
                and

                (IV) in subparagraph (D)--

                    (aa) in clause (i)(I), by striking ``subsection 
                (a)(16)(A)'' and inserting ``subsection (a)(18)(A)''; 
                and
                    (bb) in clause (ii)(II), by striking ``subsection 
                (a)(16)(B)'' and inserting ``subsection (a)(18)(B)'';

            (iv) in paragraph (4), by striking ``2013'' and inserting 
        ``2015'';
            (v) in paragraph (6)--
                (I) in subparagraph (A), by striking ``2013'' and 
            inserting ``2015''; and
                (II) in the flush language after and below subparagraph 
            (B)(ii), by striking ``or fiscal year 2012'' and inserting 
            ``, fiscal year 2012, or fiscal year 2014''; and
            (vi) in paragraph (8)--
                (I) in the paragraph heading, by striking ``2013'' and 
            inserting ``2015''; and
                (II) by striking ``2013'' and inserting ``2015''.
    (B) Section 2104(n) of such Act (42 U.S.C. 1397dd(n)) is amended--
        (i) in paragraph (2)--
            (I) in subparagraph (A)(ii)--
                (aa) by striking ``2012'' and inserting ``2014''; and
                (bb) by striking ``2013'' and inserting ``2015'';
            (II) in subparagraph (B)--
                (aa) by striking ``2012'' and inserting ``2014''; and
                (bb) by striking ``2013'' and inserting ``2015''; and
        (ii) in paragraph (3)(A), by striking ``or a semi-annual 
    allotment period for fiscal year 2013'' and inserting ``fiscal year 
    2013, fiscal year 2014, or a semi-annual allotment period for 
    fiscal year 2015''.
    (C) Section 2105(g)(4) of such Act (42 U.S.C. 1397ee(g)(4)) is 
amended--
        (i) in the paragraph heading, by striking ``2013'' and 
    inserting ``2015''; and
        (ii) in subparagraph (A), by striking ``2013'' and inserting 
    ``2015''.
    (D) Section 2110(b) of such Act (42 U.S.C. 1397jj(b)) is amended--
        (i) in paragraph (2)(B), by inserting ``except as provided in 
    paragraph (6),'' before ``a child''; and
        (ii) by adding at the end the following new paragraph:
        ``(6) Exceptions to exclusion of children of employees of a 
    public agency in the state.--
            ``(A) In general.--A child shall not be considered to be 
        described in paragraph (2)(B) if--
                ``(i) the public agency that employs a member of the 
            child's family to which such paragraph applies satisfies 
            subparagraph (B); or
                ``(ii) subparagraph (C) applies to such child.
            ``(B) Maintenance of effort with respect to per person 
        agency contribution for family coverage.--For purposes of 
        subparagraph (A)(i), a public agency satisfies this 
        subparagraph if the amount of annual agency expenditures made 
        on behalf of each employee enrolled in health coverage paid for 
        by the agency that includes dependent coverage for the most 
        recent State fiscal year is not less than the amount of such 
        expenditures made by the agency for the 1997 State fiscal year, 
        increased by the percentage increase in the medical care 
        expenditure category of the Consumer Price Index for All-Urban 
        Consumers (all items: U.S. City Average) for such preceding 
        fiscal year.
            ``(C) Hardship exception.--For purposes of subparagraph 
        (A)(ii), this subparagraph applies to a child if the State 
        determines, on a case-by-case basis, that the annual aggregate 
        amount of premiums and cost-sharing imposed for coverage of the 
        family of the child would exceed 5 percent of such family's 
        income for the year involved.''.
    (E) Section 2113 of such Act (42 U.S.C. 1397mm) is amended--
        (i) in subsection (a)(1), by striking ``2013'' and inserting 
    ``2015''; and
        (ii) in subsection (g), by striking ``$100,000,000 for the 
    period of fiscal years 2009 through 2013'' and inserting 
    ``$140,000,000 for the period of fiscal years 2009 through 2015''.
    (F) Section 108 of Public Law 111-3 is amended by striking 
``$11,706,000,000'' and all that follows through the second sentence 
and inserting ``$15,361,000,000 to accompany the allotment made for the 
period beginning on October 1, 2014, and ending on March 31, 2015, 
under section 2104(a)(18)(A) of the Social Security Act (42 U.S.C. 
1397dd(a)(18)(A)), to remain available until expended. Such amount 
shall be used to provide allotments to States under paragraph (3) of 
section 2104(m) of the Social Security Act (42 U.S.C. 1397dd(m)) for 
the first 6 months of fiscal year 2015 in the same manner as allotments 
are provided under subsection (a)(18)(A) of such section 2104 and 
subject to the same terms and conditions as apply to the allotments 
provided from such subsection (a)(18)(A).''.

      PART II--SUPPORT FOR PREGNANT AND PARENTING TEENS AND WOMEN

SEC. 10211. DEFINITIONS.

    In this part:
        (1) Accompaniment.--The term ``accompaniment'' means assisting, 
    representing, and accompanying a woman in seeking judicial relief 
    for child support, child custody, restraining orders, and 
    restitution for harm to persons and property, and in filing 
    criminal charges, and may include the payment of court costs and 
    reasonable attorney and witness fees associated therewith.
        (2) Eligible institution of higher education.--The term 
    ``eligible institution of higher education'' means an institution 
    of higher education (as such term is defined in section 101 of the 
    Higher Education Act of 1965 (20 U.S.C. 1001)) that has established 
    and operates, or agrees to establish and operate upon the receipt 
    of a grant under this part, a pregnant and parenting student 
    services office.
        (3) Community service center.--The term ``community service 
    center'' means a non-profit organization that provides social 
    services to residents of a specific geographical area via direct 
    service or by contract with a local governmental agency.
        (4) High school.--The term ``high school'' means any public or 
    private school that operates grades 10 through 12, inclusive, 
    grades 9 through 12, inclusive or grades 7 through 12, inclusive.
        (5) Intervention services.--The term ``intervention services'' 
    means, with respect to domestic violence, sexual violence, sexual 
    assault, or stalking, 24-hour telephone hotline services for police 
    protection and referral to shelters.
        (6) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.
        (7) State.--The term ``State'' includes the District of 
    Columbia, any commonwealth, possession, or other territory of the 
    United States, and any Indian tribe or reservation.
        (8) Supportive social services.--The term ``supportive social 
    services'' means transitional and permanent housing, vocational 
    counseling, and individual and group counseling aimed at preventing 
    domestic violence, sexual violence, sexual assault, or stalking.
        (9) Violence.--The term ``violence'' means actual violence and 
    the risk or threat of violence.

SEC. 10212. ESTABLISHMENT OF PREGNANCY ASSISTANCE FUND.

    (a) In General.--The Secretary, in collaboration and coordination 
with the Secretary of Education (as appropriate), shall establish a 
Pregnancy Assistance Fund to be administered by the Secretary, for the 
purpose of awarding competitive grants to States to assist pregnant and 
parenting teens and women.
    (b) Use of Fund.--A State may apply for a grant under subsection 
(a) to carry out any activities provided for in section 10213.
    (c) Applications.--To be eligible to receive a grant under 
subsection (a), a State shall submit to the Secretary an application at 
such time, in such manner, and containing such information as the 
Secretary may require, including a description of the purposes for 
which the grant is being requested and the designation of a State 
agency for receipt and administration of funding received under this 
part.

SEC. 10213. PERMISSIBLE USES OF FUND.

    (a) In General.--A State shall use amounts received under a grant 
under section 10212 for the purposes described in this section to 
assist pregnant and parenting teens and women.
    (b) Institutions of Higher Education.--
        (1) In general.--A State may use amounts received under a grant 
    under section 10212 to make funding available to eligible 
    institutions of higher education to enable the eligible 
    institutions to establish, maintain, or operate pregnant and 
    parenting student services. Such funding shall be used to 
    supplement, not supplant, existing funding for such services.
        (2) Application.--An eligible institution of higher education 
    that desires to receive funding under this subsection shall submit 
    an application to the designated State agency at such time, in such 
    manner, and containing such information as the State agency may 
    require.
        (3) Matching requirement.--An eligible institution of higher 
    education that receives funding under this subsection shall 
    contribute to the conduct of the pregnant and parenting student 
    services office supported by the funding an amount from non-Federal 
    funds equal to 25 percent of the amount of the funding provided. 
    The non-Federal share may be in cash or in-kind, fairly evaluated, 
    including services, facilities, supplies, or equipment.
        (4) Use of funds for assisting pregnant and parenting college 
    students.--An eligible institution of higher education that 
    receives funding under this subsection shall use such funds to 
    establish, maintain or operate pregnant and parenting student 
    services and may use such funding for the following programs and 
    activities:
            (A) Conduct a needs assessment on campus and within the 
        local community--
                (i) to assess pregnancy and parenting resources, 
            located on the campus or within the local community, that 
            are available to meet the needs described in subparagraph 
            (B); and
                (ii) to set goals for--

                    (I) improving such resources for pregnant, 
                parenting, and prospective parenting students; and
                    (II) improving access to such resources.

            (B) Annually assess the performance of the eligible 
        institution in meeting the following needs of students enrolled 
        in the eligible institution who are pregnant or are parents:
                (i) The inclusion of maternity coverage and the 
            availability of riders for additional family members in 
            student health care.
                (ii) Family housing.
                (iii) Child care.
                (iv) Flexible or alternative academic scheduling, such 
            as telecommuting programs, to enable pregnant or parenting 
            students to continue their education or stay in school.
                (v) Education to improve parenting skills for mothers 
            and fathers and to strengthen marriages.
                (vi) Maternity and baby clothing, baby food (including 
            formula), baby furniture, and similar items to assist 
            parents and prospective parents in meeting the material 
            needs of their children.
                (vii) Post-partum counseling.
            (C) Identify public and private service providers, located 
        on the campus of the eligible institution or within the local 
        community, that are qualified to meet the needs described in 
        subparagraph (B), and establishes programs with qualified 
        providers to meet such needs.
            (D) Assist pregnant and parenting students, fathers or 
        spouses in locating and obtaining services that meet the needs 
        described in subparagraph (B).
            (E) If appropriate, provide referrals for prenatal care and 
        delivery, infant or foster care, or adoption, to a student who 
        requests such information. An office shall make such referrals 
        only to service providers that serve the following types of 
        individuals:
                (i) Parents.
                (ii) Prospective parents awaiting adoption.
                (iii) Women who are pregnant and plan on parenting or 
            placing the child for adoption.
                (iv) Parenting or prospective parenting couples.
        (5) Reporting.--
            (A) Annual report by institutions.--
                (i) In general.--For each fiscal year that an eligible 
            institution of higher education receives funds under this 
            subsection, the eligible institution shall prepare and 
            submit to the State, by the date determined by the State, a 
            report that--

                    (I) itemizes the pregnant and parenting student 
                services office's expenditures for the fiscal year;
                    (II) contains a review and evaluation of the 
                performance of the office in fulfilling the 
                requirements of this section, using the specific 
                performance criteria or standards established under 
                subparagraph (B)(i); and
                    (III) describes the achievement of the office in 
                meeting the needs listed in paragraph (4)(B) of the 
                students served by the eligible institution, and the 
                frequency of use of the office by such students.

                (ii) Performance criteria.--Not later than 180 days 
            before the date the annual report described in clause (i) 
            is submitted, the State--

                    (I) shall identify the specific performance 
                criteria or standards that shall be used to prepare the 
                report; and
                    (II) may establish the form or format of the 
                report.

            (B) Report by state.--The State shall annually prepare and 
        submit a report on the findings under this subsection, 
        including the number of eligible institutions of higher 
        education that were awarded funds and the number of students 
        served by each pregnant and parenting student services office 
        receiving funds under this section, to the Secretary.
    (c) Support for Pregnant and Parenting Teens.--A State may use 
amounts received under a grant under section 10212 to make funding 
available to eligible high schools and community service centers to 
establish, maintain or operate pregnant and parenting services in the 
same general manner and in accordance with all conditions and 
requirements described in subsection (b), except that paragraph (3) of 
such subsection shall not apply for purposes of this subsection.
    (d) Improving Services for Pregnant Women Who Are Victims of 
Domestic Violence, Sexual Violence, Sexual Assault, and Stalking.--
        (1) In general.--A State may use amounts received under a grant 
    under section 10212 to make funding available tp its State Attorney 
    General to assist Statewide offices in providing--
            (A) intervention services, accompaniment, and supportive 
        social services for eligible pregnant women who are victims of 
        domestic violence, sexual violence, sexual assault, or 
        stalking.
            (B) technical assistance and training (as described in 
        subsection (c)) relating to violence against eligible pregnant 
        women to be made available to the following:
                (i) Federal, State, tribal, territorial, and local 
            governments, law enforcement agencies, and courts.
                (ii) Professionals working in legal, social service, 
            and health care settings.
                (iii) Nonprofit organizations.
                (iv) Faith-based organizations.
        (2) Eligibility.--To be eligible for a grant under paragraph 
    (1), a State Attorney General shall submit an application to the 
    designated State agency at such time, in such manner, and 
    containing such information, as specified by the State.
        (3) Technical assistance and training described.--For purposes 
    of paragraph (1)(B), technical assistance and training is--
            (A) the identification of eligible pregnant women 
        experiencing domestic violence, sexual violence, sexual 
        assault, or stalking;
            (B) the assessment of the immediate and short-term safety 
        of such a pregnant woman, the evaluation of the impact of the 
        violence or stalking on the pregnant woman's health, and the 
        assistance of the pregnant woman in developing a plan aimed at 
        preventing further domestic violence, sexual violence, sexual 
        assault, or stalking, as appropriate;
            (C) the maintenance of complete medical or forensic records 
        that include the documentation of any examination, treatment 
        given, and referrals made, recording the location and nature of 
        the pregnant woman's injuries, and the establishment of 
        mechanisms to ensure the privacy and confidentiality of those 
        medical records; and
            (D) the identification and referral of the pregnant woman 
        to appropriate public and private nonprofit entities that 
        provide intervention services, accompaniment, and supportive 
        social services.
        (4) Eligible pregnant woman.--In this subsection, the term 
    ``eligible pregnant woman'' means any woman who is pregnant on the 
    date on which such woman becomes a victim of domestic violence, 
    sexual violence, sexual assault, or stalking or who was pregnant 
    during the one-year period before such date.
    (e) Public Awareness and Education.--A State may use amounts 
received under a grant under section 10212 to make funding available to 
increase public awareness and education concerning any services 
available to pregnant and parenting teens and women under this part, or 
any other resources available to pregnant and parenting women in 
keeping with the intent and purposes of this part. The State shall be 
responsible for setting guidelines or limits as to how much of funding 
may be utilized for public awareness and education in any funding 
award.

SEC. 10214. APPROPRIATIONS.

    There is authorized to be appropriated, and there are appropriated, 
$25,000,000 for each of fiscal years 2010 through 2019, to carry out 
this part.

                PART III--INDIAN HEALTH CARE IMPROVEMENT

SEC. 10221. INDIAN HEALTH CARE IMPROVEMENT.

    (a) In General.--Except as provided in subsection (b), S. 1790 
entitled ``A bill to amend the Indian Health Care Improvement Act to 
revise and extend that Act, and for other purposes.'', as reported by 
the Committee on Indian Affairs of the Senate in December 2009, is 
enacted into law.
    (b) Amendments.--
        (1) Section 119 of the Indian Health Care Improvement Act (as 
    amended by section 111 of the bill referred to in subsection (a)) 
    is amended--
            (A) in subsection (d)--
                (i) in paragraph (2), by striking ``In establishing'' 
            and inserting ``Subject to paragraphs (3) and (4), in 
            establishing''; and
                (ii) by adding at the end the following:
        ``(3) Election of indian tribe or tribal organization.--
            ``(A) In general.--Subparagraph (B) of paragraph (2) shall 
        not apply in the case of an election made by an Indian tribe or 
        tribal organization located in a State (other than Alaska) in 
        which the use of dental health aide therapist services or 
        midlevel dental health provider services is authorized under 
        State law to supply such services in accordance with State law.
            ``(B) Action by secretary.--On an election by an Indian 
        tribe or tribal organization under subparagraph (A), the 
        Secretary, acting through the Service, shall facilitate 
        implementation of the services elected.
        ``(4) Vacancies.--The Secretary shall not fill any vacancy for 
    a certified dentist in a program operated by the Service with a 
    dental health aide therapist.''; and
            (B) by adding at the end the following:
    ``(e) Effect of Section.--Nothing in this section shall restrict 
the ability of the Service, an Indian tribe, or a tribal organization 
to participate in any program or to provide any service authorized by 
any other Federal law.''.
        (2) The Indian Health Care Improvement Act (as amended by 
    section 134(b) of the bill referred to in subsection (a)) is 
    amended by striking section 125 (relating to treatment of 
    scholarships for certain purposes).
        (3) Section 806 of the Indian Health Care Improvement Act (25 
    U.S.C. 1676) is amended--
            (A) by striking ``Any limitation'' and inserting the 
        following:
    ``(a) HHS Appropriations.--Any limitation''; and
            (B) by adding at the end the following:
    ``(b) Limitations Pursuant to Other Federal Law.--Any limitation 
pursuant to other Federal laws on the use of Federal funds appropriated 
to the Service shall apply with respect to the performance or coverage 
of abortions.''.
        (4) The bill referred to in subsection (a) is amended by 
    striking section 201.

              Subtitle C--Provisions Relating to Title III

SEC. 10301. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR AMBULATORY 
              SURGICAL CENTERS.

    (a) In General.--Section 3006 is amended by adding at the end the 
following new subsection:
    ``(f) Ambulatory Surgical Centers.--
        ``(1) In general.--The Secretary shall develop a plan to 
    implement a value-based purchasing program for payments under the 
    Medicare program under title XVIII of the Social Security Act for 
    ambulatory surgical centers (as described in section 1833(i) of the 
    Social Security Act (42 U.S.C. 1395l(i))).
        ``(2) Details.--In developing the plan under paragraph (1), the 
    Secretary shall consider the following issues:
            ``(A) The ongoing development, selection, and modification 
        process for measures (including under section 1890 of the 
        Social Security Act (42 U.S.C. 1395aaa) and section 1890A of 
        such Act, as added by section 3014), to the extent feasible and 
        practicable, of all dimensions of quality and efficiency in 
        ambulatory surgical centers.
            ``(B) The reporting, collection, and validation of quality 
        data.
            ``(C) The structure of value-based payment adjustments, 
        including the determination of thresholds or improvements in 
        quality that would substantiate a payment adjustment, the size 
        of such payments, and the sources of funding for the value-
        based bonus payments.
            ``(D) Methods for the public disclosure of information on 
        the performance of ambulatory surgical centers.
            ``(E) Any other issues determined appropriate by the 
        Secretary.
        ``(3) Consultation.--In developing the plan under paragraph 
    (1), the Secretary shall--
            ``(A) consult with relevant affected parties; and
            ``(B) consider experience with such demonstrations that the 
        Secretary determines are relevant to the value-based purchasing 
        program described in paragraph (1).
        ``(4) Report to congress.--Not later than January 1, 2011, the 
    Secretary shall submit to Congress a report containing the plan 
    developed under paragraph (1).''.
    (b) Technical.--Section 3006(a)(2)(A) is amended by striking 
clauses (i) and (ii).

SEC. 10302. REVISION TO NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN 
              HEALTH CARE.

    Section 399HH(a)(2)(B)(iii) of the Public Health Service Act, as 
added by section 3011, is amended by inserting ``(taking into 
consideration the limitations set forth in subsections (c) and (d) of 
section 1182 of the Social Security Act)'' after ``information''.

SEC. 10303. DEVELOPMENT OF OUTCOME MEASURES.

    (a) Development.--Section 931 of the Public Health Service Act, as 
added by section 3013(a), is amended by adding at the end the following 
new subsection:
    ``(f) Development of Outcome Measures.--
        ``(1) In general.--The Secretary shall develop, and 
    periodically update (not less than every 3 years), provider-level 
    outcome measures for hospitals and physicians, as well as other 
    providers as determined appropriate by the Secretary.
        ``(2) Categories of measures.--The measures developed under 
    this subsection shall include, to the extent determined appropriate 
    by the Secretary--
            ``(A) outcome measurement for acute and chronic diseases, 
        including, to the extent feasible, the 5 most prevalent and 
        resource-intensive acute and chronic medical conditions; and
            ``(B) outcome measurement for primary and preventative 
        care, including, to the extent feasible, measurements that 
        cover provision of such care for distinct patient populations 
        (such as healthy children, chronically ill adults, or infirm 
        elderly individuals).
        ``(3) Goals.--In developing such measures, the Secretary shall 
    seek to--
            ``(A) address issues regarding risk adjustment, 
        accountability, and sample size;
            ``(B) include the full scope of services that comprise a 
        cycle of care; and
            ``(C) include multiple dimensions.
        ``(4) Timeframe.--
            ``(A) Acute and chronic diseases.--Not later than 24 months 
        after the date of enactment of this Act, the Secretary shall 
        develop not less than 10 measures described in paragraph 
        (2)(A).
            ``(B) Primary and preventive care.--Not later than 36 
        months after the date of enactment of this Act, the Secretary 
        shall develop not less than 10 measures described in paragraph 
        (2)(B).''.
    (b) Hospital-acquired Conditions.--Section 1890A of the Social 
Security Act, as amended by section 3013(b), is amended by adding at 
the end the following new subsection:
    ``(f) Hospital Acquired Conditions.--The Secretary shall, to the 
extent practicable, publicly report on measures for hospital-acquired 
conditions that are currently utilized by the Centers for Medicare & 
Medicaid Services for the adjustment of the amount of payment to 
hospitals based on rates of hospital-acquired infections.''.
    (c) Clinical Practice Guidelines.--Section 304(b) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275) is amended by adding at the end the following new paragraph:
        ``(4) Identification.--
            ``(A) In general.--Following receipt of the report 
        submitted under paragraph (2), and not less than every 3 years 
        thereafter, the Secretary shall contract with the Institute to 
        employ the results of the study performed under paragraph (1) 
        and the best methods identified by the Institute for the 
        purpose of identifying existing and new clinical practice 
        guidelines that were developed using such best methods, 
        including guidelines listed in the National Guideline 
        Clearinghouse.
            ``(B) Consultation.--In carrying out the identification 
        process under subparagraph (A), the Secretary shall allow for 
        consultation with professional societies, voluntary health care 
        organizations, and expert panels.''.

SEC. 10304. SELECTION OF EFFICIENCY MEASURES.

    Sections 1890(b)(7) and 1890A of the Social Security Act, as added 
by section 3014, are amended by striking ``quality'' each place it 
appears and inserting ``quality and efficiency''.

SEC. 10305. DATA COLLECTION; PUBLIC REPORTING.

    Section 399II(a) of the Public Health Service Act, as added by 
section 3015, is amended to read as follows:
    ``(a) In General.--
        ``(1) Establishment of strategic framework.--The Secretary 
    shall establish and implement an overall strategic framework to 
    carry out the public reporting of performance information, as 
    described in section 399JJ. Such strategic framework may include 
    methods and related timelines for implementing nationally 
    consistent data collection, data aggregation, and analysis methods.
        ``(2) Collection and aggregation of data.--The Secretary shall 
    collect and aggregate consistent data on quality and resource use 
    measures from information systems used to support health care 
    delivery, and may award grants or contracts for this purpose. The 
    Secretary shall align such collection and aggregation efforts with 
    the requirements and assistance regarding the expansion of health 
    information technology systems, the interoperability of such 
    technology systems, and related standards that are in effect on the 
    date of enactment of the Patient Protection and Affordable Care 
    Act.
        ``(3) Scope.--The Secretary shall ensure that the data 
    collection, data aggregation, and analysis systems described in 
    paragraph (1) involve an increasingly broad range of patient 
    populations, providers, and geographic areas over time.''.

SEC. 10306. IMPROVEMENTS UNDER THE CENTER FOR MEDICARE AND MEDICAID 
              INNOVATION.

    Section 1115A of the Social Security Act, as added by section 3021, 
is amended--
        (1) in subsection (a), by inserting at the end the following 
    new paragraph:
        ``(5) Testing within certain geographic areas.--For purposes of 
    testing payment and service delivery models under this section, the 
    Secretary may elect to limit testing of a model to certain 
    geographic areas.'';
        (2) in subsection (b)(2)--
            (A) in subparagraph (A)--
                (i) in the second sentence, by striking ``the preceding 
            sentence may include'' and inserting ``this subparagraph 
            may include, but are not limited to,''; and
                (ii) by inserting after the first sentence the 
            following new sentence: ``The Secretary shall focus on 
            models expected to reduce program costs under the 
            applicable title while preserving or enhancing the quality 
            of care received by individuals receiving benefits under 
            such title.'';
            (B) in subparagraph (B), by adding at the end the following 
        new clauses:
                ``(xix) Utilizing, in particular in entities located in 
            medically underserved areas and facilities of the Indian 
            Health Service (whether operated by such Service or by an 
            Indian tribe or tribal organization (as those terms are 
            defined in section 4 of the Indian Health Care Improvement 
            Act)), telehealth services--

                    ``(I) in treating behavioral health issues (such as 
                post-traumatic stress disorder) and stroke; and
                    ``(II) to improve the capacity of non-medical 
                providers and non-specialized medical providers to 
                provide health services for patients with chronic 
                complex conditions.

                ``(xx) Utilizing a diverse network of providers of 
            services and suppliers to improve care coordination for 
            applicable individuals described in subsection (a)(4)(A)(i) 
            with 2 or more chronic conditions and a history of prior-
            year hospitalization through interventions developed under 
            the Medicare Coordinated Care Demonstration Project under 
            section 4016 of the Balanced Budget Act of 1997 (42 U.S.C. 
            1395b-1 note).''; and
            (C) in subparagraph (C), by adding at the end the following 
        new clause:
                ``(viii) Whether the model demonstrates effective 
            linkage with other public sector or private sector 
            payers.'';
        (3) in subsection (b)(4), by adding at the end the following 
    new subparagraph:
            ``(C) Measure selection.--To the extent feasible, the 
        Secretary shall select measures under this paragraph that 
        reflect national priorities for quality improvement and 
        patient-centered care consistent with the measures described in 
        1890(b)(7)(B).''; and
        (4) in subsection (c)--
            (A) in paragraph (1)(B), by striking ``care and reduce 
        spending; and'' and inserting ``patient care without increasing 
        spending;'';
            (B) in paragraph (2), by striking ``reduce program spending 
        under applicable titles.'' and inserting ``reduce (or would not 
        result in any increase in) net program spending under 
        applicable titles; and''; and
            (C) by adding at the end the following:
        ``(3) the Secretary determines that such expansion would not 
    deny or limit the coverage or provision of benefits under the 
    applicable title for applicable individuals.
In determining which models or demonstration projects to expand under 
the preceding sentence, the Secretary shall focus on models and 
demonstration projects that improve the quality of patient care and 
reduce spending.''.

SEC. 10307. IMPROVEMENTS TO THE MEDICARE SHARED SAVINGS PROGRAM.

    Section 1899 of the Social Security Act, as added by section 3022, 
is amended by adding at the end the following new subsections:
    ``(i) Option To Use Other Payment Models.--
        ``(1) In general.--If the Secretary determines appropriate, the 
    Secretary may use any of the payment models described in paragraph 
    (2) or (3) for making payments under the program rather than the 
    payment model described in subsection (d).
        ``(2) Partial capitation model.--
            ``(A) In general.--Subject to subparagraph (B), a model 
        described in this paragraph is a partial capitation model in 
        which an ACO is at financial risk for some, but not all, of the 
        items and services covered under parts A and B, such as at risk 
        for some or all physicians' services or all items and services 
        under part B. The Secretary may limit a partial capitation 
        model to ACOs that are highly integrated systems of care and to 
        ACOs capable of bearing risk, as determined to be appropriate 
        by the Secretary.
            ``(B) No additional program expenditures.--Payments to an 
        ACO for items and services under this title for beneficiaries 
        for a year under the partial capitation model shall be 
        established in a manner that does not result in spending more 
        for such ACO for such beneficiaries than would otherwise be 
        expended for such ACO for such beneficiaries for such year if 
        the model were not implemented, as estimated by the Secretary.
        ``(3) Other payment models.--
            ``(A) In general.--Subject to subparagraph (B), a model 
        described in this paragraph is any payment model that the 
        Secretary determines will improve the quality and efficiency of 
        items and services furnished under this title.
            ``(B) No additional program expenditures.--Subparagraph (B) 
        of paragraph (2) shall apply to a payment model under 
        subparagraph (A) in a similar manner as such subparagraph (B) 
        applies to the payment model under paragraph (2).
    ``(j) Involvement in Private Payer and Other Third Party 
Arrangements.--The Secretary may give preference to ACOs who are 
participating in similar arrangements with other payers.
    ``(k) Treatment of Physician Group Practice Demonstration.--During 
the period beginning on the date of the enactment of this section and 
ending on the date the program is established, the Secretary may enter 
into an agreement with an ACO under the demonstration under section 
1866A, subject to rebasing and other modifications deemed appropriate 
by the Secretary.''.

SEC. 10308. REVISIONS TO NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    (a) In General.--Section 1866D of the Social Security Act, as added 
by section 3023, is amended--
        (1) in paragraph (a)(2)(B), in the matter preceding clause (i), 
    by striking ``8 conditions'' and inserting ``10 conditions'';
        (2) by striking subsection (c)(1)(B) and inserting the 
    following:
            ``(B) Expansion.--The Secretary may, at any point after 
        January 1, 2016, expand the duration and scope of the pilot 
        program, to the extent determined appropriate by the Secretary, 
        if--
                ``(i) the Secretary determines that such expansion is 
            expected to--

                    ``(I) reduce spending under title XVIII of the 
                Social Security Act without reducing the quality of 
                care; or
                    ``(II) improve the quality of care and reduce 
                spending;

                ``(ii) the Chief Actuary of the Centers for Medicare & 
            Medicaid Services certifies that such expansion would 
            reduce program spending under such title XVIII; and
                ``(iii) the Secretary determines that such expansion 
            would not deny or limit the coverage or provision of 
            benefits under this title for individuals.''; and
        (3) by striking subsection (g) and inserting the following new 
    subsection:
    ``(g) Application of Pilot Program to Continuing Care Hospitals.--
        ``(1) In general.--In conducting the pilot program, the 
    Secretary shall apply the provisions of the program so as to 
    separately pilot test the continuing care hospital model.
        ``(2) Special rules.--In pilot testing the continuing care 
    hospital model under paragraph (1), the following rules shall 
    apply:
            ``(A) Such model shall be tested without the limitation to 
        the conditions selected under subsection (a)(2)(B).
            ``(B) Notwithstanding subsection (a)(2)(D), an episode of 
        care shall be defined as the full period that a patient stays 
        in the continuing care hospital plus the first 30 days 
        following discharge from such hospital.
        ``(3) Continuing care hospital defined.--In this subsection, 
    the term `continuing care hospital' means an entity that has 
    demonstrated the ability to meet patient care and patient safety 
    standards and that provides under common management the medical and 
    rehabilitation services provided in inpatient rehabilitation 
    hospitals and units (as defined in section 1886(d)(1)(B)(ii)), long 
    term care hospitals (as defined in section 1886(d)(1)(B)(iv)(I)), 
    and skilled nursing facilities (as defined in section 1819(a)) that 
    are located in a hospital described in section 1886(d).''.
    (b) Technical Amendments.--
        (1) Section 3023 is amended by striking ``1886C'' and inserting 
    ``1866C''.
        (2) Title XVIII of the Social Security Act is amended by 
    redesignating section 1866D, as added by section 3024, as section 
    1866E.

SEC. 10309. REVISIONS TO HOSPITAL READMISSIONS REDUCTION PROGRAM.

    Section 1886(q)(1) of the Social Security Act, as added by section 
3025, in the matter preceding subparagraph (A), is amended by striking 
``the Secretary shall reduce the payments'' and all that follows 
through ``the product of'' and inserting ``the Secretary shall make 
payments (in addition to the payments described in paragraph 
(2)(A)(ii)) for such a discharge to such hospital under subsection (d) 
(or section 1814(b)(3), as the case may be) in an amount equal to the 
product of''.

SEC. 10310. REPEAL OF PHYSICIAN PAYMENT UPDATE.

    The provisions of, and the amendment made by, section 3101 are 
repealed.

SEC. 10311. REVISIONS TO EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)), as amended by section 
3105(a), is further amended--
        (1) in the matter preceding clause (i)--
            (A) by striking ``2007, for'' and inserting ``2007, and 
        for''; and
            (B) by striking ``2010, and for such services furnished on 
        or after April 1, 2010, and before January 1, 2011'' and 
        inserting ``2011''; and
        (2) in each of clauses (i) and (ii)--
            (A) by striking ``, and on or after April 1, 2010, and 
        before January 1, 2011'' each place it appears; and
            (B) by striking ``January 1, 2010'' and inserting ``January 
        1, 2011'' each place it appears.
    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275), as amended 
by section 3105(b), is further amended by striking ``December 31, 2009, 
and during the period beginning on April 1, 2010, and ending on January 
1, 2011'' and inserting ``December 31, 2010''.
    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended by section 
3105(c), is further amended by striking ``2010, and on or after April 
1, 2010, and before January 1, 2011'' and inserting ``2011''.

SEC. 10312. CERTAIN PAYMENT RULES FOR LONG-TERM CARE HOSPITAL SERVICES 
              AND MORATORIUM ON THE ESTABLISHMENT OF CERTAIN HOSPITALS 
              AND FACILITIES.

    (a) Certain Payment Rules.--Section 114(c) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as 
amended by section 4302(a) of the American Recovery and Reinvestment 
Act (Public Law 111-5) and section 3106(a) of this Act, is further 
amended by striking ``4-year period'' each place it appears and 
inserting ``5-year period''.
    (b) Moratorium.--Section 114(d) of such Act (42 U.S.C. 1395ww 
note), as amended by section 3106(b) of this Act, in the matter 
preceding subparagraph (A), is amended by striking ``4-year period'' 
and inserting ``5-year period''.

SEC. 10313. REVISIONS TO THE EXTENSION FOR THE RURAL COMMUNITY HOSPITAL 
              DEMONSTRATION PROGRAM.

    (a) In General.--Subsection (g) of section 410A of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2272), as added by section 3123(a) of this Act, 
is amended to read as follows:
    ``(g) Five-Year Extension of Demonstration Program.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, the Secretary shall conduct the demonstration program 
    under this section for an additional 5-year period (in this section 
    referred to as the `5-year extension period') that begins on the 
    date immediately following the last day of the initial 5-year 
    period under subsection (a)(5).
        ``(2) Expansion of demonstration states.--Notwithstanding 
    subsection (a)(2), during the 5-year extension period, the 
    Secretary shall expand the number of States with low population 
    densities determined by the Secretary under such subsection to 20. 
    In determining which States to include in such expansion, the 
    Secretary shall use the same criteria and data that the Secretary 
    used to determine the States under such subsection for purposes of 
    the initial 5-year period.
        ``(3) Increase in maximum number of hospitals participating in 
    the demonstration program.--Notwithstanding subsection (a)(4), 
    during the 5-year extension period, not more than 30 rural 
    community hospitals may participate in the demonstration program 
    under this section.
        ``(4) Hospitals in demonstration program on date of 
    enactment.--In the case of a rural community hospital that is 
    participating in the demonstration program under this section as of 
    the last day of the initial 5-year period, the Secretary--
            ``(A) shall provide for the continued participation of such 
        rural community hospital in the demonstration program during 
        the 5-year extension period unless the rural community hospital 
        makes an election, in such form and manner as the Secretary may 
        specify, to discontinue such participation; and
            ``(B) in calculating the amount of payment under subsection 
        (b) to the rural community hospital for covered inpatient 
        hospital services furnished by the hospital during such 5-year 
        extension period, shall substitute, under paragraph (1)(A) of 
        such subsection--
                ``(i) the reasonable costs of providing such services 
            for discharges occurring in the first cost reporting period 
            beginning on or after the first day of the 5-year extension 
            period, for
                ``(ii) the reasonable costs of providing such services 
            for discharges occurring in the first cost reporting period 
            beginning on or after the implementation of the 
            demonstration program.''.
    (b) Conforming Amendments.--Subsection (a)(5) of section 410A of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173; 117 Stat. 2272), as amended by section 
3123(b) of this Act, is amended by striking ``1-year extension'' and 
inserting ``5-year extension''.

SEC. 10314. ADJUSTMENT TO LOW-VOLUME HOSPITAL PROVISION.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12), as amended by section 3125, is amended--
        (1) in subparagraph (C)(i), by striking ``1,500 discharges'' 
    and inserting ``1,600 discharges''; and
        (2) in subparagraph (D), by striking ``1,500 discharges'' and 
    inserting ``1,600 discharges''.

SEC. 10315. REVISIONS TO HOME HEALTH CARE PROVISIONS.

    (a) Rebasing.--Section 1895(b)(3)(A)(iii) of the Social Security 
Act, as added by section 3131, is amended--
        (1) in the clause heading, by striking ``2013'' and inserting 
    ``2014'';
        (2) in subclause (I), by striking ``2013'' and inserting 
    ``2014''; and
        (3) in subclause (II), by striking ``2016'' and inserting 
    ``2017''.
    (b) Revision of Home Health Study and Report.--Section 3131(d) is 
amended to read as follows:
    ``(d) Study and Report on the Development of Home Health Payment 
Revisions in Order to Ensure Access to Care and Payment for Severity of 
Illness.--
        ``(1) In general.--The Secretary of Health and Human Services 
    (in this section referred to as the `Secretary') shall conduct a 
    study on home health agency costs involved with providing ongoing 
    access to care to low-income Medicare beneficiaries or 
    beneficiaries in medically underserved areas, and in treating 
    beneficiaries with varying levels of severity of illness. In 
    conducting the study, the Secretary may analyze items such as the 
    following:
            ``(A) Methods to potentially revise the home health 
        prospective payment system under section 1895 of the Social 
        Security Act (42 U.S.C. 1395fff) to account for costs related 
        to patient severity of illness or to improving beneficiary 
        access to care, such as--
                ``(i) payment adjustments for services that may involve 
            additional or fewer resources;
                ``(ii) changes to reflect resources involved with 
            providing home health services to low-income Medicare 
            beneficiaries or Medicare beneficiaries residing in 
            medically underserved areas;
                ``(iii) ways outlier payments might be revised to 
            reflect costs of treating Medicare beneficiaries with high 
            levels of severity of illness; and
                ``(iv) other issues determined appropriate by the 
            Secretary.
            ``(B) Operational issues involved with potential 
        implementation of potential revisions to the home health 
        payment system, including impacts for both home health agencies 
        and administrative and systems issues for the Centers for 
        Medicare & Medicaid Services, and any possible payment 
        vulnerabilities associated with implementing potential 
        revisions.
            ``(C) Whether additional research might be needed.
            ``(D) Other items determined appropriate by the Secretary.
        ``(2) Considerations.--In conducting the study under paragraph 
    (1), the Secretary may consider whether patient severity of illness 
    and access to care could be measured by factors, such as--
            ``(A) population density and relative patient access to 
        care;
            ``(B) variations in service costs for providing care to 
        individuals who are dually eligible under the Medicare and 
        Medicaid programs;
            ``(C) the presence of severe or chronic diseases, which 
        might be measured by multiple, discontinuous home health 
        episodes;
            ``(D) poverty status, such as evidenced by the receipt of 
        Supplemental Security Income under title XVI of the Social 
        Security Act; and
            ``(E) other factors determined appropriate by the 
        Secretary.
        ``(3) Report.--Not later than March 1, 2014, the Secretary 
    shall submit to Congress a report on the study conducted under 
    paragraph (1), together with recommendations for such legislation 
    and administrative action as the Secretary determines appropriate.
        ``(4) Consultations.--In conducting the study under paragraph 
    (1), the Secretary shall consult with appropriate stakeholders, 
    such as groups representing home health agencies and groups 
    representing Medicare beneficiaries.
        ``(5) Medicare demonstration project based on the results of 
    the study.--
            ``(A) In general.--Subject to subparagraph (D), taking into 
        account the results of the study conducted under paragraph (1), 
        the Secretary may, as determined appropriate, provide for a 
        demonstration project to test whether making payment 
        adjustments for home health services under the Medicare program 
        would substantially improve access to care for patients with 
        high severity levels of illness or for low-income or 
        underserved Medicare beneficiaries.
            ``(B) Waiving budget neutrality.--The Secretary shall not 
        reduce the standard prospective payment amount (or amounts) 
        under section 1895 of the Social Security Act (42 U.S.C. 
        1395fff) applicable to home health services furnished during a 
        period to offset any increase in payments during such period 
        resulting from the application of the payment adjustments under 
        subparagraph (A).
            ``(C) No effect on subsequent periods.--A payment 
        adjustment resulting from the application of subparagraph (A) 
        for a period--
                ``(i) shall not apply to payments for home health 
            services under title XVIII after such period; and
                ``(ii) shall not be taken into account in calculating 
            the payment amounts applicable for such services after such 
            period.
            ``(D) Duration.--If the Secretary determines it appropriate 
        to conduct the demonstration project under this subsection, the 
        Secretary shall conduct the project for a four year period 
        beginning not later than January 1, 2015.
            ``(E) Funding.--The Secretary shall provide for the 
        transfer from the Federal Hospital Insurance Trust Fund under 
        section 1817 of the Social Security Act (42 U.S.C. 1395i) and 
        the Federal Supplementary Medical Insurance Trust Fund 
        established under section 1841 of such Act (42 U.S.C. 1395t), 
        in such proportion as the Secretary determines appropriate, of 
        $500,000,000 for the period of fiscal years 2015 through 2018. 
        Such funds shall be made available for the study described in 
        paragraph (1) and the design, implementation and evaluation of 
        the demonstration described in this paragraph. Amounts 
        available under this subparagraph shall be available until 
        expended.
            ``(F) Evaluation and report.--If the Secretary determines 
        it appropriate to conduct the demonstration project under this 
        subsection, the Secretary shall--
                ``(i) provide for an evaluation of the project; and
                ``(ii) submit to Congress, by a date specified by the 
            Secretary, a report on the project.
            ``(G) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply with respect to this 
        subsection.''.

SEC. 10316. MEDICARE DSH.

    Section 1886(r)(2)(B) of the Social Security Act, as added by 
section 3133, is amended--
        (1) in clause (i)--
            (A) in the matter preceding subclause (I), by striking 
        ``(divided by 100)'';
            (B) in subclause (I), by striking ``2012'' and inserting 
        ``2013'';
            (C) in subclause (II), by striking the period at the end 
        and inserting a comma; and
            (D) by adding at the end the following flush matter:
            ``minus 1.5 percentage points.''.
        (2) in clause (ii)--
            (A) in the matter preceding subclause (I), by striking 
        ``(divided by 100)'';
            (B) in subclause (I), by striking ``2012'' and inserting 
        ``2013'';
            (C) in subclause (II), by striking the period at the end 
        and inserting a comma; and
            (D) by adding at the end the following flush matter:
            ``and, for each of 2018 and 2019, minus 1.5 percentage 
            points.''.

SEC. 10317. REVISIONS TO EXTENSION OF SECTION 508 HOSPITAL PROVISIONS.

    Section 3137(a) is amended to read as follows:
    ``(a) Extension.--
        ``(1) In general.--Subsection (a) of section 106 of division B 
    of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 
    note), as amended by section 117 of the Medicare, Medicaid, and 
    SCHIP Extension Act of 2007 (Public Law 110-173) and section 124 of 
    the Medicare Improvements for Patients and Providers Act of 2008 
    (Public Law 110-275), is amended by striking `September 30, 2009' 
    and inserting `September 30, 2010'.
        ``(2) Special rule for fiscal year 2010.--
            ``(A) In general.--Subject to subparagraph (B), for 
        purposes of implementation of the amendment made by paragraph 
        (1), including (notwithstanding paragraph (3) of section 117(a) 
        of the Medicare, Medicaid and SCHIP Extension Act of 2007 
        (Public Law 110-173), as amended by section 124(b) of the 
        Medicare Improvements for Patients and Providers Act of 2008 
        (Public Law 110-275)) for purposes of the implementation of 
        paragraph (2) of such section 117(a), during fiscal year 2010, 
        the Secretary of Health and Human Services (in this subsection 
        referred to as the `Secretary') shall use the hospital wage 
        index that was promulgated by the Secretary in the Federal 
        Register on August 27, 2009 (74 Fed. Reg. 43754), and any 
        subsequent corrections.
            ``(B) Exception.--Beginning on April 1, 2010, in 
        determining the wage index applicable to hospitals that qualify 
        for wage index reclassification, the Secretary shall include 
        the average hourly wage data of hospitals whose 
        reclassification was extended pursuant to the amendment made by 
        paragraph (1) only if including such data results in a higher 
        applicable reclassified wage index.
        ``(3) Adjustment for certain hospitals in fiscal year 2010.--
            ``(A) In general.--In the case of a subsection (d) hospital 
        (as defined in subsection (d)(1)(B) of section 1886 of the 
        Social Security Act (42 U.S.C. 1395ww)) with respect to which--
                ``(i) a reclassification of its wage index for purposes 
            of such section was extended pursuant to the amendment made 
            by paragraph (1); and
                ``(ii) the wage index applicable for such hospital for 
            the period beginning on October 1, 2009, and ending on 
            March 31, 2010, was lower than for the period beginning on 
            April 1, 2010, and ending on September 30, 2010, by reason 
            of the application of paragraph (2)(B);
        the Secretary shall pay such hospital an additional payment 
        that reflects the difference between the wage index for such 
        periods.
            ``(B) Timeframe for payments.--The Secretary shall make 
        payments required under subparagraph by not later than December 
        31, 2010.''.

SEC. 10318. REVISIONS TO TRANSITIONAL EXTRA BENEFITS UNDER MEDICARE 
              ADVANTAGE.

    Section 1853(p)(3)(A) of the Social Security Act, as added by 
section 3201(h), is amended by inserting ``in 2009'' before the period 
at the end.

SEC. 10319. REVISIONS TO MARKET BASKET ADJUSTMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B)(xii) of the 
Social Security Act, as added by section 3401(a), is amended--
        (1) in subclause (I), by striking ``and'' at the end;
        (2) by redesignating subclause (II) as subclause (III);
        (3) by inserting after subclause (II) the following new 
    subclause:
        ``(II) for each of fiscal years 2012 and 2013, by 0.1 
    percentage point; and''; and
        (4) in subclause (III), as redesignated by paragraph (2), by 
    striking ``2012'' and inserting ``2014''.
    (b) Long-term Care Hospitals.--Section 1886(m)(4) of the Social 
Security Act, as added by section 3401(c), is amended--
        (1) in subparagraph (A)--
            (A) in clause (i)--
                (i) by striking ``each of rate years 2010 and 2011'' 
            and inserting ``rate year 2010''; and
                (ii) by striking ``and'' at the end;
            (B) by redesignating clause (ii) as clause (iv);
            (C) by inserting after clause (i) the following new 
        clauses:
                ``(ii) for rate year 2011, 0.50 percentage point;
                ``(iii) for each of the rate years beginning in 2012 
            and 2013, 0.1 percentage point; and''; and
            (D) in clause (iv), as redesignated by subparagraph (B), by 
        striking ``2012'' and inserting ``2014''; and
        (2) in subparagraph (B), by striking ``(A)(ii)'' and inserting 
    ``(A)(iv)''.
    (c) Inpatient Rehabilitation Facilities.--Section 1886(j)(3)(D)(i) 
of the Social Security Act, as added by section 3401(d), is amended--
        (1) in subclause (I), by striking ``and'' at the end;
        (2) by redesignating subclause (II) as subclause (III);
        (3) by inserting after subclause (II) the following new 
    subclause:

                    ``(II) for each of fiscal years 2012 and 2013, 0.1 
                percentage point; and''; and

        (4) in subclause (III), as redesignated by paragraph (2), by 
    striking ``2012'' and inserting ``2014''.
    (d) Home Health Agencies.--Section 1895(b)(3)(B)(vi)(II) of such 
Act, as added by section 3401(e), is amended by striking ``and 2012'' 
and inserting ``, 2012, and 2013''.
    (e) Psychiatric Hospitals.--Section 1886(s)(3)(A) of the Social 
Security Act, as added by section 3401(f), is amended--
        (1) in clause (i), by striking ``and'' at the end;
        (2) by redesignating clause (ii) as clause (iii);
        (3) by inserting after clause (ii) the following new clause:
                ``(ii) for each of the rate years beginning in 2012 and 
            2013, 0.1 percentage point; and''; and
        (4) in clause (iii), as redesignated by paragraph (2), by 
    striking ``2012'' and inserting ``2014''.
    (f) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3401(g), is amended--
        (1) in clause (iv)(II), by striking ``0.5'' and inserting 
    ``0.3''; and
        (2) in clause (v), in the matter preceding subclause (I), by 
    striking ``0.5'' and inserting ``0.3''.
    (g) Outpatient Hospitals.--Section 1833(t)(3)(G)(i) of the Social 
Security Act, as added by section 3401(i), is amended--
        (1) in subclause (I), by striking ``and'' at the end;
        (2) by redesignating subclause (II) as subclause (III);
        (3) by inserting after subclause (II) the following new 
    subclause:

                    ``(II) for each of 2012 and 2013, 0.1 percentage 
                point; and''; and

        (4) in subclause (III), as redesignated by paragraph (2), by 
    striking ``2012'' and inserting ``2014''.

SEC. 10320. EXPANSION OF THE SCOPE OF, AND ADDITIONAL IMPROVEMENTS TO, 
              THE INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) In General.--Section 1899A of the Social Security Act, as added 
by section 3403, is amended--
        (1) in subsection (c)--
            (A) in paragraph (1)(B), by adding at the end the following 
        new sentence: ``In any year (beginning with 2014) that the 
        Board is not required to submit a proposal under this section, 
        the Board shall submit to Congress an advisory report on 
        matters related to the Medicare program.'';
            (B) in paragraph (2)(A)--
                (i) in clause (iv), by inserting ``or the full premium 
            subsidy under section 1860D-14(a)'' before the period at 
            the end of the last sentence; and
                (ii) by adding at the end the following new clause:
                ``(vii) If the Chief Actuary of the Centers for 
            Medicare & Medicaid Services has made a determination 
            described in subsection (e)(3)(B)(i)(II) in the 
            determination year, the proposal shall be designed to help 
            reduce the growth rate described in paragraph (8) while 
            maintaining or enhancing beneficiary access to quality care 
            under this title.'';
            (C) in paragraph (2)(B)--
                (i) in clause (v), by striking ``and'' at the end;
                (ii) in clause (vi), by striking the period at the end 
            and inserting ``; and''; and
                (iii) by adding at the end the following new clause:
                ``(vii) take into account the data and findings 
            contained in the annual reports under subsection (n) in 
            order to develop proposals that can most effectively 
            promote the delivery of efficient, high quality care to 
            Medicare beneficiaries.'';
            (D) in paragraph (3)--
                (i) in the heading, by striking ``Transmission of board 
            proposal to president'' and inserting ``Submission of board 
            proposal to congress and the president'';
                (ii) in subparagraph (A)(i), by striking ``transmit a 
            proposal under this section to the President'' and insert 
            ``submit a proposal under this section to Congress and the 
            President''; and
                (iii) in subparagraph (A)(ii)--

                    (I) in subclause (I), by inserting ``or'' at the 
                end;
                    (II) in subclause (II), by striking ``; or'' and 
                inserting a period; and
                    (III) by striking subclause (III);

            (E) in paragraph (4)--
                (i) by striking ``the Board under paragraph (3)(A)(i) 
            or''; and
                (ii) by striking ``immediately'' and inserting ``within 
            2 days'';
            (F) in paragraph (5)--
                (i) by striking ``to but'' and inserting ``but''; and
                (ii) by inserting ``Congress and'' after ``submit a 
            proposal to''; and
            (G) in paragraph (6)(B)(i), by striking ``per unduplicated 
        enrollee'' and inserting ``(calculated as the sum of per capita 
        spending under each of parts A, B, and D)'';
        (2) in subsection (d)--
            (A) in paragraph (1)(A)--
                (i) by inserting ``the Board or'' after ``a proposal is 
            submitted by''; and
                (ii) by inserting ``subsection (c)(3)(A)(i) or'' after 
            ``the Senate under''; and
            (B) in paragraph (2)(A), by inserting ``the Board or'' 
        after ``a proposal is submitted by'';
        (3) in subsection (e)--
            (A) in paragraph (1), by inserting ``the Board or'' after 
        ``a proposal submitted by''; and
            (B) in paragraph (3)--
                (i) by striking ``Exception.--The Secretary shall not 
            be required to implement the recommendations contained in a 
            proposal submitted in a proposal year by'' and inserting 
            ``Exceptions.--
            ``(A) In general.--The Secretary shall not implement the 
        recommendations contained in a proposal submitted in a proposal 
        year by the Board or'';
                (ii) by redesignating subparagraphs (A) and (B) as 
            clauses (i) and (ii), respectively, and indenting 
            appropriately; and
                (iii) by adding at the end the following new 
            subparagraph:
            ``(B) Limited additional exception.--
                ``(i) In general.--Subject to clause (ii), the 
            Secretary shall not implement the recommendations contained 
            in a proposal submitted by the Board or the President to 
            Congress pursuant to this section in a proposal year 
            (beginning with proposal year 2019) if--

                    ``(I) the Board was required to submit a proposal 
                to Congress under this section in the year preceding 
                the proposal year; and
                    ``(II) the Chief Actuary of the Centers for 
                Medicare & Medicaid Services makes a determination in 
                the determination year that the growth rate described 
                in subsection (c)(8) exceeds the growth rate described 
                in subsection (c)(6)(A)(i).

                ``(ii) Limited additional exception may not be applied 
            in two consecutive years.--This subparagraph shall not 
            apply if the recommendations contained in a proposal 
            submitted by the Board or the President to Congress 
            pursuant to this section in the year preceding the proposal 
            year were not required to be implemented by reason of this 
            subparagraph.
                ``(iii) No affect on requirement to submit proposals or 
            for congressional consideration of proposals.--Clause (i) 
            and (ii) shall not affect--

                    ``(I) the requirement of the Board or the President 
                to submit a proposal to Congress in a proposal year in 
                accordance with the provisions of this section; or
                    ``(II) Congressional consideration of a legislative 
                proposal (described in subsection (c)(3)(B)(iv)) 
                contained such a proposal in accordance with subsection 
                (d).'';

        (4) in subsection (f)(3)(B)--
            (A) by striking ``or advisory reports to Congress'' and 
        inserting ``, advisory reports, or advisory recommendations''; 
        and
            (B) by inserting ``or produce the public report under 
        subsection (n)'' after ``this section''; and
        (5) by adding at the end the following new subsections:
    ``(n) Annual Public Report.--
        ``(1) In general.--Not later than July 1, 2014, and annually 
    thereafter, the Board shall produce a public report containing 
    standardized information on system-wide health care costs, patient 
    access to care, utilization, and quality-of-care that allows for 
    comparison by region, types of services, types of providers, and 
    both private payers and the program under this title.
        ``(2) Requirements.--Each report produced pursuant to paragraph 
    (1) shall include information with respect to the following areas:
            ``(A) The quality and costs of care for the population at 
        the most local level determined practical by the Board (with 
        quality and costs compared to national benchmarks and 
        reflecting rates of change, taking into account quality 
        measures described in section 1890(b)(7)(B)).
            ``(B) Beneficiary and consumer access to care, patient and 
        caregiver experience of care, and the cost-sharing or out-of-
        pocket burden on patients.
            ``(C) Epidemiological shifts and demographic changes.
            ``(D) The proliferation, effectiveness, and utilization of 
        health care technologies, including variation in provider 
        practice patterns and costs.
            ``(E) Any other areas that the Board determines affect 
        overall spending and quality of care in the private sector.
    ``(o) Advisory Recommendations for Non-Federal Health Care 
Programs.--
        ``(1) In general.--Not later than January 15, 2015, and at 
    least once every two years thereafter, the Board shall submit to 
    Congress and the President recommendations to slow the growth in 
    national health expenditures (excluding expenditures under this 
    title and in other Federal health care programs) while preserving 
    or enhancing quality of care, such as recommendations--
            ``(A) that the Secretary or other Federal agencies can 
        implement administratively;
            ``(B) that may require legislation to be enacted by 
        Congress in order to be implemented;
            ``(C) that may require legislation to be enacted by State 
        or local governments in order to be implemented;
            ``(D) that private sector entities can voluntarily 
        implement; and
            ``(E) with respect to other areas determined appropriate by 
        the Board.
        ``(2) Coordination.--In making recommendations under paragraph 
    (1), the Board shall coordinate such recommendations with 
    recommendations contained in proposals and advisory reports 
    produced by the Board under subsection (c).
        ``(3) Available to public.--The Board shall make 
    recommendations submitted to Congress and the President under this 
    subsection available to the public.''.
    (b) Name Change.--Any reference in the provisions of, or amendments 
made by, section 3403 to the ``Independent Medicare Advisory Board'' 
shall be deemed to be a reference to the ``Independent Payment Advisory 
Board''.
    (c) Rule of Construction.--Nothing in the amendments made by this 
section shall preclude the Independent Medicare Advisory Board, as 
established under section 1899A of the Social Security Act (as added by 
section 3403), from solely using data from public or private sources to 
carry out the amendments made by subsection (a)(4).

SEC. 10321. REVISION TO COMMUNITY HEALTH TEAMS.

    Section 3502(c)(2)(A) is amended by inserting ``or other primary 
care providers'' after ``physicians''.

SEC. 10322. QUALITY REPORTING FOR PSYCHIATRIC HOSPITALS.

    (a) In General.--Section 1886(s) of the Social Security Act, as 
added by section 3401(f), is amended by adding at the end the following 
new paragraph:
        ``(4) Quality reporting.--
            ``(A) Reduction in update for failure to report.--
                ``(i) In general.--Under the system described in 
            paragraph (1), for rate year 2014 and each subsequent rate 
            year, in the case of a psychiatric hospital or psychiatric 
            unit that does not submit data to the Secretary in 
            accordance with subparagraph (C) with respect to such a 
            rate year, any annual update to a standard Federal rate for 
            discharges for the hospital during the rate year, and after 
            application of paragraph (2), shall be reduced by 2 
            percentage points.
                ``(ii) Special rule.--The application of this 
            subparagraph may result in such annual update being less 
            than 0.0 for a rate year, and may result in payment rates 
            under the system described in paragraph (1) for a rate year 
            being less than such payment rates for the preceding rate 
            year.
            ``(B) Noncumulative application.--Any reduction under 
        subparagraph (A) shall apply only with respect to the rate year 
        involved and the Secretary shall not take into account such 
        reduction in computing the payment amount under the system 
        described in paragraph (1) for a subsequent rate year.
            ``(C) Submission of quality data.--For rate year 2014 and 
        each subsequent rate year, each psychiatric hospital and 
        psychiatric unit shall submit to the Secretary data on quality 
        measures specified under subparagraph (D). Such data shall be 
        submitted in a form and manner, and at a time, specified by the 
        Secretary for purposes of this subparagraph.
            ``(D) Quality measures.--
                ``(i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under this subparagraph must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
                ``(iii) Time frame.--Not later than October 1, 2012, 
            the Secretary shall publish the measures selected under 
            this subparagraph that will be applicable with respect to 
            rate year 2014.
            ``(E) Public availability of data submitted.--The Secretary 
        shall establish procedures for making data submitted under 
        subparagraph (C) available to the public. Such procedures shall 
        ensure that a psychiatric hospital and a psychiatric unit has 
        the opportunity to review the data that is to be made public 
        with respect to the hospital or unit prior to such data being 
        made public. The Secretary shall report quality measures that 
        relate to services furnished in inpatient settings in 
        psychiatric hospitals and psychiatric units on the Internet 
        website of the Centers for Medicare & Medicaid Services.''.
    (b) Conforming Amendment.--Section 1890(b)(7)(B)(i)(I) of the 
Social Security Act, as added by section 3014, is amended by inserting 
``1886(s)(4)(D),'' after ``1886(o)(2),''.

SEC. 10323. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO ENVIRONMENTAL 
              HEALTH HAZARDS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by inserting after section 1881 the following 
new section:

``SEC. 1881A. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO 
              ENVIRONMENTAL HEALTH HAZARDS.

    ``(a) Deeming of Individuals as Eligible for Medicare Benefits.--
        ``(1) In general.--For purposes of eligibility for benefits 
    under this title, an individual determined under subsection (c) to 
    be an environmental exposure affected individual described in 
    subsection (e)(2) shall be deemed to meet the conditions specified 
    in section 226(a).
        ``(2) Discretionary deeming.--For purposes of eligibility for 
    benefits under this title, the Secretary may deem an individual 
    determined under subsection (c) to be an environmental exposure 
    affected individual described in subsection (e)(3) to meet the 
    conditions specified in section 226(a).
        ``(3) Effective date of coverage.--An Individual who is deemed 
    eligible for benefits under this title under paragraph (1) or (2) 
    shall be--
            ``(A) entitled to benefits under the program under Part A 
        as of the date of such deeming; and
            ``(B) eligible to enroll in the program under Part B 
        beginning with the month in which such deeming occurs.
    ``(b) Pilot Program for Care of Certain Individuals Residing in 
Emergency Declaration Areas.--
        ``(1) Program; purpose.--
            ``(A) Primary pilot program.--The Secretary shall establish 
        a pilot program in accordance with this subsection to provide 
        innovative approaches to furnishing comprehensive, coordinated, 
        and cost-effective care under this title to individuals 
        described in paragraph (2)(A).
            ``(B) Optional pilot programs.--The Secretary may establish 
        a separate pilot program, in accordance with this subsection, 
        with respect to each geographic area subject to an emergency 
        declaration (other than the declaration of June 17, 2009), in 
        order to furnish such comprehensive, coordinated and cost-
        effective care to individuals described in subparagraph (2)(B) 
        who reside in each such area.
        ``(2) Individual described.--For purposes of paragraph (1), an 
    individual described in this paragraph is an individual who enrolls 
    in part B, submits to the Secretary an application to participate 
    in the applicable pilot program under this subsection, and--
            ``(A) is an environmental exposure affected individual 
        described in subsection (e)(2) who resides in or around the 
        geographic area subject to an emergency declaration made as of 
        June 17, 2009; or
            ``(B) is an environmental exposure affected individual 
        described in subsection (e)(3) who--
                ``(i) is deemed under subsection (a)(2); and
                ``(ii) meets such other criteria or conditions for 
            participation in a pilot program under paragraph (1)(B) as 
            the Secretary specifies.
        ``(3) Flexible benefits and services.--A pilot program under 
    this subsection may provide for the furnishing of benefits, items, 
    or services not otherwise covered or authorized under this title, 
    if the Secretary determines that furnishing such benefits, items, 
    or services will further the purposes of such pilot program (as 
    described in paragraph (1)).
        ``(4) Innovative reimbursement methodologies.--For purposes of 
    the pilot program under this subsection, the Secretary--
            ``(A) shall develop and implement appropriate methodologies 
        to reimburse providers for furnishing benefits, items, or 
        services for which payment is not otherwise covered or 
        authorized under this title, if such benefits, items, or 
        services are furnished pursuant to paragraph (3); and
            ``(B) may develop and implement innovative approaches to 
        reimbursing providers for any benefits, items, or services 
        furnished under this subsection.
        ``(5) Limitation.--Consistent with section 1862(b), no payment 
    shall be made under the pilot program under this subsection with 
    respect to benefits, items, or services furnished to an 
    environmental exposure affected individual (as defined in 
    subsection (e)) to the extent that such individual is eligible to 
    receive such benefits, items, or services through any other public 
    or private benefits plan or legal agreement.
        ``(6) Waiver authority.--The Secretary may waive such 
    provisions of this title and title XI as are necessary to carry out 
    pilot programs under this subsection.
        ``(7) Funding.--For purposes of carrying out pilot programs 
    under this subsection, the Secretary shall provide for the 
    transfer, from the Federal Hospital Insurance Trust Fund under 
    section 1817 and the Federal Supplementary Medical Insurance Trust 
    Fund under section 1841, in such proportion as the Secretary 
    determines appropriate, of such sums as the Secretary determines 
    necessary, to the Centers for Medicare & Medicaid Services Program 
    Management Account.
        ``(8) Waiver of budget neutrality.--The Secretary shall not 
    require that pilot programs under this subsection be budget neutral 
    with respect to expenditures under this title.
    ``(c) Determinations.--
        ``(1) By the commissioner of social security.--For purposes of 
    this section, the Commissioner of Social Security, in consultation 
    with the Secretary, and using the cost allocation method prescribed 
    in section 201(g), shall determine whether individuals are 
    environmental exposure affected individuals.
        ``(2) By the secretary.--The Secretary shall determine 
    eligibility for pilot programs under subsection (b).
    ``(d) Emergency Declaration Defined.--For purposes of this section, 
the term `emergency declaration' means a declaration of a public health 
emergency under section 104(a) of the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980.
    ``(e) Environmental Exposure Affected Individual Defined.--
        ``(1) In general.--For purposes of this section, the term 
    `environmental exposure affected individual' means--
            ``(A) an individual described in paragraph (2); and
            ``(B) an individual described in paragraph (3).
        ``(2) Individual described.--
            ``(A) In general.--An individual described in this 
        paragraph is any individual who--
                ``(i) is diagnosed with 1 or more conditions described 
            in subparagraph (B);
                ``(ii) as demonstrated in such manner as the Secretary 
            determines appropriate, has been present for an aggregate 
            total of 6 months in the geographic area subject to an 
            emergency declaration specified in subsection (b)(2)(A), 
            during a period ending--

                    ``(I) not less than 10 years prior to such 
                diagnosis; and
                    ``(II) prior to the implementation of all the 
                remedial and removal actions specified in the Record of 
                Decision for Operating Unit 4 and the Record of 
                Decision for Operating Unit 7;

                ``(iii) files an application for benefits under this 
            title (or has an application filed on behalf of the 
            individual), including pursuant to this section; and
                ``(iv) is determined under this section to meet the 
            criteria in this subparagraph.
            ``(B) Conditions described.--For purposes of subparagraph 
        (A), the following conditions are described in this 
        subparagraph:
                ``(i) Asbestosis, pleural thickening, or pleural 
            plaques as established by--

                    ``(I) interpretation by a `B Reader' qualified 
                physician of a plain chest x-ray or interpretation of a 
                computed tomographic radiograph of the chest by a 
                qualified physician, as determined by the Secretary; or
                    ``(II) such other diagnostic standards as the 
                Secretary specifies,

            except that this clause shall not apply to pleural 
            thickening or pleural plaques unless there are symptoms or 
            conditions requiring medical treatment as a result of these 
            diagnoses.
                ``(ii) Mesothelioma, or malignancies of the lung, 
            colon, rectum, larynx, stomach, esophagus, pharynx, or 
            ovary, as established by--

                    ``(I) pathologic examination of biopsy tissue;
                    ``(II) cytology from bronchioalveolar lavage; or
                    ``(III) such other diagnostic standards as the 
                Secretary specifies.

                ``(iii) Any other diagnosis which the Secretary, in 
            consultation with the Commissioner of Social Security, 
            determines is an asbestos-related medical condition, as 
            established by such diagnostic standards as the Secretary 
            specifies.
        ``(3) Other individual described.--An individual described in 
    this paragraph is any individual who--
            ``(A) is not an individual described in paragraph (2);
            ``(B) is diagnosed with a medical condition caused by the 
        exposure of the individual to a public health hazard to which 
        an emergency declaration applies, based on such medical 
        conditions, diagnostic standards, and other criteria as the 
        Secretary specifies;
            ``(C) as demonstrated in such manner as the Secretary 
        determines appropriate, has been present for an aggregate total 
        of 6 months in the geographic area subject to the emergency 
        declaration involved, during a period determined appropriate by 
        the Secretary;
            ``(D) files an application for benefits under this title 
        (or has an application filed on behalf of the individual), 
        including pursuant to this section; and
            ``(E) is determined under this section to meet the criteria 
        in this paragraph.''.
    (b) Program for Early Detection of Certain Medical Conditions 
Related to Environmental Health Hazards.--Title XX of the Social 
Security Act (42 U.S.C. 1397 et seq.), as amended by section 5507, is 
amended by adding at the end the following:

``SEC. 2009. PROGRAM FOR EARLY DETECTION OF CERTAIN MEDICAL CONDITIONS 
              RELATED TO ENVIRONMENTAL HEALTH HAZARDS.

    ``(a) Program Establishment.--The Secretary shall establish a 
program in accordance with this section to make competitive grants to 
eligible entities specified in subsection (b) for the purpose of--
        ``(1) screening at-risk individuals (as defined in subsection 
    (c)(1)) for environmental health conditions (as defined in 
    subsection (c)(3)); and
        ``(2) developing and disseminating public information and 
    education concerning--
            ``(A) the availability of screening under the program under 
        this section;
            ``(B) the detection, prevention, and treatment of 
        environmental health conditions; and
            ``(C) the availability of Medicare benefits for certain 
        individuals diagnosed with environmental health conditions 
        under section 1881A.
    ``(b) Eligible Entities.--
        ``(1) In general.--For purposes of this section, an eligible 
    entity is an entity described in paragraph (2) which submits an 
    application to the Secretary in such form and manner, and 
    containing such information and assurances, as the Secretary 
    determines appropriate.
        ``(2) Types of eligible entities.--The entities described in 
    this paragraph are the following:
            ``(A) A hospital or community health center.
            ``(B) A Federally qualified health center.
            ``(C) A facility of the Indian Health Service.
            ``(D) A National Cancer Institute-designated cancer center.
            ``(E) An agency of any State or local government.
            ``(F) A nonprofit organization.
            ``(G) Any other entity the Secretary determines 
        appropriate.
    ``(c) Definitions.--In this section:
        ``(1) At-risk individual.--The term `at-risk individual' means 
    an individual who--
            ``(A)(i) as demonstrated in such manner as the Secretary 
        determines appropriate, has been present for an aggregate total 
        of 6 months in the geographic area subject to an emergency 
        declaration specified under paragraph (2), during a period 
        ending--
                ``(I) not less than 10 years prior to the date of such 
            individual's application under subparagraph (B); and
                ``(II) prior to the implementation of all the remedial 
            and removal actions specified in the Record of Decision for 
            Operating Unit 4 and the Record of Decision for Operating 
            Unit 7; or
            ``(ii) meets such other criteria as the Secretary 
        determines appropriate considering the type of environmental 
        health condition at issue; and
            ``(B) has submitted an application (or has an application 
        submitted on the individual's behalf), to an eligible entity 
        receiving a grant under this section, for screening under the 
        program under this section.
        ``(2) Emergency declaration.--The term `emergency declaration' 
    means a declaration of a public health emergency under section 
    104(a) of the Comprehensive Environmental Response, Compensation, 
    and Liability Act of 1980.
        ``(3) Environmental health condition.--The term `environmental 
    health condition' means--
            ``(A) asbestosis, pleural thickening, or pleural plaques, 
        as established by--
                ``(i) interpretation by a `B Reader' qualified 
            physician of a plain chest x-ray or interpretation of a 
            computed tomographic radiograph of the chest by a qualified 
            physician, as determined by the Secretary; or
                ``(ii) such other diagnostic standards as the Secretary 
            specifies;
            ``(B) mesothelioma, or malignancies of the lung, colon, 
        rectum, larynx, stomach, esophagus, pharynx, or ovary, as 
        established by--
                ``(i) pathologic examination of biopsy tissue;
                ``(ii) cytology from bronchioalveolar lavage; or
                ``(iii) such other diagnostic standards as the 
            Secretary specifies; and
            ``(C) any other medical condition which the Secretary 
        determines is caused by exposure to a hazardous substance or 
        pollutant or contaminant at a Superfund site to which an 
        emergency declaration applies, based on such criteria and as 
        established by such diagnostic standards as the Secretary 
        specifies.
        ``(4) Hazardous substance; pollutant; contaminant.--The terms 
    `hazardous substance', `pollutant', and `contaminant' have the 
    meanings given those terms in section 101 of the Comprehensive 
    Environmental Response, Compensation, and Liability Act of 1980 (42 
    U.S.C. 9601).
        ``(5) Superfund site.--The term `Superfund site' means a site 
    included on the National Priorities List developed by the President 
    in accordance with section 105(a)(8)(B) of the Comprehensive 
    Environmental Response, Compensation, and Liability Act of 1980 (42 
    U.S.C. 9605(a)(8)(B)).
    ``(d) Health Coverage Unaffected.--Nothing in this section shall be 
construed to affect any coverage obligation of a governmental or 
private health plan or program relating to an at-risk individual.
    ``(e) Funding.--
        ``(1) In general.--Out of any funds in the Treasury not 
    otherwise appropriated, there are appropriated to the Secretary, to 
    carry out the program under this section--
            ``(A) $23,000,000 for the period of fiscal years 2010 
        through 2014; and
            ``(B) $20,000,000 for each 5-fiscal year period thereafter.
        ``(2) Availability.--Funds appropriated under paragraph (1) 
    shall remain available until expended.
    ``(f) Nonapplication.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    preceding sections of this title shall not apply to grants awarded 
    under this section.
        ``(2) Limitations on use of grants.--Section 2005(a) shall 
    apply to a grant awarded under this section to the same extent and 
    in the same manner as such section applies to payments to States 
    under this title, except that paragraph (4) of such section shall 
    not be construed to prohibit grantees from conducting screening for 
    environmental health conditions as authorized under this 
    section.''.

SEC. 10324. PROTECTIONS FOR FRONTIER STATES.

    (a) Floor on Area Wage Index for Hospitals in Frontier States.--
        (1) In general.--Section 1886(d)(3)(E) of the Social Security 
    Act (42 U.S.C. 1395ww(d)(3)(E)) is amended--
            (A) in clause (i), by striking ``clause (ii)'' and 
        inserting ``clause (ii) or (iii)''; and
            (B) by adding at the end the following new clause:
                ``(iii) Floor on area wage index for hospitals in 
            frontier states.--

                    ``(I) In general.--Subject to subclause (IV), for 
                discharges occurring on or after October 1, 2010, the 
                area wage index applicable under this subparagraph to 
                any hospital which is located in a frontier State (as 
                defined in subclause (II)) may not be less than 1.00.
                    ``(II) Frontier state defined.--In this clause, the 
                term `frontier State' means a State in which at least 
                50 percent of the counties in the State are frontier 
                counties.
                    ``(III) Frontier county defined.--In this clause, 
                the term `frontier county' means a county in which the 
                population per square mile is less than 6.
                    ``(IV) Limitation.--This clause shall not apply to 
                any hospital located in a State that receives a non-
                labor related share adjustment under paragraph 
                (5)(H).''.

        (2) Waiving budget neutrality.--Section 1886(d)(3)(E) of the 
    Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by 
    subsection (a), is amended in the third sentence by inserting ``and 
    the amendments made by section 10324(a)(1) of the Patient 
    Protection and Affordable Care Act'' after ``2003''.
    (b) Floor on Area Wage Adjustment Factor for Hospital Outpatient 
Department Services in Frontier States.--Section 1833(t) of the Social 
Security Act (42 U.S.C. 1395l(t)), as amended by section 3138, is 
amended--
        (1) in paragraph (2)(D), by striking ``the Secretary'' and 
    inserting ``subject to paragraph (19), the Secretary''; and
        (2) by adding at the end the following new paragraph:
        ``(19) Floor on area wage adjustment factor for hospital 
    outpatient department services in frontier states.--
            ``(A) In general.--Subject to subparagraph (B), with 
        respect to covered OPD services furnished on or after January 
        1, 2011, the area wage adjustment factor applicable under the 
        payment system established under this subsection to any 
        hospital outpatient department which is located in a frontier 
        State (as defined in section 1886(d)(3)(E)(iii)(II)) may not be 
        less than 1.00. The preceding sentence shall not be applied in 
        a budget neutral manner.
            ``(B) Limitation.--This paragraph shall not apply to any 
        hospital outpatient department located in a State that receives 
        a non-labor related share adjustment under section 
        1886(d)(5)(H).''.
    (c) Floor for Practice Expense Index for Physicians' Services 
Furnished in Frontier States.--Section 1848(e)(1) of the Social 
Security Act (42 U.S.C. 1395w-4(e)(1)), as amended by section 3102, is 
amended--
        (1) in subparagraph (A), by striking ``and (H)'' and inserting 
    ``(H), and (I)''; and
        (2) by adding at the end the following new subparagraph:
            ``(I) Floor for practice expense index for services 
        furnished in frontier states.--
                ``(i) In general.--Subject to clause (ii), for purposes 
            of payment for services furnished in a frontier State (as 
            defined in section 1886(d)(3)(E)(iii)(II)) on or after 
            January 1, 2011, after calculating the practice expense 
            index in subparagraph (A)(i), the Secretary shall increase 
            any such index to 1.00 if such index would otherwise be 
            less that 1.00. The preceding sentence shall not be applied 
            in a budget neutral manner.
                ``(ii) Limitation.--This subparagraph shall not apply 
            to services furnished in a State that receives a non-labor 
            related share adjustment under section 1886(d)(5)(H).''.

SEC. 10325. REVISION TO SKILLED NURSING FACILITY PROSPECTIVE PAYMENT 
              SYSTEM.

    (a) Temporary Delay of RUG-IV.--Notwithstanding any other provision 
of law, the Secretary of Health and Human Services shall not, prior to 
October 1, 2011, implement Version 4 of the Resource Utilization Groups 
(in this subsection refereed to as ``RUG-IV'') published in the Federal 
Register on August 11, 2009, entitled ``Prospective Payment System and 
Consolidated Billing for Skilled Nursing Facilities for FY 2010; 
Minimum Data Set, Version 3.0 for Skilled Nursing Facilities and 
Medicaid Nursing Facilities'' (74 Fed. Reg. 40288). Beginning on 
October 1, 2010, the Secretary of Health and Human Services shall 
implement the change specific to therapy furnished on a concurrent 
basis that is a component of RUG-IV and changes to the lookback period 
to ensure that only those services furnished after admission to a 
skilled nursing facility are used as factors in determining a case mix 
classification under the skilled nursing facility prospective payment 
system under section 1888(e) of the Social Security Act (42 U.S.C. 
1395yy(e)).
    (b) Construction.--Nothing in this section shall be interpreted as 
delaying the implementation of Version 3.0 of the Minimum Data Sets 
(MDS 3.0) beyond the planned implementation date of October 1, 2010.

SEC. 10326. PILOT TESTING PAY-FOR-PERFORMANCE PROGRAMS FOR CERTAIN 
              MEDICARE PROVIDERS.

    (a) In General.--Not later than January 1, 2016, the Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall, for each provider described in subsection (b), 
conduct a separate pilot program under title XVIII of the Social 
Security Act to test the implementation of a value-based purchasing 
program for payments under such title for the provider.
    (b) Providers Described.--The providers described in this paragraph 
are the following:
        (1) Psychiatric hospitals (as described in clause (i) of 
    section 1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B))) and 
    psychiatric units (as described in the matter following clause (v) 
    of such section).
        (2) Long-term care hospitals (as described in clause (iv) of 
    such section).
        (3) Rehabilitation hospitals (as described in clause (ii) of 
    such section).
        (4) PPS-exempt cancer hospitals (as described in clause (v) of 
    such section).
        (5) Hospice programs (as defined in section 1861(dd)(2) of such 
    Act (42 U.S.C. 1395x(dd)(2))).
    (c) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act as may be necessary 
solely for purposes of carrying out the pilot programs under this 
section.
    (d) No Additional Program Expenditures.--Payments under this 
section under the separate pilot program for value based purchasing (as 
described in subsection (a)) for each provider type described in 
paragraphs (1) through (5) of subsection (b) for applicable items and 
services under title XVIII of the Social Security Act for a year shall 
be established in a manner that does not result in spending more under 
each such value based purchasing program for such year than would 
otherwise be expended for such provider type for such year if the pilot 
program were not implemented, as estimated by the Secretary.
    (e) Expansion of Pilot Program.--The Secretary may, at any point 
after January 1, 2018, expand the duration and scope of a pilot program 
conducted under this subsection, to the extent determined appropriate 
by the Secretary, if--
        (1) the Secretary determines that such expansion is expected 
    to--
            (A) reduce spending under title XVIII of the Social 
        Security Act without reducing the quality of care; or
            (B) improve the quality of care and reduce spending;
        (2) the Chief Actuary of the Centers for Medicare & Medicaid 
    Services certifies that such expansion would reduce program 
    spending under such title XVIII; and
        (3) the Secretary determines that such expansion would not deny 
    or limit the coverage or provision of benefits under such title 
    XIII for Medicare beneficiaries.

SEC. 10327. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) In General.--Section 1848(m) of the Social Security Act (42 
U.S.C. 1395w-4(m)) is amended by adding at the end the following new 
paragraph:
        ``(7) Additional incentive payment.--
            ``(A) In general.--For 2011 through 2014, if an eligible 
        professional meets the requirements described in subparagraph 
        (B), the applicable quality percent for such year, as described 
        in clauses (iii) and (iv) of paragraph (1)(B), shall be 
        increased by 0.5 percentage points.
            ``(B) Requirements described.--In order to qualify for the 
        additional incentive payment described in subparagraph (A), an 
        eligible professional shall meet the following requirements:
                ``(i) The eligible professional shall--

                    ``(I) satisfactorily submit data on quality 
                measures for purposes of paragraph (1) for a year; and
                    ``(II) have such data submitted on their behalf 
                through a Maintenance of Certification Program (as 
                defined in subparagraph (C)(i)) that meets--

                        ``(aa) the criteria for a registry (as 
                    described in subsection (k)(4)); or
                        ``(bb) an alternative form and manner 
                    determined appropriate by the Secretary.
                ``(ii) The eligible professional, more frequently than 
            is required to qualify for or maintain board certification 
            status--

                    ``(I) participates in such a Maintenance of 
                Certification program for a year; and
                    ``(II) successfully completes a qualified 
                Maintenance of Certification Program practice 
                assessment (as defined in subparagraph (C)(ii)) for 
                such year.

                ``(iii) A Maintenance of Certification program submits 
            to the Secretary, on behalf of the eligible professional, 
            information--

                    ``(I) in a form and manner specified by the 
                Secretary, that the eligible professional has 
                successfully met the requirements of clause (ii) (which 
                may be in the form of a structural measure);
                    ``(II) if requested by the Secretary, on the survey 
                of patient experience with care (as described in 
                subparagraph (C)(ii)(II)); and
                    ``(III) as the Secretary may require, on the 
                methods, measures, and data used under the Maintenance 
                of Certification Program and the qualified Maintenance 
                of Certification Program practice assessment.

            ``(C) Definitions.--For purposes of this paragraph:
                ``(i) The term `Maintenance of Certification Program' 
            means a continuous assessment program, such as qualified 
            American Board of Medical Specialties Maintenance of 
            Certification program or an equivalent program (as 
            determined by the Secretary), that advances quality and the 
            lifelong learning and self-assessment of board certified 
            specialty physicians by focusing on the competencies of 
            patient care, medical knowledge, practice-based learning, 
            interpersonal and communication skills and professionalism. 
            Such a program shall include the following:

                    ``(I) The program requires the physician to 
                maintain a valid, unrestricted medical license in the 
                United States.
                    ``(II) The program requires a physician to 
                participate in educational and self-assessment programs 
                that require an assessment of what was learned.
                    ``(III) The program requires a physician to 
                demonstrate, through a formalized, secure examination, 
                that the physician has the fundamental diagnostic 
                skills, medical knowledge, and clinical judgment to 
                provide quality care in their respective specialty.
                    ``(IV) The program requires successful completion 
                of a qualified Maintenance of Certification Program 
                practice assessment as described in clause (ii).

                ``(ii) The term `qualified Maintenance of Certification 
            Program practice assessment' means an assessment of a 
            physician's practice that--

                    ``(I) includes an initial assessment of an eligible 
                professional's practice that is designed to demonstrate 
                the physician's use of evidence-based medicine;
                    ``(II) includes a survey of patient experience with 
                care; and
                    ``(III) requires a physician to implement a quality 
                improvement intervention to address a practice weakness 
                identified in the initial assessment under subclause 
                (I) and then to remeasure to assess performance 
                improvement after such intervention.''.

    (b) Authority.--Section 3002(c) of this Act is amended by adding at 
the end the following new paragraph:
        ``(3) Authority.--For years after 2014, if the Secretary of 
    Health and Human Services determines it to be appropriate, the 
    Secretary may incorporate participation in a Maintenance of 
    Certification Program and successful completion of a qualified 
    Maintenance of Certification Program practice assessment into the 
    composite of measures of quality of care furnished pursuant to the 
    physician fee schedule payment modifier, as described in section 
    1848(p)(2) of the Social Security Act (42 U.S.C. 1395w-4(p)(2)).''.
    (c) Elimination of MA Regional Plan Stabilization Fund.--
        (1) In general.--Section 1858 of the Social Security Act (42 
    U.S.C. 1395w-27a) is amended by striking subsection (e).
        (2) Transition.--Any amount contained in the MA Regional Plan 
    Stabilization Fund as of the date of the enactment of this Act 
    shall be transferred to the Federal Supplementary Medical Insurance 
    Trust Fund.

SEC. 10328. IMPROVEMENT IN PART D MEDICATION THERAPY MANAGEMENT (MTM) 
              PROGRAMS.

    (a) In General.--Section 1860D-4(c)(2) of the Social Security Act 
(42 U.S.C. 1395w-104(c)(2)) is amended--
        (1) by redesignating subparagraphs (C), (D), and (E) as 
    subparagraphs (E), (F), and (G), respectively; and
        (2) by inserting after subparagraph (B) the following new 
    subparagraphs:
            ``(C) Required interventions.--For plan years beginning on 
        or after the date that is 2 years after the date of the 
        enactment of the Patient Protection and Affordable Care Act, 
        prescription drug plan sponsors shall offer medication therapy 
        management services to targeted beneficiaries described in 
        subparagraph (A)(ii) that include, at a minimum, the following 
        to increase adherence to prescription medications or other 
        goals deemed necessary by the Secretary:
                ``(i) An annual comprehensive medication review 
            furnished person-to-person or using telehealth technologies 
            (as defined by the Secretary) by a licensed pharmacist or 
            other qualified provider. The comprehensive medication 
            review--

                    ``(I) shall include a review of the individual's 
                medications and may result in the creation of a 
                recommended medication action plan or other actions in 
                consultation with the individual and with input from 
                the prescriber to the extent necessary and practicable; 
                and
                    ``(II) shall include providing the individual with 
                a written or printed summary of the results of the 
                review.

            The Secretary, in consultation with relevant stakeholders, 
            shall develop a standardized format for the action plan 
            under subclause (I) and the summary under subclause (II).
                ``(ii) Follow-up interventions as warranted based on 
            the findings of the annual medication review or the 
            targeted medication enrollment and which may be provided 
            person-to-person or using telehealth technologies (as 
            defined by the Secretary).
            ``(D) Assessment.--The prescription drug plan sponsor shall 
        have in place a process to assess, at least on a quarterly 
        basis, the medication use of individuals who are at risk but 
        not enrolled in the medication therapy management program, 
        including individuals who have experienced a transition in 
        care, if the prescription drug plan sponsor has access to that 
        information.
            ``(E) Automatic enrollment with ability to opt-out.--The 
        prescription drug plan sponsor shall have in place a process 
        to--
                ``(i) subject to clause (ii), automatically enroll 
            targeted beneficiaries described in subparagraph (A)(ii), 
            including beneficiaries identified under subparagraph (D), 
            in the medication therapy management program required under 
            this subsection; and
                ``(ii) permit such beneficiaries to opt-out of 
            enrollment in such program.''.
    (b) Rule of Construction.--Nothing in this section shall limit the 
authority of the Secretary of Health and Human Services to modify or 
broaden requirements for a medication therapy management program under 
part D of title XVIII of the Social Security Act or to study new models 
for medication therapy management through the Center for Medicare and 
Medicaid Innovation under section 1115A of such Act, as added by 
section 3021.

SEC. 10329. DEVELOPING METHODOLOGY TO ASSESS HEALTH PLAN VALUE.

    (a) Development.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), in consultation 
with relevant stakeholders including health insurance issuers, health 
care consumers, employers, health care providers, and other entities 
determined appropriate by the Secretary, shall develop a methodology to 
measure health plan value. Such methodology shall take into 
consideration, where applicable--
        (1) the overall cost to enrollees under the plan;
        (2) the quality of the care provided for under the plan;
        (3) the efficiency of the plan in providing care;
        (4) the relative risk of the plan's enrollees as compared to 
    other plans;
        (5) the actuarial value or other comparative measure of the 
    benefits covered under the plan; and
        (6) other factors determined relevant by the Secretary.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report concerning 
the methodology developed under subsection (a).

SEC. 10330. MODERNIZING COMPUTER AND DATA SYSTEMS OF THE CENTERS FOR 
              MEDICARE & MEDICAID SERVICES TO SUPPORT IMPROVEMENTS IN 
              CARE DELIVERY.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall develop a plan 
(and detailed budget for the resources needed to implement such plan) 
to modernize the computer and data systems of the Centers for Medicare 
& Medicaid Services (in this section referred to as ``CMS'').
    (b) Considerations.--In developing the plan, the Secretary shall 
consider how such modernized computer system could--
        (1) in accordance with the regulations promulgated under 
    section 264(c) of the Health Insurance Portability and 
    Accountability Act of 1996, make available data in a reliable and 
    timely manner to providers of services and suppliers to support 
    their efforts to better manage and coordinate care furnished to 
    beneficiaries of CMS programs; and
        (2) support consistent evaluations of payment and delivery 
    system reforms under CMS programs.
    (c) Posting of Plan.--By not later than 9 months after the date of 
the enactment of this Act, the Secretary shall post on the website of 
the Centers for Medicare & Medicaid Services the plan described in 
subsection (a).

SEC. 10331. PUBLIC REPORTING OF PERFORMANCE INFORMATION.

    (a) In General.--
        (1) Development.--Not later than January 1, 2011, the Secretary 
    shall develop a Physician Compare Internet website with information 
    on physicians enrolled in the Medicare program under section 
    1866(j) of the Social Security Act (42 U.S.C. 1395cc(j)) and other 
    eligible professionals who participate in the Physician Quality 
    Reporting Initiative under section 1848 of such Act (42 U.S.C. 
    1395w-4).
        (2) Plan.--Not later than January 1, 2013, and with respect to 
    reporting periods that begin no earlier than January 1, 2012, the 
    Secretary shall also implement a plan for making publicly available 
    through Physician Compare, consistent with subsection (c), 
    information on physician performance that provides comparable 
    information for the public on quality and patient experience 
    measures with respect to physicians enrolled in the Medicare 
    program under such section 1866(j). To the extent scientifically 
    sound measures that are developed consistent with the requirements 
    of this section are available, such information, to the extent 
    practicable, shall include--
            (A) measures collected under the Physician Quality 
        Reporting Initiative;
            (B) an assessment of patient health outcomes and the 
        functional status of patients;
            (C) an assessment of the continuity and coordination of 
        care and care transitions, including episodes of care and risk-
        adjusted resource use;
            (D) an assessment of efficiency;
            (E) an assessment of patient experience and patient, 
        caregiver, and family engagement;
            (F) an assessment of the safety, effectiveness, and 
        timeliness of care; and
            (G) other information as determined appropriate by the 
        Secretary.
    (b) Other Required Considerations.--In developing and implementing 
the plan described in subsection (a)(2), the Secretary shall, to the 
extent practicable, include--
        (1) processes to assure that data made public, either by the 
    Centers for Medicare & Medicaid Services or by other entities, is 
    statistically valid and reliable, including risk adjustment 
    mechanisms used by the Secretary;
        (2) processes by which a physician or other eligible 
    professional whose performance on measures is being publicly 
    reported has a reasonable opportunity, as determined by the 
    Secretary, to review his or her individual results before they are 
    made public;
        (3) processes by the Secretary to assure that the 
    implementation of the plan and the data made available on Physician 
    Compare provide a robust and accurate portrayal of a physician's 
    performance;
        (4) data that reflects the care provided to all patients seen 
    by physicians, under both the Medicare program and, to the extent 
    practicable, other payers, to the extent such information would 
    provide a more accurate portrayal of physician performance;
        (5) processes to ensure appropriate attribution of care when 
    multiple physicians and other providers are involved in the care of 
    a patient;
        (6) processes to ensure timely statistical performance feedback 
    is provided to physicians concerning the data reported under any 
    program subject to public reporting under this section; and
        (7) implementation of computer and data systems of the Centers 
    for Medicare & Medicaid Services that support valid, reliable, and 
    accurate public reporting activities authorized under this section.
    (c) Ensuring Patient Privacy.--The Secretary shall ensure that 
information on physician performance and patient experience is not 
disclosed under this section in a manner that violates sections 552 or 
552a of title 5, United States Code, with regard to the privacy of 
individually identifiable health information.
    (d) Feedback From Multi-stakeholder Groups.--The Secretary shall 
take into consideration input provided by multi-stakeholder groups, 
consistent with sections 1890(b)(7) and 1890A of the Social Security 
Act, as added by section 3014 of this Act, in selecting quality 
measures for use under this section.
    (e) Consideration of Transition to Value-based Purchasing.--In 
developing the plan under this subsection (a)(2), the Secretary shall, 
as the Secretary determines appropriate, consider the plan to 
transition to a value-based purchasing program for physicians and other 
practitioners developed under section 131 of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275).
    (f) Report to Congress.--Not later than January 1, 2015, the 
Secretary shall submit to Congress a report on the Physician Compare 
Internet website developed under subsection (a)(1). Such report shall 
include information on the efforts of and plans made by the Secretary 
to collect and publish data on physician quality and efficiency and on 
patient experience of care in support of value-based purchasing and 
consumer choice, together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.
    (g) Expansion.--At any time before the date on which the report is 
submitted under subsection (f), the Secretary may expand (including 
expansion to other providers of services and suppliers under title 
XVIII of the Social Security Act) the information made available on 
such website.
    (h) Financial Incentives To Encourage Consumers To Choose High 
Quality Providers.--The Secretary may establish a demonstration 
program, not later than January 1, 2019, to provide financial 
incentives to Medicare beneficiaries who are furnished services by high 
quality physicians, as determined by the Secretary based on factors in 
subparagraphs (A) through (G) of subsection (a)(2). In no case may 
Medicare beneficiaries be required to pay increased premiums or cost 
sharing or be subject to a reduction in benefits under title XVIII of 
the Social Security Act as a result of such demonstration program. The 
Secretary shall ensure that any such demonstration program does not 
disadvantage those beneficiaries without reasonable access to high 
performing physicians or create financial inequities under such title.
    (i) Definitions.--In this section:
        (1) Eligible professional.--The term ``eligible professional'' 
    has the meaning given that term for purposes of the Physician 
    Quality Reporting Initiative under section 1848 of the Social 
    Security Act (42 U.S.C. 1395w-4).
        (2) Physician.--The term ``physician'' has the meaning given 
    that term in section 1861(r) of such Act (42 U.S.C. 1395x(r)).
        (3) Physician compare.--The term ``Physician Compare'' means 
    the Internet website developed under subsection (a)(1).
        (4) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.

SEC. 10332. AVAILABILITY OF MEDICARE DATA FOR PERFORMANCE MEASUREMENT.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
1395kk) is amended by adding at the end the following new subsection:
    ``(e) Availability of Medicare Data.--
        ``(1) In general.--Subject to paragraph (4), the Secretary 
    shall make available to qualified entities (as defined in paragraph 
    (2)) data described in paragraph (3) for the evaluation of the 
    performance of providers of services and suppliers.
        ``(2) Qualified entities.--For purposes of this subsection, the 
    term `qualified entity' means a public or private entity that--
            ``(A) is qualified (as determined by the Secretary) to use 
        claims data to evaluate the performance of providers of 
        services and suppliers on measures of quality, efficiency, 
        effectiveness, and resource use; and
            ``(B) agrees to meet the requirements described in 
        paragraph (4) and meets such other requirements as the 
        Secretary may specify, such as ensuring security of data.
        ``(3) Data described.--The data described in this paragraph are 
    standardized extracts (as determined by the Secretary) of claims 
    data under parts A, B, and D for items and services furnished under 
    such parts for one or more specified geographic areas and time 
    periods requested by a qualified entity. The Secretary shall take 
    such actions as the Secretary deems necessary to protect the 
    identity of individuals entitled to or enrolled for benefits under 
    such parts.
        ``(4) Requirements.--
            ``(A) Fee.--Data described in paragraph (3) shall be made 
        available to a qualified entity under this subsection at a fee 
        equal to the cost of making such data available. Any fee 
        collected pursuant to the preceding sentence shall be deposited 
        into the Federal Supplementary Medical Insurance Trust Fund 
        under section 1841.
            ``(B) Specification of uses and methodologies.--A qualified 
        entity requesting data under this subsection shall--
                ``(i) submit to the Secretary a description of the 
            methodologies that such qualified entity will use to 
            evaluate the performance of providers of services and 
            suppliers using such data;
                ``(ii)(I) except as provided in subclause (II), if 
            available, use standard measures, such as measures endorsed 
            by the entity with a contract under section 1890(a) and 
            measures developed pursuant to section 931 of the Public 
            Health Service Act; or
                ``(II) use alternative measures if the Secretary, in 
            consultation with appropriate stakeholders, determines that 
            use of such alternative measures would be more valid, 
            reliable, responsive to consumer preferences, cost-
            effective, or relevant to dimensions of quality and 
            resource use not addressed by such standard measures;
                ``(iii) include data made available under this 
            subsection with claims data from sources other than claims 
            data under this title in the evaluation of performance of 
            providers of services and suppliers;
                ``(iv) only include information on the evaluation of 
            performance of providers and suppliers in reports described 
            in subparagraph (C);
                ``(v) make available to providers of services and 
            suppliers, upon their request, data made available under 
            this subsection; and
                ``(vi) prior to their release, submit to the Secretary 
            the format of reports under subparagraph (C).
            ``(C) Reports.--Any report by a qualified entity evaluating 
        the performance of providers of services and suppliers using 
        data made available under this subsection shall--
                ``(i) include an understandable description of the 
            measures, which shall include quality measures and the 
            rationale for use of other measures described in 
            subparagraph (B)(ii)(II), risk adjustment methods, 
            physician attribution methods, other applicable methods, 
            data specifications and limitations, and the sponsors, so 
            that consumers, providers of services and suppliers, health 
            plans, researchers, and other stakeholders can assess such 
            reports;
                ``(ii) be made available confidentially, to any 
            provider of services or supplier to be identified in such 
            report, prior to the public release of such report, and 
            provide an opportunity to appeal and correct errors;
                ``(iii) only include information on a provider of 
            services or supplier in an aggregate form as determined 
            appropriate by the Secretary; and
                ``(iv) except as described in clause (ii), be made 
            available to the public.
            ``(D) Approval and limitation of uses.--The Secretary shall 
        not make data described in paragraph (3) available to a 
        qualified entity unless the qualified entity agrees to release 
        the information on the evaluation of performance of providers 
        of services and suppliers. Such entity shall only use such 
        data, and information derived from such evaluation, for the 
        reports under subparagraph (C). Data released to a qualified 
        entity under this subsection shall not be subject to discovery 
        or admission as evidence in judicial or administrative 
        proceedings without consent of the applicable provider of 
        services or supplier.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2012.

SEC. 10333. COMMUNITY-BASED COLLABORATIVE CARE NETWORKS.

    Part D of title III of the Public Health Service Act (42 U.S.C. 
254b et seq.) is amended by adding at the end the following new 
subpart:

    ``Subpart XI--Community-Based Collaborative Care Network Program

``SEC. 340H. COMMUNITY-BASED COLLABORATIVE CARE NETWORK PROGRAM.

    ``(a) In General.--The Secretary may award grants to eligible 
entities to support community-based collaborative care networks that 
meet the requirements of subsection (b).
    ``(b) Community-based Collaborative Care Networks.--
        ``(1) Description.--A community-based collaborative care 
    network (referred to in this section as a `network') shall be a 
    consortium of health care providers with a joint governance 
    structure (including providers within a single entity) that 
    provides comprehensive coordinated and integrated health care 
    services (as defined by the Secretary) for low-income populations.
        ``(2) Required inclusion.--A network shall include the 
    following providers (unless such provider does not exist within the 
    community, declines or refuses to participate, or places 
    unreasonable conditions on their participation):
            ``(A) A hospital that meets the criteria in section 
        1923(b)(1) of the Social Security Act; and
            ``(B) All Federally qualified health centers (as defined in 
        section 1861(aa) of the Social Security Act located in the 
        community.
        ``(3) Priority.--In awarding grants, the Secretary shall give 
    priority to networks that include--
            ``(A) the capability to provide the broadest range of 
        services to low-income individuals;
            ``(B) the broadest range of providers that currently serve 
        a high volume of low-income individuals; and
            ``(C) a county or municipal department of health.
    ``(c) Application.--
        ``(1) Application.--A network described in subsection (b) shall 
    submit an application to the Secretary.
        ``(2) Renewal.--In subsequent years, based on the performance 
    of grantees, the Secretary may provide renewal grants to prior year 
    grant recipients.
    ``(d) Use of Funds.--
        ``(1) Use by grantees.--Grant funds may be used for the 
    following activities:
            ``(A) Assist low-income individuals to--
                ``(i) access and appropriately use health services;
                ``(ii) enroll in health coverage programs; and
                ``(iii) obtain a regular primary care provider or a 
            medical home.
            ``(B) Provide case management and care management.
            ``(C) Perform health outreach using neighborhood health 
        workers or through other means.
            ``(D) Provide transportation.
            ``(E) Expand capacity, including through telehealth, after-
        hours services or urgent care.
            ``(F) Provide direct patient care services.
        ``(2) Grant funds to hrsa grantees.--The Secretary may limit 
    the percent of grant funding that may be spent on direct care 
    services provided by grantees of programs administered by the 
    Health Resources and Services Administration or impose other 
    requirements on such grantees deemed necessary.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2011 through 2015.''.

SEC. 10334. MINORITY HEALTH.

    (a) Office of Minority Health.--
        (1) In general.--Section 1707 of the Public Health Service Act 
    (42 U.S.C. 300u-6) is amended--
            (A) in subsection (a), by striking ``within the Office of 
        Public Health and Science'' and all that follows through the 
        end and inserting ``. The Office of Minority Health as existing 
        on the date of enactment of the Patient Protection and 
        Affordable Care Act shall be transferred to the Office of the 
        Secretary in such manner that there is established in the 
        Office of the Secretary, the Office of Minority Health, which 
        shall be headed by the Deputy Assistant Secretary for Minority 
        Health who shall report directly to the Secretary, and shall 
        retain and strengthen authorities (as in existence on such date 
        of enactment) for the purpose of improving minority health and 
        the quality of health care minorities receive, and eliminating 
        racial and ethnic disparities. In carrying out this subsection, 
        the Secretary, acting through the Deputy Assistant Secretary, 
        shall award grants, contracts, enter into memoranda of 
        understanding, cooperative, interagency, intra-agency and other 
        agreements with public and nonprofit private entities, 
        agencies, as well as Departmental and Cabinet agencies and 
        organizations, and with organizations that are indigenous human 
        resource providers in communities of color to assure improved 
        health status of racial and ethnic minorities, and shall 
        develop measures to evaluate the effectiveness of activities 
        aimed at reducing health disparities and supporting the local 
        community. Such measures shall evaluate community outreach 
        activities, language services, workforce cultural competence, 
        and other areas as determined by the Secretary.''; and
            (B) by striking subsection (h) and inserting the following:
    ``(h) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2011 through 2016.''.
        (2) Transfer of functions.--There are transferred to the Office 
    of Minority Health in the office of the Secretary of Health and 
    Human Services, all duties, responsibilities, authorities, 
    accountabilities, functions, staff, funds, award mechanisms, and 
    other entities under the authority of the Office of Minority Health 
    of the Public Health Service as in effect on the date before the 
    date of enactment of this Act, which shall continue in effect 
    according to the terms in effect on the date before such date of 
    enactment, until modified, terminated, superseded, set aside, or 
    revoked in accordance with law by the President, the Secretary, a 
    court of competent jurisdiction, or by operation of law.
        (3) Reports.--Not later than 1 year after the date of enactment 
    of this section, and biennially thereafter, the Secretary of Health 
    and Human Services shall prepare and submit to the appropriate 
    committees of Congress a report describing the activities carried 
    out under section 1707 of the Public Health Service Act (as amended 
    by this subsection) during the period for which the report is being 
    prepared. Not later than 1 year after the date of enactment of this 
    section, and biennially thereafter, the heads of each of the 
    agencies of the Department of Health and Human Services shall 
    submit to the Deputy Assistant Secretary for Minority Health a 
    report summarizing the minority health activities of each of the 
    respective agencies.
    (b) Establishment of Individual Offices of Minority Health Within 
the Department of Health and Human Services.--
        (1) In general.--Title XVII of the Public Health Service Act 
    (42 U.S.C. 300u et seq.) is amended by inserting after section 1707 
    the following section:

``SEC. 1707A. INDIVIDUAL OFFICES OF MINORITY HEALTH WITHIN THE 
              DEPARTMENT.

    ``(a) In General.--The head of each agency specified in subsection 
(b)(1) shall establish within the agency an office to be known as the 
Office of Minority Health. The head of each such Office shall be 
appointed by the head of the agency within which the Office is 
established, and shall report directly to the head of the agency. The 
head of such agency shall carry out this section (as this section 
relates to the agency) acting through such Director.
    ``(b) Specified Agencies.--The agencies referred to in subsection 
(a) are the Centers for Disease Control and Prevention, the Health 
Resources and Services Administration, the Substance Abuse and Mental 
Health Services Administration, the Agency for Healthcare Research and 
Quality, the Food and Drug Administration, and the Centers for Medicare 
& Medicaid Services.
    ``(c) Director; Appointment.--Each Office of Minority Health 
established in an agency listed in subsection (a) shall be headed by a 
director, with documented experience and expertise in minority health 
services research and health disparities elimination.
    ``(d) References.--Except as otherwise specified, any reference in 
Federal law to an Office of Minority Health (in the Department of 
Health and Human Services) is deemed to be a reference to the Office of 
Minority Health in the Office of the Secretary.
    ``(e) Funding.--
        ``(1) Allocations.--Of the amounts appropriated for a specified 
    agency for a fiscal year, the Secretary must designate an 
    appropriate amount of funds for the purpose of carrying out 
    activities under this section through the minority health office of 
    the agency. In reserving an amount under the preceding sentence for 
    a minority health office for a fiscal year, the Secretary shall 
    reduce, by substantially the same percentage, the amount that 
    otherwise would be available for each of the programs of the 
    designated agency involved.
        ``(2) Availability of funds for staffing.--The purposes for 
    which amounts made available under paragraph may be expended by a 
    minority health office include the costs of employing staff for 
    such office.''.
        (2) No new regulatory authority.--Nothing in this subsection 
    and the amendments made by this subsection may be construed as 
    establishing regulatory authority or modifying any existing 
    regulatory authority.
        (3) Limitation on termination.--Notwithstanding any other 
    provision of law, a Federal office of minority health or Federal 
    appointive position with primary responsibility over minority 
    health issues that is in existence in an office of agency of the 
    Department of Health and Human Services on the date of enactment of 
    this section shall not be terminated, reorganized, or have any of 
    its power or duties transferred unless such termination, 
    reorganization, or transfer is approved by an Act of Congress.
    (c) Redesignation of National Center on Minority Health and Health 
Disparities.--
        (1) Redesignation.--Title IV of the Public Health Service Act 
    (42 U.S.C. 281 et seq.) is amended--
            (A) by redesignating subpart 6 of part E as subpart 20;
            (B) by transferring subpart 20, as so redesignated, to part 
        C of such title IV;
            (C) by inserting subpart 20, as so redesignated, after 
        subpart 19 of such part C; and
            (D) in subpart 20, as so redesignated--
                (i) by redesignating sections 485E through 485H as 
            sections 464z-3 through 464z-6, respectively;
                (ii) by striking ``National Center on Minority Health 
            and Health Disparities'' each place such term appears and 
            inserting ``National Institute on Minority Health and 
            Health Disparities''; and
                (iii) by striking ``Center'' each place such term 
            appears and inserting ``Institute''.
        (2) Purpose of institute; duties.--Section 464z-3 of the Public 
    Health Service Act, as so redesignated, is amended--
            (A) in subsection (h)(1), by striking ``research endowments 
        at centers of excellence under section 736.'' and inserting the 
        following: ``research endowments--
        ``(1) at centers of excellence under section 736; and
        ``(2) at centers of excellence under section 464z-4.'';
            (B) in subsection (h)(2)(A), by striking ``average'' and 
        inserting ``median''; and
            (C) by adding at the end the following:
    ``(h) Interagency Coordination.--The Director of the Institute, as 
the primary Federal officials with responsibility for coordinating all 
research and activities conducted or supported by the National 
Institutes of Health on minority health and health disparities, shall 
plan, coordinate, review and evaluate research and other activities 
conducted or supported by the Institutes and Centers of the National 
Institutes of Health.''.
        (3) Technical and conforming amendments.--
            (A) Section 401(b)(24) of the Public Health Service Act (42 
        U.S.C. 281(b)(24)) is amended by striking ``Center'' and 
        inserting ``Institute''.
            (B) Subsection (d)(1) of section 903 of the Public Health 
        Service Act (42 U.S.C. 299a-1(d)(1)) is amended by striking 
        ``section 485E'' and inserting ``section 464z-3''.

SEC. 10335. TECHNICAL CORRECTION TO THE HOSPITAL VALUE-BASED PURCHASING 
              PROGRAM.

    Section 1886(o)(2)A) of the Social Security Act, as added by 
section 3001, is amended, in the first sentence, by inserting ``, other 
than measures of readmissions,'' after ``shall select measures''.

SEC. 10336. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY ACCESS TO 
              HIGH-QUALITY DIALYSIS SERVICES.

    (a) Study.--
        (1) In general.--The Comptroller General of the United States 
    shall conduct a study on the impact on Medicare beneficiary access 
    to high-quality dialysis services of including specified oral drugs 
    that are furnished to such beneficiaries for the treatment of end 
    stage renal disease in the bundled prospective payment system under 
    section 1881(b)(14) of the Social Security Act (42 U.S.C. 
    1395rr(b)(14)) (pursuant to the proposed rule published by the 
    Secretary of Health and Human Services in the Federal Register on 
    September 29, 2009 (74 Fed. Reg. 49922 et seq.)). Such study shall 
    include an analysis of--
            (A) the ability of providers of services and renal dialysis 
        facilities to furnish specified oral drugs or arrange for the 
        provision of such drugs;
            (B) the ability of providers of services and renal dialysis 
        facilities to comply, if necessary, with applicable State laws 
        (such as State pharmacy licensure requirements) in order to 
        furnish specified oral drugs;
            (C) whether appropriate quality measures exist to safeguard 
        care for Medicare beneficiaries being furnished specified oral 
        drugs by providers of services and renal dialysis facilities; 
        and
            (D) other areas determined appropriate by the Comptroller 
        General.
        (2) Specified oral drug defined.--For purposes of paragraph 
    (1), the term ``specified oral drug'' means a drug or biological 
    for which there is no injectable equivalent (or other non-oral form 
    of administration).
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Comptroller General of the United States shall submit 
to Congress a report containing the results of the study conducted 
under subsection (a), together with recommendations for such 
legislation and administrative action as the Comptroller General 
determines appropriate.

              Subtitle D--Provisions Relating to Title IV

SEC. 10401. AMENDMENTS TO SUBTITLE A.

    (a) Section 4001(h)(4) and (5) of this Act is amended by striking 
``2010'' each place such appears and inserting ``2020''.
    (b) Section 4002(c) of this Act is amended--
        (1) by striking ``research and health screenings'' and 
    inserting ``research, health screenings, and initiatives''; and
        (2) by striking ``for Preventive'' and inserting ``Regarding 
    Preventive''.
    (c) Section 4004(a)(4) of this Act is amended by striking ``a 
Gateway'' and inserting ``an Exchange''.

SEC. 10402. AMENDMENTS TO SUBTITLE B.

    (a) Section 399Z-1(a)(1(A) of the Public Health Service Act, as 
added by section 4101(b) of this Act, is amended by inserting ``and 
vision'' after ``oral''.
    (b) Section 1861(hhh)(4)(G) of the Social Security Act, as added by 
section 4103(b), is amended to read as follows:
            ``(G) A beneficiary shall be eligible to receive only an 
        initial preventive physical examination (as defined under 
        subsection (ww)(1)) during the 12-month period after the date 
        that the beneficiary's coverage begins under part B and shall 
        be eligible to receive personalized prevention plan services 
        under this subsection each year thereafter provided that the 
        beneficiary has not received either an initial preventive 
        physical examination or personalized prevention plan services 
        within the preceding 12-month period.''.

SEC. 10403. AMENDMENTS TO SUBTITLE C.

    Section 4201 of this Act is amended--
        (1) in subsection (a), by adding before the period the 
    following: ``, with not less than 20 percent of such grants being 
    awarded to rural and frontier areas'';
        (2) in subsection (c)(2)(B)(vii), by striking ``both urban and 
    rural areas'' and inserting ``urban, rural, and frontier areas''; 
    and
        (3) in subsection (f), by striking ``each fiscal years'' and 
    inserting ``each of fiscal year''.

SEC. 10404. AMENDMENTS TO SUBTITLE D.

    Section 399MM(2) of the Public Health Service Act, as added by 
section 4303 of this Act, is amended by striking ``by ensuring'' and 
inserting ``and ensuring''.

SEC. 10405. AMENDMENTS TO SUBTITLE E.

    Subtitle E of title IV of this Act is amended by striking section 
4401.

SEC. 10406. AMENDMENT RELATING TO WAIVING COINSURANCE FOR PREVENTIVE 
              SERVICES.

    Section 4104(b) of this Act is amended to read as follows:
    ``(b) Payment and Elimination of Coinsurance in All Settings.--
Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)), 
as amended by section 4103(c)(1), is amended--
        ``(1) in subparagraph (T), by inserting `(or 100 percent if 
    such services are recommended with a grade of A or B by the United 
    States Preventive Services Task Force for any indication or 
    population and are appropriate for the individual)' after `80 
    percent';
        ``(2) in subparagraph (W)--
            ``(A) in clause (i), by inserting `(if such subparagraph 
        were applied, by substituting ``100 percent'' for ``80 
        percent'')' after `subparagraph (D)'; and
            ``(B) in clause (ii), by striking `80 percent' and 
        inserting `100 percent';
        ``(3) by striking `and' before `(X)'; and
        ``(4) by inserting before the semicolon at the end the 
    following: `, and (Y) with respect to preventive services described 
    in subparagraphs (A) and (B) of section 1861(ddd)(3) that are 
    appropriate for the individual and, in the case of such services 
    described in subparagraph (A), are recommended with a grade of A or 
    B by the United States Preventive Services Task Force for any 
    indication or population, the amount paid shall be 100 percent of 
    (i) except as provided in clause (ii), the lesser of the actual 
    charge for the services or the amount determined under the fee 
    schedule that applies to such services under this part, and (ii) in 
    the case of such services that are covered OPD services (as defined 
    in subsection (t)(1)(B)), the amount determined under subsection 
    (t)'.''.

SEC. 10407. BETTER DIABETES CARE.

    (a) Short Title.--This section may be cited as the ``Catalyst to 
Better Diabetes Care Act of 2009''.
    (b) National Diabetes Report Card.--
        (1) In general.--The Secretary, in collaboration with the 
    Director of the Centers for Disease Control and Prevention 
    (referred to in this section as the ``Director''), shall prepare on 
    a biennial basis a national diabetes report card (referred to in 
    this section as a ``Report Card'') and, to the extent possible, for 
    each State.
        (2) Contents.--
            (A) In general.--Each Report Card shall include aggregate 
        health outcomes related to individuals diagnosed with diabetes 
        and prediabetes including--
                (i) preventative care practices and quality of care;
                (ii) risk factors; and
                (iii) outcomes.
            (B) Updated reports.--Each Report Card that is prepared 
        after the initial Report Card shall include trend analysis for 
        the Nation and, to the extent possible, for each State, for the 
        purpose of--
                (i) tracking progress in meeting established national 
            goals and objectives for improving diabetes care, costs, 
            and prevalence (including Healthy People 2010); and
                (ii) informing policy and program development.
        (3) Availability.--The Secretary, in collaboration with the 
    Director, shall make each Report Card publicly available, including 
    by posting the Report Card on the Internet.
    (c) Improvement of Vital Statistics Collection.--
        (1) In general.--The Secretary, acting through the Director of 
    the Centers for Disease Control and Prevention and in collaboration 
    with appropriate agencies and States, shall--
            (A) promote the education and training of physicians on the 
        importance of birth and death certificate data and how to 
        properly complete these documents, including the collection of 
        such data for diabetes and other chronic diseases;
            (B) encourage State adoption of the latest standard 
        revisions of birth and death certificates; and
            (C) work with States to re-engineer their vital statistics 
        systems in order to provide cost-effective, timely, and 
        accurate vital systems data.
        (2) Death certificate additional language.--In carrying out 
    this subsection, the Secretary may promote improvements to the 
    collection of diabetes mortality data, including the addition of a 
    question for the individual certifying the cause of death regarding 
    whether the deceased had diabetes.
    (d) Study on Appropriate Level of Diabetes Medical Education.--
        (1) In general.--The Secretary shall, in collaboration with the 
    Institute of Medicine and appropriate associations and councils, 
    conduct a study of the impact of diabetes on the practice of 
    medicine in the United States and the appropriateness of the level 
    of diabetes medical education that should be required prior to 
    licensure, board certification, and board recertification.
        (2) Report.--Not later than 2 years after the date of the 
    enactment of this Act, the Secretary shall submit a report on the 
    study under paragraph (1) to the Committees on Ways and Means and 
    Energy and Commerce of the House of Representatives and the 
    Committees on Finance and Health, Education, Labor, and Pensions of 
    the Senate.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

SEC. 10408. GRANTS FOR SMALL BUSINESSES TO PROVIDE COMPREHENSIVE 
              WORKPLACE WELLNESS PROGRAMS.

    (a) Establishment.--The Secretary shall award grants to eligible 
employers to provide their employees with access to comprehensive 
workplace wellness programs (as described under subsection (c)).
    (b) Scope.--
        (1) Duration.--The grant program established under this section 
    shall be conducted for a 5-year period.
        (2) Eligible employer.--The term ``eligible employer'' means an 
    employer (including a non-profit employer) that--
            (A) employs less than 100 employees who work 25 hours or 
        greater per week; and
            (B) does not provide a workplace wellness program as of the 
        date of enactment of this Act.
    (c) Comprehensive Workplace Wellness Programs.--
        (1) Criteria.--The Secretary shall develop program criteria for 
    comprehensive workplace wellness programs under this section that 
    are based on and consistent with evidence-based research and best 
    practices, including research and practices as provided in the 
    Guide to Community Preventive Services, the Guide to Clinical 
    Preventive Services, and the National Registry for Effective 
    Programs.
        (2) Requirements.--A comprehensive workplace wellness program 
    shall be made available by an eligible employer to all employees 
    and include the following components:
            (A) Health awareness initiatives (including health 
        education, preventive screenings, and health risk assessments).
            (B) Efforts to maximize employee engagement (including 
        mechanisms to encourage employee participation).
            (C) Initiatives to change unhealthy behaviors and lifestyle 
        choices (including counseling, seminars, online programs, and 
        self-help materials).
            (D) Supportive environment efforts (including workplace 
        policies to encourage healthy lifestyles, healthy eating, 
        increased physical activity, and improved mental health).
    (d) Application.--An eligible employer desiring to participate in 
the grant program under this section shall submit an application to the 
Secretary, in such manner and containing such information as the 
Secretary may require, which shall include a proposal for a 
comprehensive workplace wellness program that meet the criteria and 
requirements described under subsection (c).
    (e) Authorization of Appropriation.--For purposes of carrying out 
the grant program under this section, there is authorized to be 
appropriated $200,000,000 for the period of fiscal years 2011 through 
2015. Amounts appropriated pursuant to this subsection shall remain 
available until expended.

SEC. 10409. CURES ACCELERATION NETWORK.

    (a) Short Title.--This section may be cited as the ``Cures 
Acceleration Network Act of 2009''.
    (b) Requirement for the Director of NIH To Establish a Cures 
Acceleration Network.--Section 402(b) of the Public Health Service Act 
(42 U.S.C. 282(b)) is amended--
        (1) in paragraph (22), by striking ``and'' at the end;
        (2) in paragraph (23), by striking the period and inserting ``; 
    and''; and
        (3) by inserting after paragraph (23), the following:
        ``(24) implement the Cures Acceleration Network described in 
    section 402C.''.
    (c) Accepting Gifts To Support the Cures Acceleration Network.--
Section 499(c)(1) of the Public Health Service Act (42 U.S.C. 
290b(c)(1)) is amended by adding at the end the following:
            ``(E) The Cures Acceleration Network described in section 
        402C.''.
    (d) Establishment of the Cures Acceleration Network.--Part A of 
title IV of the Public Health Service Act is amended by inserting after 
section 402B (42 U.S.C. 282b) the following:

``SEC. 402C. CURES ACCELERATION NETWORK.

    ``(a) Definitions.--In this section:
        ``(1) Biological product.--The term `biological product' has 
    the meaning given such term in section 351 of the Public Health 
    Service Act.
        ``(2) Drug; device.--The terms `drug' and `device' have the 
    meanings given such terms in section 201 of the Federal Food, Drug, 
    and Cosmetic Act.
        ``(3) High need cure.--The term `high need cure' means a drug 
    (as that term is defined by section 201(g)(1) of the Federal Food, 
    Drug, and Cosmetic Act, biological product (as that term is defined 
    by section 262(i)), or device (as that term is defined by section 
    201(h) of the Federal Food, Drug, and Cosmetic Act) that, in the 
    determination of the Director of NIH--
            ``(A) is a priority to diagnose, mitigate, prevent, or 
        treat harm from any disease or condition; and
            ``(B) for which the incentives of the commercial market are 
        unlikely to result in its adequate or timely development.
        ``(4) Medical product.--The term `medical product' means a 
    drug, device, biological product, or product that is a combination 
    of drugs, devices, and biological products.
    ``(b) Establishment of the Cures Acceleration Network.--Subject to 
the appropriation of funds as described in subsection (g), there is 
established within the Office of the Director of NIH a program to be 
known as the Cures Acceleration Network (referred to in this section as 
`CAN'), which shall--
        ``(1) be under the direction of the Director of NIH, taking 
    into account the recommendations of a CAN Review Board (referred to 
    in this section as the `Board'), described in subsection (d); and
        ``(2) award grants and contracts to eligible entities, as 
    described in subsection (e), to accelerate the development of high 
    need cures, including through the development of medical products 
    and behavioral therapies.
    ``(c) Functions.--The functions of the CAN are to--
        ``(1) conduct and support revolutionary advances in basic 
    research, translating scientific discoveries from bench to bedside;
        ``(2) award grants and contracts to eligible entities to 
    accelerate the development of high need cures;
        ``(3) provide the resources necessary for government agencies, 
    independent investigators, research organizations, biotechnology 
    companies, academic research institutions, and other entities to 
    develop high need cures;
        ``(4) reduce the barriers between laboratory discoveries and 
    clinical trials for new therapies; and
        ``(5) facilitate review in the Food and Drug Administration for 
    the high need cures funded by the CAN, through activities that may 
    include--
            ``(A) the facilitation of regular and ongoing communication 
        with the Food and Drug Administration regarding the status of 
        activities conducted under this section;
            ``(B) ensuring that such activities are coordinated with 
        the approval requirements of the Food and Drug Administration, 
        with the goal of expediting the development and approval of 
        countermeasures and products; and
            ``(C) connecting interested persons with additional 
        technical assistance made available under section 565 of the 
        Federal Food, Drug, and Cosmetic Act.
    ``(d) CAN Board.--
        ``(1) Establishment.--There is established a Cures Acceleration 
    Network Review Board (referred to in this section as the `Board'), 
    which shall advise the Director of NIH on the conduct of the 
    activities of the Cures Acceleration Network.
        ``(2) Membership.--
            ``(A) In general.--
                ``(i) Appointment.--The Board shall be comprised of 24 
            members who are appointed by the Secretary and who serve at 
            the pleasure of the Secretary.
                ``(ii) Chairperson and vice chairperson.--The Secretary 
            shall designate, from among the 24 members appointed under 
            clause (i), one Chairperson of the Board (referred to in 
            this section as the `Chairperson') and one Vice 
            Chairperson.
            ``(B) Terms.--
                ``(i) In general.--Each member shall be appointed to 
            serve a 4-year term, except that any member appointed to 
            fill a vacancy occurring prior to the expiration of the 
            term for which the member's predecessor was appointed shall 
            be appointed for the remainder of such term.
                ``(ii) Consecutive appointments; maximum terms.--A 
            member may be appointed to serve not more than 3 terms on 
            the Board, and may not serve more than 2 such terms 
            consecutively.
            ``(C) Qualifications.--
                ``(i) In general.--The Secretary shall appoint 
            individuals to the Board based solely upon the individual's 
            established record of distinguished service in one of the 
            areas of expertise described in clause (ii). Each 
            individual appointed to the Board shall be of distinguished 
            achievement and have a broad range of disciplinary 
            interests.
                ``(ii) Expertise.--The Secretary shall select 
            individuals based upon the following requirements:

                    ``(I) For each of the fields of--

                        ``(aa) basic research;
                        ``(bb) medicine;
                        ``(cc) biopharmaceuticals;
                        ``(dd) discovery and delivery of medical 
                    products;
                        ``(ee) bioinformatics and gene therapy;
                        ``(ff) medical instrumentation; and
                        ``(gg) regulatory review and approval of 
                    medical products,

                the Secretary shall select at least 1 individual who is 
                eminent in such fields.
                    ``(II) At least 4 individuals shall be recognized 
                leaders in professional venture capital or private 
                equity organizations and have demonstrated experience 
                in private equity investing.
                    ``(III) At least 8 individuals shall represent 
                disease advocacy organizations.

        ``(3) Ex-officio members.--
            ``(A) Appointment.--In addition to the 24 Board members 
        described in paragraph (2), the Secretary shall appoint as ex-
        officio members of the Board--
                ``(i) a representative of the National Institutes of 
            Health, recommended by the Secretary of the Department of 
            Health and Human Services;
                ``(ii) a representative of the Office of the Assistant 
            Secretary of Defense for Health Affairs, recommended by the 
            Secretary of Defense;
                ``(iii) a representative of the Office of the Under 
            Secretary for Health for the Veterans Health 
            Administration, recommended by the Secretary of Veterans 
            Affairs;
                ``(iv) a representative of the National Science 
            Foundation, recommended by the Chair of the National 
            Science Board; and
                ``(v) a representative of the Food and Drug 
            Administration, recommended by the Commissioner of Food and 
            Drugs.
            ``(B) Terms.--Each ex-officio member shall serve a 3-year 
        term on the Board, except that the Chairperson may adjust the 
        terms of the initial ex-officio members in order to provide for 
        a staggered term of appointment for all such members.
        ``(4) Responsibilities of the board and the director of nih.--
            ``(A) Responsibilities of the board.--
                ``(i) In general.--The Board shall advise, and provide 
            recommendations to, the Director of NIH with respect to--

                    ``(I) policies, programs, and procedures for 
                carrying out the duties of the Director of NIH under 
                this section; and
                    ``(II) significant barriers to successful 
                translation of basic science into clinical application 
                (including issues under the purview of other agencies 
                and departments).

                ``(ii) Report.--In the case that the Board identifies a 
            significant barrier, as described in clause (i)(II), the 
            Board shall submit to the Secretary a report regarding such 
            barrier.
            ``(B) Responsibilities of the director of nih.--With 
        respect to each recommendation provided by the Board under 
        subparagraph (A)(i), the Director of NIH shall respond in 
        writing to the Board, indicating whether such Director will 
        implement such recommendation. In the case that the Director of 
        NIH indicates a recommendation of the Board will not be 
        implemented, such Director shall provide an explanation of the 
        reasons for not implementing such recommendation.
        ``(5) Meetings.--
            ``(A) In general.--The Board shall meet 4 times per 
        calendar year, at the call of the Chairperson.
            ``(B) Quorum; requirements; limitations.--
                ``(i) Quorum.--A quorum shall consist of a total of 13 
            members of the Board, excluding ex-officio members, with 
            diverse representation as described in clause (iii).
                ``(ii) Chairperson or vice chairperson.--Each meeting 
            of the Board shall be attended by either the Chairperson or 
            the Vice Chairperson.
                ``(iii) Diverse representation.--At each meeting of the 
            Board, there shall be not less than one scientist, one 
            representative of a disease advocacy organization, and one 
            representative of a professional venture capital or private 
            equity organization.
        ``(6) Compensation and travel expenses.--
            ``(A) Compensation.--Members shall receive compensation at 
        a rate to be fixed by the Chairperson but not to exceed a rate 
        equal to the daily equivalent of the annual rate of basic pay 
        prescribed for level IV of the Executive Schedule under section 
        5315 of title 5, United States Code, for each day (including 
        travel time) during which the member is engaged in the 
        performance of the duties of the Board. All members of the 
        Board who are officers or employees of the United States shall 
        serve without compensation in addition to that received for 
        their services as officers or employees of the United States.
            ``(B) Travel expenses.--Members of the Board shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for persons employed 
        intermittently by the Federal Government under section 5703(b) 
        of title 5, United States Code, while away from their homes or 
        regular places of business in the performance of services for 
        the Board.
    ``(e) Grant Program.--
        ``(1) Supporting innovation.--To carry out the purposes 
    described in this section, the Director of NIH shall award 
    contracts, grants, or cooperative agreements to the entities 
    described in paragraph (2), to--
            ``(A) promote innovation in technologies supporting the 
        advanced research and development and production of high need 
        cures, including through the development of medical products 
        and behavioral therapies.
            ``(B) accelerate the development of high need cures, 
        including through the development of medical products, 
        behavioral therapies, and biomarkers that demonstrate the 
        safety or effectiveness of medical products; or
            ``(C) help the award recipient establish protocols that 
        comply with Food and Drug Administration standards and 
        otherwise permit the recipient to meet regulatory requirements 
        at all stages of development, manufacturing, review, approval, 
        and safety surveillance of a medical product.
        ``(2) Eligible entities.--To receive assistance under paragraph 
    (1), an entity shall--
            ``(A) be a public or private entity, which may include a 
        private or public research institution, an institution of 
        higher education, a medical center, a biotechnology company, a 
        pharmaceutical company, a disease advocacy organization, a 
        patient advocacy organization, or an academic research 
        institution;
            ``(B) submit an application containing--
                ``(i) a detailed description of the project for which 
            the entity seeks such grant or contract;
                ``(ii) a timetable for such project;
                ``(iii) an assurance that the entity will submit--

                    ``(I) interim reports describing the entity's--

                        ``(aa) progress in carrying out the project; 
                    and
                        ``(bb) compliance with all provisions of this 
                    section and conditions of receipt of such grant or 
                    contract; and

                    ``(II) a final report at the conclusion of the 
                grant period, describing the outcomes of the project; 
                and

                ``(iv) a description of the protocols the entity will 
            follow to comply with Food and Drug Administration 
            standards and regulatory requirements at all stages of 
            development, manufacturing, review, approval, and safety 
            surveillance of a medical product; and
            ``(C) provide such additional information as the Director 
        of NIH may require.
        ``(3) Awards.--
            ``(A) The cures acceleration partnership awards.--
                ``(i) Initial award amount.--Each award under this 
            subparagraph shall be not more than $15,000,000 per project 
            for the first fiscal year for which the project is funded, 
            which shall be payable in one payment.
                ``(ii) Funding in subsequent fiscal years.--An eligible 
            entity receiving an award under clause (i) may apply for 
            additional funding for such project by submitting to the 
            Director of NIH the information required under 
            subparagraphs (B) and (C) of paragraph (2). The Director 
            may fund a project of such eligible entity in an amount not 
            to exceed $15,000,000 for a fiscal year subsequent to the 
            initial award under clause (i).
                ``(iii) Matching funds.--As a condition for receiving 
            an award under this subsection, an eligible entity shall 
            contribute to the project non-Federal funds in the amount 
            of $1 for every $3 awarded under clauses (i) and (ii), 
            except that the Director of NIH may waive or modify such 
            matching requirement in any case where the Director 
            determines that the goals and objectives of this section 
            cannot adequately be carried out unless such requirement is 
            waived.
            ``(B) The cures acceleration grant awards.--
                ``(i) Initial award amount.--Each award under this 
            subparagraph shall be not more than $15,000,000 per project 
            for the first fiscal year for which the project is funded, 
            which shall be payable in one payment.
                ``(ii) Funding in subsequent fiscal years.--An eligible 
            entity receiving an award under clause (i) may apply for 
            additional funding for such project by submitting to the 
            Board the information required under subparagraphs (B) and 
            (C) of paragraph (2). The Director of NIH may fund a 
            project of such eligible entity in an amount not to exceed 
            $15,000,000 for a fiscal year subsequent to the initial 
            award under clause (i).
            ``(C) The cures acceleration flexible research awards.--If 
        the Director of NIH determines that the goals and objectives of 
        this section cannot adequately be carried out through a 
        contract, grant, or cooperative agreement, the Director of NIH 
        shall have flexible research authority to use other 
        transactions to fund projects in accordance with the terms and 
        conditions of this section. Awards made under such flexible 
        research authority for a fiscal year shall not exceed 20 
        percent of the total funds appropriated under subsection (g)(1) 
        for such fiscal year.
        ``(4) Suspension of awards for defaults, noncompliance with 
    provisions and plans, and diversion of funds; repayment of funds.--
    The Director of NIH may suspend the award to any entity upon 
    noncompliance by such entity with provisions and plans under this 
    section or diversion of funds.
        ``(5) Audits.--The Director of NIH may enter into agreements 
    with other entities to conduct periodic audits of the projects 
    funded by grants or contracts awarded under this subsection.
        ``(6) Closeout procedures.--At the end of a grant or contract 
    period, a recipient shall follow the closeout procedures under 
    section 74.71 of title 45, Code of Federal Regulations (or any 
    successor regulation).
        ``(7) Review.--A determination by the Director of NIH as to 
    whether a drug, device, or biological product is a high need cure 
    (for purposes of subsection (a)(3)) shall not be subject to 
    judicial review.
    ``(f) Competitive Basis of Awards.--Any grant, cooperative 
agreement, or contract awarded under this section shall be awarded on a 
competitive basis.
    ``(g) Authorization of Appropriations.--
        ``(1) In general.--For purposes of carrying out this section, 
    there are authorized to be appropriated $500,000,000 for fiscal 
    year 2010, and such sums as may be necessary for subsequent fiscal 
    years. Funds appropriated under this section shall be available 
    until expended.
        ``(2) Limitation on use of funds otherwise appropriated.--No 
    funds appropriated under this Act, other than funds appropriated 
    under paragraph (1), may be allocated to the Cures Acceleration 
    Network.''.

SEC. 10410. CENTERS OF EXCELLENCE FOR DEPRESSION.

    (a) Short Title.--This section may be cited as the ``Establishing a 
Network of Health-Advancing National Centers of Excellence for 
Depression Act of 2009'' or the ``ENHANCED Act of 2009''.
    (b) Centers of Excellence for Depression.--Subpart 3 of part B of 
title V of the Public Health Service Act (42 U.S.C. 290bb et seq.) is 
amended by inserting after section 520A the following:

``SEC. 520B. NATIONAL CENTERS OF EXCELLENCE FOR DEPRESSION.

    ``(a) Depressive Disorder Defined.--In this section, the term 
`depressive disorder' means a mental or brain disorder relating to 
depression, including major depression, bipolar disorder, and related 
mood disorders.
    ``(b) Grant Program.--
        ``(1) In general.--The Secretary, acting through the 
    Administrator, shall award grants on a competitive basis to 
    eligible entities to establish national centers of excellence for 
    depression (referred to in this section as `Centers'), which shall 
    engage in activities related to the treatment of depressive 
    disorders.
        ``(2) Allocation of awards.--If the funds authorized under 
    subsection (f) are appropriated in the amounts provided for under 
    such subsection, the Secretary shall allocate such amounts so 
    that--
            ``(A) not later than 1 year after the date of enactment of 
        the ENHANCED Act of 2009, not more than 20 Centers may be 
        established; and
            ``(B) not later than September 30, 2016, not more than 30 
        Centers may be established.
        ``(3) Grant period.--
            ``(A) In general.--A grant awarded under this section shall 
        be for a period of 5 years.
            ``(B) Renewal.--A grant awarded under subparagraph (A) may 
        be renewed, on a competitive basis, for 1 additional 5-year 
        period, at the discretion of the Secretary. In determining 
        whether to renew a grant, the Secretary shall consider the 
        report cards issued under subsection (e)(2).
        ``(4) Use of funds.--Grant funds awarded under this subsection 
    shall be used for the establishment and ongoing activities of the 
    recipient of such funds.
        ``(5) Eligible entities.--
            ``(A) Requirements.--To be eligible to receive a grant 
        under this section, an entity shall--
                ``(i) be an institution of higher education or a public 
            or private nonprofit research institution; and
                ``(ii) submit an application to the Secretary at such 
            time and in such manner as the Secretary may require, as 
            described in subparagraph (B).
            ``(B) Application.--An application described in 
        subparagraph (A)(ii) shall include--
                ``(i) evidence that such entity--

                    ``(I) provides, or is capable of coordinating with 
                other entities to provide, comprehensive health 
                services with a focus on mental health services and 
                subspecialty expertise for depressive disorders;
                    ``(II) collaborates with other mental health 
                providers, as necessary, to address co-occurring mental 
                illnesses;
                    ``(III) is capable of training health professionals 
                about mental health; and

                ``(ii) such other information, as the Secretary may 
            require.
            ``(C) Priorities.--In awarding grants under this section, 
        the Secretary shall give priority to eligible entities that 
        meet 1 or more of the following criteria:
                ``(i) Demonstrated capacity and expertise to serve the 
            targeted population.
                ``(ii) Existing infrastructure or expertise to provide 
            appropriate, evidence-based and culturally and 
            linguistically competent services.
                ``(iii) A location in a geographic area with 
            disproportionate numbers of underserved and at-risk 
            populations in medically underserved areas and health 
            professional shortage areas.
                ``(iv) Proposed innovative approaches for outreach to 
            initiate or expand services.
                ``(v) Use of the most up-to-date science, practices, 
            and interventions available.
                ``(vi) Demonstrated capacity to establish cooperative 
            and collaborative agreements with community mental health 
            centers and other community entities to provide mental 
            health, social, and human services to individuals with 
            depressive disorders.
        ``(6) National coordinating center.--
            ``(A) In general.--The Secretary, acting through the 
        Administrator, shall designate 1 recipient of a grant under 
        this section to be the coordinating center of excellence for 
        depression (referred to in this section as the `coordinating 
        center'). The Secretary shall select such coordinating center 
        on a competitive basis, based upon the demonstrated capacity of 
        such center to perform the duties described in subparagraph 
        (C).
            ``(B) Application.--A Center that has been awarded a grant 
        under paragraph (1) may apply for designation as the 
        coordinating center by submitting an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(C) Duties.--The coordinating center shall--
                ``(i) develop, administer, and coordinate the network 
            of Centers under this section;
                ``(ii) oversee and coordinate the national database 
            described in subsection (d);
                ``(iii) lead a strategy to disseminate the findings and 
            activities of the Centers through such database; and
                ``(iv) serve as a liaison with the Administration, the 
            National Registry of Evidence-based Programs and Practices 
            of the Administration, and any Federal interagency or 
            interagency forum on mental health.
        ``(7) Matching funds.--The Secretary may not award a grant or 
    contract under this section to an entity unless the entity agrees 
    that it will make available (directly or through contributions from 
    other public or private entities) non-Federal contributions toward 
    the activities to be carried out under the grant or contract in an 
    amount equal to $1 for each $5 of Federal funds provided under the 
    grant or contract. Such non-Federal matching funds may be provided 
    directly or through donations from public or private entities and 
    may be in cash or in-kind, fairly evaluated, including plant, 
    equipment, or services.
    ``(c) Activities of the Centers.--Each Center shall carry out the 
following activities:
        ``(1) General activities.--Each Center shall--
            ``(A) integrate basic, clinical, or health services 
        interdisciplinary research and practice in the development, 
        implementation, and dissemination of evidence-based 
        interventions;
            ``(B) involve a broad cross-section of stakeholders, such 
        as researchers, clinicians, consumers, families of consumers, 
        and voluntary health organizations, to develop a research 
        agenda and disseminate findings, and to provide support in the 
        implementation of evidence-based practices;
            ``(C) provide training and technical assistance to mental 
        health professionals, and engage in and disseminate 
        translational research with a focus on meeting the needs of 
        individuals with depressive disorders; and
            ``(D) educate policy makers, employers, community leaders, 
        and the public about depressive disorders to reduce stigma and 
        raise awareness of treatments.
        ``(2) Improved treatment standards, clinical guidelines, 
    diagnostic protocols, and care coordination practice.--Each Center 
    shall collaborate with other Centers in the network to--
            ``(A) develop and implement treatment standards, clinical 
        guidelines, and protocols that emphasize primary prevention, 
        early intervention, treatment for, and recovery from, 
        depressive disorders;
            ``(B) foster communication with other providers attending 
        to co-occurring physical health conditions such as 
        cardiovascular, diabetes, cancer, and substance abuse 
        disorders;
            ``(C) leverage available community resources, develop and 
        implement improved self-management programs, and, when 
        appropriate, involve family and other providers of social 
        support in the development and implementation of care plans; 
        and
            ``(D) use electronic health records and telehealth 
        technology to better coordinate and manage, and improve access 
        to, care, as determined by the coordinating center.
        ``(3) Translational research through collaboration of centers 
    and community-based organizations.--Each Center shall--
            ``(A) demonstrate effective use of a public-private 
        partnership to foster collaborations among members of the 
        network and community-based organizations such as community 
        mental health centers and other social and human services 
        providers;
            ``(B) expand interdisciplinary, translational, and patient-
        oriented research and treatment; and
            ``(C) coordinate with accredited academic programs to 
        provide ongoing opportunities for the professional and 
        continuing education of mental health providers.
    ``(d) National Database.--
        ``(1) In general.--The coordinating center shall establish and 
    maintain a national, publicly available database to improve 
    prevention programs, evidence-based interventions, and disease 
    management programs for depressive disorders, using data collected 
    from the Centers, as described in paragraph (2).
        ``(2) Data collection.--Each Center shall submit data gathered 
    at such center, as appropriate, to the coordinating center 
    regarding--
            ``(A) the prevalence and incidence of depressive disorders;
            ``(B) the health and social outcomes of individuals with 
        depressive disorders;
            ``(C) the effectiveness of interventions designed, tested, 
        and evaluated;
            ``(D) other information, as the Secretary may require.
        ``(3) Submission of data to the administrator.--The 
    coordinating center shall submit to the Administrator the data and 
    financial information gathered under paragraph (2).
        ``(4) Publication using data from the database.--A Center, or 
    an individual affiliated with a Center, may publish findings using 
    the data described in paragraph (2) only if such center submits 
    such data to the coordinating center, as required under such 
    paragraph.
    ``(e) Establishment of Standards; Report Cards and Recommendations; 
Third Party Review.--
        ``(1) Establishment of standards.--The Secretary, acting 
    through the Administrator, shall establish performance standards 
    for--
            ``(A) each Center; and
            ``(B) the network of Centers as a whole.
        ``(2) Report cards.--The Secretary, acting through the 
    Administrator, shall--
            ``(A) for each Center, not later than 3 years after the 
        date on which such center of excellence is established and 
        annually thereafter, issue a report card to the coordinating 
        center to rate the performance of such Center; and
            ``(B) not later than 3 years after the date on which the 
        first grant is awarded under subsection (b)(1) and annually 
        thereafter, issue a report card to Congress to rate the 
        performance of the network of centers of excellence as a whole.
        ``(3) Recommendations.--Based upon the report cards described 
    in paragraph (2), the Secretary shall, not later than September 30, 
    2015--
            ``(A) make recommendations to the Centers regarding 
        improvements such centers shall make; and
            ``(B) make recommendations to Congress for expanding the 
        Centers to serve individuals with other types of mental 
        disorders.
        ``(4) Third party review.--Not later than 3 years after the 
    date on which the first grant is awarded under subsection (b)(1) 
    and annually thereafter, the Secretary shall arrange for an 
    independent third party to conduct an evaluation of the network of 
    Centers to ensure that such centers are meeting the goals of this 
    section.
    ``(f) Authorization of Appropriations.--
        ``(1) In general.--To carry out this section, there are 
    authorized to be appropriated--
            ``(A) $100,000,000 for each of the fiscal years 2011 
        through 2015; and
            ``(B) $150,000,000 for each of the fiscal years 2016 
        through 2020.
        ``(2) Allocation of funds authorized.--Of the amount 
    appropriated under paragraph (1) for a fiscal year, the Secretary 
    shall determine the allocation of each Center receiving a grant 
    under this section, but in no case may the allocation be more than 
    $5,000,000, except that the Secretary may allocate not more than 
    $10,000,000 to the coordinating center.''.

SEC. 10411. PROGRAMS RELATING TO CONGENITAL HEART DISEASE.

    (a) Short Title.--This subtitle may be cited as the ``Congenital 
Heart Futures Act''.
    (b) Programs Relating to Congenital Heart Disease.--
        (1) National congenital heart disease surveillance system.--
    Part P of title III of the Public Health Service Act (42 U.S.C. 
    280g et seq.), as amended by section 5405, is further amended by 
    adding at the end the following:

``SEC. 399V-2. NATIONAL CONGENITAL HEART DISEASE SURVEILLANCE SYSTEM.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, may--
        ``(1) enhance and expand infrastructure to track the 
    epidemiology of congenital heart disease and to organize such 
    information into a nationally-representative, population-based 
    surveillance system that compiles data concerning actual 
    occurrences of congenital heart disease, to be known as the 
    `National Congenital Heart Disease Surveillance System'; or
        ``(2) award a grant to one eligible entity to undertake the 
    activities described in paragraph (1).
    ``(b) Purpose.--The purpose of the Congenital Heart Disease 
Surveillance System shall be to facilitate further research into the 
types of health services patients use and to identify possible areas 
for educational outreach and prevention in accordance with standard 
practices of the Centers for Disease Control and Prevention.
    ``(c) Content.--The Congenital Heart Disease Surveillance System--
        ``(1) may include information concerning the incidence and 
    prevalence of congenital heart disease in the United States;
        ``(2) may be used to collect and store data on congenital heart 
    disease, including data concerning--
            ``(A) demographic factors associated with congenital heart 
        disease, such as age, race, ethnicity, sex, and family history 
        of individuals who are diagnosed with the disease;
            ``(B) risk factors associated with the disease;
            ``(C) causation of the disease;
            ``(D) treatment approaches; and
            ``(E) outcome measures, such that analysis of the outcome 
        measures will allow derivation of evidence-based best practices 
        and guidelines for congenital heart disease patients; and
        ``(3) may ensure the collection and analysis of longitudinal 
    data related to individuals of all ages with congenital heart 
    disease, including infants, young children, adolescents, and adults 
    of all ages.
    ``(d) Public Access.--The Congenital Heart Disease Surveillance 
System shall be made available to the public, as appropriate, including 
congenital heart disease researchers.
    ``(e) Patient Privacy.--The Secretary shall ensure that the 
Congenital Heart Disease Surveillance System is maintained in a manner 
that complies with the regulations promulgated under section 264 of the 
Health Insurance Portability and Accountability Act of 1996.
    ``(f) Eligibility for Grant.--To be eligible to receive a grant 
under subsection (a)(2), an entity shall--
        ``(1) be a public or private nonprofit entity with specialized 
    experience in congenital heart disease; and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require.''.
        (2) Congenital heart disease research.--Subpart 2 of part C of 
    title IV of the Public Health Service Act (42 U.S.C. 285b et seq.) 
    is amended by adding at the end the following:

``SEC. 425. CONGENITAL HEART DISEASE.

    ``(a) In General.--The Director of the Institute may expand, 
intensify, and coordinate research and related activities of the 
Institute with respect to congenital heart disease, which may include 
congenital heart disease research with respect to--
        ``(1) causation of congenital heart disease, including genetic 
    causes;
        ``(2) long-term outcomes in individuals with congenital heart 
    disease, including infants, children, teenagers, adults, and 
    elderly individuals;
        ``(3) diagnosis, treatment, and prevention;
        ``(4) studies using longitudinal data and retrospective 
    analysis to identify effective treatments and outcomes for 
    individuals with congenital heart disease; and
        ``(5) identifying barriers to life-long care for individuals 
    with congenital heart disease.
    ``(b) Coordination of Research Activities.--The Director of the 
Institute may coordinate research efforts related to congenital heart 
disease among multiple research institutions and may develop research 
networks.
    ``(c) Minority and Medically Underserved Communities.--In carrying 
out the activities described in this section, the Director of the 
Institute shall consider the application of such research and other 
activities to minority and medically underserved communities.''.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the amendments made by this section such sums 
as may be necessary for each of fiscal years 2011 through 2015.

SEC. 10412. AUTOMATED DEFIBRILLATION IN ADAM'S MEMORY ACT.

    Section 312 of the Public Health Service Act (42 U.S.C. 244) is 
amended--
        (1) in subsection (c)(6), after ``clearinghouse'' insert ``, 
    that shall be administered by an organization that has substantial 
    expertise in pediatric education, pediatric medicine, and 
    electrophysiology and sudden death,''; and
        (2) in the first sentence of subsection (e), by striking 
    ``fiscal year 2003'' and all that follows through ``2006'' and 
    inserting ``for each of fiscal years 2003 through 2014''.

SEC. 10413. YOUNG WOMEN'S BREAST HEALTH AWARENESS AND SUPPORT OF YOUNG 
              WOMEN DIAGNOSED WITH BREAST CANCER.

    (a) Short Title.--This section may be cited as the ``Young Women's 
Breast Health Education and Awareness Requires Learning Young Act of 
2009'' or the ``EARLY Act''.
    (b) Amendment.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.), as amended by this Act, is further amended by 
adding at the end the following:

        ``PART V--PROGRAMS RELATING TO BREAST HEALTH AND CANCER

``SEC. 399NN. YOUNG WOMEN'S BREAST HEALTH AWARENESS AND SUPPORT OF 
              YOUNG WOMEN DIAGNOSED WITH BREAST CANCER.

    ``(a) Public Education Campaign.--
        ``(1) In general.--The Secretary, acting through the Director 
    of the Centers for Disease Control and Prevention, shall conduct a 
    national evidence-based education campaign to increase awareness of 
    young women's knowledge regarding--
            ``(A) breast health in young women of all racial, ethnic, 
        and cultural backgrounds;
            ``(B) breast awareness and good breast health habits;
            ``(C) the occurrence of breast cancer and the general and 
        specific risk factors in women who may be at high risk for 
        breast cancer based on familial, racial, ethnic, and cultural 
        backgrounds such as Ashkenazi Jewish populations;
            ``(D) evidence-based information that would encourage young 
        women and their health care professional to increase early 
        detection of breast cancers; and
            ``(E) the availability of health information and other 
        resources for young women diagnosed with breast cancer.
        ``(2) Evidence-based, age appropriate messages.--The campaign 
    shall provide evidence-based, age-appropriate messages and 
    materials as developed by the Centers for Disease Control and 
    Prevention and the Advisory Committee established under paragraph 
    (4).
        ``(3) Media campaign.--In conducting the education campaign 
    under paragraph (1), the Secretary shall award grants to entities 
    to establish national multimedia campaigns oriented to young women 
    that may include advertising through television, radio, print 
    media, billboards, posters, all forms of existing and especially 
    emerging social networking media, other Internet media, and any 
    other medium determined appropriate by the Secretary.
        ``(4) Advisory committee.--
            ``(A) Establishment.--Not later than 60 days after the date 
        of the enactment of this section, the Secretary, acting through 
        the Director of the Centers for Disease Control and Prevention, 
        shall establish an advisory committee to assist in creating and 
        conducting the education campaigns under paragraph (1) and 
        subsection (b)(1).
            ``(B) Membership.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall appoint to the advisory committee under subparagraph (A) 
        such members as deemed necessary to properly advise the 
        Secretary, and shall include organizations and individuals with 
        expertise in breast cancer, disease prevention, early 
        detection, diagnosis, public health, social marketing, genetic 
        screening and counseling, treatment, rehabilitation, palliative 
        care, and survivorship in young women.
    ``(b) Health Care Professional Education Campaign.--The Secretary, 
acting through the Director of the Centers for Disease Control and 
Prevention, and in consultation with the Administrator of the Health 
Resources and Services Administration, shall conduct an education 
campaign among physicians and other health care professionals to 
increase awareness--
        ``(1) of breast health, symptoms, and early diagnosis and 
    treatment of breast cancer in young women, including specific risk 
    factors such as family history of cancer and women that may be at 
    high risk for breast cancer, such as Ashkenazi Jewish population;
        ``(2) on how to provide counseling to young women about their 
    breast health, including knowledge of their family cancer history 
    and importance of providing regular clinical breast examinations;
        ``(3) concerning the importance of discussing healthy 
    behaviors, and increasing awareness of services and programs 
    available to address overall health and wellness, and making 
    patient referrals to address tobacco cessation, good nutrition, and 
    physical activity;
        ``(4) on when to refer patients to a health care provider with 
    genetics expertise;
        ``(5) on how to provide counseling that addresses long-term 
    survivorship and health concerns of young women diagnosed with 
    breast cancer; and
        ``(6) on when to provide referrals to organizations and 
    institutions that provide credible health information and 
    substantive assistance and support to young women diagnosed with 
    breast cancer.
    ``(c) Prevention Research Activities.--The Secretary, acting 
through--
        ``(1) the Director of the Centers for Disease Control and 
    Prevention, shall conduct prevention research on breast cancer in 
    younger women, including--
            ``(A) behavioral, survivorship studies, and other research 
        on the impact of breast cancer diagnosis on young women;
            ``(B) formative research to assist with the development of 
        educational messages and information for the public, targeted 
        populations, and their families about breast health, breast 
        cancer, and healthy lifestyles;
            ``(C) testing and evaluating existing and new social 
        marketing strategies targeted at young women; and
            ``(D) surveys of health care providers and the public 
        regarding knowledge, attitudes, and practices related to breast 
        health and breast cancer prevention and control in high-risk 
        populations; and
        ``(2) the Director of the National Institutes of Health, shall 
    conduct research to develop and validate new screening tests and 
    methods for prevention and early detection of breast cancer in 
    young women.
    ``(d) Support for Young Women Diagnosed With Breast Cancer.--
        ``(1) In general.--The Secretary shall award grants to 
    organizations and institutions to provide health information from 
    credible sources and substantive assistance directed to young women 
    diagnosed with breast cancer and pre-neoplastic breast diseases.
        ``(2) Priority.--In making grants under paragraph (1), the 
    Secretary shall give priority to applicants that deal specifically 
    with young women diagnosed with breast cancer and pre-neoplastic 
    breast disease.
    ``(e) No Duplication of Effort.--In conducting an education 
campaign or other program under subsections (a), (b), (c), or (d), the 
Secretary shall avoid duplicating other existing Federal breast cancer 
education efforts.
    ``(f) Measurement; Reporting.--The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention, shall--
        ``(1) measure--
            ``(A) young women's awareness regarding breast health, 
        including knowledge of family cancer history, specific risk 
        factors and early warning signs, and young women's proactive 
        efforts at early detection;
            ``(B) the number or percentage of young women utilizing 
        information regarding lifestyle interventions that foster 
        healthy behaviors;
            ``(C) the number or percentage of young women receiving 
        regular clinical breast exams; and
            ``(D) the number or percentage of young women who perform 
        breast self exams, and the frequency of such exams, before the 
        implementation of this section;
        ``(2) not less than every 3 years, measure the impact of such 
    activities; and
        ``(3) submit reports to the Congress on the results of such 
    measurements.
    ``(g) Definition.--In this section, the term `young women' means 
women 15 to 44 years of age.
    ``(h) Authorization of Appropriations.--To carry out subsections 
(a), (b), (c)(1), and (d), there are authorized to be appropriated 
$9,000,000 for each of the fiscal years 2010 through 2014.''.

               Subtitle E--Provisions Relating to Title V

SEC. 10501. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT, THE SOCIAL 
              SECURITY ACT, AND TITLE V OF THIS ACT.

    (a) Section 5101 of this Act is amended--
        (1) in subsection (c)(2)(B)(i)(II), by inserting ``, including 
    representatives of small business and self-employed individuals'' 
    after ``employers'';
        (2) in subsection (d)(4)(A)--
            (A) by redesignating clause (iv) as clause (v); and
            (B) by inserting after clause (iii) the following:
                ``(iv) An analysis of, and recommendations for, 
            eliminating the barriers to entering and staying in primary 
            care, including provider compensation.''; and
        (3) in subsection (i)(2)(B), by inserting ``optometrists, 
    ophthalmologists,'' after ``occupational therapists,''.
    (b) Subtitle B of title V of this Act is amended by adding at the 
end the following:

``SEC. 5104. INTERAGENCY TASK FORCE TO ASSESS AND IMPROVE ACCESS TO 
              HEALTH CARE IN THE STATE OF ALASKA.

    ``(a) Establishment.--There is established a task force to be known 
as the `Interagency Access to Health Care in Alaska Task Force' 
(referred to in this section as the `Task Force').
    ``(b) Duties.--The Task Force shall--
        ``(1) assess access to health care for beneficiaries of Federal 
    health care systems in Alaska; and
        ``(2) develop a strategy for the Federal Government to improve 
    delivery of health care to Federal beneficiaries in the State of 
    Alaska.
    ``(c) Membership.--The Task Force shall be comprised of Federal 
members who shall be appointed, not later than 45 days after the date 
of enactment of this Act, as follows:
        ``(1) The Secretary of Health and Human Services shall appoint 
    one representative of each of the following:
            ``(A) The Department of Health and Human Services.
            ``(B) The Centers for Medicare and Medicaid Services.
            ``(C) The Indian Health Service.
        ``(2) The Secretary of Defense shall appoint one representative 
    of the TRICARE Management Activity.
        ``(3) The Secretary of the Army shall appoint one 
    representative of the Army Medical Department.
        ``(4) The Secretary of the Air Force shall appoint one 
    representative of the Air Force, from among officers at the Air 
    Force performing medical service functions.
        ``(5) The Secretary of Veterans Affairs shall appoint one 
    representative of each of the following:
            ``(A) The Department of Veterans Affairs.
            ``(B) The Veterans Health Administration.
        ``(6) The Secretary of Homeland Security shall appoint one 
    representative of the United States Coast Guard.
    ``(d) Chairperson.--One chairperson of the Task Force shall be 
appointed by the Secretary at the time of appointment of members under 
subsection (c), selected from among the members appointed under 
paragraph (1).
    ``(e) Meetings.--The Task Force shall meet at the call of the 
chairperson.
    ``(f) Report.--Not later than 180 days after the date of enactment 
of this Act, the Task Force shall submit to Congress a report detailing 
the activities of the Task Force and containing the findings, 
strategies, recommendations, policies, and initiatives developed 
pursuant to the duty described in subsection (b)(2). In preparing such 
report, the Task Force shall consider completed and ongoing efforts by 
Federal agencies to improve access to health care in the State of 
Alaska.
    ``(g) Termination.--The Task Force shall be terminated on the date 
of submission of the report described in subsection (f).''.
    (c) Section 399V of the Public Health Service Act, as added by 
section 5313, is amended--
        (1) in subsection (b)(4), by striking ``identify, educate, 
    refer, and enroll'' and inserting ``identify and refer''; and
        (2) in subsection (k)(1), by striking ``, as defined by the 
    Department of Labor as Standard Occupational Classification [21-
    1094]''.
    (d) Section 738(a)(3) of the Public Health Service Act (42 U.S.C. 
293b(a)(3)) is amended by inserting ``schools offering physician 
assistant education programs,'' after ``public health,''.
    (e) Subtitle D of title V of this Act is amended by adding at the 
end the following:

``SEC. 5316. DEMONSTRATION GRANTS FOR FAMILY NURSE PRACTITIONER 
              TRAINING PROGRAMS.

    ``(a) Establishment of Program.--The Secretary of Health and Human 
Services (referred to in this section as the `Secretary') shall 
establish a training demonstration program for family nurse 
practitioners (referred to in this section as the `program') to employ 
and provide 1-year training for nurse practitioners who have graduated 
from a nurse practitioner program for careers as primary care providers 
in Federally qualified health centers (referred to in this section as 
`FQHCs') and nurse-managed health clinics (referred to in this section 
as `NMHCs').
    ``(b) Purpose.--The purpose of the program is to enable each grant 
recipient to--
        ``(1) provide new nurse practitioners with clinical training to 
    enable them to serve as primary care providers in FQHCs and NMHCs;
        ``(2) train new nurse practitioners to work under a model of 
    primary care that is consistent with the principles set forth by 
    the Institute of Medicine and the needs of vulnerable populations; 
    and
        ``(3) create a model of FQHC and NMHC training for nurse 
    practitioners that may be replicated nationwide.
    ``(c) Grants.--The Secretary shall award 3-year grants to eligible 
entities that meet the requirements established by the Secretary, for 
the purpose of operating the nurse practitioner primary care programs 
described in subsection (a) in such entities.
    ``(d) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity shall--
        ``(1)(A) be a FQHC as defined in section 1861(aa) of the Social 
    Security Act (42 U.S.C. 1395x(aa)); or
        ``(B) be a nurse-managed health clinic, as defined in section 
    330A-1 of the Public Health Service Act (as added by section 5208 
    of this Act); and
        ``(2) submit to the Secretary an application at such time, in 
    such manner, and containing such information as the Secretary may 
    require.
    ``(e) Priority in Awarding Grants.--In awarding grants under this 
section, the Secretary shall give priority to eligible entities that--
        ``(1) demonstrate sufficient infrastructure in size, scope, and 
    capacity to undertake the requisite training of a minimum of 3 
    nurse practitioners per year, and to provide to each awardee 12 
    full months of full-time, paid employment and benefits consistent 
    with the benefits offered to other full-time employees of such 
    entity;
        ``(2) will assign not less than 1 staff nurse practitioner or 
    physician to each of 4 precepted clinics;
        ``(3) will provide to each awardee specialty rotations, 
    including specialty training in prenatal care and women's health, 
    adult and child psychiatry, orthopedics, geriatrics, and at least 3 
    other high-volume, high-burden specialty areas;
        ``(4) provide sessions on high-volume, high-risk health 
    problems and have a record of training health care professionals in 
    the care of children, older adults, and underserved populations; 
    and
        ``(5) collaborate with other safety net providers, schools, 
    colleges, and universities that provide health professions 
    training.
    ``(f) Eligibility of Nurse Practitioners.--
        ``(1) In general.--To be eligible for acceptance to a program 
    funded through a grant awarded under this section, an individual 
    shall--
            ``(A) be licensed or eligible for licensure in the State in 
        which the program is located as an advanced practice registered 
        nurse or advanced practice nurse and be eligible or board-
        certified as a family nurse practitioner; and
            ``(B) demonstrate commitment to a career as a primary care 
        provider in a FQHC or in a NMHC.
        ``(2) Preference.--In selecting awardees under the program, 
    each grant recipient shall give preference to bilingual candidates 
    that meet the requirements described in paragraph (1).
        ``(3) Deferral of certain service.--The starting date of 
    required service of individuals in the National Health Service 
    Corps Service program under title II of the Public Health Service 
    Act (42 U.S.C. 202 et seq.) who receive training under this section 
    shall be deferred until the date that is 22 days after the date of 
    completion of the program.
    ``(g) Grant Amount.--Each grant awarded under this section shall be 
in an amount not to exceed $600,000 per year. A grant recipient may 
carry over funds from 1 fiscal year to another without obtaining 
approval from the Secretary.
    ``(h) Technical Assistance Grants.--The Secretary may award 
technical assistance grants to 1 or more FQHCs or NMHCs that have 
demonstrated expertise in establishing a nurse practitioner residency 
training program. Such technical assistance grants shall be for the 
purpose of providing technical assistance to other recipients of grants 
under subsection (c).
    ``(i) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated such sums as may be necessary 
for each of fiscal years 2011 through 2014.''.
    (f)(1) Section 399W of the Public Health Service Act, as added by 
section 5405, is redesignated as section 399V-1.
    (2) Section 399V-1 of the Public Health Service Act, as so 
redesignated, is amended in subsection (b)(2)(A) by striking ``and the 
departments of 1 or more health professions schools in the State that 
train providers in primary care'' and inserting ``and the departments 
that train providers in primary care in 1 or more health professions 
schools in the State''.
    (3) Section 934 of the Public Health Service Act, as added by 
section 3501, is amended by striking ``399W'' each place such term 
appears and inserting ``399V-1''.
    (4) Section 935(b) of the Public Health Service Act, as added by 
section 3503, is amended by striking ``399W'' and inserting ``399V-1''.
    (g) Part P of title III of the Public Health Service Act 42 U.S.C. 
280g et seq.), as amended by section 10411, is amended by adding at the 
end the following:

``SEC. 399V-3. NATIONAL DIABETES PREVENTION PROGRAM.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall establish a 
national diabetes prevention program (referred to in this section as 
the `program') targeted at adults at high risk for diabetes in order to 
eliminate the preventable burden of diabetes.
    ``(b) Program Activities.--The program described in subsection (a) 
shall include--
        ``(1) a grant program for community-based diabetes prevention 
    program model sites;
        ``(2) a program within the Centers for Disease Control and 
    Prevention to determine eligibility of entities to deliver 
    community-based diabetes prevention services;
        ``(3) a training and outreach program for lifestyle 
    intervention instructors; and
        ``(4) evaluation, monitoring and technical assistance, and 
    applied research carried out by the Centers for Disease Control and 
    Prevention.
    ``(c) Eligible Entities.--To be eligible for a grant under 
subsection (b)(1), an entity shall be a State or local health 
department, a tribal organization, a national network of community-
based non-profits focused on health and wellbeing, an academic 
institution, or other entity, as the Secretary determines.
    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2010 through 2014.''.
    (h) The provisions of, and amendment made by, section 5501(c) of 
this Act are repealed.
    (i)(1) The provisions of, and amendments made by, section 5502 of 
this Act are repealed.
    (2)(A) Section 1861(aa)(3)(A) of the Social Security Act (42 U.S.C. 
1395w(aa)(3)(A)) is amended to read as follows:
        ``(A) services of the type described in subparagraphs (A) 
    through (C) of paragraph (1) and preventive services (as defined in 
    section 1861(ddd)(3)); and''.
    (B) The amendment made by subparagraph (A) shall apply to services 
furnished on or after January 1, 2011.
    (3)(A) Section 1834 of the Social Security Act (42 U.S.C. 1395m), 
as amended by section 4105, is amended by adding at the end the 
following new subsection:
    ``(o) Development and Implementation of Prospective Payment 
System.--
        ``(1) Development.--
            ``(A) In general.--The Secretary shall develop a 
        prospective payment system for payment for Federally qualified 
        health center services furnished by Federally qualified health 
        centers under this title. Such system shall include a process 
        for appropriately describing the services furnished by 
        Federally qualified health centers and shall establish payment 
        rates for specific payment codes based on such appropriate 
        descriptions of services. Such system shall be established to 
        take into account the type, intensity, and duration of services 
        furnished by Federally qualified health centers. Such system 
        may include adjustments, including geographic adjustments, 
        determined appropriate by the Secretary.
            ``(B) Collection of data and evaluation.--By not later than 
        January 1, 2011, the Secretary shall require Federally 
        qualified health centers to submit to the Secretary such 
        information as the Secretary may require in order to develop 
        and implement the prospective payment system under this 
        subsection, including the reporting of services using HCPCS 
        codes.
        ``(2) Implementation.--
            ``(A) In general.--Notwithstanding section 1833(a)(3)(A), 
        the Secretary shall provide, for cost reporting periods 
        beginning on or after October 1, 2014, for payments of 
        prospective payment rates for Federally qualified health center 
        services furnished by Federally qualified health centers under 
        this title in accordance with the prospective payment system 
        developed by the Secretary under paragraph (1).
            ``(B) Payments.--
                ``(i) Initial payments.--The Secretary shall implement 
            such prospective payment system so that the estimated 
            aggregate amount of prospective payment rates (determined 
            prior to the application of section 1833(a)(1)(Z)) under 
            this title for Federally qualified health center services 
            in the first year that such system is implemented is equal 
            to 100 percent of the estimated amount of reasonable costs 
            (determined without the application of a per visit payment 
            limit or productivity screen and prior to the application 
            of section 1866(a)(2)(A)(ii)) that would have occurred for 
            such services under this title in such year if the system 
            had not been implemented.
                ``(ii) Payments in subsequent years.--Payment rates in 
            years after the year of implementation of such system shall 
            be the payment rates in the previous year increased--

                    ``(I) in the first year after implementation of 
                such system, by the percentage increase in the MEI (as 
                defined in section 1842(i)(3)) for the year involved; 
                and
                    ``(II) in subsequent years, by the percentage 
                increase in a market basket of Federally qualified 
                health center goods and services as promulgated through 
                regulations, or if such an index is not available, by 
                the percentage increase in the MEI (as defined in 
                section 1842(i)(3)) for the year involved.

            ``(C) Preparation for pps implementation.--Notwithstanding 
        any other provision of law, the Secretary may establish and 
        implement by program instruction or otherwise the payment codes 
        to be used under the prospective payment system under this 
        section.''.
    (B) Section 1833(a)(1) of the Social Security Act (42 U.S.C. 
1395l(a)(1)), as amended by section 4104, is amended--
        (i) by striking ``and'' before ``(Y)''; and
        (ii) by inserting before the semicolon at the end the 
    following: ``, and (Z) with respect to Federally qualified health 
    center services for which payment is made under section 1834(o), 
    the amounts paid shall be 80 percent of the lesser of the actual 
    charge or the amount determined under such section''.
    (C) Section 1833(a) of the Social Security Act (42 U.S.C. 1395l(a)) 
is amended--
        (i) in paragraph (3)(B)(i)--
            (I) by inserting ``(I)'' after ``otherwise been provided''; 
        and
            (II) by inserting ``, or (II) in the case of such services 
        furnished on or after the implementation date of the 
        prospective payment system under section 1834(o), under such 
        section (calculated as if `100 percent' were substituted for 
        `80 percent' in such section) for such services if the 
        individual had not been so enrolled'' after ``been so 
        enrolled''; and
        (ii) by adding at the end the following flush sentence:
    ``Paragraph (3)(A) shall not apply to Federally qualified health 
    center services furnished on or after the implementation date of 
    the prospective payment system under section 1834(0).''.
    (j) Section 5505 is amended by adding at the end the following new 
subsection:
    ``(d) Application.--The amendments made by this section shall not 
be applied in a manner that requires reopening of any settled cost 
reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. 1395ww(h)).''.
    (k) Subtitle G of title V of this Act is amended by adding at the 
end the following:

``SEC. 5606. STATE GRANTS TO HEALTH CARE PROVIDERS WHO PROVIDE SERVICES 
              TO A HIGH PERCENTAGE OF MEDICALLY UNDERSERVED POPULATIONS 
              OR OTHER SPECIAL POPULATIONS.

    ``(a) In General.--A State may award grants to health care 
providers who treat a high percentage, as determined by such State, of 
medically underserved populations or other special populations in such 
State.
    ``(b) Source of Funds.--A grant program established by a State 
under subsection (a) may not be established within a department, 
agency, or other entity of such State that administers the Medicaid 
program under title XIX of the Social Security Act (42 U.S.C. 1396 et 
seq.), and no Federal or State funds allocated to such Medicaid 
program, the Medicare program under title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.), or the TRICARE program under chapter 55 
of title 10, United States Code, may be used to award grants or to pay 
administrative costs associated with a grant program established under 
subsection (a).''.
    (l) Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended--
        (1) after the part heading, by inserting the following:

               ``Subpart I--Medical Training Generally'';

    and
        (2) by inserting at the end the following:

           ``Subpart II--Training in Underserved Communities

``SEC. 749B. RURAL PHYSICIAN TRAINING GRANTS.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, shall establish a 
grant program for the purposes of assisting eligible entities in 
recruiting students most likely to practice medicine in underserved 
rural communities, providing rural-focused training and experience, and 
increasing the number of recent allopathic and osteopathic medical 
school graduates who practice in underserved rural communities.
    ``(b) Eligible Entities.--In order to be eligible to receive a 
grant under this section, an entity shall--
        ``(1) be a school of allopathic or osteopathic medicine 
    accredited by a nationally recognized accrediting agency or 
    association approved by the Secretary for this purpose, or any 
    combination or consortium of such schools; and
        ``(2) submit an application to the Secretary that includes a 
    certification that such entity will use amounts provided to the 
    institution as described in subsection (d)(1).
    ``(c) Priority.--In awarding grant funds under this section, the 
Secretary shall give priority to eligible entities that--
        ``(1) demonstrate a record of successfully training students, 
    as determined by the Secretary, who practice medicine in 
    underserved rural communities;
        ``(2) demonstrate that an existing academic program of the 
    eligible entity produces a high percentage, as determined by the 
    Secretary, of graduates from such program who practice medicine in 
    underserved rural communities;
        ``(3) demonstrate rural community institutional partnerships, 
    through such mechanisms as matching or contributory funding, 
    documented in-kind services for implementation, or existence of 
    training partners with interprofessional expertise in community 
    health center training locations or other similar facilities; or
        ``(4) submit, as part of the application of the entity under 
    subsection (b), a plan for the long-term tracking of where the 
    graduates of such entity practice medicine.
    ``(d) Use of Funds.--
        ``(1) Establishment.--An eligible entity receiving a grant 
    under this section shall use the funds made available under such 
    grant to establish, improve, or expand a rural-focused training 
    program (referred to in this section as the `Program') meeting the 
    requirements described in this subsection and to carry out such 
    program.
        ``(2) Structure of program.--An eligible entity shall--
            ``(A) enroll no fewer than 10 students per class year into 
        the Program; and
            ``(B) develop criteria for admission to the Program that 
        gives priority to students--
                ``(i) who have originated from or lived for a period of 
            2 or more years in an underserved rural community; and
                ``(ii) who express a commitment to practice medicine in 
            an underserved rural community.
        ``(3) Curricula.--The Program shall require students to enroll 
    in didactic coursework and clinical experience particularly 
    applicable to medical practice in underserved rural communities, 
    including--
            ``(A) clinical rotations in underserved rural communities, 
        and in applicable specialties, or other coursework or clinical 
        experience deemed appropriate by the Secretary; and
            ``(B) in addition to core school curricula, additional 
        coursework or training experiences focused on medical issues 
        prevalent in underserved rural communities.
        ``(4) Residency placement assistance.--Where available, the 
    Program shall assist all students of the Program in obtaining 
    clinical training experiences in locations with postgraduate 
    programs offering residency training opportunities in underserved 
    rural communities, or in local residency training programs that 
    support and train physicians to practice in underserved rural 
    communities.
        ``(5) Program student cohort support.--The Program shall 
    provide and require all students of the Program to participate in 
    group activities designed to further develop, maintain, and 
    reinforce the original commitment of such students to practice in 
    an underserved rural community.
    ``(e) Annual Reporting.--An eligible entity receiving a grant under 
this section shall submit an annual report to the Secretary on the 
success of the Program, based on criteria the Secretary determines 
appropriate, including the residency program selection of graduating 
students who participated in the Program.
    ``(f) Regulations.--Not later than 60 days after the date of 
enactment of this section, the Secretary shall by regulation define 
`underserved rural community' for purposes of this section.
    ``(g) Supplement Not Supplant.--Any eligible entity receiving funds 
under this section shall use such funds to supplement, not supplant, 
any other Federal, State, and local funds that would otherwise be 
expended by such entity to carry out the activities described in this 
section.
    ``(h) Maintenance of Effort.--With respect to activities for which 
funds awarded under this section are to be expended, the entity shall 
agree to maintain expenditures of non-Federal amounts for such 
activities at a level that is not less than the level of such 
expenditures maintained by the entity for the fiscal year preceding the 
fiscal year for which the entity receives a grant under this section.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated $4,000,000 for each of the fiscal years 2010 through 
2013.''.
    (m)(1) Section 768 of the Public Health Service Act (42 U.S.C. 
295c) is amended to read as follows:

``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
              PROGRAM.

    ``(a) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration and in consultation 
with the Director of the Centers for Disease Control and Prevention, 
shall award grants to, or enter into contracts with, eligible entities 
to provide training to graduate medical residents in preventive 
medicine specialties.
    ``(b) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
        ``(1) an accredited school of public health or school of 
    medicine or osteopathic medicine;
        ``(2) an accredited public or private nonprofit hospital;
        ``(3) a State, local, or tribal health department; or
        ``(4) a consortium of 2 or more entities described in 
    paragraphs (1) through (3).
    ``(c) Use of Funds.--Amounts received under a grant or contract 
under this section shall be used to--
        ``(1) plan, develop (including the development of curricula), 
    operate, or participate in an accredited residency or internship 
    program in preventive medicine or public health;
        ``(2) defray the costs of practicum experiences, as required in 
    such a program; and
        ``(3) establish, maintain, or improve--
            ``(A) academic administrative units (including departments, 
        divisions, or other appropriate units) in preventive medicine 
        and public health; or
            ``(B) programs that improve clinical teaching in preventive 
        medicine and public health.
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.
        (2) Section 770(a) of the Public Health Service Act (42 U.S.C. 
    295e(a)) is amended to read as follows:
    ``(a) In General.--For the purpose of carrying out this subpart, 
there is authorized to be appropriated $43,000,000 for fiscal year 
2011, and such sums as may be necessary for each of the fiscal years 
2012 through 2015.''.
    (n)(1) Subsection (i) of section 331 of the Public Health Service 
Act (42 U.S.C. 254d) of the Public Health Service Act is amended--
        (A) in paragraph (1), by striking ``In carrying out subpart 
    III'' and all that follows through the period and inserting ``In 
    carrying out subpart III, the Secretary may, in accordance with 
    this subsection, issue waivers to individuals who have entered into 
    a contract for obligated service under the Scholarship Program or 
    the Loan Repayment Program under which the individuals are 
    authorized to satisfy the requirement of obligated service through 
    providing clinical practice that is half time.'';
        (B) in paragraph (2)--
            (i) in subparagraphs (A)(ii) and (B), by striking ``less 
        than full time'' each place it appears and inserting ``half 
        time'';
            (ii) in subparagraphs (C) and (F), by striking ``less than 
        full-time service'' each place it appears and inserting ``half-
        time service''; and
            (iii) by amending subparagraphs (D) and (E) to read as 
        follows:
        ``(D) the entity and the Corps member agree in writing that the 
    Corps member will perform half-time clinical practice;
        ``(E) the Corps member agrees in writing to fulfill all of the 
    service obligations under section 338C through half-time clinical 
    practice and either--
            ``(i) double the period of obligated service that would 
        otherwise be required; or
            ``(ii) in the case of contracts entered into under section 
        338B, accept a minimum service obligation of 2 years with an 
        award amount equal to 50 percent of the amount that would 
        otherwise be payable for full-time service; and''; and
        (C) in paragraph (3), by striking ``In evaluating a 
    demonstration project described in paragraph (1)'' and inserting 
    ``In evaluating waivers issued under paragraph (1)''.
    (2) Subsection (j) of section 331 of the Public Health Service Act 
(42 U.S.C. 254d) is amended by adding at the end the following:
        ``(5) The terms `full time' and `full-time' mean a minimum of 
    40 hours per week in a clinical practice, for a minimum of 45 weeks 
    per year.
        ``(6) The terms `half time' and `half-time' mean a minimum of 
    20 hours per week (not to exceed 39 hours per week) in a clinical 
    practice, for a minimum of 45 weeks per year.''.
    (3) Section 337(b)(1) of the Public Health Service Act (42 U.S.C. 
254j(b)(1)) is amended by striking ``Members may not be reappointed to 
the Council.''.
    (4) Section 338B(g)(2)(A) of the Public Health Service Act (42 
U.S.C. 254l-1(g)(2)(A)) is amended by striking ``$35,000'' and 
inserting ``$50,000, plus, beginning with fiscal year 2012, an amount 
determined by the Secretary on an annual basis to reflect inflation,''.
    (5) Subsection (a) of section 338C of the Public Health Service Act 
(42 U.S.C. 254m), as amended by section 5508, is amended--
        (A) by striking the second sentence and inserting the 
    following: ``The Secretary may treat teaching as clinical practice 
    for up to 20 percent of such period of obligated service.''; and
        (B) by adding at the end the following: ``Notwithstanding the 
    preceding sentence, with respect to a member of the Corps 
    participating in the teaching health centers graduate medical 
    education program under section 340H, for the purpose of 
    calculating time spent in full-time clinical practice under this 
    section, up to 50 percent of time spent teaching by such member may 
    be counted toward his or her service obligation.''.

SEC. 10502. INFRASTRUCTURE TO EXPAND ACCESS TO CARE.

    (a) Appropriation.--There are authorized to be appropriated, and 
there are appropriated to the Department of Health and Human Services, 
$100,000,000 for fiscal year 2010, to remain available for obligation 
until September 30, 2011, to be used for debt service on, or direct 
construction or renovation of, a health care facility that provides 
research, inpatient tertiary care, or outpatient clinical services. 
Such facility shall be affiliated with an academic health center at a 
public research university in the United States that contains a State's 
sole public academic medical and dental school.
    (b) Requirement.--Amount appropriated under subsection (a) may only 
be made available by the Secretary of Health and Human Services upon 
the receipt of an application from the Governor of a State that 
certifies that--
        (1) the new health care facility is critical for the provision 
    of greater access to health care within the State;
        (2) such facility is essential for the continued financial 
    viability of the State's sole public medical and dental school and 
    its academic health center;
        (3) the request for Federal support represents not more than 40 
    percent of the total cost of the proposed new facility; and
        (4) the State has established a dedicated funding mechanism to 
    provide all remaining funds necessary to complete the construction 
    or renovation of the proposed facility.

SEC. 10503. COMMUNITY HEALTH CENTERS AND THE NATIONAL HEALTH SERVICE 
              CORPS FUND.

    (a) Purpose.--It is the purpose of this section to establish a 
Community Health Center Fund (referred to in this section as the ``CHC 
Fund''), to be administered through the Office of the Secretary of the 
Department of Health and Human Services to provide for expanded and 
sustained national investment in community health centers under section 
330 of the Public Health Service Act and the National Health Service 
Corps.
    (b) Funding.--There is authorized to be appropriated, and there is 
appropriated, out of any monies in the Treasury not otherwise 
appropriated, to the CHC Fund--
        (1) to be transferred to the Secretary of Health and Human 
    Services to provide enhanced funding for the community health 
    center program under section 330 of the Public Health Service Act--
            (A) $700,000,000 for fiscal year 2011;
            (B) $800,000,000 for fiscal year 2012;
            (C) $1,000,000,000 for fiscal year 2013;
            (D) $1,600,000,000 for fiscal year 2014; and
            (E) $2,900,000,000 for fiscal year 2015; and
        (2) to be transferred to the Secretary of Health and Human 
    Services to provide enhanced funding for the National Health 
    Service Corps--
            (A) $290,000,000 for fiscal year 2011;
            (B) $295,000,000 for fiscal year 2012;
            (C) $300,000,000 for fiscal year 2013;
            (D) $305,000,000 for fiscal year 2014; and
            (E) $310,000,000 for fiscal year 2015.
    (c) Construction.--There is authorized to be appropriated, and 
there is appropriated, out of any monies in the Treasury not otherwise 
appropriated, $1,500,000,000 to be available for fiscal years 2011 
through 2015 to be used by the Secretary of Health and Human Services 
for the construction and renovation of community health centers.
    (d) Use of Fund.--The Secretary of Health and Human Services shall 
transfer amounts in the CHC Fund to accounts within the Department of 
Health and Human Services to increase funding, over the fiscal year 
2008 level, for community health centers and the National Health 
Service Corps.
    (e) Availability.--Amounts appropriated under subsections (b) and 
(c) shall remain available until expended.

SEC. 10504. DEMONSTRATION PROJECT TO PROVIDE ACCESS TO AFFORDABLE CARE.

    (a) In General.--Not later than 6 months after the date of 
enactment of this Act, the Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Health Resources and Services Administration, shall establish a 3 year 
demonstration project in up to 10 States to provide access to 
comprehensive health care services to the uninsured at reduced fees. 
The Secretary shall evaluate the feasibility of expanding the project 
to additional States.
    (b) Eligibility.--To be eligible to participate in the 
demonstration project, an entity shall be a State-based, nonprofit, 
public-private partnership that provides access to comprehensive health 
care services to the uninsured at reduced fees. Each State in which a 
participant selected by the Secretary is located shall receive not more 
than $2,000,000 to establish and carry out the project for the 3-year 
demonstration period.
    (c) Authorization.--There is authorized to be appropriated such 
sums as may be necessary to carry out this section.

              Subtitle F--Provisions Relating to Title VI

SEC. 10601. REVISIONS TO LIMITATION ON MEDICARE EXCEPTION TO THE 
              PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877(i) of the Social Security Act, as 
added by section 6001(a), is amended--
        (1) in paragraph (1)(A)(i), by striking ``February 1, 2010'' 
    and inserting ``August 1, 2010''; and
        (2) in paragraph (3)(A)--
            (A) in clause (iii), by striking ``August 1, 2011'' and 
        inserting ``February 1, 2012''; and
            (B) in clause (iv), by striking ``July 1, 2011'' and 
        inserting ``January 1, 2012''.
    (b) Conforming Amendment.--Section 6001(b)(2) of this Act is 
amended by striking ``November 1, 2011'' and inserting ``May 1, 2012''.

SEC. 10602. CLARIFICATIONS TO PATIENT-CENTERED OUTCOMES RESEARCH.

    Section 1181 of the Social Security Act (as added by section 6301) 
is amended--
        (1) in subsection (d)(2)(B)--
            (A) in clause (ii)(IV)--
                (i) by inserting ``, as described in subparagraph 
            (A)(ii),'' after ``original research''; and
                (ii) by inserting ``, as long as the researcher enters 
            into a data use agreement with the Institute for use of the 
            data from the original research, as appropriate'' after 
            ``publication''; and
            (B) by amending clause (iv) to read as follows:
                ``(iv) Subsequent use of the data.--The Institute shall 
            not allow the subsequent use of data from original research 
            in work-for-hire contracts with individuals, entities, or 
            instrumentalities that have a financial interest in the 
            results, unless approved under a data use agreement with 
            the Institute.'';
        (2) in subsection (d)(8)(A)(iv), by striking ``not be construed 
    as mandates for'' and inserting ``do not include''; and
        (3) in subsection (f)(1)(C), by amending clause (ii) to read as 
    follows:
                ``(ii) 7 members representing physicians and providers, 
            including 4 members representing physicians (at least 1 of 
            whom is a surgeon), 1 nurse, 1 State-licensed integrative 
            health care practitioner, and 1 representative of a 
            hospital.''.

SEC. 10603. STRIKING PROVISIONS RELATING TO INDIVIDUAL PROVIDER 
              APPLICATION FEES.

    (a) In General.--Section 1866(j)(2)(C) of the Social Security Act, 
as added by section 6401(a), is amended--
        (1) by striking clause (i);
        (2) by redesignating clauses (ii) through (iv), respectively, 
    as clauses (i) through (iii); and
        (3) in clause (i), as redesignated by paragraph (2), by 
    striking ``clause (iii)'' and inserting ``clause (ii)''.
    (b) Technical Correction.--Section 6401(a)(2) of this Act is 
amended to read as follows:
        ``(2) by redesignating paragraph (2) as paragraph (8); and''.

SEC. 10604. TECHNICAL CORRECTION TO SECTION 6405.

    Paragraphs (1) and (2) of section 6405(b) are amended to read as 
follows:
        ``(1) Part a.--Section 1814(a)(2) of the Social Security Act 
    (42 U.S.C. 1395(a)(2)) is amended in the matter preceding 
    subparagraph (A) by inserting `, or, in the case of services 
    described in subparagraph (C), a physician enrolled under section 
    1866(j),' after `in collaboration with a physician,'.
        ``(2) Part b.--Section 1835(a)(2) of the Social Security Act 
    (42 U.S.C. 1395n(a)(2)) is amended in the matter preceding 
    subparagraph (A) by inserting `, or, in the case of services 
    described in subparagraph (A), a physician enrolled under section 
    1866(j),' after `a physician'.''.

SEC. 10605. CERTAIN OTHER PROVIDERS PERMITTED TO CONDUCT FACE TO FACE 
              ENCOUNTER FOR HOME HEALTH SERVICES.

    (a) Part A.--Section 1814(a)(2)(C) of the Social Security Act (42 
U.S.C. 1395f(a)(2)(C)), as amended by section 6407(a)(1), is amended by 
inserting ``, or a nurse practitioner or clinical nurse specialist (as 
those terms are defined in section 1861(aa)(5)) who is working in 
collaboration with the physician in accordance with State law, or a 
certified nurse-midwife (as defined in section 1861(gg)) as authorized 
by State law, or a physician assistant (as defined in section 
1861(aa)(5)) under the supervision of the physician,'' after ``himself 
or herself''.
    (b) Part B.--Section 1835(a)(2)(A)(iv) of the Social Security Act, 
as added by section 6407(a)(2), is amended by inserting ``, or a nurse 
practitioner or clinical nurse specialist (as those terms are defined 
in section 1861(aa)(5)) who is working in collaboration with the 
physician in accordance with State law, or a certified nurse-midwife 
(as defined in section 1861(gg)) as authorized by State law, or a 
physician assistant (as defined in section 1861(aa)(5)) under the 
supervision of the physician,'' after ``must document that the 
physician''.

SEC. 10606. HEALTH CARE FRAUD ENFORCEMENT.

    (a) Fraud Sentencing Guidelines.--
        (1) Definition.--In this subsection, the term ``Federal health 
    care offense'' has the meaning given that term in section 24 of 
    title 18, United States Code, as amended by this Act.
        (2) Review and amendments.--Pursuant to the authority under 
    section 994 of title 28, United States Code, and in accordance with 
    this subsection, the United States Sentencing Commission shall--
            (A) review the Federal Sentencing Guidelines and policy 
        statements applicable to persons convicted of Federal health 
        care offenses;
            (B) amend the Federal Sentencing Guidelines and policy 
        statements applicable to persons convicted of Federal health 
        care offenses involving Government health care programs to 
        provide that the aggregate dollar amount of fraudulent bills 
        submitted to the Government health care program shall 
        constitute prima facie evidence of the amount of the intended 
        loss by the defendant; and
            (C) amend the Federal Sentencing Guidelines to provide--
                (i) a 2-level increase in the offense level for any 
            defendant convicted of a Federal health care offense 
            relating to a Government health care program which involves 
            a loss of not less than $1,000,000 and less than 
            $7,000,000;
                (ii) a 3-level increase in the offense level for any 
            defendant convicted of a Federal health care offense 
            relating to a Government health care program which involves 
            a loss of not less than $7,000,000 and less than 
            $20,000,000;
                (iii) a 4-level increase in the offense level for any 
            defendant convicted of a Federal health care offense 
            relating to a Government health care program which involves 
            a loss of not less than $20,000,000; and
                (iv) if appropriate, otherwise amend the Federal 
            Sentencing Guidelines and policy statements applicable to 
            persons convicted of Federal health care offenses involving 
            Government health care programs.
        (3) Requirements.--In carrying this subsection, the United 
    States Sentencing Commission shall--
            (A) ensure that the Federal Sentencing Guidelines and 
        policy statements--
                (i) reflect the serious harms associated with health 
            care fraud and the need for aggressive and appropriate law 
            enforcement action to prevent such fraud; and
                (ii) provide increased penalties for persons convicted 
            of health care fraud offenses in appropriate circumstances;
            (B) consult with individuals or groups representing health 
        care fraud victims, law enforcement officials, the health care 
        industry, and the Federal judiciary as part of the review 
        described in paragraph (2);
            (C) ensure reasonable consistency with other relevant 
        directives and with other guidelines under the Federal 
        Sentencing Guidelines;
            (D) account for any aggravating or mitigating circumstances 
        that might justify exceptions, including circumstances for 
        which the Federal Sentencing Guidelines, as in effect on the 
        date of enactment of this Act, provide sentencing enhancements;
            (E) make any necessary conforming changes to the Federal 
        Sentencing Guidelines; and
            (F) ensure that the Federal Sentencing Guidelines 
        adequately meet the purposes of sentencing.
    (b) Intent Requirement for Health Care Fraud.--Section 1347 of 
title 18, United States Code, is amended--
        (1) by inserting ``(a)'' before ``Whoever knowingly''; and
        (2) by adding at the end the following:
    ``(b) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (c) Health Care Fraud Offense.--Section 24(a) of title 18, United 
States Code, is amended--
        (1) in paragraph (1), by striking the semicolon and inserting 
    ``or section 1128B of the Social Security Act (42 U.S.C. 1320a-7b); 
    or''; and
        (2) in paragraph (2)--
            (A) by inserting ``1349,'' after ``1343,''; and
            (B) by inserting ``section 301 of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 331), or section 501 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1131),'' after ``title,''.
    (d) Subpoena Authority Relating to Health Care.--
        (1) Subpoenas under the health insurance portability and 
    accountability act of 1996.--Section 1510(b) of title 18, United 
    States Code, is amended--
            (A) in paragraph (1), by striking ``to the grand jury''; 
        and
            (B) in paragraph (2)--
                (i) in subparagraph (A), by striking ``grand jury 
            subpoena'' and inserting ``subpoena for records''; and
                (ii) in the matter following subparagraph (B), by 
            striking ``to the grand jury''.
        (2) Subpoenas under the civil rights of institutionalized 
    persons act.--The Civil Rights of Institutionalized Persons Act (42 
    U.S.C. 1997 et seq.) is amended by inserting after section 3 the 
    following:

``SEC. 3A. SUBPOENA AUTHORITY.

    ``(a) Authority.--The Attorney General, or at the direction of the 
Attorney General, any officer or employee of the Department of Justice 
may require by subpoena access to any institution that is the subject 
of an investigation under this Act and to any document, record, 
material, file, report, memorandum, policy, procedure, investigation, 
video or audio recording, or quality assurance report relating to any 
institution that is the subject of an investigation under this Act to 
determine whether there are conditions which deprive persons residing 
in or confined to the institution of any rights, privileges, or 
immunities secured or protected by the Constitution or laws of the 
United States.
    ``(b) Issuance and Enforcement of Subpoenas.--
        ``(1) Issuance.--Subpoenas issued under this section--
            ``(A) shall bear the signature of the Attorney General or 
        any officer or employee of the Department of Justice as 
        designated by the Attorney General; and
            ``(B) shall be served by any person or class of persons 
        designated by the Attorney General or a designated officer or 
        employee for that purpose.
        ``(2) Enforcement.--In the case of contumacy or failure to obey 
    a subpoena issued under this section, the United States district 
    court for the judicial district in which the institution is located 
    may issue an order requiring compliance. Any failure to obey the 
    order of the court may be punished by the court as a contempt that 
    court.
    ``(c) Protection of Subpoenaed Records and Information.--Any 
document, record, material, file, report, memorandum, policy, 
procedure, investigation, video or audio recording, or quality 
assurance report or other information obtained under a subpoena issued 
under this section--
        ``(1) may not be used for any purpose other than to protect the 
    rights, privileges, or immunities secured or protected by the 
    Constitution or laws of the United States of persons who reside, 
    have resided, or will reside in an institution;
        ``(2) may not be transmitted by or within the Department of 
    Justice for any purpose other than to protect the rights, 
    privileges, or immunities secured or protected by the Constitution 
    or laws of the United States of persons who reside, have resided, 
    or will reside in an institution; and
        ``(3) shall be redacted, obscured, or otherwise altered if used 
    in any publicly available manner so as to prevent the disclosure of 
    any personally identifiable information.''.

SEC. 10607. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO 
              CURRENT MEDICAL TORT LITIGATION.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.), as amended by this Act, is further amended by adding at 
the end the following:

``SEC. 399V-4. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO 
              CURRENT MEDICAL TORT LITIGATION.

    ``(a) In General.--The Secretary is authorized to award 
demonstration grants to States for the development, implementation, and 
evaluation of alternatives to current tort litigation for resolving 
disputes over injuries allegedly caused by health care providers or 
health care organizations. In awarding such grants, the Secretary shall 
ensure the diversity of the alternatives so funded.
    ``(b) Duration.--The Secretary may award grants under subsection 
(a) for a period not to exceed 5 years.
    ``(c) Conditions for Demonstration Grants.--
        ``(1) Requirements.--Each State desiring a grant under 
    subsection (a) shall develop an alternative to current tort 
    litigation that--
            ``(A) allows for the resolution of disputes over injuries 
        allegedly caused by health care providers or health care 
        organizations; and
            ``(B) promotes a reduction of health care errors by 
        encouraging the collection and analysis of patient safety data 
        related to disputes resolved under subparagraph (A) by 
        organizations that engage in efforts to improve patient safety 
        and the quality of health care.
        ``(2) Alternative to current tort litigation.--Each State 
    desiring a grant under subsection (a) shall demonstrate how the 
    proposed alternative described in paragraph (1)(A)--
            ``(A) makes the medical liability system more reliable by 
        increasing the availability of prompt and fair resolution of 
        disputes;
            ``(B) encourages the efficient resolution of disputes;
            ``(C) encourages the disclosure of health care errors;
            ``(D) enhances patient safety by detecting, analyzing, and 
        helping to reduce medical errors and adverse events;
            ``(E) improves access to liability insurance;
            ``(F) fully informs patients about the differences in the 
        alternative and current tort litigation;
            ``(G) provides patients the ability to opt out of or 
        voluntarily withdraw from participating in the alternative at 
        any time and to pursue other options, including litigation, 
        outside the alternative;
            ``(H) would not conflict with State law at the time of the 
        application in a way that would prohibit the adoption of an 
        alternative to current tort litigation; and
            ``(I) would not limit or curtail a patient's existing legal 
        rights, ability to file a claim in or access a State's legal 
        system, or otherwise abrogate a patient's ability to file a 
        medical malpractice claim.
        ``(3) Sources of compensation.--Each State desiring a grant 
    under subsection (a) shall identify the sources from and methods by 
    which compensation would be paid for claims resolved under the 
    proposed alternative to current tort litigation, which may include 
    public or private funding sources, or a combination of such 
    sources. Funding methods shall to the extent practicable provide 
    financial incentives for activities that improve patient safety.
        ``(4) Scope.--
            ``(A) In general.--Each State desiring a grant under 
        subsection (a) shall establish a scope of jurisdiction (such as 
        Statewide, designated geographic region, a designated area of 
        health care practice, or a designated group of health care 
        providers or health care organizations) for the proposed 
        alternative to current tort litigation that is sufficient to 
        evaluate the effects of the alternative. No scope of 
        jurisdiction shall be established under this paragraph that is 
        based on a health care payer or patient population.
            ``(B) Notification of patients.--A State shall demonstrate 
        how patients would be notified that they are receiving health 
        care services that fall within such scope, and the process by 
        which they may opt out of or voluntarily withdraw from 
        participating in the alternative. The decision of the patient 
        whether to participate or continue participating in the 
        alternative process shall be made at any time and shall not be 
        limited in any way.
        ``(5) Preference in awarding demonstration grants.--In awarding 
    grants under subsection (a), the Secretary shall give preference to 
    States--
            ``(A) that have developed the proposed alternative through 
        substantive consultation with relevant stakeholders, including 
        patient advocates, health care providers and health care 
        organizations, attorneys with expertise in representing 
        patients and health care providers, medical malpractice 
        insurers, and patient safety experts;
            ``(B) that make proposals that are likely to enhance 
        patient safety by detecting, analyzing, and helping to reduce 
        medical errors and adverse events; and
            ``(C) that make proposals that are likely to improve access 
        to liability insurance.
    ``(d) Application.--
        ``(1) In general.--Each State desiring a grant under subsection 
    (a) shall submit to the Secretary an application, at such time, in 
    such manner, and containing such information as the Secretary may 
    require.
        ``(2) Review panel.--
            ``(A) In general.--In reviewing applications under 
        paragraph (1), the Secretary shall consult with a review panel 
        composed of relevant experts appointed by the Comptroller 
        General.
            ``(B) Composition.--
                ``(i) Nominations.--The Comptroller General shall 
            solicit nominations from the public for individuals to 
            serve on the review panel.
                ``(ii) Appointment.--The Comptroller General shall 
            appoint, at least 9 but not more than 13, highly qualified 
            and knowledgeable individuals to serve on the review panel 
            and shall ensure that the following entities receive fair 
            representation on such panel:

                    ``(I) Patient advocates.
                    ``(II) Health care providers and health care 
                organizations.
                    ``(III) Attorneys with expertise in representing 
                patients and health care providers.
                    ``(IV) Medical malpractice insurers.
                    ``(V) State officials.
                    ``(VI) Patient safety experts.

            ``(C) Chairperson.--The Comptroller General, or an 
        individual within the Government Accountability Office 
        designated by the Comptroller General, shall be the chairperson 
        of the review panel.
            ``(D) Availability of information.--The Comptroller General 
        shall make available to the review panel such information, 
        personnel, and administrative services and assistance as the 
        review panel may reasonably require to carry out its duties.
            ``(E) Information from agencies.--The review panel may 
        request directly from any department or agency of the United 
        States any information that such panel considers necessary to 
        carry out its duties. To the extent consistent with applicable 
        laws and regulations, the head of such department or agency 
        shall furnish the requested information to the review panel.
    ``(e) Reports.--
        ``(1) By state.--Each State receiving a grant under subsection 
    (a) shall submit to the Secretary an annual report evaluating the 
    effectiveness of activities funded with grants awarded under such 
    subsection. Such report shall, at a minimum, include the impact of 
    the activities funded on patient safety and on the availability and 
    price of medical liability insurance.
        ``(2) By secretary.--The Secretary shall submit to Congress an 
    annual compendium of the reports submitted under paragraph (1) and 
    an analysis of the activities funded under subsection (a) that 
    examines any differences that result from such activities in terms 
    of the quality of care, number and nature of medical errors, 
    medical resources used, length of time for dispute resolution, and 
    the availability and price of liability insurance.
    ``(f) Technical Assistance.--
        ``(1) In general.--The Secretary shall provide technical 
    assistance to the States applying for or awarded grants under 
    subsection (a).
        ``(2) Requirements.--Technical assistance under paragraph (1) 
    shall include--
            ``(A) guidance on non-economic damages, including the 
        consideration of individual facts and circumstances in 
        determining appropriate payment, guidance on identifying 
        avoidable injuries, and guidance on disclosure to patients of 
        health care errors and adverse events; and
            ``(B) the development, in consultation with States, of 
        common definitions, formats, and data collection infrastructure 
        for States receiving grants under this section to use in 
        reporting to facilitate aggregation and analysis of data both 
        within and between States.
        ``(3) Use of common definitions, formats, and data collection 
    infrastructure.--States not receiving grants under this section may 
    also use the common definitions, formats, and data collection 
    infrastructure developed under paragraph (2)(B).
    ``(g) Evaluation.--
        ``(1) In general.--The Secretary, in consultation with the 
    review panel established under subsection (d)(2), shall enter into 
    a contract with an appropriate research organization to conduct an 
    overall evaluation of the effectiveness of grants awarded under 
    subsection (a) and to annually prepare and submit a report to 
    Congress. Such an evaluation shall begin not later than 18 months 
    following the date of implementation of the first program funded by 
    a grant under subsection (a).
        ``(2) Contents.--The evaluation under paragraph (1) shall 
    include--
            ``(A) an analysis of the effects of the grants awarded 
        under subsection (a) with regard to the measures described in 
        paragraph (3);
            ``(B) for each State, an analysis of the extent to which 
        the alternative developed under subsection (c)(1) is effective 
        in meeting the elements described in subsection (c)(2);
            ``(C) a comparison among the States receiving grants under 
        subsection (a) of the effectiveness of the various alternatives 
        developed by such States under subsection (c)(1);
            ``(D) a comparison, considering the measures described in 
        paragraph (3), of States receiving grants approved under 
        subsection (a) and similar States not receiving such grants; 
        and
            ``(E) a comparison, with regard to the measures described 
        in paragraph (3), of--
                ``(i) States receiving grants under subsection (a);
                ``(ii) States that enacted, prior to the date of 
            enactment of the Patient Protection and Affordable Care 
            Act, any cap on non-economic damages; and
                ``(iii) States that have enacted, prior to the date of 
            enactment of the Patient Protection and Affordable Care 
            Act, a requirement that the complainant obtain an opinion 
            regarding the merit of the claim, although the substance of 
            such opinion may have no bearing on whether the complainant 
            may proceed with a case.
        ``(3) Measures.--The evaluations under paragraph (2) shall 
    analyze and make comparisons on the basis of--
            ``(A) the nature and number of disputes over injuries 
        allegedly caused by health care providers or health care 
        organizations;
            ``(B) the nature and number of claims in which tort 
        litigation was pursued despite the existence of an alternative 
        under subsection (a);
            ``(C) the disposition of disputes and claims, including the 
        length of time and estimated costs to all parties;
            ``(D) the medical liability environment;
            ``(E) health care quality;
            ``(F) patient safety in terms of detecting, analyzing, and 
        helping to reduce medical errors and adverse events;
            ``(G) patient and health care provider and organization 
        satisfaction with the alternative under subsection (a) and with 
        the medical liability environment; and
            ``(H) impact on utilization of medical services, 
        appropriately adjusted for risk.
        ``(4) Funding.--The Secretary shall reserve 5 percent of the 
    amount appropriated in each fiscal year under subsection (k) to 
    carry out this subsection.
    ``(h) MedPAC and MACPAC Reports.--
        ``(1) MedPAC.--The Medicare Payment Advisory Commission shall 
    conduct an independent review of the alternatives to current tort 
    litigation that are implemented under grants under subsection (a) 
    to determine the impact of such alternatives on the Medicare 
    program under title XVIII of the Social Security Act, and its 
    beneficiaries.
        ``(2) MACPAC.--The Medicaid and CHIP Payment and Access 
    Commission shall conduct an independent review of the alternatives 
    to current tort litigation that are implemented under grants under 
    subsection (a) to determine the impact of such alternatives on the 
    Medicaid or CHIP programs under titles XIX and XXI of the Social 
    Security Act, and their beneficiaries.
        ``(3) Reports.--Not later than December 31, 2016, the Medicare 
    Payment Advisory Commission and the Medicaid and CHIP Payment and 
    Access Commission shall each submit to Congress a report that 
    includes the findings and recommendations of each respective 
    Commission based on independent reviews conducted under paragraphs 
    (1) and (2), including an analysis of the impact of the 
    alternatives reviewed on the efficiency and effectiveness of the 
    respective programs.
    ``(i) Option To Provide for Initial Planning Grants.--Of the funds 
appropriated pursuant to subsection (k), the Secretary may use a 
portion not to exceed $500,000 per State to provide planning grants to 
such States for the development of demonstration project applications 
meeting the criteria described in subsection (c). In selecting States 
to receive such planning grants, the Secretary shall give preference to 
those States in which State law at the time of the application would 
not prohibit the adoption of an alternative to current tort litigation.
    ``(j) Definitions.--In this section:
        ``(1) Health care services.--The term `health care services' 
    means any services provided by a health care provider, or by any 
    individual working under the supervision of a health care provider, 
    that relate to--
            ``(A) the diagnosis, prevention, or treatment of any human 
        disease or impairment; or
            ``(B) the assessment of the health of human beings.
        ``(2) Health care organization.--The term `health care 
    organization' means any individual or entity which is obligated to 
    provide, pay for, or administer health benefits under any health 
    plan.
        ``(3) Health care provider.--The term `health care provider' 
    means any individual or entity--
            ``(A) licensed, registered, or certified under Federal or 
        State laws or regulations to provide health care services; or
            ``(B) required to be so licensed, registered, or certified 
        but that is exempted by other statute or regulation.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $50,000,000 for the 5-fiscal 
year period beginning with fiscal year 2011.
    ``(l) Current State Efforts To Establish Alternative To Tort 
Litigation.--Nothing in this section shall be construed to limit any 
prior, current, or future efforts of any State to establish any 
alternative to tort litigation.
    ``(m) Rule of Construction.--Nothing in this section shall be 
construed as limiting states' authority over or responsibility for 
their state justice systems.''.

SEC. 10608. EXTENSION OF MEDICAL MALPRACTICE COVERAGE TO FREE CLINICS.

    (a) In General.--Section 224(o)(1) of the Public Health Service Act 
(42 U.S.C. 233(o)(1)) is amended by inserting after ``to an 
individual'' the following: ``, or an officer, governing board member, 
employee, or contractor of a free clinic shall in providing services 
for the free clinic,''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of enactment of this Act and apply to any act or 
omission which occurs on or after that date.

SEC. 10609. LABELING CHANGES.

    Section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(j)) is amended by adding at the end the following:
    ``(10)(A) If the proposed labeling of a drug that is the subject of 
an application under this subsection differs from the listed drug due 
to a labeling revision described under clause (i), the drug that is the 
subject of such application shall, notwithstanding any other provision 
of this Act, be eligible for approval and shall not be considered 
misbranded under section 502 if--
        ``(i) the application is otherwise eligible for approval under 
    this subsection but for expiration of patent, an exclusivity 
    period, or of a delay in approval described in paragraph 
    (5)(B)(iii), and a revision to the labeling of the listed drug has 
    been approved by the Secretary within 60 days of such expiration;
        ``(ii) the labeling revision described under clause (i) does 
    not include a change to the `Warnings' section of the labeling;
        ``(iii) the sponsor of the application under this subsection 
    agrees to submit revised labeling of the drug that is the subject 
    of such application not later than 60 days after the notification 
    of any changes to such labeling required by the Secretary; and
        ``(iv) such application otherwise meets the applicable 
    requirements for approval under this subsection.
    ``(B) If, after a labeling revision described in subparagraph 
(A)(i), the Secretary determines that the continued presence in 
interstate commerce of the labeling of the listed drug (as in effect 
before the revision described in subparagraph (A)(i)) adversely impacts 
the safe use of the drug, no application under this subsection shall be 
eligible for approval with such labeling.''.

             Subtitle G--Provisions Relating to Title VIII

SEC. 10801. PROVISIONS RELATING TO TITLE VIII.

    (a) Title XXXII of the Public Health Service Act, as added by 
section 8002(a)(1), is amended--
        (1) in section 3203--
            (A) in subsection (a)(1), by striking subparagraph (E);
            (B) in subsection (b)(1)(C)(i), by striking ``for 
        enrollment'' and inserting ``for reenrollment''; and
            (C) in subsection (c)(1), by striking ``, as part of their 
        automatic enrollment in the CLASS program,''; and
        (2) in section 3204--
            (A) in subsection (c)(2), by striking subparagraph (A) and 
        inserting the following:
            ``(A) receives wages or income on which there is imposed a 
        tax under section 3101(a) or 3201(a) of the Internal Revenue 
        Code of 1986; or'';
            (B) in subsection (d), by striking ``subparagraph (B) or 
        (C) of subsection (c)(1)'' and inserting ``subparagraph (A) or 
        (B) of subsection (c)(2)'';
            (C) in subsection (e)(2)(A), by striking ``subparagraph 
        (A)'' and inserting ``paragraph (1)''; and
            (D) in subsection (g)(1), by striking ``has elected to 
        waive enrollment'' and inserting ``has not enrolled''.
    (b) Section 8002 of this Act is amended in the heading for 
subsection (d), by striking ``Information on Supplemental Coverage'' 
and inserting ``CLASS Program Information''.
    (c) Section 6021(d)(2)(A)(iv) of the Deficit Reduction Act of 2005, 
as added by section 8002(d) of this Act, is amended by striking ``and 
coverage available'' and all that follows through ``that program,''.

              Subtitle H--Provisions Relating to Title IX

SEC. 10901. MODIFICATIONS TO EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED 
              HEALTH COVERAGE.

    (a) Longshore Workers Treated as Employees Engaged in High-risk 
Professions.--Paragraph (3) of section 4980I(f) of the Internal Revenue 
Code of 1986, as added by section 9001 of this Act, is amended by 
inserting ``individuals whose primary work is longshore work (as 
defined in section 258(b) of the Immigration and Nationality Act (8 
U.S.C. 1288(b)), determined without regard to paragraph (2) thereof),'' 
before ``and individuals engaged in the construction, mining''.
    (b) Exemption From High-cost Insurance Tax Includes Certain 
Additional Excepted Benefits.--Clause (i) of section 4980I(d)(1)(B) of 
the Internal Revenue Code of 1986, as added by section 9001 of this 
Act, is amended by striking ``section 9832(c)(1)(A)'' and inserting 
``section 9832(c)(1) (other than subparagraph (G) thereof)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 10902. INFLATION ADJUSTMENT OF LIMITATION ON HEALTH FLEXIBLE 
              SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS.

    (a) In General.--Subsection (i) of section 125 of the Internal 
Revenue Code of 1986, as added by section 9005 of this Act, is amended 
to read as follows:
    ``(i) Limitation on Health Flexible Spending Arrangements.--
        ``(1) In general.--For purposes of this section, if a benefit 
    is provided under a cafeteria plan through employer contributions 
    to a health flexible spending arrangement, such benefit shall not 
    be treated as a qualified benefit unless the cafeteria plan 
    provides that an employee may not elect for any taxable year to 
    have salary reduction contributions in excess of $2,500 made to 
    such arrangement.
        ``(2) Adjustment for inflation.--In the case of any taxable 
    year beginning after December 31, 2011, the dollar amount in 
    paragraph (1) shall be increased by an amount equal to--
            ``(A) such amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which such taxable 
        year begins by substituting `calendar year 2010' for `calendar 
        year 1992' in subparagraph (B) thereof.
    If any increase determined under this paragraph is not a multiple 
    of $50, such increase shall be rounded to the next lowest multiple 
    of $50.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 10903. MODIFICATION OF LIMITATION ON CHARGES BY CHARITABLE 
              HOSPITALS.

    (a) In General.--Subparagraph (A) of section 501(r)(5) of the 
Internal Revenue Code of 1986, as added by section 9007 of this Act, is 
amended by striking ``the lowest amounts charged'' and inserting ``the 
amounts generally billed''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 10904. MODIFICATION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS 
              AND IMPORTERS.

    (a) In General.--Section 9009 of this Act is amended--
        (1) by striking ``2009'' in subsection (a)(1) and inserting 
    ``2010'',
        (2) by inserting ``($3,000,000,000 after 2017)'' after 
    ``$2,000,000,000'', and
        (3) by striking ``2008'' in subsection (i) and inserting 
    ``2009''.
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 9009.

SEC. 10905. MODIFICATION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.

    (a) Determination of Fee Amount.--Subsection (b) of section 9010 of 
this Act is amended to read as follows:
    ``(b) Determination of Fee Amount.--
        ``(1) In general.--With respect to each covered entity, the fee 
    under this section for any calendar year shall be equal to an 
    amount that bears the same ratio to the applicable amount as--
            ``(A) the covered entity's net premiums written with 
        respect to health insurance for any United States health risk 
        that are taken into account during the preceding calendar year, 
        bears to
            ``(B) the aggregate net premiums written with respect to 
        such health insurance of all covered entities that are taken 
        into account during such preceding calendar year.
        ``(2) Amounts taken into account.--For purposes of paragraph 
    (1), the net premiums written with respect to health insurance for 
    any United States health risk that are taken into account during 
    any calendar year with respect to any covered entity shall be 
    determined in accordance with the following table:

 
  ``With respect to a covered entity's    The percentage of net premiums
    net premiums written during the        written that are taken into
        calendar year that are:                    account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 

        ``(3) Secretarial determination.--The Secretary shall calculate 
    the amount of each covered entity's fee for any calendar year under 
    paragraph (1). In calculating such amount, the Secretary shall 
    determine such covered entity's net premiums written with respect 
    to any United States health risk on the basis of reports submitted 
    by the covered entity under subsection (g) and through the use of 
    any other source of information available to the Secretary.''.
    (b) Applicable Amount.--Subsection (e) of section 9010 of this Act 
is amended to read as follows:
    ``(e) Applicable Amount.--For purposes of subsection (b)(1), the 
applicable amount shall be determined in accordance with the following 
table:

``Calendar year                          Applicable amount
  2011.................................  $2,000,000,000
  2012.................................  $4,000,000,000
  2013.................................  $7,000,000,000
  2014, 2015 and 2016..................  $9,000,000,000
  2017 and thereafter..................  $10,000,000,000.''.
 

    (c) Exemption From Annual Fee on Health Insurance for Certain 
Nonprofit Entities.--Section 9010(c)(2) of this Act is amended by 
striking ``or'' at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting a comma, and by adding at 
the end the following new subparagraphs:
            ``(C) any entity--
                ``(i)(I) which is incorporated as, is a wholly owned 
            subsidiary of, or is a wholly owned affiliate of, a 
            nonprofit corporation under a State law, or
                ``(II) which is described in section 501(c)(4) of the 
            Internal Revenue Code of 1986 and the activities of which 
            consist of providing commercial-type insurance (within the 
            meaning of section 501(m) of such Code),
                ``(ii) the premium rate increases of which are 
            regulated by a State authority,
                ``(iii) which, as of the date of the enactment of this 
            section, acts as the insurer of last resort in the State 
            and is subject to State guarantee issue requirements, and
                ``(iv) for which the medical loss ratio (determined in 
            a manner consistent with the determination of such ratio 
            under section 2718(b)(1)(A) of the Public Health Service 
            Act) with respect to the individual insurance market for 
            such entity for the calendar year is not less than 100 
            percent,
            ``(D) any entity--
                ``(i)(I) which is incorporated as a nonprofit 
            corporation under a State law, or
                ``(II) which is described in section 501(c)(4) of the 
            Internal Revenue Code of 1986 and the activities of which 
            consist of providing commercial-type insurance (within the 
            meaning of section 501(m) of such Code), and
                ``(ii) for which the medical loss ratio (as so 
            determined)--

                    ``(I) with respect to each of the individual, small 
                group, and large group insurance markets for such 
                entity for the calendar year is not less than 90 
                percent, and
                    ``(II) with respect to all such markets for such 
                entity for the calendar year is not less than 92 
                percent, or

            ``(E) any entity--
                ``(i) which is a mutual insurance company,
                ``(ii) which for the period reported on the 2008 
            Accident and Health Policy Experience Exhibit of the 
            National Association of Insurance Commissioners had--

                    ``(I) a market share of the insured population of a 
                State of at least 40 but not more than 60 percent, and
                    ``(II) with respect to all markets described in 
                subparagraph (D)(ii)(I), a medical loss ratio of not 
                less than 90 percent, and

                ``(iii) with respect to annual payment dates in 
            calendar years after 2011, for which the medical loss ratio 
            (determined in a manner consistent with the determination 
            of such ratio under section 2718(b)(1)(A) of the Public 
            Health Service Act) with respect to all such markets for 
            such entity for the preceding calendar year is not less 
            than 89 percent (except that with respect to such annual 
            payment date for 2012, the calculation under 
            2718(b)(1)(B)(ii) of such Act is determined by reference to 
            the previous year, and with respect to such annual payment 
            date for 2013, such calculation is determined by reference 
            to the average for the previous 2 years).''.
    (d) Certain Insurance Exempted From Fee.--Paragraph (3) of section 
9010(h) of this Act is amended to read as follows:
        ``(3) Health insurance.--The term `health insurance' shall not 
    include--
            ``(A) any insurance coverage described in paragraph (1)(A) 
        or (3) of section 9832(c) of the Internal Revenue Code of 1986,
            ``(B) any insurance for long-term care, or
            ``(C) any medicare supplemental health insurance (as 
        defined in section 1882(g)(1) of the Social Security Act).''.
    (e) Anti-avoidance Guidance.--Subsection (i) of section 9010 of 
this Act is amended by inserting ``and shall prescribe such regulations 
as are necessary or appropriate to prevent avoidance of the purposes of 
this section, including inappropriate actions taken to qualify as an 
exempt entity under subsection (c)(2)'' after ``section''.
    (f) Conforming Amendments.--
        (1) Section 9010(a)(1) of this Act is amended by striking 
    ``2009'' and inserting ``2010''.
        (2) Section 9010(c)(2)(B) of this Act is amended by striking 
    ``(except'' and all that follows through ``1323)''.
        (3) Section 9010(c)(3) of this Act is amended by adding at the 
    end the following new sentence: ``If any entity described in 
    subparagraph (C)(i)(I), (D)(i)(I), or (E)(i) of paragraph (2) is 
    treated as a covered entity by reason of the application of the 
    preceding sentence, the net premiums written with respect to health 
    insurance for any United States health risk of such entity shall 
    not be taken into account for purposes of this section.''.
        (4) Section 9010(g)(1) of this Act is amended by striking ``and 
    third party administration agreement fees''.
        (5) Section 9010(j) of this Act is amended--
            (A) by striking ``2008'' and inserting ``2009'', and
            (B) by striking ``, and any third party administration 
        agreement fees received after such date''.
    (g) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 9010.

SEC. 10906. MODIFICATIONS TO ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-
              INCOME TAXPAYERS.

    (a) FICA.--Section 3101(b)(2) of the Internal Revenue Code of 1986, 
as added by section 9015(a)(1) of this Act, is amended by striking 
``0.5 percent'' and inserting ``0.9 percent''.
    (b) SECA.--Section 1401(b)(2)(A) of the Internal Revenue Code of 
1986, as added by section 9015(b)(1) of this Act, is amended by 
striking ``0.5 percent'' and inserting ``0.9 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to remuneration received, and taxable years 
beginning, after December 31, 2012.

SEC. 10907. EXCISE TAX ON INDOOR TANNING SERVICES IN LIEU OF ELECTIVE 
              COSMETIC MEDICAL PROCEDURES.

    (a) In General.--The provisions of, and amendments made by, section 
9017 of this Act are hereby deemed null, void, and of no effect.
    (b) Excise Tax on Indoor Tanning Services.--Subtitle D of the 
Internal Revenue Code of 1986, as amended by this Act, is amended by 
adding at the end the following new chapter:

                    ``CHAPTER 49--COSMETIC SERVICES

``Sec. 5000B. Imposition of tax on indoor tanning services.

``SEC. 5000B. IMPOSITION OF TAX ON INDOOR TANNING SERVICES.

    ``(a) In General.--There is hereby imposed on any indoor tanning 
service a tax equal to 10 percent of the amount paid for such service 
(determined without regard to this section), whether paid by insurance 
or otherwise.
    ``(b) Indoor Tanning Service.--For purposes of this section--
        ``(1) In general.--The term `indoor tanning service' means a 
    service employing any electronic product designed to incorporate 1 
    or more ultraviolet lamps and intended for the irradiation of an 
    individual by ultraviolet radiation, with wavelengths in air 
    between 200 and 400 nanometers, to induce skin tanning.
        ``(2) Exclusion of phototherapy services.--Such term does not 
    include any phototherapy service performed by a licensed medical 
    professional.
    ``(c) Payment of Tax.--
        ``(1) In general.--The tax imposed by this section shall be 
    paid by the individual on whom the service is performed.
        ``(2) Collection.--Every person receiving a payment for 
    services on which a tax is imposed under subsection (a) shall 
    collect the amount of the tax from the individual on whom the 
    service is performed and remit such tax quarterly to the Secretary 
    at such time and in such manner as provided by the Secretary.
        ``(3) Secondary liability.--Where any tax imposed by subsection 
    (a) is not paid at the time payments for indoor tanning services 
    are made, then to the extent that such tax is not collected, such 
    tax shall be paid by the person who performs the service.''.
    (c) Clerical Amendment.--The table of chapter for subtitle D of the 
Internal Revenue Code of 1986, as amended by this Act, is amended by 
inserting after the item relating to chapter 48 the following new item:

                   ``Chapter 49--Cosmetic Services''.

    (d) Effective Date.--The amendments made by this section shall 
apply to services performed on or after July 1, 2010.

SEC. 10908. EXCLUSION FOR ASSISTANCE PROVIDED TO PARTICIPANTS IN STATE 
              STUDENT LOAN REPAYMENT PROGRAMS FOR CERTAIN HEALTH 
              PROFESSIONALS.

    (a) In General.--Paragraph (4) of section 108(f) of the Internal 
Revenue Code of 1986 is amended to read as follows:
        ``(4) Payments under national health service corps loan 
    repayment program and certain state loan repayment programs.--In 
    the case of an individual, gross income shall not include any 
    amount received under section 338B(g) of the Public Health Service 
    Act, under a State program described in section 338I of such Act, 
    or under any other State loan repayment or loan forgiveness program 
    that is intended to provide for the increased availability of 
    health care services in underserved or health professional shortage 
    areas (as determined by such State).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts received by an individual in taxable years beginning after 
December 31, 2008.

SEC. 10909. EXPANSION OF ADOPTION CREDIT AND ADOPTION ASSISTANCE 
              PROGRAMS.

    (a) Increase in Dollar Limitation.--
        (1) Adoption credit.--
            (A) In general.--Paragraph (1) of section 23(b) of the 
        Internal Revenue Code of 1986 (relating to dollar limitation) 
        is amended by striking ``$10,000'' and inserting ``$13,170''.
            (B) Child with special needs.--Paragraph (3) of section 
        23(a) of such Code (relating to $10,000 credit for adoption of 
        child with special needs regardless of expenses) is amended--
                (i) in the text by striking ``$10,000'' and inserting 
            ``$13,170'', and
                (ii) in the heading by striking ``$10,000'' and 
            inserting ``$13,170''.
            (C) Conforming amendment to inflation adjustment.--
        Subsection (h) of section 23 of such Code (relating to 
        adjustments for inflation) is amended to read as follows:
    ``(h) Adjustments for Inflation.--
        ``(1) Dollar limitations.--In the case of a taxable year 
    beginning after December 31, 2010, each of the dollar amounts in 
    subsections (a)(3) and (b)(1) shall be increased by an amount equal 
    to--
            ``(A) such dollar amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2009' for 
        `calendar year 1992' in subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a 
    multiple of $10, such amount shall be rounded to the nearest 
    multiple of $10.
        ``(2) Income limitation.--In the case of a taxable year 
    beginning after December 31, 2002, the dollar amount in subsection 
    (b)(2)(A)(i) shall be increased by an amount equal to--
            ``(A) such dollar amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2001' for 
        `calendar year 1992' in subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a 
    multiple of $10, such amount shall be rounded to the nearest 
    multiple of $10.''.
        (2) Adoption assistance programs.--
            (A) In general.--Paragraph (1) of section 137(b) of the 
        Internal Revenue Code of 1986 (relating to dollar limitation) 
        is amended by striking ``$10,000'' and inserting ``$13,170''.
            (B) Child with special needs.--Paragraph (2) of section 
        137(a) of such Code (relating to $10,000 exclusion for adoption 
        of child with special needs regardless of expenses) is 
        amended--
                (i) in the text by striking ``$10,000'' and inserting 
            ``$13,170'', and
                (ii) in the heading by striking ``$10,000'' and 
            inserting ``$13,170''.
            (C) Conforming amendment to inflation adjustment.--
        Subsection (f) of section 137 of such Code (relating to 
        adjustments for inflation) is amended to read as follows:
    ``(f) Adjustments for Inflation.--
        ``(1) Dollar limitations.--In the case of a taxable year 
    beginning after December 31, 2010, each of the dollar amounts in 
    subsections (a)(2) and (b)(1) shall be increased by an amount equal 
    to--
            ``(A) such dollar amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2009' for 
        `calendar year 1992' in subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a 
    multiple of $10, such amount shall be rounded to the nearest 
    multiple of $10.
        ``(2) Income limitation.--In the case of a taxable year 
    beginning after December 31, 2002, the dollar amount in subsection 
    (b)(2)(A) shall be increased by an amount equal to--
            ``(A) such dollar amount, multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2001' for 
        `calendar year 1992' in subparagraph thereof.
    If any amount as increased under the preceding sentence is not a 
    multiple of $10, such amount shall be rounded to the nearest 
    multiple of $10.''.
    (b) Credit Made Refundable.--
        (1) Credit moved to subpart relating to refundable credits.--
    The Internal Revenue Code of 1986 is amended--
            (A) by redesignating section 23, as amended by subsection 
        (a), as section 36C, and
            (B) by moving section 36C (as so redesignated) from subpart 
        A of part IV of subchapter A of chapter 1 to the location 
        immediately before section 37 in subpart C of part IV of 
        subchapter A of chapter 1.
        (2) Conforming amendments.--
            (A) Section 24(b)(3)(B) of such Code is amended by striking 
        ``23,''.
            (B) Section 25(e)(1)(C) of such Code is amended by striking 
        ``23,'' both places it appears.
            (C) Section 25A(i)(5)(B) of such Code is amended by 
        striking ``23, 25D,'' and inserting ``25D''.
            (D) Section 25B(g)(2) of such Code is amended by striking 
        ``23,''.
            (E) Section 26(a)(1) of such Code is amended by striking 
        ``23,''.
            (F) Section 30(c)(2)(B)(ii) of such Code is amended by 
        striking ``23, 25D,'' and inserting ``25D''.
            (G) Section 30B(g)(2)(B)(ii) of such Code is amended by 
        striking ``23,''.
            (H) Section 30D(c)(2)(B)(ii) of such Code is amended by 
        striking ``sections 23 and'' and inserting ``section''.
            (I) Section 36C of such Code, as so redesignated, is 
        amended--
                (i) by striking paragraph (4) of subsection (b), and
                (ii) by striking subsection (c).
            (J) Section 137 of such Code is amended--
                (i) by striking ``section 23(d)'' in subsection (d) and 
            inserting ``section 36C(d)'', and
                (ii) by striking ``section 23'' in subsection (e) and 
            inserting ``section 36C''.
            (K) Section 904(i) of such Code is amended by striking 
        ``23,''.
            (L) Section 1016(a)(26) is amended by striking ``23(g)'' 
        and inserting ``36C(g)''.
            (M) Section 1400C(d) of such Code is amended by striking 
        ``23,''.
            (N) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' before ``53(e)''.
            (O) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code of 1986 is amended by 
        striking the item relating to section 23.
            (P) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, as amended by this Act, is amended by inserting 
        ``36C,'' after ``36B,''.
            (Q) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986, 
        as amended by this Act, is amended by inserting after the item 
        relating to section 36B the following new item:
``Sec. 36C. Adoption expenses.''.
    (c) Application and Extension of EGTRRA Sunset.--Notwithstanding 
section 901 of the Economic Growth and Tax Relief Reconciliation Act of 
2001, such section shall apply to the amendments made by this section 
and the amendments made by section 202 of such Act by substituting 
``December 31, 2011'' for ``December 31, 2010'' in subsection (a)(1) 
thereof.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.