1.Short title; table of
contents
(a)This Act may be cited
as the Medicare SGR Improvement and
Reform Act of 2009
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Ensuring Continued Access to Physicians in
Medicare
Sec. 101. Improving Medicare physician payments.
Sec. 102. Statement of policy.
Title II—Deficit Protection and Fiscal Responsibility
Subtitle A—Enacting Real Medical Liability Reform
Sec. 201. Encouraging speedy resolution of claims.
Sec. 202. Compensating patient injury.
Sec. 203. Maximizing patient recovery.
Sec. 204. Additional health benefits.
Sec. 205. Punitive damages.
Sec. 206. Authorization of payment of future damages to
claimants in health care lawsuits.
Sec. 207. Definitions.
Sec. 208. Effect on other laws.
Sec. 209. State flexibility and protection of states’
rights.
Sec. 210. Applicability; effective date.
Subtitle B—Application of Medicare Improvement
Fund
Sec. 211. Application of Medicare Improvement Fund.
Subtitle C—Pathway for Biosimilar Biological
Products
Sec. 221. Licensure pathway for biosimilar biological
products.
Sec. 222. Fees relating to biosimilar biological
products.
Sec. 223. Amendments to certain patent provisions.
Subtitle D—Administrative Simplification
Sec. 231. Administrative simplification.
<enum>I</enum><header>Ensuring Continued
Access to Physicians in Medicare</header>
<section display-inline="no-display-inline" id="H57CA14FBC9BF4C7088ED4EA02A3DCAC4"><enum>101.</enum><header>Improving
Medicare physician payments</header><text display-inline="no-display-inline">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
paragraphs:</text>
<quoted-block id="HFEF95F1729A24A708411C2D97EF9F311" style="OLC">
<paragraph id="HFB4BED62E6A24DD48572F3DDA09EAB75"><enum>(10)</enum><header>2 percent
annual update for years 2010 through 2013</header>
<subparagraph id="HCFAC297E8E1B4F47ACD5F371777F5CED"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to paragraphs
(7)(B), (8)(B), and (9)(B) and subparagraph (B), in lieu of the update to the
single conversion factor established in paragraph (1)(C) that would otherwise
apply for each of 2010, 2011, 2012, and 2013, the update to the single
conversion factor shall be 2 percent.</text>
</subparagraph><subparagraph id="HBFB6FF8C813441DE8437708FE4A7AAB9"><enum>(B)</enum><header>No effect on
computation of conversion factor for 2014 and subsequent years</header><text display-inline="yes-display-inline">The conversion factor under this subsection
shall be computed under paragraph (1)(A) for 2014 and subsequent years as if
subparagraph (A) had never applied, subject to paragraph (11).</text>
</subparagraph></paragraph><paragraph id="H49AC2943C6A642EFB4572A440885084E"><enum>(11)</enum><header>Update for 2014
and possible subsequent years through 2019</header>
<subparagraph id="H2AB6596A3C01477B8FD8495906AF42E4"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to paragraphs
(7)(B), (8)(B), and (9)(B) and subparagraph (B), in lieu of the update to the
single conversion factor established in paragraph (1)(C) that would otherwise
apply for 2014 and, at the Secretary’s discretion, for subsequent years ending
not later than 2019, the update to the single conversion factor shall be such
percentage for each such year as the Secretary determines will result in
additional expenditures under this title in the aggregate for all such years of
$26,400,000,000. Not later than October 1, 2013, the Secretary shall establish
by regulation the method the Secretary will use in allocating the
$26,400,000,000 under the previous sentence between 2014 and subsequent years.
Such allocation shall be designed in a manner so that the single conversion
factor for a year is not less than 79 percent of the conversion factor for the
previous year.</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="H33FA5F5FCF33432ABF2A1820BD82D713"><enum>(B)</enum><header>Limited effect
on computation of conversion factor for subsequent years</header><text display-inline="yes-display-inline">The conversion factor under this subsection
shall be computed under paragraph (1)(A) for subsequent years as if
subparagraph (A) had never applied, but taking into account the aggregate
additional increase in expenditures permitted under such
subparagraph.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HB2386475DE744BB9AB9750F9EBD31B52"><enum>102.</enum><header>Statement of
policy</header><text display-inline="no-display-inline">It is the policy of the
Federal Government that the sustainable growth rate formula, upon which
physician payments are based for the Medicare program, should be permanently
repealed and replaced with a reimbursement policy that pays doctors an amount
reflecting the true cost of services provided in a high-quality and efficient
manner and uses a fiscally responsibly funding mechanism.</text>
</section><enum>II</enum><header>Deficit
Protection and Fiscal Responsibility</header>
<subtitle id="HAFFFD764889C479C8E59E69AD3A87DEE"><enum>A</enum><header>Enacting Real
Medical Liability Reform</header>
<section id="H90BF4D0B9CF447C1B305319A2CFE1F14"><enum>201.</enum><header>Encouraging
speedy resolution of claims</header><text display-inline="no-display-inline">The time for the commencement of a health
care lawsuit shall be 3 years after the date of manifestation of injury or 1
year after the claimant discovers, or through the use of reasonable diligence
should have discovered, the injury, whichever occurs first. In no event shall
the time for commencement of a health care lawsuit exceed 3 years after the
date of manifestation of injury unless tolled for any of the following—</text>
<paragraph id="H6A2BBDE1A7FB494292EE6D0808E91675"><enum>(1)</enum><text>upon proof of
fraud;</text>
</paragraph><paragraph id="H00ED735EBF3C45B0B989CB618515D852"><enum>(2)</enum><text>intentional
concealment; or</text>
</paragraph><paragraph id="H9D28067D59C844D9A4AFF7A0DE3D31FD"><enum>(3)</enum><text>the presence of a
foreign body, which has no therapeutic or diagnostic purpose or effect, in the
person of the injured person.</text>
</paragraph><continuation-text continuation-text-level="section">Actions by a
minor shall be commenced within 3 years from the date of the alleged
manifestation of injury except that actions by a minor under the full age of 6
years shall be commenced within 3 years of manifestation of injury or prior to
the minor’s 8th birthday, whichever provides a longer period. Such time
limitation shall be tolled for minors for any period during which a parent or
guardian and a health care provider or health care organization have committed
fraud or collusion in the failure to bring an action on behalf of the injured
minor.</continuation-text></section><section id="H297BBDC6471345FDAA16590FE9F175AB"><enum>202.</enum><header>Compensating
patient injury</header>
<subsection id="HDE5A20DABE3A49359E4CB1765090C325"><enum>(a)</enum><header>Unlimited amount
of damages for actual economic losses in health care lawsuits</header><text>In
any health care lawsuit, nothing in this subtitle shall limit a claimant’s
recovery of the full amount of the available economic damages, notwithstanding
the limitation in subsection (b).</text>
</subsection><subsection id="H5A5F0CDA57A94287A8CAA77935CDD7AA"><enum>(b)</enum><header>Additional
noneconomic damages</header><text>In any health care lawsuit, the amount of
noneconomic damages, if available, may be as much as $250,000, regardless of
the number of parties against whom the action is brought or the number of
separate claims or actions brought with respect to the same injury.</text>
</subsection><subsection id="HC446F4F62C5245399941D7A7EDFFAE87"><enum>(c)</enum><header>No discount of
award for noneconomic damages</header><text>For purposes of applying the
limitation in subsection (b), future noneconomic damages shall not be
discounted to present value. The jury shall not be informed about the maximum
award for noneconomic damages. An award for noneconomic damages in excess of
$250,000 shall be reduced either before the entry of judgment, or by amendment
of the judgment after entry of judgment, and such reduction shall be made
before accounting for any other reduction in damages required by law. If
separate awards are rendered for past and future noneconomic damages and the
combined awards exceed $250,000, the future noneconomic damages shall be
reduced first.</text>
</subsection><subsection id="H7F52D8D0521448F3A312374EBC5A4FBA"><enum>(d)</enum><header>Fair share
rule</header><text>In any health care lawsuit, each party shall be liable for
that party’s several share of any damages only and not for the share of any
other person. Each party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party’s percentage of
responsibility. Whenever a judgment of liability is rendered as to any party, a
separate judgment shall be rendered against each such party for the amount
allocated to such party. For purposes of this section, the trier of fact shall
determine the proportion of responsibility of each party for the claimant’s
harm.</text>
</subsection></section><section id="HC7703DE609C64D0CB064BA20C9A2F080"><enum>203.</enum><header>Maximizing
patient recovery</header>
<subsection id="HAD24A512B3544FD2B059B93436CD1B45"><enum>(a)</enum><header>Court
supervision of share of damages actually paid to claimants</header><text>In any
health care lawsuit, the court shall supervise the arrangements for payment of
damages to protect against conflicts of interest that may have the effect of
reducing the amount of damages awarded that are actually paid to claimants. In
particular, in any health care lawsuit in which the attorney for a party claims
a financial stake in the outcome by virtue of a contingent fee, the court shall
have the power to restrict the payment of a claimant’s damage recovery to such
attorney, and to redirect such damages to the claimant based upon the interests
of justice and principles of equity. In no event shall the total of all
contingent fees for representing all claimants in a health care lawsuit exceed
the following limits—</text>
<paragraph id="HA1F0635BAF6747B595403985B7C2051A"><enum>(1)</enum><text>40 percent of the
first $50,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="H44E8A05586AB406BA50CACEDB2C82355"><enum>(2)</enum><text>33<fraction>1/3</fraction>
percent of the next $50,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="H5E6CC14FAE1B48C7B6651838CEFAF2FF"><enum>(3)</enum><text>25 percent of the
next $500,000 recovered by the claimant(s).</text>
</paragraph><paragraph id="H489F7DA1420B4A979122D0872D21B078"><enum>(4)</enum><text>15 percent of any
amount by which the recovery by the claimant(s) is in excess of
$600,000.</text>
</paragraph></subsection><subsection id="H4573E4B397F641FC8594DAC8A4C410E0"><enum>(b)</enum><header>Applicability</header><text>The
limitations in this section shall apply whether the recovery is by judgment,
settlement, mediation, arbitration, or any other form of alternative dispute
resolution. In a health care lawsuit involving a minor or incompetent person, a
court retains the authority to authorize or approve a fee that is less than the
maximum permitted under this section. The requirement for court supervision in
the first two sentences of
<internal-xref idref="HAD24A512B3544FD2B059B93436CD1B45" legis-path="303.(a)">subsection (a)</internal-xref> applies only in civil
actions.</text>
</subsection></section><section id="H2A4C9817DAE041A2B9BC8BEAC8CA00F7"><enum>204.</enum><header>Additional
health benefits</header><text display-inline="no-display-inline">In any health
care lawsuit involving injury or wrongful death, any party may introduce
evidence of collateral source benefits. If a party elects to introduce such
evidence, any opposing party may introduce evidence of any amount paid or
contributed or reasonably likely to be paid or contributed in the future by or
on behalf of the opposing party to secure the right to such collateral source
benefits. No provider of collateral source benefits shall recover any amount
against the claimant or receive any lien or credit against the claimant’s
recovery or be equitably or legally subrogated to the right of the claimant in
a health care lawsuit involving injury or wrongful death. This section shall
apply to any health care lawsuit that is settled as well as a health care
lawsuit that is resolved by a fact finder. This section shall not apply to
section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C.
1396a(a)(25)) of the <act-name parsable-cite="SSA">Social Security
Act</act-name>.</text>
</section><section id="H0973496D98C44178BF0E8EF05CBF74BD"><enum>205.</enum><header>Punitive
damages</header>
<subsection id="H85DFC976BB754D3383BE3FB9B03FB021"><enum>(a)</enum><header>In
General</header><text>Punitive damages may, if otherwise permitted by
applicable State or Federal law, be awarded against any person in a health care
lawsuit only if it is proven by clear and convincing evidence that such person
acted with malicious intent to injure the claimant, or that such person
deliberately failed to avoid unnecessary injury that such person knew the
claimant was substantially certain to suffer. In any health care lawsuit where
no judgment for compensatory damages is rendered against such person, no
punitive damages may be awarded with respect to the claim in such lawsuit. No
demand for punitive damages shall be included in a health care lawsuit as
initially filed. A court may allow a claimant to file an amended pleading for
punitive damages only upon a motion by the claimant and after a finding by the
court, upon review of supporting and opposing affidavits or after a hearing,
after weighing the evidence, that the claimant has established by a substantial
probability that the claimant will prevail on the claim for punitive damages.
At the request of any party in a health care lawsuit, the trier of fact shall
consider in a separate proceeding—</text>
<paragraph id="H03C5ABD25F8948BE97B2DE01B6393D9F"><enum>(1)</enum><text>whether punitive
damages are to be awarded and the amount of such award; and</text>
</paragraph><paragraph id="H6F01D9CD7D1245EE927F4E518CD6D15B"><enum>(2)</enum><text>the amount of
punitive damages following a determination of punitive liability.</text>
</paragraph><continuation-text continuation-text-level="subsection">If a
separate proceeding is requested, evidence relevant only to the claim for
punitive damages, as determined by applicable State law, shall be inadmissible
in any proceeding to determine whether compensatory damages are to be
awarded.</continuation-text></subsection><subsection id="H1CF61C4D6627429685C3F3D7BC931B07"><enum>(b)</enum><header>Determining
amount of punitive damages</header>
<paragraph id="HAA3E19A93A454F4E95B93D6257C4B3F5"><enum>(1)</enum><header>Factors
considered</header><text>In determining the amount of punitive damages, if
awarded, in a health care lawsuit, the trier of fact shall consider only the
following—</text>
<subparagraph id="HEFA7F218F26F4770A6F76CE6447BA283"><enum>(A)</enum><text>the severity of
the harm caused by the conduct of such party;</text>
</subparagraph><subparagraph id="H70778C7DA27249D4AA897C6A2E66DAC5"><enum>(B)</enum><text>the duration of
the conduct or any concealment of it by such party;</text>
</subparagraph><subparagraph id="H4503D33CEF8149D084B20B1F356DF500"><enum>(C)</enum><text>the profitability
of the conduct to such party;</text>
</subparagraph><subparagraph id="HA1663D74BF084A278D574066D35F8E1B"><enum>(D)</enum><text>the number of
products sold or medical procedures rendered for compensation, as the case may
be, by such party, of the kind causing the harm complained of by the
claimant;</text>
</subparagraph><subparagraph id="H87DA112E592A4F89A6CE8EBDEED0AE2E"><enum>(E)</enum><text>any criminal
penalties imposed on such party, as a result of the conduct complained of by
the claimant; and</text>
</subparagraph><subparagraph id="H36F3A94193044C648E93B979B2DA6E00"><enum>(F)</enum><text>the amount of any
civil fines assessed against such party as a result of the conduct complained
of by the claimant.</text>
</subparagraph></paragraph><paragraph id="H8019DB2517F24BBBB18952A1499B447B"><enum>(2)</enum><header>Maximum
award</header><text>The amount of punitive damages, if awarded, in a health
care lawsuit may be as much as $250,000 or as much as two times the amount of
economic damages awarded, whichever is greater. The jury shall not be informed
of this limitation.</text>
</paragraph></subsection></section><section id="HB02297228A754DD1AA5FF294029224D1"><enum>206.</enum><header>Authorization
of payment of future damages to claimants in health care lawsuits</header>
<subsection id="HA6C6804040BE45DDB473CFD441326635"><enum>(a)</enum><header>In
general</header><text>In any health care lawsuit, if an award of future
damages, without reduction to present value, equaling or exceeding $50,000 is
made against a party with sufficient insurance or other assets to fund a
periodic payment of such a judgment, the court shall, at the request of any
party, enter a judgment ordering that the future damages be paid by periodic
payments. In any health care lawsuit, the court may be guided by the Uniform
Periodic Payment of Judgments Act promulgated by the National Conference of
Commissioners on Uniform State Laws.</text>
</subsection><subsection id="H4C7CA442E3044321A79358D0178A7B4C"><enum>(b)</enum><header>Applicability</header><text>This
section applies to all actions which have not been first set for trial or
retrial before the effective date of this subtitle.</text>
</subsection></section><section id="HDE3BC9B24FD1473DA4BE4D60B277CD10"><enum>207.</enum><header>Definitions</header><text display-inline="no-display-inline">In this subtitle:</text>
<paragraph id="H9FFBDAB952034C068F9ED119876F707F"><enum>(1)</enum><header>Alternative
dispute resolution system; ADR</header><text>The term <term>alternative dispute
resolution system</term> or <term>ADR</term> means a system that provides for
the resolution of health care lawsuits in a manner other than through a civil
action brought in a State or Federal court.</text>
</paragraph><paragraph id="HCFB805ABD3394B65ADB6AA0923AF6750"><enum>(2)</enum><header>Claimant</header><text>The
term <term>claimant</term> means any person who brings a health care lawsuit,
including a person who asserts or claims a right to legal or equitable
contribution, indemnity, or subrogation, arising out of a health care liability
claim or action, and any person on whose behalf such a claim is asserted or
such an action is brought, whether deceased, incompetent, or a minor.</text>
</paragraph><paragraph id="H970C080C7DFD4504A2659DF39F502510"><enum>(3)</enum><header>Collateral
source benefits</header><text>The term <term>collateral source benefits</term>
means any amount paid or reasonably likely to be paid in the future to or on
behalf of the claimant, or any service, product, or other benefit provided or
reasonably likely to be provided in the future to or on behalf of the claimant,
as a result of the injury or wrongful death, pursuant to—</text>
<subparagraph id="H8AAC1AAE3306465C8BA3DDF7C050DD2B"><enum>(A)</enum><text>any State or
Federal health, sickness, income-disability, accident, or workers’ compensation
law;</text>
</subparagraph><subparagraph id="H790F90AB3FDF47AEBF15ED732C2DD179"><enum>(B)</enum><text>any health,
sickness, income-disability, or accident insurance that provides health
benefits or income-disability coverage;</text>
</subparagraph><subparagraph id="H5734DE6412AE46E48A3122D3CED4BE51"><enum>(C)</enum><text>any contract or
agreement of any group, organization, partnership, or corporation to provide,
pay for, or reimburse the cost of medical, hospital, dental, or
income-disability benefits; and</text>
</subparagraph><subparagraph id="H3895AAE01CCD431CAC66D644C054B302"><enum>(D)</enum><text>any other publicly
or privately funded program.</text>
</subparagraph></paragraph><paragraph id="HD4222D0AD5BA4CE3B76AF489ACE7D62F"><enum>(4)</enum><header>Compensatory
damages</header><text>The term <term>compensatory damages</term> means
objectively verifiable monetary losses incurred as a result of the provision
of, use of, or payment for (or failure to provide, use, or pay for) health care
services or medical products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services, loss of
employment, and loss of business or employment opportunities, damages for
physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of any
kind or nature. The term <term>compensatory damages</term> includes economic
damages and noneconomic damages, as such terms are defined in this
section.</text>
</paragraph><paragraph id="HF9A87AF31D044DBFA7436C9B755C6901"><enum>(5)</enum><header>Contingent
fee</header><text>The term <term>contingent fee</term> includes all
compensation to any person or persons which is payable only if a recovery is
effected on behalf of one or more claimants.</text>
</paragraph><paragraph id="H422DB2AB3F8D47F287DF38E1E822DF0A"><enum>(6)</enum><header>Economic
damages</header><text>The term <term>economic damages</term> means objectively
verifiable monetary losses incurred as a result of the provision of, use of, or
payment for (or failure to provide, use, or pay for) health care services or
medical products, such as past and future medical expenses, loss of past and
future earnings, cost of obtaining domestic services, loss of employment, and
loss of business or employment opportunities.</text>
</paragraph><paragraph id="HE1DC92C4889649B2BF838762266FFBCA"><enum>(7)</enum><header>Health care
lawsuit</header><text>The term <term>health care lawsuit</term> means any
health care liability claim concerning the provision of health care goods or
services or any medical product affecting interstate commerce, or any health
care liability action concerning the provision of health care goods or services
or any medical product affecting interstate commerce, brought in a State or
Federal court or pursuant to an alternative dispute resolution system, against
a health care provider, a health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the claim is based, or the
number of claimants, plaintiffs, defendants, or other parties, or the number of
claims or causes of action, in which the claimant alleges a health care
liability claim. Such term does not include a claim or action which is based on
criminal liability; which seeks civil fines or penalties paid to Federal,
State, or local government; or which is grounded in antitrust.</text>
</paragraph><paragraph id="H11287B40C834498AA392FD597EF54653"><enum>(8)</enum><header>Health care
liability action</header><text>The term <term>health care liability
action</term> means a civil action brought in a State or Federal court or
pursuant to an alternative dispute resolution system, against a health care
provider, a health care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product, regardless of the
theory of liability on which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of action, in which the
claimant alleges a health care liability claim.</text>
</paragraph><paragraph id="H6FAE6C4F9932450892DE51A7088B1AC4"><enum>(9)</enum><header>Health care
liability claim</header><text>The term <term>health care liability claim</term>
means a demand by any person, whether or not pursuant to ADR, against a health
care provider, health care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product, including, but
not limited to, third-party claims, cross-claims, counter-claims, or
contribution claims, which are based upon the provision of, use of, or payment
for (or the failure to provide, use, or pay for) health care services or
medical products, regardless of the theory of liability on which the claim is
based, or the number of plaintiffs, defendants, or other parties, or the number
of causes of action.</text>
</paragraph><paragraph id="HCC57667FA6F3459191A6301EAB9F7EA8"><enum>(10)</enum><header>Health care
organization</header><text>The term <term>health care organization</term> means
any person or entity which is obligated to provide or pay for health benefits
under any health plan, including any person or entity acting under a contract
or arrangement with a health care organization to provide or administer any
health benefit.</text>
</paragraph><paragraph id="H52ADCD7E27244514874A5B7F4508EE7E"><enum>(11)</enum><header>Health care
provider</header><text>The term <term>health care provider</term> means any
person or entity required by State or Federal laws or regulations to be
licensed, registered, or certified to provide health care services, and being
either so licensed, registered, or certified, or exempted from such requirement
by other statute or regulation.</text>
</paragraph><paragraph id="HD7FF0B286CCD4A37B01BFD76B82748D3"><enum>(12)</enum><header>Health care
goods or services</header><text>The term <term>health care goods or
services</term> means any goods or services provided by a health care
organization, provider, or by any individual working under the supervision of a
health care provider, that relates to the diagnosis, prevention, or treatment
of any human disease or impairment, or the assessment or care of the health of
human beings.</text>
</paragraph><paragraph id="H73F2B0B796894162B72B695A5662E199"><enum>(13)</enum><header>Malicious
intent to injure</header><text>The term <term>malicious intent to injure</term>
means intentionally causing or attempting to cause physical injury other than
providing health care goods or services.</text>
</paragraph><paragraph id="HDCAE98C5D78D4C1FB21464F1B8015B8A"><enum>(14)</enum><header>Medical
product</header><text>The term <term>medical product</term> means a drug,
device, or biological product intended for humans, and the terms
<term>drug</term>, <term>device</term>, and <term>biological product</term>
have the meanings given such terms in sections 201(g)(1) and 201(h) of the
Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) and (h)) and section
351(a) of the <act-name parsable-cite="PHSA">Public Health Service
Act</act-name> (42 U.S.C. 262(a)), respectively, including any component or raw
material used therein, but excluding health care services.</text>
</paragraph><paragraph id="H312F2965E17C4E1A87AD33ABA94834A2"><enum>(15)</enum><header>Noneconomic
damages</header><text>The term <term>noneconomic damages</term> means damages
for physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic service),
hedonic damages, injury to reputation, and all other nonpecuniary losses of any
kind or nature.</text>
</paragraph><paragraph id="HF574A92D858B4EAB81C9C243F16A8E16"><enum>(16)</enum><header>Punitive
damages</header><text>The term <term>punitive damages</term> means damages
awarded, for the purpose of punishment or deterrence, and not solely for
compensatory purposes, against a health care provider, health care
organization, or a manufacturer, distributor, or supplier of a medical product.
Punitive damages are neither economic nor noneconomic damages.</text>
</paragraph><paragraph id="H9A3422E1B126477DAC6B1B15113D70AD"><enum>(17)</enum><header>Recovery</header><text>The
term <term>recovery</term> means the net sum recovered after deducting any
disbursements or costs incurred in connection with prosecution or settlement of
the claim, including all costs paid or advanced by any person. Costs of health
care incurred by the plaintiff and the attorneys’ office overhead costs or
charges for legal services are not deductible disbursements or costs for such
purpose.</text>
</paragraph><paragraph id="H03FD91DCC5964F148F1D87931C853088"><enum>(18)</enum><header>State</header><text>The
term <term>State</term> means each of the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific
Islands, and any other territory or possession of the United States, or any
political subdivision thereof.</text>
</paragraph></section><section id="HE68A653C7ABC4989B515E058E25819CB"><enum>208.</enum><header>Effect on other
laws</header>
<subsection id="H08A39A3D45304A6FA0FECA4B049A70EF"><enum>(a)</enum><header>Vaccine
Injury</header>
<paragraph id="H6064BFF871D64FEE8AC95C123F8C4D53"><enum>(1)</enum><text>To the extent that
title XXI of the <act-name parsable-cite="PHSA">Public Health Service
Act</act-name> establishes a Federal rule of law applicable to a civil action
brought for a vaccine-related injury or death—</text>
<subparagraph id="HBB7E2BB827BF42209358DEDE03777FC9"><enum>(A)</enum><text>this subtitle does
not affect the application of the rule of law to such an action; and</text>
</subparagraph><subparagraph id="H67878D42536742F3AB7058111097F38E"><enum>(B)</enum><text>any rule of law
prescribed by this subtitle in conflict with a rule of law of such title XXI
shall not apply to such action.</text>
</subparagraph></paragraph><paragraph id="H4306BE6576B0452AB365BD5EBE98297F"><enum>(2)</enum><text>If there is an
aspect of a civil action brought for a vaccine-related injury or death to which
a Federal rule of law under title XXI of the <act-name parsable-cite="PHSA">Public Health Service Act</act-name> does not apply, then
this subtitle or otherwise applicable law (as determined under this subtitle)
will apply to such aspect of such action.</text>
</paragraph></subsection><subsection id="HFD8EAF37DC224756A4A3FD60FA4BFBA9"><enum>(b)</enum><header>Other Federal
Law</header><text>Except as provided in this section, nothing in this subtitle
shall be deemed to affect any defense available to a defendant in a health care
lawsuit or action under any other provision of Federal law.</text>
</subsection></section><section id="HC2236A0CB6664F33B19F07C3CD64947D"><enum>209.</enum><header>State
flexibility and protection of states’ rights</header>
<subsection id="HEBCA7CFC2BC74E9090510E648A00CD4B"><enum>(a)</enum><header>Health Care
Lawsuits</header><text>The provisions governing health care lawsuits set forth
in this subtitle preempt, subject to subsections (b) and (c), State law to the
extent that State law prevents the application of any provisions of law
established by or under this subtitle. The provisions governing health care
lawsuits set forth in this subtitle supersede chapter 171 of title 28, United
States Code, to the extent that such chapter—</text>
<paragraph id="H62A0C9B0351E4597BC610590F422C8A5"><enum>(1)</enum><text>provides for a
greater amount of damages or contingent fees, a longer period in which a health
care lawsuit may be commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this subtitle; or</text>
</paragraph><paragraph id="H27495912C49A4ED098FF5ED78CD1152F"><enum>(2)</enum><text>prohibits the
introduction of evidence regarding collateral source benefits, or mandates or
permits subrogation or a lien on collateral source benefits.</text>
</paragraph></subsection><subsection id="HF4B844C2B5104557855C305F35E6204F"><enum>(b)</enum><header>Protection of
States’ Rights and Other Laws</header><paragraph commented="no" display-inline="yes-display-inline" id="H1E876BB1C4F9422EA504996AF899E8F2"><enum>(1)</enum><text>Any issue that is not
governed by any provision of law established by or under this subtitle
(including State standards of negligence) shall be governed by otherwise
applicable State or Federal law.</text>
</paragraph><paragraph id="HF1D74DDE8F6B45319A408108D6A2D898" indent="up1"><enum>(2)</enum><text>This subtitle shall not preempt or
supersede any State or Federal law that imposes greater procedural or
substantive protections for health care providers and health care organizations
from liability, loss, or damages than those provided by this subtitle or create
a cause of action.</text>
</paragraph></subsection><subsection id="H36019385866241E7A30AFF5234363C80"><enum>(c)</enum><header>State
Flexibility</header><text>No provision of this subtitle shall be construed to
preempt—</text>
<paragraph id="H627DED038BD349B4A08CD385970E3E0E"><enum>(1)</enum><text>any State law
(whether effective before, on, or after the date of the enactment of this Act)
that specifies a particular monetary amount of compensatory or punitive damages
(or the total amount of damages) that may be awarded in a health care lawsuit,
regardless of whether such monetary amount is greater or lesser than is
provided for under this subtitle, notwithstanding section 202(a); or</text>
</paragraph><paragraph id="HD7949754EFD449B9B6AAE7EFC6EE8690"><enum>(2)</enum><text>any defense
available to a party in a health care lawsuit under any other provision of
State or Federal law.</text>
</paragraph></subsection></section><section id="HFB44C4F31621461685574E876719FFC9"><enum>210.</enum><header>Applicability;
effective date</header><text display-inline="no-display-inline">This subtitle
shall apply to any health care lawsuit brought in a Federal or State court, or
subject to an alternative dispute resolution system, that is initiated on or
after the date of the enactment of this Act, except that any health care
lawsuit arising from an injury occurring prior to the date of the enactment of
this Act shall be governed by the applicable statute of limitations provisions
in effect at the time the injury occurred.</text>
</section></subtitle><subtitle id="HC7DDFFF2017441389CDA2359A5392B35"><enum>B</enum><header>Application of
Medicare Improvement Fund</header>
<section id="H9E69F7EF9025449BBC112410696D7840"><enum>211.</enum><header>Application of
Medicare Improvement Fund</header><text display-inline="no-display-inline">Section 1898(b)(1) of the Social Security
Act (42 U.S.C. 1395iii(b)(1)) is amended by striking <quote>for services
furnished</quote> and all that follows and inserting <quote>for services
furnished on or after January 1, 2010, $0.</quote>.</text>
</section></subtitle><subtitle id="HA57DAE3C3E74410CA35AC0920E69BDC3"><enum>C</enum><header>Pathway for
Biosimilar Biological Products</header>
<section id="HCACAC6F73DCF40BC85C6ECD3263F3084"><enum>221.</enum><header>Licensure
pathway for biosimilar biological products</header>
<subsection id="H68F8A8861ACC4C2FAC73D6EC86437663"><enum>(a)</enum><header>Licensure of
Biological Products as Biosimilar or Interchangeable</header><text>Section 351
of the Public Health Service Act (42 U.S.C. 262) is amended—</text>
<paragraph id="HC37B8008A38F466D8E2FDC604063C66F"><enum>(1)</enum><text>in subsection
(a)(1)(A), by inserting <quote>under this subsection or subsection (k)</quote>
after <quote>biologics license</quote>; and</text>
</paragraph><paragraph id="H744CF34777EC44CFADEA04FB45B3453A"><enum>(2)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="H2DB08F5AA12B4374ACB4F1170E172E01" style="OLC">
<subsection id="H4B7238632E544D4490637A93966BFC9E"><enum>(k)</enum><header>Licensure of
biological products as biosimilar or interchangeable</header>
<paragraph id="H71FF071638344573B2357D31F4A383D0"><enum>(1)</enum><header>In
general</header><text>Any person may submit an application for licensure of a
biological product under this subsection.</text>
</paragraph><paragraph id="H92B4A5FFC1D84F409B0BF3B25853178B"><enum>(2)</enum><header>Content</header>
<subparagraph id="HCB8131740D73424E83B771260BF0F211"><enum>(A)</enum><header>In
general</header>
<clause id="H338E23EB8EAC47D980ADC573FE196B61"><enum>(i)</enum><header>Required
information</header><text>An application submitted under this subsection shall
include information demonstrating that—</text>
<subclause id="HC71E33F1ECFC4086A4387001C8A9924C"><enum>(I)</enum><text>the biological
product is biosimilar to a reference product based upon data derived
from—</text>
<item id="H153DA233FA2E4FCC85FF3D52E34B9450"><enum>(aa)</enum><text>analytical
studies that demonstrate that the biological product is highly similar to the
reference product notwithstanding minor differences in clinically inactive
components;</text>
</item><item id="HA289600BA5CD4505882337CBBB29E6C8"><enum>(bb)</enum><text>animal studies
(including the assessment of toxicity); and</text>
</item><item id="H984631493A9E484A9113A2D367BEFE9C"><enum>(cc)</enum><text>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;</text>
</item></subclause><subclause commented="no" display-inline="no-display-inline" id="H37F9A2F967944318AD8ACB6726E7CAB2"><enum>(II)</enum><text display-inline="yes-display-inline">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;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="HAE9B35AD2A244B1DA9AFF217FA852999"><enum>(III)</enum><text display-inline="yes-display-inline">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;</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="HC526F06412E94E618A2FF5C9348AE77C"><enum>(IV)</enum><text display-inline="yes-display-inline">the route of administration, the dosage
form, and the strength of the biological product are the same as those of the
reference product; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="H576B88D7DC154122B641DCC62BB44042"><enum>(V)</enum><text display-inline="yes-display-inline">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.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="HBA2C219ED2564A85BFB8542177D12AD3"><enum>(ii)</enum><header>Determination
by Secretary</header><text>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.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H8C61FEF15C8B4BC0AB9BF0CA16664397"><enum>(iii)</enum><header>Additional
information</header><text>An application submitted under this
subsection—</text>
<subclause commented="no" display-inline="no-display-inline" id="H5E48C2598DDF4E5EA816D1B728058C88"><enum>(I)</enum><text display-inline="yes-display-inline">shall include publicly available
information regarding the Secretary’s previous determination that the reference
product is safe, pure, and potent; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="H528879988AFE4B8AB0344C1212AB19D7"><enum>(II)</enum><text display-inline="yes-display-inline">may include any additional information in
support of the application, including publicly available information with
respect to the reference product or another biological product.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HA92FA862956E42879DD01078016EFA95"><enum>(B)</enum><header>Interchangeability</header><text>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).</text>
</subparagraph></paragraph><paragraph id="H1F35A59F38254968AEC067997DD4B8C3"><enum>(3)</enum><header>Evaluation by
Secretary</header><text>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—</text>
<subparagraph id="H3DA7ED0F4ECA4B02950E07C79CC78D57"><enum>(A)</enum><text>the Secretary
determines that the information submitted in the application (or the
supplement) is sufficient to show that the biological product—</text>
<clause id="H63B968B877AF4F22A9164DF5A80EC0D1"><enum>(i)</enum><text>is
biosimilar to the reference product; or</text>
</clause><clause id="HAE9E1BF1AA7747368C3767CA1B6CF123"><enum>(ii)</enum><text>meets the
standards described in paragraph (4), and therefore is interchangeable with the
reference product; and</text>
</clause></subparagraph><subparagraph id="H3BD2A0DCF47C482A999636A266766918"><enum>(B)</enum><text>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).</text>
</subparagraph></paragraph><paragraph commented="no" id="HD3FB5BBFED3A4891AE25C254956C3209"><enum>(4)</enum><header>Safety standards
for determining interchangeability</header><text>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—</text>
<subparagraph commented="no" id="HD7A36675F2B44EFF90DCB25D28CDB273"><enum>(A)</enum><text>the biological
product—</text>
<clause commented="no" id="H2D94A95119E24B929BCF4F1CBDEF91EF"><enum>(i)</enum><text>is biosimilar to
the reference product; and</text>
</clause><clause commented="no" id="HD6C0F6E55C75471F8863C3FBB9B81894"><enum>(ii)</enum><text>can be expected
to produce the same clinical result as the reference product in any given
patient; and</text>
</clause></subparagraph><subparagraph commented="no" id="HA844DCE9197A42D589F53EF544847096"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph><paragraph commented="no" id="HC7E5FFA4C8274A6D8B73385A859600FA"><enum>(5)</enum><header>General
rules</header>
<subparagraph commented="no" id="H54F5E0F6EFFB4CC3B8768ECD207A5210"><enum>(A)</enum><header>One reference
product per application</header><text>A biological product, in an application
submitted under this subsection, may not be evaluated against more than 1
reference product.</text>
</subparagraph><subparagraph commented="no" id="H858DD02BA87646A08C36CD7230867227"><enum>(B)</enum><header>Review</header><text>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.</text>
</subparagraph><subparagraph commented="no" id="H741E0FE2DEB24FE5B23CAED3C68D8B2C"><enum>(C)</enum><header>Risk evaluation
and mitigation strategies</header><text>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).</text>
</subparagraph><subparagraph commented="no" id="H2EA46066244D4D8D970E456EFA383518"><enum>(D)</enum><header>Restrictions on
biological products containing dangerous ingredients</header><text display-inline="yes-display-inline">If information in an application submitted
under this subsection, in a supplement to such an application, or otherwise
available to the Secretary shows that a biological product—</text>
<clause id="H9F3580DB177D4EFAA143B147EC5C1674"><enum>(i)</enum><text>is, bears, or
contains a select agent or toxin listed in section 73.3 or 73.4 of title 42,
section 121.3 or 121.4 of title 9, or section 331.3 of title 7, Code of Federal
Regulations (or any successor regulations); or</text>
</clause><clause id="HECB609FDE9D140C0B71647BEE11BF657"><enum>(ii)</enum><text>is, bears, or
contains a controlled substance in schedule I or II of section 202 of the
Controlled Substances Act, as listed in part 1308 of title 21, Code of Federal
Regulations (or any successor regulations);</text>
</clause><continuation-text continuation-text-level="subparagraph">the
Secretary shall not license the biological product under this subsection unless
the Secretary determines, after consultation with appropriate national security
and drug enforcement agencies, that there would be no increased risk to the
security or health of the public from licensing such biological product under
this subsection.</continuation-text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H20B4819D65714F40B7D531F485EE36E5"><enum>(6)</enum><header display-inline="yes-display-inline">Exclusivity for first interchangeable
biological product</header><text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="H1560DC78F7724196B9815021F55FE2D6"><enum>(A)</enum><text display-inline="yes-display-inline">1 year after the first commercial marketing
of the first interchangeable biosimilar biological product to be approved as
interchangeable for that reference product;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H574ECD84849346299348B5047C69A0C0"><enum>(B)</enum><text display-inline="yes-display-inline">18 months after—</text>
<clause commented="no" display-inline="no-display-inline" id="H6BBCE11845EC446195E0A3967FA6CE14"><enum>(i)</enum><text display-inline="yes-display-inline">a final court decision on all patents in
suit in an action instituted under subsection (l)(5) against the applicant that
submitted the application for the first approved interchangeable biosimilar
biological product; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H7ADFE1679BF74DF0B680F362CC0CB6AB"><enum>(ii)</enum><text display-inline="yes-display-inline">the dismissal with or without prejudice of
an action instituted under subsection (l)(5) against the applicant that
submitted the application for the first approved interchangeable biosimilar
biological product; or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HDC553FF7C2EC4DB881F59A493A7E5465"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="HBEA41C33ADCB4F409181B983A0D49250"><enum>(i)</enum><text display-inline="yes-display-inline">42 months after approval of the first
interchangeable biosimilar biological product if the applicant that submitted
such application has been sued under subsection (l)(5) and such litigation is
still ongoing within such 42-month period; or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H6C7C25157B42433EBFF99B317F84A23A" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">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)(5).</text>
</clause></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">For purposes of this paragraph, the
term <term>final court decision</term> 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.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HDABF7B7CBDC14653AEBBD221EB75FBDB"><enum>(7)</enum><header>Exclusivity for
reference product</header>
<subparagraph id="HA3D8194D73E84DF7B6A4618A419EE8BA"><enum>(A)</enum><header>Effective date
of biosimilar application approval</header><text>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).</text>
</subparagraph><subparagraph id="H87F2A03580E44E3A9EACAEA90654FCFC"><enum>(B)</enum><header>Filing
period</header><text>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).</text>
</subparagraph><subparagraph id="H08F58B97D9144C7B998A4846A3713FF9"><enum>(C)</enum><header>First
licensure</header><text>Subparagraphs (A) and (B) shall not apply to a license
for or approval of—</text>
<clause id="HBDB50C3480C548AFB44B5C521678B311"><enum>(i)</enum><text>a
supplement for the biological product that is the reference product; or</text>
</clause><clause id="H1C1ADB59B30749BDABFFDC43D6892B69"><enum>(ii)</enum><text>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—</text>
<subclause id="H4E1BAFB73F9F4B92BBE3F70E0B923E21"><enum>(I)</enum><text>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</text>
</subclause><subclause id="HE934CD6F3F8B46CDB341C7DEFBFE0321"><enum>(II)</enum><text>a modification to
the structure of the biological product that does not result in a change in
safety, purity, or potency.</text>
</subclause></clause></subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H4E622888DE99464996A737ABB1CEA6E2"><enum>(8)</enum><header>Pediatric
studies</header>
<subparagraph display-inline="no-display-inline" id="HDCE2890123424842986BEADB10EA0C92"><enum>(A)</enum><header>Exclusivity</header><text display-inline="yes-display-inline">If, before or after licensure of the
reference product under subsection (a) of this section, the Secretary
determines that information relating to the use of such 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 or holder of the approved
application 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
the period referred to in paragraph (7)(A) of this subsection is deemed to be
12 years and 6 months rather than 12 years.</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="H9F0815063B4B459BB5FEAF3537300356"><enum>(B)</enum><header>Exception</header><text>The
Secretary shall not extend the period referred to in subparagraph (A) of this
paragraph if the determination under section 505A(d)(3) of the Federal Food,
Drug, and Cosmetic Act is made later than 9 months prior to the expiration of
such period.</text>
</subparagraph><subparagraph id="H4DEB5D3E074D4B3FAE2A87089D13D21A"><enum>(C)</enum><header>Application of
certain provisions</header><text>The provisions of subsections (a), (d), (e),
(f), (h), (j), (k), and (l) of section 505A of the Federal Food, Drug, and
Cosmetic Act shall apply with respect to the extension of a period under
subparagraph (A) of this paragraph 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.</text>
</subparagraph></paragraph><paragraph id="H2199FBF5992A45B184AB73AB0259B17E"><enum>(9)</enum><header>Guidance
documents</header>
<subparagraph id="H3F578893EBFA4ED2A2DBEA34786E5CE7"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HC879C322A1004B3B82C67FD144B1D36E"><enum>(B)</enum><header>Public
comment</header>
<clause id="H221076FA1935439BB89EAC846077D2BD"><enum>(i)</enum><header>In
general</header><text>The Secretary shall provide the public an opportunity to
comment on any proposed guidance issued under subparagraph (A) before issuing
final guidance.</text>
</clause><clause id="HDBD85DBC8A7F46F787A6C129EA55E3CD"><enum>(ii)</enum><header>Input regarding
most valuable guidance</header><text>The Secretary shall establish a process
through which the public may provide the Secretary with input regarding
priorities for issuing guidance.</text>
</clause></subparagraph><subparagraph id="HAA1FC1C1DC8648CD8B30081AB91B6F22"><enum>(C)</enum><header>No requirement
for application consideration</header><text>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.</text>
</subparagraph><subparagraph id="HC7BD12160109439F82A54BF6733C5736"><enum>(D)</enum><header>Requirement for
product class-specific guidance</header><text>If the Secretary issues product
class-specific guidance under subparagraph (A), such guidance shall include a
description of—</text>
<clause id="H8AADF5421EFA4ED7818888B55F4FFA9C"><enum>(i)</enum><text>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</text>
</clause><clause id="HBE96400DBC724822B43A49B2A6C9E16B"><enum>(ii)</enum><text>the criteria, if
available, that the Secretary will use to determine whether a biological
product meets the standards described in paragraph (4).</text>
</clause></subparagraph><subparagraph commented="no" id="H13E1EE3D57AD41AA931DBFC3432D1377"><enum>(E)</enum><header>Certain product
classes</header>
<clause commented="no" id="H66DD3EBE0DC24E9B927306C2957D474F"><enum>(i)</enum><header>Guidance</header><text>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.</text>
</clause><clause commented="no" id="HF0D69056972244118FFDBFD7E891D12D"><enum>(ii)</enum><header>Modification or
reversal</header><text>The Secretary may issue a subsequent guidance document
under subparagraph (A) to modify or reverse a guidance document under clause
(i).</text>
</clause><clause commented="no" id="H9411FED9F9AD4201A4DC0D44253BF615"><enum>(iii)</enum><header>No effect on
ability to deny license</header><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="HB8F93321D2BB4ACB9E5870697FFF9BBB"><enum>(10)</enum><header>Naming</header><text display-inline="yes-display-inline">The Secretary shall ensure that the
labeling and packaging of each biological product licensed under this
subsection bears a name that uniquely identifies the biological product and
distinguishes it from the reference product and any other biological products
licensed under this subsection following evaluation against such reference
product.</text>
</paragraph></subsection><subsection commented="no" id="H56906E2A55E645B3B9AFE511D13A9F80"><enum>(l)</enum><header>Patent notices;
relationship to final approval</header>
<paragraph commented="no" id="H6842C3A02FC34A6EA6358F53EEAAC83B"><enum>(1)</enum><header>Definitions</header><text>For
the purposes of this subsection, the term—</text>
<subparagraph commented="no" id="HEEF40A2F23284EA089F8CB543450BF7C"><enum>(A)</enum><text><quote>biosimilar
product</quote> means the biological product that is the subject of the
application under subsection (k);</text>
</subparagraph><subparagraph commented="no" id="HB991720A945E4346B7C41CC6B08E0222"><enum>(B)</enum><text><quote>relevant
patent</quote> means a patent that—</text>
<clause commented="no" id="HAD90B80923994D0E8F51CACFC3D467A7"><enum>(i)</enum><text>expires after the
date specified in subsection (k)(7)(A) that applies to the reference product;
and</text>
</clause><clause commented="no" id="H1CBE7C6E19FF4E70B04BBB1E05ECEC04"><enum>(ii)</enum><text>could reasonably
be asserted against the applicant due to the unauthorized making, use, sale, or
offer for sale within the United States, or the importation into the United
States of the biosimilar product, or materials used in the manufacture of the
biosimilar product, or due to a use of the biosimilar product in a method of
treatment that is indicated in the application;</text>
</clause></subparagraph><subparagraph commented="no" id="H0E46239DDD584FF48B6C55E18E8178B3"><enum>(C)</enum><text><quote>reference
product sponsor</quote> means the holder of an approved application or license
for the reference product; and</text>
</subparagraph><subparagraph commented="no" id="HA52B98AF78C54196B80F3C870DAAFD7E"><enum>(D)</enum><text><quote>interested
third party</quote> means a person other than the reference product sponsor
that owns a relevant patent, or has the right to commence or participate in an
action for infringement of a relevant patent.</text>
</subparagraph></paragraph><paragraph commented="no" id="H6E92769027B245A08E07147259E8D6D3"><enum>(2)</enum><header>Handling of
confidential information</header><text>Any entity receiving confidential
information pursuant to this subsection shall designate one or more individuals
to receive such information. Each individual so designated shall execute an
agreement in accordance with regulations promulgated by the Secretary. The
regulations shall require each such individual to take reasonable steps to
maintain the confidentiality of information received pursuant to this
subsection and use the information solely for purposes authorized by this
subsection. The obligations imposed on an individual who has received
confidential information pursuant to this subsection shall continue until the
individual returns or destroys the confidential information, a court imposes a
protective order that governs the use or handling of the confidential
information, or the party providing the confidential information agrees to
other terms or conditions regarding the handling or use of the confidential
information.</text>
</paragraph><paragraph commented="no" id="HD0162201D2434394939B4AFB7CF015DE"><enum>(3)</enum><header>Public notice by
secretary</header><text>Within 30 days of acceptance by the Secretary of an
application filed under subsection (k), the Secretary shall publish a notice
identifying—</text>
<subparagraph id="HCF048F018E084886AE413689E7EEDFC1"><enum>(A)</enum><text>the reference
product identified in the application; and</text>
</subparagraph><subparagraph id="H5C4F81D8D20E4D518A222477417A0EFE"><enum>(B)</enum><text>the name and
address of an agent designated by the applicant to receive notices pursuant to
paragraph (4)(B).</text>
</subparagraph></paragraph><paragraph commented="no" id="H97B5D1F54777416791443A3DEB64813C"><enum>(4)</enum><header>Exchanges
concerning patents</header>
<subparagraph commented="no" id="HF53A9F7092054D8FB2CFE39315829725"><enum>(A)</enum><header>Exchanges with
reference product sponsor</header>
<clause commented="no" id="H20739407390B4D928470960D624BEC6E"><enum>(i)</enum><text>Within 30 days of
the date of acceptance of the application by the Secretary, the applicant shall
provide the reference product sponsor with a copy of the application and
information concerning the biosimilar product and its production. This
information shall include a detailed description of the biosimilar product, its
method of manufacture, and the materials used in the manufacture of the
product.</text>
</clause><clause commented="no" id="H700C9DF8513D48859D3219EC46DBDE9C"><enum>(ii)</enum><text>Within 60 days of
the date of receipt of the information required to be provided under clause
(i), the reference product sponsor shall provide to the applicant a list of
relevant patents owned by the reference product sponsor, or in respect of which
the reference product sponsor has the right to commence an action of
infringement or otherwise has an interest in the patent as such patent concerns
the biosimilar product.</text>
</clause><clause commented="no" id="H20299D69ED764E03A997E85B7B74CCD4"><enum>(iii)</enum><text>If the reference
product sponsor is issued or acquires an interest in a relevant patent after
the date on which the reference product sponsor provides the list required by
clause (ii) to the applicant, the reference product sponsor shall identify that
patent to the applicant within 30 days of the date of issue of the patent, or
the date of acquisition of the interest in the patent, as applicable.</text>
</clause></subparagraph><subparagraph commented="no" id="H9FB11309E5C844959B4FF25E04FE067E"><enum>(B)</enum><header>Exchanges with
interested third parties</header>
<clause commented="no" id="H02704102C9004927946B17ABEA0F90A8"><enum>(i)</enum><text>At any time after
the date on which the Secretary publishes a notice for an application under
paragraph (3), any interested third party may provide notice to the designated
agent of the applicant that the interested third party owns or has rights under
1 or more patents that may be relevant patents. The notice shall identify at
least 1 patent and shall designate an individual who has executed an agreement
in accordance with paragraph (2) to receive confidential information from the
applicant.</text>
</clause><clause commented="no" id="H522984C730134E7F9AF25868CECA46B6"><enum>(ii)</enum><text>Within 30 days of
the date of receiving notice pursuant to clause (i), the applicant shall send
to the individual designated by the interested third party the information
specified in subparagraph (A)(i), unless the applicant and interested third
party otherwise agree.</text>
</clause><clause commented="no" id="H06A4FDD258A04640B225C5A97B97FF77"><enum>(iii)</enum><text>Within 90 days
of the date of receiving information pursuant to clause (ii), the interested
third party shall provide to the applicant a list of relevant patents which the
interested third party owns, or in respect of which the interested third party
has the right to commence or participate in an action for infringement.</text>
</clause><clause commented="no" id="H42917BE688E24EC7A087160C0F11515A"><enum>(iv)</enum><text>If the interested
third party is issued or acquires an interest in a relevant patent after the
date on which the interested third party provides the list required by clause
(iii), the interested third party shall identify that patent within 30 days of
the date of issue of the patent, or the date of acquisition of the interest in
the patent, as applicable.</text>
</clause></subparagraph><subparagraph commented="no" id="HE24113F40D1F49C3A2ED78954E77C036"><enum>(C)</enum><header>Identification
of basis for infringement</header><text>For any patent identified under clause
(ii) or (iii) of subparagraph (A) or under clause (iii) or (iv) of subparagraph
(B), the reference product sponsor or the interested third party, as
applicable—</text>
<clause commented="no" id="H793F5F131C5548DF92C8560C47E26E03"><enum>(i)</enum><text>shall explain in
writing why the sponsor or the interested third party believes the relevant
patent would be infringed by the making, use, sale, or offer for sale within
the United States, or importation into the United States, of the biosimilar
product or by a use of the biosimilar product in treatment that is indicated in
the application;</text>
</clause><clause commented="no" id="H10B10758A4174F09A3BB6F600E531AF4"><enum>(ii)</enum><text>may specify
whether the relevant patent is available for licensing; and</text>
</clause><clause commented="no" id="H28F4602610D143509C693341712180A8"><enum>(iii)</enum><text>shall specify
the number and date of expiration of the relevant patent.</text>
</clause></subparagraph><subparagraph commented="no" id="H58D5EFA1EC1B489783003FF79A69DF9F"><enum>(D)</enum><header>Certification by
applicant concerning identified relevant patents</header><text display-inline="yes-display-inline">Not later than 45 days after the date on
which a patent is identified under clause (ii) or (iii) of subparagraph (A) or
under clause (iii) or (iv) of subparagraph (B), the applicant shall send a
written statement regarding each identified patent to the party that identified
the patent. Such statement shall either—</text>
<clause commented="no" id="H2A1CD92A40E14236BAAC2C0E4A3B38D4"><enum>(i)</enum><text>state that the
applicant will not commence marketing of the biosimilar product and has
requested the Secretary to not grant final approval of the application before
the date of expiration of the noticed patent; or</text>
</clause><clause commented="no" id="H8D71DB4443C74521858820FE2E4C8BFA"><enum>(ii)</enum><text>provide a
detailed written explanation setting forth the reasons why the applicant
believes—</text>
<subclause id="H628DDFA34B3F453498C1AC4A6221C148"><enum>(I)</enum><text>the making, use,
sale, or offer for sale within the United States, or the importation into the
United States, of the biosimilar product, or the use of the biosimilar product
in a treatment indicated in the application, would not infringe the patent;
or</text>
</subclause><subclause id="H8E37F9113B784C9AAB3D4DCCD3FAE899"><enum>(II)</enum><text>the patent is
invalid or unenforceable.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="H0FB4900D32684989B5DA9529BF785759"><enum>(5)</enum><header>Action for
infringement involving reference product sponsor</header><text display-inline="yes-display-inline">If an action for infringement concerning a
relevant patent identified by the reference product sponsor under clause (ii)
or (iii) of paragraph (4)(A), or by an interested third party under clause
(iii) or (iv) of paragraph (4)(B), is brought within 60 days of the date of
receipt of a statement under paragraph (4)(D)(ii), and the court in which such
action has been commenced determines the patent is infringed prior to the date
applicable under subsection (k)(7)(A) or (k)(8), the Secretary shall make
approval of the application effective on the day after the date of expiration
of the patent that has been found to be infringed. If more than one such patent
is found to be infringed by the court, the approval of the application shall be
made effective on the day after the date that the last such patent
expires.</text>
</paragraph><paragraph id="HA51F430146AD45539505A1AE91795F9F"><enum>(6)</enum><header>Notification of
agreements</header>
<subparagraph id="H40FABA4FDFD7432D96EBA76675BBE6E4"><enum>(A)</enum><header>Requirements</header>
<clause id="H53A6F38DF5CE42F7A9D22D8379504CC0"><enum>(i)</enum><header>Agreement
between biosimilar product applicant and reference product
sponsor</header><text>If a biosimilar product applicant under subsection (k)
and the reference product sponsor enter into an agreement described in
subparagraph (B), the applicant and sponsor shall each file the agreement in
accordance with subparagraph (C).</text>
</clause><clause id="H3249CF04E69F4D2DB14CABE03DC56E3E"><enum>(ii)</enum><header>Agreement
between biosimilar product applicants</header><text display-inline="yes-display-inline">If 2 or more biosimilar product applicants
submit an application under subsection (k) for biosimilar products with the
same reference product and enter into an agreement described in subparagraph
(B), the applicants shall each file the agreement in accordance with
subparagraph (C).</text>
</clause></subparagraph><subparagraph id="H62D51F2D77FC4339B9BE8DB155F6C5E5"><enum>(B)</enum><header>Subject matter
of agreement</header><text display-inline="yes-display-inline">An agreement
described in this subparagraph—</text>
<clause id="H36D5E6E8B68A47989C0BD5BB3D55CF49"><enum>(i)</enum><text>is
an agreement between the biosimilar product applicant under subsection (k) and
the reference product sponsor or between 2 or more biosimilar product
applicants under subsection (k) regarding the manufacture, marketing, or sale
of—</text>
<subclause id="HB37D7E6D5940420D87BBF3E46FCCDA90"><enum>(I)</enum><text>the biosimilar
product (or biosimilar products) for which an application was submitted;
or</text>
</subclause><subclause id="HA02DE02562254B05A1447476AB98B1F3"><enum>(II)</enum><text>the reference
product;</text>
</subclause></clause><clause id="H10D8FC20C5B241C9B50AA092AD76C13D"><enum>(ii)</enum><text display-inline="yes-display-inline">includes any agreement between the
biosimilar product applicant under subsection (k) and the reference product
sponsor or between 2 or more biosimilar product applicants under subsection (k)
that is contingent upon, provides a contingent condition for, or otherwise
relates to an agreement described in clause (i); and</text>
</clause><clause id="HCB411F037F3F4653A72BC2B13E09477E"><enum>(iii)</enum><text display-inline="yes-display-inline">excludes any agreement that solely
concerns—</text>
<subclause display-inline="no-display-inline" id="H7A4D0DD07C704EACB6FA944083BC9A03"><enum>(I)</enum><text>purchase orders
for raw material supplies;</text>
</subclause><subclause id="HBED5EFCDC4D849FAA022F5A9610FEA25"><enum>(II)</enum><text>equipment and
facility contracts;</text>
</subclause><subclause id="H31DE129E22C146DF8931ED18124A0776"><enum>(III)</enum><text>employment or
consulting contracts; or</text>
</subclause><subclause id="H6A20A02471044A45B34FDE855E5225DC"><enum>(IV)</enum><text>packaging and
labeling contracts.</text>
</subclause></clause></subparagraph><subparagraph id="H9B7C42A21A014A2DA2EB06E1AF22D928"><enum>(C)</enum><header>Filing</header>
<clause id="HD64F1DCAAA3F47BE93029AFB4845B020"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">The text of an
agreement required to be filed by subparagraph (A) shall be filed with the
Assistant Attorney General and the Federal Trade Commission not later
than—</text>
<subclause id="H2DF93BCC174F4715924FAA33CD46BC18"><enum>(I)</enum><text>10 business days
after the date on which the agreement is executed; and</text>
</subclause><subclause id="HB8AFB75EA0564EB88A2DC882BD8FAEBC"><enum>(II)</enum><text>prior to the date
of the first commercial marketing of, for agreements described in subparagraph
(A)(i), the biosimilar product that is the subject of the application or, for
agreements described in subparagraph (A)(ii), any biosimilar product that is
the subject of an application described in such subparagraph.</text>
</subclause></clause><clause id="HD7DE28F109734F049037EEDF95DD865E"><enum>(ii)</enum><header>If agreement
not reduced to text</header><text>If an agreement required to be filed by
subparagraph (A) has not been reduced to text, the persons required to file the
agreement shall each file written descriptions of the agreement that are
sufficient to disclose all the terms and conditions of the agreement.</text>
</clause><clause id="HC748E26D4E404E239280F45BB2224681"><enum>(iii)</enum><header>Certification</header><text display-inline="yes-display-inline">The chief executive officer or the company
official responsible for negotiating any agreement required to be filed by
subparagraph (A) shall include in any filing under this paragraph a
certification as follows: <quote>I declare under penalty of perjury that the
following is true and correct: The materials filed with the Federal Trade
Commission and the Department of Justice under section 351(l)(6) of the Public
Health Service Act, with respect to the agreement referenced in this
certification: (1) represent the complete, final, and exclusive agreement
between the parties; (2) include any ancillary agreements that are contingent
upon, provide a contingent condition for, or are otherwise related to, the
referenced agreement; and (3) include written descriptions of any oral
agreements, representations, commitments, or promises between the parties that
are responsive to such section and have not been reduced to
writing.</quote>.</text>
</clause></subparagraph><subparagraph id="H86EBC2B9A3624009A5783BC8F6DF6B29"><enum>(D)</enum><header>Disclosure
exemption</header><text>Any information or documentary material filed with the
Assistant Attorney General or the Federal Trade Commission pursuant to this
paragraph shall be exempt from disclosure under section 552 of title 5, United
States Code, and no such information or documentary material may be made
public, except as may be relevant to any administrative or judicial action or
proceeding. Nothing in this subparagraph prevents disclosure of information or
documentary material to either body of the Congress or to any duly authorized
committee or subcommittee of the Congress.</text>
</subparagraph><subparagraph id="HB364CFE9C35048D5A12A77A63034FFF3"><enum>(E)</enum><header>Enforcement</header>
<clause id="H46C66015709148EDB8B2CE6015F08834"><enum>(i)</enum><header>Civil
penalty</header><text>Any person that violates a provision of this paragraph
shall be liable for a civil penalty of not more than $11,000 for each day on
which the violation occurs. Such penalty may be recovered in a civil
action—</text>
<subclause id="H3E429650E4594DB6AC489957BC79B4FC"><enum>(I)</enum><text>brought by the
United States; or</text>
</subclause><subclause id="H2FE484DCFEE7406FACD0E9D642AA2530"><enum>(II)</enum><text>brought by the
Federal Trade Commission in accordance with the procedures established in
section 16(a)(1) of the Federal Trade Commission Act.</text>
</subclause></clause><clause id="H00214FB3B7144267AEC4C4C523423323"><enum>(ii)</enum><header>Compliance and
equitable relief</header><text>If any person violates any provision of this
paragraph, the United States district court may order compliance, and may grant
such other equitable relief as the court in its discretion determines necessary
or appropriate, upon application of the Assistant Attorney General or the
Federal Trade Commission.</text>
</clause></subparagraph><subparagraph id="H7203EE07D9DB438BAE354BD1498B6752"><enum>(F)</enum><header>Rulemaking</header><text>The
Federal Trade Commission, with the concurrence of the Assistant Attorney
General and by rule in accordance with section 553 of title 5, United States
Code, consistent with the purposes of this paragraph—</text>
<clause id="HD4D8CF33163D42E99C48F2E2D92C9D46"><enum>(i)</enum><text>may define the
terms used in this paragraph;</text>
</clause><clause id="HF2F60CE9957F41B7A4E201902799E104"><enum>(ii)</enum><text>may exempt
classes of persons or agreements from the requirements of this paragraph;
and</text>
</clause><clause id="H764710BECE3C449691BC2AABE69169C0"><enum>(iii)</enum><text>may prescribe
such other rules as may be necessary and appropriate to carry out the purposes
of this paragraph.</text>
</clause></subparagraph><subparagraph id="H1E600F19147E4AE8A8EC4C86186CA672"><enum>(G)</enum><header>Savings
clause</header><text display-inline="yes-display-inline">Any action taken by
the Assistant Attorney General or the Federal Trade Commission, or any failure
of the Assistant Attorney General or the Commission to take action, under this
paragraph shall not at any time bar any proceeding or any action with respect
to any agreement between a biosimilar product applicant under subsection (k)
and the reference product sponsor, or any agreement between biosimilar product
applicants under subsection (k), under any other provision of law, nor shall
any filing under this paragraph constitute or create a presumption of any
violation of any competition
laws.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H428A183B1BD242D1AA9FBE05BE0B02E2"><enum>(b)</enum><header>Definitions</header><text>Section
351(i) of the Public Health Service Act (42 U.S.C. 262(i)) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="H87731ADF52D2493996E1D7F1BF03EBA2"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>In this section, the
term <term>biological product</term> means</quote> and inserting the
following:</text>
<quoted-block display-inline="yes-display-inline" id="HD770CA3D328A4BE785DFB7D34CF25EF1" style="OLC">
<text>In this
section:</text><paragraph commented="no" display-inline="no-display-inline" id="HFDA12BF1770743BA8108F202A2D3E632"><enum>(1)</enum><text display-inline="yes-display-inline">The term <term>biological product</term>
means</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H06A8AB94E6604B059C1E656910F874F3"><enum>(2)</enum><text>in paragraph (1),
as so designated, by inserting <quote>protein (except any chemically
synthesized polypeptide),</quote> after <quote>allergenic product,</quote>;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H243EC0B033E145ADB3CD1A86B1E29FA1"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HC7BCB2B6434B4D4E9A996709D6DA03C8" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="H5498A9C034AB488DA5B70DC4A0FD0B7D"><enum>(2)</enum><text display-inline="yes-display-inline">The term <term>biosimilar</term> or
<term>biosimilarity</term>, in reference to a biological product that is the
subject of an application under subsection (k), means—</text>
<subparagraph id="H50FB833021B743E583BD84C27568A0E9"><enum>(A)</enum><text>that the
biological product is highly similar to the reference product notwithstanding
minor differences in clinically inactive components; and</text>
</subparagraph><subparagraph id="HF0EBC5A5F8BF4FC995DB87C52C36B06E"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HBFB7E7FC84B240F998078071CB749102"><enum>(3)</enum><text>The term
<term>interchangeable</term> or <term>interchangeability</term>, 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.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H0EE0D74635AA42399F30F63B84532995"><enum>(4)</enum><text display-inline="yes-display-inline">The term <term>reference product</term>
means the single biological product licensed under subsection (a) against which
a biological product is evaluated in an application submitted under subsection
(k).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H292C45F193DD4A799F617246C97A31F0"><enum>(c)</enum><header>Products
Previously Approved Under Section 505</header>
<paragraph id="H9FFFAAE344D74EF78A9221A8AADE3112"><enum>(1)</enum><header>Requirement to
follow section 351</header><text>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).</text>
</paragraph><paragraph id="HC18C6EA85B534F6DA2A84CC5FD047EFC"><enum>(2)</enum><header>Exception</header><text>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—</text>
<subparagraph id="H1130FD8612A1407BAFE4C6DAC6C1144A"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="HAEA47B018A4A40C689BF779BC9535F94"><enum>(B)</enum><text>such
application—</text>
<clause id="H5EAC52F9836449E0B9F6CEF1A9878691"><enum>(i)</enum><text>has
been submitted to the Secretary of Health and Human Services (referred to in
this Act as the <quote>Secretary</quote>) before the date of enactment of this
Act; or</text>
</clause><clause id="H8330CCBAC6A44E02A072BDA2622511AA"><enum>(ii)</enum><text>is
submitted to the Secretary not later than the date that is 10 years after the
date of enactment of this Act.</text>
</clause></subparagraph></paragraph><paragraph id="HD4284D6DCE4F46F697B03622577A64BB"><enum>(3)</enum><header>Limitation</header><text>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.</text>
</paragraph><paragraph id="HCDA2A79722374AB68996B9812686C0F5"><enum>(4)</enum><header>Deemed approved
under section 351</header><text>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.</text>
</paragraph><paragraph id="H047969C5D61443608D71DB536AE7FC1F"><enum>(5)</enum><header>Definitions</header><text>For
purposes of this subsection, the term <term>biological product</term> 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).</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="HFF1399B8AF6A4405A4C73D1A07147621" section-type="subsequent-section"><enum>222.</enum><header>Fees relating to
biosimilar biological products</header><text display-inline="no-display-inline">Subparagraph (B) of section 735(1) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g(1)) is amended by
inserting <quote>, including licensure of a biological product under section
351(k) of such Act</quote> before the period at the end.</text>
</section><section id="HB7BE3B119CB8461D9AAE2C4F7F10E3B6" section-type="subsequent-section"><enum>223.</enum><header>Amendments to
certain patent provisions</header>
<subsection id="HBBB031855AFE4A229B522E604A130976"><enum>(a)</enum><text display-inline="yes-display-inline">Section 271(e)(2) of title 35, United
States Code is amended—</text>
<paragraph id="H64A2A745BC50413CA62737989BCB21D2"><enum>(1)</enum><text>in subparagraph
(A), by striking <quote>or</quote> after <quote>patent,</quote>;</text>
</paragraph><paragraph id="HDA502621982B49ACB78202AC48D67D30"><enum>(2)</enum><text>in subparagraph
(B), by adding <quote>or</quote> after the comma at the end;</text>
</paragraph><paragraph id="H3F15CF4DBCF544139DDFD9C18113CCC1"><enum>(3)</enum><text>by inserting the
following after subparagraph (B):</text>
<quoted-block display-inline="no-display-inline" id="H216B3506E0714059AE7BCAB80809208B" style="OLC">
<subparagraph id="HC37F99CD7E0644FFB5F841E642C82A91"><enum>(C)</enum><text display-inline="yes-display-inline">a statement under section 351(l)(4)(D)(ii)
of the Public Health Service Act,</text>
</subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="HE671223746154F71A780C0E5B5E2968F"><enum>(4)</enum><text>in the matter
following subparagraph (C) (as added by paragraph (3)), by inserting before the
period the following: <quote>, or if the statement described in subparagraph
(C) is provided in connection with an application to obtain a license to engage
in the commercial manufacture, use, or sale of a biological product claimed in
a patent or the use of which is claimed in a patent before the expiration of
such patent</quote>.</text>
</paragraph></subsection><subsection id="H250A91AB98F04A42A8E1A710013998EC"><enum>(b)</enum><text display-inline="yes-display-inline">Section 271(e)(4) of title 35, United
States Code, is amended by striking <quote>in paragraph (2)</quote> in both
places it appears and inserting <quote>in paragraph (2)(A) or
(2)(B)</quote>.</text>
</subsection></section></subtitle><subtitle id="HE34E1E90FA0A48FBA2190EF08162251B"><enum>D</enum><header>Administrative
Simplification</header>
<section display-inline="no-display-inline" id="HD203A42CA1B94CCA993FA2FD95ACC7E3" section-type="subsequent-section"><enum>231.</enum><header>Administrative
simplification</header>
<subsection id="H93FE126FED2649C7ACC823FD81D75E0A"><enum>(a)</enum><header>Operating Rules
for Health Information Transactions</header>
<paragraph id="H2244B4E938ED48E19BA5BD1DBE92925B"><enum>(1)</enum><header>Definition of
operating rules</header><text>Section 1171 of the Social Security Act (42
U.S.C. 1320d) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H490493B9C2B04713B8B1AA9476F1EF53" style="OLC">
<paragraph id="HF2328F49740E4B36A4824765A62E2D18"><enum>(9)</enum><header>Operating
rules</header><text>The term <term>operating rules</term> 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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H145BD5FF6DD14711A619CD22008E6FB6"><enum>(2)</enum><header>Operating rules
and compliance</header><text>Section 1173 of the Social Security Act (42 U.S.C.
1320d–2) is amended—</text>
<subparagraph id="HFB5C9A4D59E74DD786B1878C924B0B60"><enum>(A)</enum><text>in subsection
(a)(2), by adding at the end the following new subparagraph:</text>
<quoted-block act-name="" id="H7077515EBC7448628C1A567B0118E346" style="OLC">
<subparagraph id="H4E5B52AFD22A4918B6150968108CD8EF"><enum>(J)</enum><text>Electronic funds
transfers.</text>
</subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H3040BBAFCD8847C6BA9485BDBBBF0BB7"><enum>(B)</enum><text>by adding at the
end the following new subsections:</text>
<quoted-block act-name="" id="HF31115296E344D159A376BC0059711DF" style="traditional">
<subsection id="H40729BB0FC0041C2B5E1A352E4B1B830"><enum>(g)</enum><header>Operating
rules</header>
<paragraph id="H68BA9B25818142EAAD7CFF8E2E66F225"><enum>(1)</enum><header>In
general</header><text>The Secretary shall adopt a single set of operating rules
for each transaction described in subsection (a)(2) 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.</text>
</paragraph><paragraph id="HDF21FC63020A4351925EF9B0B2BC60FF"><enum>(2)</enum><header>Operating rules
development</header><text>In adopting operating rules under this subsection,
the Secretary shall rely on recommendations for operating rules developed by a
qualified nonprofit entity, as selected by the Secretary, that meets the
following requirements:</text>
<subparagraph id="H04E7B0FC69574EB5843E952B5C657BF1"><enum>(A)</enum><text>The entity focuses
its mission on administrative simplification.</text>
</subparagraph><subparagraph commented="no" id="H348A4F76799E4EEF8233E821DA332A10"><enum>(B)</enum><text>The entity
demonstrates an established 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.</text>
</subparagraph><subparagraph id="HEEE1F70804C649A5A77A34625BAD4023"><enum>(C)</enum><text>The entity has
established a public set of guiding principles that ensure the operating rules
and process are open and transparent.</text>
</subparagraph><subparagraph id="HCB2CBEE9BB094F7593AB50647068F50A"><enum>(D)</enum><text>The entity
coordinates its activities with the HIT Policy Committee and the HIT Standards
Committee (as established under title XXX of the Public Health Service Act) and
complements the efforts of the Office of the National Healthcare Coordinator
and its related health information exchange goals.</text>
</subparagraph><subparagraph id="H0A8C056B88D34E46898D2DBA1C9FF914"><enum>(E)</enum><text>The entity
incorporates national standards, including the transaction standards issued
under Health Insurance Portability and Accountability Act of 1996.</text>
</subparagraph><subparagraph id="H1CC7B27C49314D67B348D4CC65A9A37B"><enum>(F)</enum><text>The entity
supports nondiscrimination and conflict of interest policies that demonstrate a
commitment to open, fair, and nondiscriminatory practices.</text>
</subparagraph><subparagraph id="H0A63E555B0DB4FACB2B5B5ED1EE75C6C"><enum>(G)</enum><text>The entity allows
for public review and updates of the operating rules.</text>
</subparagraph></paragraph><paragraph id="H647F04AC593746689389353876708A58"><enum>(3)</enum><header>Review and
recommendations</header><text>The National Committee on Vital and Health
Statistics shall—</text>
<subparagraph id="HC7F8FE737FBA42D29F19421B59CA7EC0"><enum>(A)</enum><text>review the
operating rules developed by a nonprofit entity described under paragraph
(2);</text>
</subparagraph><subparagraph id="HC73305DD85134655AC1D69F7AFF02422"><enum>(B)</enum><text>determine whether
such rules represent a consensus view of the health care industry and are
consistent with and do not alter current standards;</text>
</subparagraph><subparagraph id="H21C981F05D0B44EEBB5B568F8C8F0973"><enum>(C)</enum><text>evaluate whether
such rules are consistent with electronic standards adopted for health
information technology; and</text>
</subparagraph><subparagraph id="HE66D74B45D2A4652AEE2B8327833B761"><enum>(D)</enum><text>submit to the
Secretary a recommendation as to whether the Secretary should adopt such
rules.</text>
</subparagraph></paragraph><paragraph id="HE1004FE2DF984B4097A0BD0483C6B510"><enum>(4)</enum><header>Implementation</header>
<subparagraph id="H4DEA6AB01EAC485682994D76B499FFEA"><enum>(A)</enum><header>In
general</header><text>The Secretary shall adopt operating rules under this
subsection, by regulation in accordance with subparagraph (C), following
consideration of the 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)(D) and having ensured
consultation with providers.</text>
</subparagraph><subparagraph id="HD8BEBEFBE8774090AF96E5F087D75E92"><enum>(B)</enum><header>Adoption
requirements; effective dates</header>
<clause id="H816B27E3971D452C941C467E7CC3F113"><enum>(i)</enum><header>Eligibility for
a health plan and health claim status</header><text>The set of operating rules
for transactions for eligibility for a health plan and health claim status
shall be adopted not later than July 1, 2011, in a manner ensuring that such
rules are effective not later than January 1, 2013, and may allow for the use
of a machine readable identification card.</text>
</clause><clause id="HE02E751A274348358D4A44C9FFCF506E"><enum>(ii)</enum><header>Electronic
funds transfers and health care payment and remittance advice</header><text>The
set of operating rules for electronic funds transfers and health care payment
and remittance advice shall be adopted not later than July 1, 2012, in a manner
ensuring that such rules are effective not later than January 1, 2014.</text>
</clause><clause id="H72D756DB59DA48A7B5F9CD248486ECD0"><enum>(iii)</enum><header>Other
completed transactions</header><text>The set of operating rules for the
remainder of the completed transactions described in subsection (a)(2),
including health claims or equivalent encounter information, enrollment and
disenrollment in a health plan, health plan premium payments, and referral
certification and authorization, shall be adopted not later than July 1, 2014,
in a manner ensuring that such rules are effective not later than January 1,
2016.</text>
</clause></subparagraph><subparagraph id="H1CA91121D475452886785AF001CE7E72"><enum>(C)</enum><header>Expedited
rulemaking</header><text>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 public comments on any interim final rule published under this
subparagraph for 60 days after the date of such publication.</text>
</subparagraph></paragraph></subsection><subsection id="H3CD56351539540188D72EDD07689DF5B"><enum>(h)</enum><header>Compliance</header>
<paragraph id="HCD4811F351834C0B9D6F2BBADB871682"><enum>(1)</enum><header>Health plan
certification</header>
<subparagraph id="HDE03F1D2900141F38659B2BD2EAB79AF"><enum>(A)</enum><header>Eligibility for
a health plan, health claim status, electronic funds transfers, health care
payment and remittance advice</header><text>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 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.</text>
</subparagraph><subparagraph id="H22E386BF21A547A58FE80F69DEC7C904"><enum>(B)</enum><header>Other completed
transactions</header><text>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 operating rules for the remainder
of the completed transactions described in subsection (a)(2), including health
claims or equivalent encounter information, enrollment and disenrollment in a
health plan, health plan premium payments, 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).</text>
</subparagraph></paragraph><paragraph id="H2BBAE9C237CF4A2991AE83CF4537040F"><enum>(2)</enum><header>Documentation of
compliance</header><text>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—</text>
<subparagraph id="H37D751E7A0324C9792C2F5A6F5C1CFDC"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="HF4200AEEE7604C758B8E0793CF52FB1B"><enum>(B)</enum><text>provides
documentation showing that the plan has completed end-to-end testing for such
transactions with their partners, such as hospitals and physicians.</text>
</subparagraph></paragraph><paragraph id="H24430CE1246B45199A199BC4998E1755"><enum>(3)</enum><header>Service
contracts</header><text>A health plan shall be required to comply with any
applicable certification and compliance requirements (and provide the Secretary
with adequate documentation of such compliance) under this subsection for any
entities that provide services pursuant to a contract with such health
plan.</text>
</paragraph><paragraph id="H2061721B97934B97B7F7B80BBF8DBC3A"><enum>(4)</enum><header>Certification by
outside entity</header><text>The Secretary may contract with an independent,
outside entity 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 rules issued by the
Secretary.</text>
</paragraph><paragraph id="H7C905571614E4868AA87085B753ECDD0"><enum>(5)</enum><header>Compliance with
revised standards and rules</header><text>A health plan (including entities
described under paragraph (3)) shall comply with the certification and
documentation requirements under this subsection for any interim final rule
promulgated by the Secretary under subsection (i) that amends any standard or
operating rule described under paragraph (1) of this subsection. A health plan
shall comply with such requirements not later than the effective date of the
applicable interim final rule.</text>
</paragraph><paragraph commented="no" id="HC5F4F3BDE1C149C2BB2753B3328FB497"><enum>(6)</enum><header>Audits of health
plans</header><text>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).</text>
</paragraph></subsection><subsection id="H0C460A0094C843CE94AC6A5A2677FE3E"><enum>(i)</enum><header>Review and
amendment of standards and rules</header>
<paragraph id="H54DCA95E6B32439F9BCF8354B39AF26B"><enum>(1)</enum><header>Establishment</header><text>Not
later than January 1, 2014, the Secretary shall establish a review committee
(as described under paragraph (4)).</text>
</paragraph><paragraph id="HC83D0DE30CFF46F690670DBA424BD86E"><enum>(2)</enum><header>Evaluations and
Reports</header>
<subparagraph id="H8BCB0B5FC9134960BBB1AD9DEEB4091B"><enum>(A)</enum><header>Hearings</header><text>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 existing standards and operating rules established
under this section.</text>
</subparagraph><subparagraph id="HCBF38622E88049D7A31A714095AF4FAE"><enum>(B)</enum><header>Report</header><text>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 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.</text>
</subparagraph></paragraph><paragraph id="HE322C581278A4179A5B47008C559A39A"><enum>(3)</enum><header>Interim final
rulemaking</header>
<subparagraph id="H43D2CA00447742ACAA3181475D0D3B65"><enum>(A)</enum><header>In
general</header><text>Any recommendations to amend existing 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.</text>
</subparagraph><subparagraph id="HB1F5BB77054E45DC9590A5696C86E0B9"><enum>(B)</enum><header>Public
comment</header>
<clause id="HFF2E1ED1072C49D8B5BA74AD7DE3E13F"><enum>(i)</enum><header>Public comment
period</header><text>The Secretary shall accept public comments on any interim
final rule published under this paragraph for 60 days after the date of such
publication.</text>
</clause><clause id="H23763EC9640F441F860D6B8063509CAC"><enum>(ii)</enum><header>Effective
date</header><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="HE279BB81EA8447F29E6582F89A668E48"><enum>(4)</enum><header>Review
committee</header>
<subparagraph id="HCF06BE1FD83A417E8AD645D5DF56F17C"><enum>(A)</enum><header>Definition</header><text>For
the purposes of this subsection, the term <term>review committee</term> means a
committee within the Department of Health and Human services that has been
designated by the Secretary to carry out this subsection, including—</text>
<clause id="H5B64E17B7B66423198103EEA272B5904"><enum>(i)</enum><text>the National
Committee on Vital and Health Statistics; or</text>
</clause><clause id="H017A3098505D470BB4C7EE38BEDD6830"><enum>(ii)</enum><text>any appropriate
committee as determined by the Secretary.</text>
</clause></subparagraph><subparagraph id="HDD2734AA082740889F78022E2E496260"><enum>(B)</enum><header>Coordination of
HIT Standards</header><text>In developing recommendations under this
subsection, the review committee shall consider the standards approved by the
Office of the National Coordinator for Health Information Technology.</text>
</subparagraph></paragraph></subsection><subsection id="H9693A68CF1984988881958B7937EC2B9"><enum>(j)</enum><header>Penalties</header>
<paragraph id="H362E1A457173460E91D88A6D273869EE"><enum>(1)</enum><header>Penalty
fee</header>
<subparagraph id="HD024E243C06447EA86D7DE788DB14AD1"><enum>(A)</enum><header>In
general</header><text>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 the
standards (and their operating rules) as described under paragraph (1) of such
subsection.</text>
</subparagraph><subparagraph id="H2C056C037CAD46B0834A1F1C1BD63013"><enum>(B)</enum><header>Fee
amount</header><text>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).</text>
</subparagraph><subparagraph id="H7DA02853BC7846F2ABAD4DED935D7618"><enum>(C)</enum><header>Additional
penalty for misrepresentation</header><text>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.</text>
</subparagraph><subparagraph id="HE67830E1C92240E09047BE2D88490B40"><enum>(D)</enum><header>Annual fee
increase</header><text>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.</text>
</subparagraph><subparagraph id="H36EF96275F054838A7491C430A52C358"><enum>(E)</enum><header>Penalty
limit</header><text>A penalty fee assessed against a health plan under this
subsection shall not exceed, on an annual basis—</text>
<clause id="H9596FA560F6648C487E4407A88271700"><enum>(i)</enum><text>an
amount equal to $20 per covered life under such plan; or</text>
</clause><clause id="HC8FA373C88764903A732C98FD52A2DCF"><enum>(ii)</enum><text>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)).</text>
</clause></subparagraph><subparagraph id="H52C665396E6F4768A1285711AC6D16A3"><enum>(F)</enum><header>Determination of
covered individuals</header><text>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.</text>
</subparagraph></paragraph><paragraph id="HAC59D2DA645748A08BC4E72C57D63536"><enum>(2)</enum><header>Notice and
Dispute Procedure</header><text>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)).</text>
</paragraph><paragraph id="HD65DBAD4964549ABAADD817B62980EAF"><enum>(3)</enum><header>Penalty fee
report</header><text>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.</text>
</paragraph><paragraph id="HE743AB4D909C49B98D3AAD1EEE4DBEB0"><enum>(4)</enum><header>Collection of
penalty fee</header>
<subparagraph id="H7BECAAAD59204FADA4ADF50E6F26CEFA"><enum>(A)</enum><header>In
General</header><text>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).</text>
</subparagraph><subparagraph id="H0973052021304EBA8E41745B0A5F9609"><enum>(B)</enum><header>Notice</header><text>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)).</text>
</subparagraph><subparagraph id="H9914F5331BA1488DAB8409DF4220FBB2"><enum>(C)</enum><header>Payment due
date</header><text>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.</text>
</subparagraph><subparagraph id="HCD2983DFA9EF4E2BB97206957456B9D2"><enum>(D)</enum><header>Unpaid penalty
fees</header><text>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—</text>
<clause id="H980BDA4B62894835A5DBA9F9ABC2F9B9"><enum>(i)</enum><text>increased by the
interest accrued on such amount, as determined pursuant to the underpayment
rate established under section 6601 of the Internal Revenue Code of 1986;
and</text>
</clause><clause id="HDA2D880FBD1644A7BA704F2AF2C5B67C"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph><subparagraph id="H2CB9657CFEA84031A31AEB019BC7F463"><enum>(E)</enum><header>Administrative
fees</header><text>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.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H1F131C447EEB466FBDE61DD27017FE1F"><enum>(b)</enum><header>Promulgation of
rules</header>
<paragraph id="HB9028768692F454E829CE47400313BAB"><enum>(1)</enum><header>Unique health
plan identifier</header><text>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 of 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.</text>
</paragraph><paragraph id="H88B17E70DBAF4EF7931A8EDB54A4F8DB"><enum>(2)</enum><header>Electronic funds
transfer</header><text>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 (a)(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.</text>
</paragraph></subsection><subsection id="H62DA71267FC049AFBA38B2B6F686B6DD"><enum>(c)</enum><header>Expansion of
electronic transactions in Medicare</header><text>Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended—</text>
<paragraph id="HF882F34467AE45628726A331BA357A7F"><enum>(1)</enum><text>in paragraph (23),
by striking the <quote>or</quote> at the end;</text>
</paragraph><paragraph id="H3AA708B0CFDF4700BB7D2A9F34462DB0"><enum>(2)</enum><text>in paragraph (24),
by striking the period and inserting <quote>; or</quote>; and</text>
</paragraph><paragraph id="HCF786C4DA3334698B44415B744039DE6"><enum>(3)</enum><text>by inserting after
paragraph (24) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H0222FB1434A948FAB617911C556CDD0C" style="OLC">
<paragraph id="HE29CC0E83E3C421991D2611993392C4B"><enum>(25)</enum><text display-inline="yes-display-inline">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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HB28926C078284D7BB49F279D10BB7E57"><enum>(d)</enum><header>Medicare and
medicaid compliance reports</header><text>Not later than July 1, 2013, the
Secretary of Health and Human Services shall submit a report to the Chairs and
Ranking Members of the Committee on Ways and Means and the Committee on Energy
and Commerce of the House of Representatives and the Chairs and Ranking Members
of the Committee on Health, Education, Labor, and Pensions and the Committee on
Finance of the Senate on the extent to which the Medicare program and providers
that serve beneficiaries under that program, and State Medicaid programs and
providers that serve beneficiaries under those programs, transact
electronically in accordance with transaction standards issued under the Health
Insurance Portability and Accountability Act of 1996, part C of title XI of the
Social Security Act, and regulations promulgated under such Acts.</text>
</subsection></section></subtitle>